New fiscal year: CA Revenue down, jobless up

While the nation’s economy is creeping upward, California’s is creeping downward. The latest:

Gov. Jerry Brown’s Department of Finance reported:

“Sales and use tax receipts were $123 million below the month’s forecast of $1.710 billion. July represents the final payment for second quarter taxable sales, which was due July 31.”

And state unemployment rose to 8.7 percent in July, up from 8.5 percent in June. It’s still down from the 10.6 percent a year earlier. But it’s also still nearly double the 4.6 percent of 2006, before the Great Recession hit.

On the positive side:

“Last month, the U.S. reported a gain of 162,000 net jobs. That means California captured nearly one in four new positions created in July.”

Treading water

Basically, the state as a whole is treading water. Some ares, such as Silicon Valley and housing, are rising. Most other areas are holding steady.

But we’re just not getting traction for the sustained high growth needed to make up for what was lost during the recession. Such growth occurred nationally during the Reagan Recovery of the 1980s, and especially in California when Gov. George Deukmejian pursued generally conservative policies at the state level and Silicon Valley was going into orbit.

But under the Bush-Obama-Schwarzenegger-Brown policies of heavy government involvement and overspending, combined with faulty Federal Reserve policy — inflationism plus low interest rates — growth has been hobbled.

With the Fed now restricting monetary growth, which is necessary to prevent hyperinflation, there is no rescue on the horizon. Indeed, a new recession is possible.

Recessions hit about every 4-6 years. The last one struck in 2007, six years ago. So we’re due.

When the next recession does hit, it will slam an economy that only partly recovered from the previous recession, the Great Recession.

Which means the next recession could be really bad, especially for California. It’ll be like getting the flu just as you’re recovering from a cold.

Maybe someday we’ll go back to free markets: sound money, tax cuts, spending cuts, fewer regulations. Actually, we’ll have to do that pretty soon. With China, India, etc. breathing down our necks, we’ll have to switch back to capitalism just to keep us from being swamped by the competition.