The Rise and Fall of California

California was once a symbol of America's dynamic growth.  In 1962, it supplanted New York as the most populous state.  Business boomed.  Waves of migrants flocked west.  Roads, bridges and other infrastructure projects launched a new era of prosperity.  California was branded The Golden State.

Today California's golden image has faded.  A mass exodus of people is draining the state.  Businesses are fleeing. Prices of everything from gasoline to energy and housing are skyrocketing. Illegal immigrants are swamping cities.  California now is the trademark of failed liberalism.

Despite its glaring issues, California's government remains in denial. Delusional Governor Jerry Brown smears lipstick on the pig that is California.  Things are not that bad he protests.  But the facts cannot be disputed no matter the hyperbole whipped up by the governor and his Democratic Party.

The golden age of migration to California ended in 2010.  From 1960 to 2010, its population leaped 137 percent.  However, for the past two decades the state's residents are moving out in record numbers.  From 2010 to 2015, 3.5 million Californians packed up and shipped out to other states.

The loss of residents has impacted the state's economy.  Figures show that from 2013 to 2014 the outward migration resulted in a $21 billion loss in taxable income to California.  The exiles are escaping to Texas, Nevada and Arizona, where cost of living and taxes are lower.

What matters most is that the largest number of people leaving are upper middle class residents making $100,000 to $200,000 annually.  These high earners are being replaced by low-wage illegal immigrants. The trade off has squeezed the state's finances and created budget deficits.

From 2008 to 2015, more than 9,000 business pulled up stakes and departed California.  Many firms cite California government's hostility to businesses as a main reason for their relocation.  The state has some of the most onerous regulations and taxes, according to surveys.

Why the exodus?  What makes California unlivable for so many residents?

California has the fourth highest cost of living at 132 percent of the national average.  Electricity cost 10 times more than neighboring states. California gas prices are among the highest.  It has the country's steepest sales tax (7.5%).  Its top marginal income tax rate (13.3%) leads the nation.

Housing costs are a non-starter for many Californians.  Median price for a home in the state is $499,500.  That compares to the national average price of $180,000.  Even renting an apartment is no bargain.  The average monthly rental is $2,000.  No wonder the state is losing residents.

Because of the astronomical housing costs, California has the lowest percentage of home ownership in the country.  The average Californian pays two-and-one-half times the national norm for a single-family residence.  Commercial real estate also carries one of the heftiest price tags in the nation.

Why does everything cost so much more in California?  Part of the answer is the law of supply and demand.  There are 39.2 million people competing for groceries, housing, gasoline and other goods. However, there is no escaping the fact that the biggest drivers of costs are taxes and regulation.

California's government wields heavy-handed regulation that adds cost to everything from gasoline to home building.  The state mandates refinery specs for gasoline that hike the cost.  State and local housing restrictions, codes and environmental standards raise construction prices.

The Democratic Party shoulders the blame for regulatory and tax excess.  The party controls the legislature, governorship and virtually every statewide elective office.  Both chambers of the California legislature have been dominated by Democrats since 1959, except during 1969 to 1971.

Under Democratic rule,  government spending has spiraled out of control, fueling escalating taxes.  Welfare spending in California is rising twice as fast as the U.S. as a whole. Governor Brown recently was forced to admit the budget deficit for 2018 will be $1.6 billion.

California's laissez-faire attitude toward illegal immigration has exacerbated the problem.  A Pew Research study estimates are are 2.4 million unauthorized immigrants living in California, 6.7 percent of the total population.  However, some estimates put the number as high as 3 million.

California is losing upper middle class residents with high incomes and replacing them with illegal immigrants, including 57 percent with no high school degree.  That is a prescription of economic disaster.  However, not many politicians in California seem fazed about the trend. 

Shankar Singam, leader of a movement calling for California to exit the United States, has made it clear that his organization cheers the new population direction.  He recently claimed it was a "good thing" to jettison the middle class to make room for a "new wave" of immigrants.

A cynic might conclude California politicians want to keep the state blue (Democrat) by importing more immigrants who traditionally vote like sheep for their party while exporting middle class voters who lean Republican. That's one strategy for maintaining a single-party state. 

But surely no politician, not even one in California, would put the party above the state's future?  The actions of Governor Brown and the California legislature make the question rhetorical.