19 December 2012

California's Irreversible Decline

Adapted from an earlier article on Al Fin Energy

Employers and productive citizens are moving out. Unskilled and poverty stricken welfare-dependent illegal aliens are moving in. California has been in a politically-instigated decline for decades, but California's voters and its political class has learned nothing from the decline.
For decades after World War II, California was a destination for Americans in search of a better life. In many people’s minds, it was the state with more jobs, more space, more sunlight, and more opportunity. They voted with their feet, and California grew spectacularly (its population increased by 137 percent between 1960 and 2010). However, this golden age of migration into the state is over. For the past two decades, California has been sending more people to other American states than it receives from them. Since 1990, the state has lost nearly 3.4 million residents through this migration.

What has caused California’s transformation from a “pull in” to a “push out” state? The data have revealed several crucial drivers. One is chronic economic adversity (in most years, California unemployment is above the national average). Another is... state and local governments’ constant fiscal instability, which sends at least two discouraging messages to businesses and individuals. One is that they cannot count on state and local governments to provide essential services—much less, tax breaks or other incentives. Second, chronically out-of-balance budgets can be seen as tax hikes waiting to happen. _Great California Exodus
And don't forget California's looming energy crisis, caused entirely by dysfunctional energy policy originating in the Sacramento.

California is obligated by legal mandate to provide 1/3 of its electrical power by "green energy," including intermittent unreliable forms such as big wind and big solar, by the year 2020. Governor Brown of California wants to increase that requirement to 40% of California's electrical power via intermittent unreliables. But what will happen to California's already shaky economy as power consumers are forced to pay higher and higher rates, and as power brownouts and blackouts become more common -- as in a third world country?
One of the hidden costs of solar and wind power — and a problem the state is not yet prepared to meet — is that wind and solar energy must be backed up by other sources, typically gas-fired generators. As more solar and wind energy generators come online, fulfilling a legal mandate to produce one-third of California's electricity by 2020, the demand will rise for more backup power from fossil fuel plants.

"The public hears solar is free, wind is free," said Mitchell Weinberg, director of strategic development for Calpine Corp., which owns Delta Energy Center. "But it is a lot more complicated than that."

Wind and solar energy are called intermittent sources, because the power they produce can suddenly disappear when a cloud bank moves across the Mojave Desert or wind stops blowing through the Tehachapi Mountains. In just half an hour, a thousand megawatts of electricity — the output of a nuclear reactor — can disappear and threaten stability of the grid.

To avoid that calamity, fossil fuel plants have to be ready to generate electricity in mere seconds. That requires turbines to be hot and spinning, but not producing much electricity until complex data networks detect a sudden drop in the output of renewables. Then, computerized switches are thrown and the turbines roar to life, delivering power just in time to avoid potential blackouts.

The state's electricity system can handle the fluctuations from existing renewable output, but by 2020 vast wind and solar complexes will sprawl across the state, and the problem will become more severe. _LATimes
Big wind and big solar -- the "intermittent unreliable" forms of energy generation -- are "feel-good" public pacifiers for coastal dwellers steeped in carbon hysteria. But are these well indoctrinated, pseudo-intellectual academically lobotomised and politically correct devotees of faux environmentalism willing to pay the ultimate costs of their lefty-Luddite neo-Malthusian ideologies? Probably not.
... by 2017 the state will be short by about 3,100 megawatts of flexible power that it can dedicate to meeting reserve needs — about what three nuclear reactors produce. The company is pushing the state Public Utility Commission to require that capacity. The commission has been noncommittal so far. _LAT
Here are the top 10 reasons why businesses are leaving California, as of May, 2012:

