The power of faith is always impressive, and few demonstrate more faith than those who truly believe that California’s economy will always recover boundless economic prosperity regardless of policy. The true believers’ faith persists in spite of years of contrary evidence. California’s share of national jobs peaked in 1990. Domestic migration has been negative for over a decade. International migration to California has slowed. California is receiving a smaller share of international migrants to the United States.
Recent data have again disappointed California’s true believers. Job growth has fallen, almost to a seasonally adjusted zero, while California’s unemployment rate has again climbed to 12 percent. Indeed, California’s unemployment rate exceeds even Michigan’s, by a margin of over one percent. Only the hapless Nevada–a state with no real economic engine, a state that built the Baby Boomers’ retirement homes, only to find that Baby Boomers can’t afford to retire–has a higher unemployment rate than California.
A realistic assessment of California’s short-term economic prospects must be dismal. Even with all its natural advantages, California’s economy will recover only very slowly, in fits and starts, hogtied as it is by DURT (Delay, Uncertainty, Regulation, and Taxes).
At this point, California desperately needs a complete review of all of its policies. Every policy, law, and regulation should be examined for its impact on business, jobs, and opportunity for citizens. Failure to do so, will only lead to California’s continued economic decline relative to most other states.