California's economy

Steven Pearlstein, the Washington Post's left wing business columnist, is in California this week and wrote a dispatch about the state's crumbling economy. He then took part in a Q&A this morning in which he was asked some of the same questions that have been on my mind:

Virginia: Thanks for taking our questions, I have found your work to be helpful and informative. I can't help but make this observation: If California is a real mess, then can't the comparison be made to the Obama/Democrat plan that makes the U.S.A one big California? Under Obama's budget/stimulus/bailout, we will certainly have higher taxes and more "things" we cannot afford that will only get more expensive in the future. Is this a fair comparison?

Steven Pearlstein: No, it is not a good analogy because government in California is really, really disfunctional (sic). That said, the big fiscal elephant in our room nationally is health care costs under Medicare and Medicaid, which is why it is important that we move ahead on comprehensive health care reform. That is for us what public employee pensions and retiree health benefits are to people in California.

What, and the federal government isn't? Where do I begin? Congress has already missed a couple of deadlines in the 2010 budget process, there's a witch hunt taking place on Capitol Hill against AIG employees and then there's the odd spectacle of Maxine Waters who uses her perch on the House Financial Services Committee to wax conspiratorial about Goldman Sachs. You think we're not held hostage by special interests? We have a budget well over $3 trillion and still can't find anything to cut because of all the kicking and screaming from various groups. We have Congress trying to kill school vouchers and end the secret ballot in union elections because of pressure from special interests.

Aldie, Va.: Isn't the story you tell of California a harbinger for the United States' future if the Democrat party is able to implement their platform of higher taxes, huge budget deficits, excessive regulation, burdensome mandates on private industry, growth of government at the expense of the private sector, refusal to force the unions to allow meaningful school reform, and policies that encourage uncontrolled illegal immigration that swamp public services?

Steven Pearlstein: Obviously lots of people thinking along the same lines.

California is the Democrat/Obama agenda writ large. Given the policies that have been enacted no one should be surprised by what has transpired there -- or what will happen here if such policies go national.