#1 – Excessively Adversarial: For eight years in a row, Chief Executive magazine found California to be the worst state for business. Editors said the state appears to have slipped deeper into the “ninth circle of business hell,” a reference to Dante’s Inferno. “The economy, which used to outperform the rest of the country, now substantially underperforms.” They’ve called California the “Venezuela of North America.”
#2 – Severe Existing Tax Treatment: The Tax Foundation in its 2012 State Business Tax Climate Index lists California at No. 48. CFO Magazine ranked California the worst state for tax treatment, as do many other rankings.
#3 – Future Tax Increases: Businesses will face higher income and sales taxes. The state has the largest budget deficit of any state. Employer costs will rise in 2013 as payroll taxes increase to bail out the Unemployment Insurance Fund (insolvent by $10 billion) and to cover excessive borrowing from the Disability Insurance Fund. Future bond borrowing costs will grow because California is S&P's lowest-rated U.S. state. (Bloomberg News, May 18, 2012: "Gov. Jerry Brown is seeking a 38,000 percent spending increase for a proposed high-speed rail system” despite a $15.7 billion deficit.)
#4 – Worst Regulatory Burden: California approved global warming cap-and-trade initiatives with 262 pages of new regulations and fees going into effect in early 2013 even though the state contributes less than 1 percent of the worlds’ green house gases. The draconian measures ignore Bain & Co.’s “regulatory hassle index” that found “California is far worse than any other state by a very significant margin.”
#5 – Unprecedented Energy Costs: California’s commercial electrical rates already average 50 percent  higher than in the rest of the country. The new 2013-2018 “green energy” mandates will boost rates by a minimum of another 19 percent in many California localities, which will harm companies in every industry.
#6 – Dreadful Legal Treatment: The Civil Justice Association of California said the state ranks 44th in legal fairness to business. In 2010, the Institute for Legal Reform found Los Angeles’ courts were the second worst in the nation for legal fairness, after Chicago’s, while San Francisco’s courts were the sixth worst.
#7 – Most Expensive Locations: The Milken Institute found that California businesses pay 23% more than the national average in operating costs. McAfee avoids hiring in California and saves about 30 percent to 40 percent every time it hires outside of the state. 
#8 – Oppressive Permitting Procedures: Obtaining permits from public agencies is extraordinarily expensive and time consuming because of confusing, extraneous and harsh requirements. Example: It can take 2 years to obtain permits just to build a restaurant in California while in other states it can be as little as 1-1/2 months.
#9 – Unfriendly Even to Small Businesses: In 2012, Thumbtack.com and the Kauffman Foundation gave California an “F” grade from small businesses for overall business unfriendliness, difficult regulations, tax code, licensing and health and safety. The finding echoes the Small Business & Entrepreneurship Council in Virginia 2011 conclusion that California ranked 49th overall in terms of business friendliness.
#10 – ‘Composite’ Findings Put California Last: Development Counselors International in a 2011 survey of executives found that ranked California as having the worst business climate of any state based on operating costs, taxes and deficits. That reinforced the “Pollina Corporate Top 10 Pro-Business States for 2010” study that placed the state at the bottom based on labor costs, taxes, litigation abuse, crime rates, demographics, school dropout rates and other factors.

As faux environmental political activists push California's utilities and more reliable power producers closer and closer to the brink, expect "power blackouts and brownouts" to move to the top of the list for reasons why businesses leave the golden state.

California is under the total control of morons, who elect imbeciles such as Barbara Boxer, Diane Feinstein, Nancy Pelosi, Jerry Brown, and Maxine Waters as their representatives. The clock is ticking down on their idiocy. Try not to be hurt too badly by the fallout that will accompany the state's downfall.


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Blogger MnMark said...

California may be the fate of the rest of the country too, since its combination of white liberals running things with the voting assistance of non-whites who want to feed on welfare is the same sort of thing that is happening at the national level.

For now, businesses and productive individuals can move from California to friendlier states.

What happens when the whole country is California and there's no place to leave to?

Wednesday, 19 December, 2012  
Blogger Matt M said...

The "blue social model" -- high taxes, much regulation, strong unions and a fairly high level of government services -- is in deep trouble everywhere. The red model -- low taxes, low spending, more business-friendly policies -- is still thriving.


Wednesday, 19 December, 2012  
Blogger Ugh said...

This makes me sad. I love California for it's climate and beauty. The Golden State has turned to lead and it will surely weigh all of us down. Clearly Mr. Obama has the California model in his designs (READ points 1 - 10 again) for the nation as a whole.

Thursday, 27 December, 2012  

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