California Vs. Texas

This is good stuff at Powerline, so read the whole thing:

Texas, increasingly, is the economic and intellectual leader of the U.S. During the last 18 months before the current recession took hold, while the country as a whole was still creating jobs, more than half of those jobs were created in a single state: Texas.

Texas has usurped the leadership position that, decades ago, belonged to California. Today California is in decline, likely irreversibly so. William Voegeli draws the sad but instructive comparison in the Los Angeles Times:

In America's federal system, some states, such as California, offer residents a "package deal" that bundles numerous and ambitious public benefits with the high taxes needed to pay for them. Other states, such as Texas, offer packages combining modest benefits and low taxes. These alternatives, of course, define the basic argument between liberals and conservatives over what it means to get the size and scope of government right. ...

California and Texas are not perfect representatives of the alternative deals, but they come close. Overall, the Census Bureau's latest data show that state and local government expenditures for all purposes in 2005-06 were 46.8% higher in California than in Texas: $10,070 per person compared with $6,858. ...

Confronted with a stark choice between government dominance and freedom, Americans are voting with their feet:

One way to assess how Americans feel about the different tax and benefit packages the states offer is by examining internal U.S. migration patterns. Between April 1, 2000, and June 30, 2007, an average of 3,247 more people moved out of California than into it every week, according to the Census Bureau. Over the same period, Texas had a net weekly population increase of 1,544 as a result of people moving in from other states. During these years, more generally, 16 of the 17 states with the lowest tax levels had positive "net internal migration," in the Census Bureau's language, while 14 of the 17 states with the highest taxes had negative net internal migration.

That's not hard to understand. As Voegeli says, "All things being equal, everyone would rather pay low taxes than high ones." So high-tax states like California have to be able to show that their taxes are somehow worth it:

Today's public benefits fail that test, as urban scholar Joel Kotkin of NewGeography.com and Chapman University told the Los Angeles Times in March: "Twenty years ago, you could go to Texas, where they had very low taxes, and you would see the difference between there and California. Today, you go to Texas, the roads are no worse, the public schools are not great but are better than or equal to ours, and their universities are good. The bargain between California's government and the middle class is constantly being renegotiated to the disadvantage of the middle class."

These judgments are not based on drive-by sociology. According to a report issued earlier this year by the consulting firm McKinsey & Co., Texas students "are, on average, one to two years of learning ahead of California students of the same age," even though per-pupil expenditures on public school students are 12% higher in California. The details of the Census Bureau data show that Texas not only spends its citizens' dollars more effectively than California but emphasizes priorities that are more broadly beneficial. Per capita spending on transportation was 5.9% lower in California, and highway expenditures in particular were 9.5% lower, a discovery both plausible and infuriating to any Los Angeles commuter losing the will to live while sitting in yet another freeway traffic jam.

But those higher taxes in California must be going somewhere. Why aren't they benefiting those many thousands of citizens who are leaving the state for greener pastures?

In what respects, then, does California "excel"? California's state and local government employees were the best compensated in America, according to the Census Bureau data for 2006. And the latest posting on the website of the California Foundation for Fiscal Responsibility shows 9,223 former civil servants and educators receiving pensions worth more than $100,000 a year from California's public retirement funds. The "dues" paid by taxpayers in order to belong to Club California purchase benefits that, increasingly, are enjoyed by the staff instead of the members.

No doubt similar studies in other high tax states, like my home state of Minnesota, would show the same thing: taxpayers aren't getting anything in particular for their money, likely less than citizens in other states, but public employees are doing very well indeed. This explains why public employees' unions have become the Democratic Party's most loyal supporters, while those who are not on the public employee gravy train increasingly are packing up their belongings and moving to lower-tax states like Texas.

The debate, really, is over. High-tax states don't deliver a better lifestyle--not for taxpayers, anyway. One of these days, voters will figure out that the same thing holds true at the national level. Higher taxes may be OK if you're a public employee; otherwise, they're a dead loss.

This is precisely why the Founders set up this system of federalism, where the central government should be responsible only for a few things like national defense and settling legal cases between states.  By their design, the states should have most of the power to set policy for the express purpose of conducting experiments on a small scale that can be more easily changed.  If one state enacts policies that cause a slow, self-inflicted death (like California), the residents of that state can leave and go to another state with better policies.  Thus, the entire nation sees what works and what doesn't without risking the whole nation.

This comparison between Texas and California is literally a perfect example of the genius of the Founders' design.

It is also a perfect example of why a massive, all-powerful federal government is a very, very bad idea.

There's my two cents.

The Role Of Government In A Free Society

Jason Lewis talked on Rush Limbaugh's radio show a while back about the role of government in a free society. This is an outstanding description of the topic, very easy to listen to, and very understandable. It could be the best six and a half minutes you spend today.

Listen here.

This is one of the reasons conservatives don't like McCain, but it's also one of the precise reasons liberals should not be allowed to run government unchecked. I've said this over and over, but Lewis really paints the picture well - this is one of the key differences between liberalism and conservatism.

