California is not Greece
/One of the most common, and most facile, journalistic takes on California’s governing crisis is to compare the state to Greece. This is simply wrong. As Harvard University economist Dani Rodrik explains on his blog, Greece stands in an entirely different, and more perilous, institutional relationship with Europe than California does with the United States.
But Rodrik leaves out something even more important in the comparison. For all its woes, California is nothing like Greece either fiscally or economically. Below, for example, is a chart comparing California’s general fund debt to that of Greece and of the United States. Greece’s debt burden is roughly fortyfold higher than California’s.
Not only is it much more heavily indebted, Greece doesn’t begin to stack up to the Golden State as an economy. Greece exports olive oil, cheese, wine, and tourist services. So does California. But beyond the menu for a nice picnic, California has Silicon Valley, Hollywood, biotechnology, business services, and wholesale trade. It lives at the cutting edge of the global future. Although the overall economy is weighed down by the collapse of housing construction and deep cuts in government employment, California’s private sector is growing faster than the United States as a whole.
California is not Greece. And anyone who writes otherwise is grinding a very dull ax.
