Capitol denial

by Katy Grimes | May 12, 2010 8:33 am

With Greece in total upheaval, it’s not difficult to imagine California in such a place. We are after all, not far behind in our policy and politics, and state legislators seem to be in a serious state of denial about their denial.

While economic experts predict that Portugal, Spain, Italy and Germany are all teetering precariously as well, the self-delusion exhibited by California’s lawmakers overlaps with their denial of responsibility, awareness and even the impact of their actions and in-actions.

Economic disaster is staring us straight in the eyes, but California legislators appear unable to look objectively at the repercussions of their own policies for running the government. Since we know that as California goes, so goes the rest of the nation, the denial is that California’s pending economic disaster will have a huge impact on the rest of the country.

Operating government using business principles is not out of touch as Democrats routinely claim. Since lifetime government types don’t run private businesses, and there isn’t a thriving business in the world adhering to what clearly is a socialistic model, one can easily deduce that’s because it doesn’t work – in business or the operation of government.

The bottom line for any government is to know that it needs a certain percentage of private business in order to pay for the cost government — what that percentage might be differs from economist to economist. But state government is killing the goose that lays the golden egg in California while simultaneously ignoring basic business workplace issues such as overtime, the cost of labor and material costs.

If the cost of labor jumps too much, working capital and profit is eaten up.

It’s not rocket science – California’s labor costs are too high. There are too many people standing around who can’t tell you what they do. A surplus in the private sector labor market is called “unemployment.” A surplus in government labor is not called unemployment because the state does not cut the excess. Because governments are unable to engineer prosperity or a greater demand for services, we are headed for higher unemployment and potentially another Depression.

And, California’s costs and expenses have more than doubled since 1998.

During an economic crisis, liberals like to blame the concepts of “overproduction and under-consumption” as the culprits. Hardly the correct analysis, this is why liberal economists should never be used. Economist Thomas Sowell explains what every business owner already knows: “supply creates demand.” This means that “overproduction” in a free economy is actually impossible.

The same applies to government – supply creates demand. But instead, the tail wags the dog in government. No longer focused on providing the services needed by citizens, government has become a benefits-driven workplace with no accountability to the client. And as the client, citizens are forced to pay the inflated bill.

California has been stuck in a wage and price game. Union workers demand higher wages. Then the cost of government services increase. Then workers demand even higher wages. While businesses can’t always pass along the increases, the government can and does.

The land of opportunity has turned into the land that time forgot – our once rich agricultural land has been cut off from water, our schools more closely resemble prisons, politicians have entered our homes telling us what foods we can eat, how much water, electricity and gas we can use, what colors we can paint our homes, when our children have to go to school, what kinds of sporting equipment our kids can use, and even what kinds of bags we can carry our groceries in.

California’s elected officials are faced with facts that are apparently too uncomfortable to accept. Some politicians even insist that the state’s overall dismal condition is not true, despite the overwhelming evidence. The collective state of denial is leading California right over the cliff.

Lying, blaming, minimizing and justifying, are all traits of denial and behaviors we witness everyday under the dome. Denial may not be the longest river in the world, but it is the 800-pound gorilla in the Capitol.

–Katy Grimes

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