There's my two cents.

Follow Up To Federal Vs. State Discussion

Some time ago I blogged about the different roles of federal and state government.  If you haven't read it, please do so now.  It is central to understanding what I'm about to discuss.

[...quietly humming the Jeopardy theme song while you go read the previous blog...]

Excellent!  Now that you've read that, here's proof of how the system was designed to work.  WorldNetDaily recently posted a story with the headline, "California Exodus Turns To Stampede" which illustrates my point perfectly [emphasis mine]:

California, which once lured Americans from near and far, is now driving out millions of the most productive residents – including high percentages of the most affluent.

"When California faced a Mount Everest-sized $14 billion deficit in 2003, one of the major causes for the red ink was the stampede of millionaire households from the state," says a report called "Rich States, Poor States" by economists Arthur Laffer and Stephen Moore. "Out of the 25,000 or so seven-figure-income families, more than 5,000 left in the early 2000s, and the loss of their tax payments accounted for about half the budget hole."

And it's not just the rich leaving.

Based on data from moving companies, California had the second-highest domestic population out-flow of any state in 2005, according to the report, "despite the beautiful weather, beaches, and mountains."

Former Governor Gray Davis was successfully recalled a few years ago because he had tanked the state's economy.  Schwarzenegger replaced him by running as a Republican who would be fiscally sound, but he has unfortunately implemented many liberal Democrat policies.  Now it's come back to bite him, and the state is in worse shape than it was under Davis.  There are some key points to consider here before addressing the fed vs. state question.

First, California has one of the highest tax burdens in the country.  High taxes never help the economy, they actually hinder it by discouraging success and profit.  Second, did you notice that the biggest group of people moving out of the state are the rich?  That's because taxes affect them the most (for an explanation of this, I refer you to yesterday's explanation of how taxes work against the rich more than anyone else).  If this doesn't illustrate that principle in real life, nothing will (especially the part about what happens when the rich don't show up).

Now, how does this story illustrate my point about federal vs. state government?  Because Californians are 'voting' with their feet.  They are leaving California in droves because they don't like the policies that the state has implemented.  This is the key result of our concept of government, and the precise problem with putting too much control at the federal level!  If the tax policies in California have resulted in a mass migration out of the state (especially by the state's most productive people), then they are clearly not good policies.  If the same bad tax policies applied to all states, where would people go?  They'd either be stuck with bad policies, or they'd leave the country.  Either way, it would hurt the country.

This is why the federal level should be as limited as possible - the states are microcosms of legislation, and can be used to test new ways of doing things without damaging the country at large.  If something doesn't work, people will go to a state where things work better.  If California wants people to come back, they'll have to fix their policies to attract people once again.

It's really quite simple, but I don't think most people understand the critical importance of this design.  It is all about the freedom to choose, and when the federal government issues a mandate, that freedom is gone.  I love this story for the reason that it illustrates the concept in the real world - there could not be a better example!  Just look at the numbers of a report published by the American Legislative Exchange Council [emphasis mine]:

"States are in direct competition with each other for human capital and business investment. State governments that think they can attract jobs and people, and grow their economies, by taxing their citizens at a higher rate than their neighbors are sadly mistaken," said Democratic Arkansas state Sen. Steve Faris, ALEC's 2008 national chairman. "Legislators should take a close look at where their state ranks in this book and use it as a tool to help them improve."

The report provides economic competitiveness rankings for all 50 states based on 16 policy variables with a proven effect on the migration of people and investment capital in and out of states. States with the lowest tax, spending, and regulatory burdens win the competitiveness contest.

So, when you hear me talk about big government being a bad thing, this is precisely why.  A big federal government inherently removes freedom from the people, and there is far greater potential for bad policies or abuse of power because there's no way to get away.  I also have a hard time understanding why any American would accept any tax increase when it has been proven over and over and over that the way to accelerate the economy -- and overall prosperity -- is to do just the opposite.

There's my two cents.

Federal Vs. State Government

Here's the promised follow up to my earlier post about federal vs. state government. I think most people look at the difference between the levels of government as sort of like middle management and executive management. That's how I thought of it, anyway, until recently. But that's not correct at all. It's basically yet another layer of checks and balances. I'm no constitutional scholar, but I'll try to explain it as well as I understand it myself.

The federal government has just a handful of specific things it's allowed to do in the Constitution (called enumerated powers). These things include:
- signing international treaties
- national security
- ensuring no religious test is applied to office-holders
- ensuring that no state laws violate the Constitution

There are some others, but not many. Other than that, the Constitution indicates (through the 10th Amendment) that EVERYTHING else is a power given to either the states or to individuals.

I don't usually find a whole lot of inspiration in the substitute professors at the Limbaugh Institute of Conservative Studies (that's what Rush Limbaugh affectionately calls his radio program, and he is, of course, the head instructor), but one of the subs earlier this week, Jason Lewis, talked about this very topic. He explains it in a very easy-to-understand way in the context of global warming.

