Wednesday, November 3, 2010

The Great Californian experiment

Californians firmly rejected the Tea Party and its philosophies of free markets and austerity.  In electing Jerry Brown, they chose the one Governor who did the most to take a fast growing state in surplus to the structural bankruptcy they are in today.

There is a certain irony in asking the man most responsible for getting them into their current mess to fix it.  But certainly it is rarely the case that strategy works.

And so we have an interesting real life lab experiment setting up in California.  How does a progressive legislature that repudiates all free market principles save a state from bankruptcy?  California will tell us.

The federal government is not a good example.  Because the Fed can print money, the federal government can remain in denial, buttressed by a Keynesian religion unconfused by reality.

But in California we have a whole nation sized state that must now squarely face reality, without the benefit of market philosophy to help them.  What will they do?

We shall find out.  Painfully.

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