Another Bad Day for California Haters

Apparently the U.S. Bureau of Labor Statistics hasn’t gotten the word that California is a terrible, no good, rotten place doomed to sink into economic decrepitude. It has reported again that California led the nation in job growth last month and over the last year. As economist Stephen Levy notes, California accounted for half of all the jobs added in the country in May and June.

Let’s be clear. None of this means the economy is fully recovered. An unemployment rate of 10.7 percent statewide is reason to cheer only because the rate was so much higher two years ago. California, like the rest of the nation and the world, still suffers from the fallout from the collapse of the housing bubble, the resulting recession and budget crisis, and huge losses of jobs in construction, government, and education. California, like everyone else, is being held back by the political paralysis of decision makers in the Federal Reserve and Congress. There’s lot of work to do.

But what the numbers do show is that the California haters are full of hooey, and always have been.

As always, the numbers show that there is no such thing as a “California economy.” What people call the California economy is an umbrella term for a collection of regional economies, each with its own mix of industries.

Under the California umbrella fall both the San Joaquin Valley, with its deep poverty and low-wage businesses, and Silicon Valley, with booming companies like Apple and Facebook. The differences in economic performance between regions in California are far larger than the differences between California and the nation as a whole. The jobless rates in the San Joaquin Valley regions are the highest in the nation; the rates in San Francisco, San Jose, and the central coast are now lower than in New York City, Miami, Atlanta, and Chicago, and are falling faster.

If there is something uniquely debilitating about California, as the California haters keep telling us, apparently it’s not strong enough to keep the state’s most vibrant regions from outperforming some of the world’s best cities.

Bad News for California Haters

The U.S. Bureau of Labor Statistics reports that California led the nation in job growth in May, creating 33,900 jobs. Over the last year, California added 221,500 jobs, continuing the recovery that began in earnest last year, when the state’s real growth outpaced the country’s as a whole. California’s performance is even more notable because it has been achieved against major headwinds, particularly the continuing depression in housing construction (housing starts are projected this year to be only about a quarter of the housing bubble peak) and the shrinking of government employment due to budget cuts.

This is, of course, very bad news. A whole industry has grown up around the meme that California is an economic cesspool, bound to fester in the sun for the rest of eternity because of — take your pick — hostility to business, environmental extremism, rampant spending, “imperial” public employee unions, exorbitant taxes, illegal immigrants.

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Sports Extortion (Cont'd)

The Sacramento Bee asked me for my take on the question of whether Sacramento ought to spend $200 million to subsidize a new arena for the Sacramento Kings and the National Basketball Association. You can read my answer on the Bee’s site.

The Bee gave me only 800 words, so I wasn’t able to flesh out the argument as well as I would have liked. Fortunately, we have the web for that.

If you want to understand the economics better, you can check out the longer reporting piece I wrote for the Bee when I worked there. The most accessible book on the subject is Neil deMause and Joanna Cagan’s splendid Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit. Neil deMause also runs a companion web site, Field of Schemes, where he tracks and analyzes the money grabs of welfare-seeking sports owners around the country.

Given more space, I would have also repeated what I wrote here last spring: The best way to limit the extortion game is for the California Legislature to prevent the billionaire sports owners and their leagues from playing city against city. It should ban any local jurisdictions from using public funds to subsidize professional sports teams.

California is at a critical moment on this issue.

The extortionists are on the attack right now all over the state: Sacramento, San Diego, Santa Clara, Anaheim, Los Angeles. But as we all know, from the news and daily life, core California public services reducing the state’s quality of life. Every public dollar extorted today steals from California’s future.

Ideally, local politicians would do the right thing. But there’s something about sports that makes them go weak in the knees and soft in the head. (My wife blames it on testosterone poisoning.) They need to be saved from themselves with a law that protects them against their worst instincts.

That law would set budget priorities right at a time when we need to be putting first things first. But it would also send a bracing message to the rest of the country. If California cities, home to one in eight Americans, can no longer be used as leverage in the extortion game, other states will gain some protection, and perhaps even be encouraged to protect their taxpayers as well as California does.

Contrary to the moans of the extortionists, that wouldn’t mean the end of pro sports. As Scott Lewis points out, at Voice of San Diego, we would then be on track to replace sports socialism with true sports capitalism. And who can disagree with that?