Take a listen - it's only about 5 minutes.

This is a great description of the difference between the federal government and the state government. On a bigger scale, the same theories apply to national sovereignty (doing what's best for the U.S.) vs. global sovereignty (bowing to the U.N.), which Lewis also covers.

This really brings into perspective the quote about Rep. Shadegg's Enumerated Powers Act - if this bill were to be passed, it would force Congress to actually govern within the powers given to the federal government by the Constitution, and that would leave them with very little.

One thing Ron Paul has right is that he would get rid of a lot of the monolithic government entities like the IRS, the FBI, the Department of Education (by the way, one of Ronald Reagan's presidential platform planks in the early 1980's was getting rid of the Dept. of Ed.), etc. that aren't mentioned in the Constitution. His foreign policy is a recipe for absolute disaster, but he is technically correct on his assertions about cutting back the size of government.

This is one of the most clear-cut differences between liberal philosophy and conservative philosophy. Liberalism wants a centralized all-powerful government that has total control over everything. It might sound nice on the surface, but as Lewis says, what happens if your political adversaries are in charge? Life sucks. On the other hand, conservatives want a more de-centralized government with more power given to the states and/or individuals. If your political adversaries run things, you can always 'vote with your feet' and go to another state.

On the global scale, that's also the biggest fundamental problem with allowing the U.N. to dictate U.S. policy. What happens if our political adversaries run things and have control of the entire world?

Exactly.

Now, keep in mind that many of these huge government programs like universal health care are irreversible. Once we start it, there's no going back - once you give the public 'free' handouts, they'll forever expect it. You don't cure a drug user without significant withdrawal pains, and some never recover from the scars. That's what ending universal health care would be like. Do you want to go through that as a country? Now, what if the current crop of liberals get their way and achieve universal health care, pre-school/kindergarten, housing assistance, food stamps, and all of the other things they've proposed (or that we're already doing)?

Just stop and think about that for a moment. What part of life wouldn't be affected? Not a single one.

That's why it's so critically important that far-left liberals don't gain power. The longer they stay there, the farther the U.S. gets down a road from which we can't come back. This is serious stuff, and has immeasurable impact on the future of our country. A little understanding of how things are supposed to be can go a long, long way to helping us preserve our system of government and way of life.

I hope you've learned as much about this critical topic as I have. I hope you put your new knowledge to good use.

There's my two cents.

Quotes: Federal Vs. State Government

Here are a group of quotes that I think are particularly appropriate as we get into the guts of the 2008 elections, where the role of federal government and state government is sure to be a centerpiece.

I think most Americans have very little understanding of how things were originally set up by the Founding Fathers, and why. Personally, I thought I had a good grasp of it, but until recently I actually didn't have a clue. I've often blogged about how liberals (primarily Democrats) want a large federal government with power centrally located (i.e. think 'universal' health care, mandatory insurance, etc.), whereas conservatives (primarily Republicans) want to see the power dispersed as much as possible to the people, which means in state governments, but I've never truly understood why. I'll post more on this in the next day or so, but for now, here are some quotes to get you thinking about the subject:



"The State governments possess inherent advantages, which will ever give them an influence and ascendancy over the National Government, and will for ever preclude the possibility of federal encroachments. That their liberties, indeed, can be subverted by the federal head, is repugnant to every rule of political calculation."

-- Alexander Hamilton --



"In each new Congress since 1995, Rep. John Shadegg (R-AZ) has introduced the Enumerated Powers Act (HR 1359). Simply put, if enacted, the Enumerated Powers Act would require Congress to specify the basis of authority in the U.S. Constitution for the enactment of laws and other congressional actions. HR 1359 has 28 co-sponsors in the House of Representatives. When Shadegg introduced the Enumerated Powers Act, he explained that the Constitution gives the federal government great, but limited, powers. Its framers granted Congress, as the central mechanism for protecting liberty, specific rather than general powers. The Constitution gives Congress 18 specific enumerated powers, spelled out mostly in Article 1, Section 8. The framers reinforced that enumeration by the 10th Amendment, which reads: 'The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved for the States respectively, or to the people.' Just a few of the numerous statements by our founders demonstrate that their vision and the vision of Shadegg's Enumerated Powers Act are one and the same. I salute the bravery of Rep. Shadegg and the 28 co-sponsors of the Enumerated Powers Act. They have a monumental struggle. Congress is not alone in its constitutional contempt, but is joined by the White House and particularly the constitutionally derelict U.S. Supreme Court."

-- Walter Williams --



Once you become a liberal, you can wax eloquent on the glories of the public schools while sending your kids to private school. You can wax prolix about the greedy rich while making a fortune on the side. You can even use the government to impose your values willy-nilly, from racial quotas and confiscatory tax rates to draconian environmental policies and sex-ed for grade-schoolers—all of which will paid for in part by people who disagree with you."

- Jonah Goldberg --

Posted by Heavy-Handed Politics