Is California's Economic Condition Being Ignored?

By
Services for Real Estate Pros with Law Offices of Louis J. Esbin
Listening to the broadcasters on some of the Business Networks, from Squawk Box (U.S. and Europe) to Fox Business, it is clear that the economic crisis facing California and its residents is either completely misunderstood or being ignored. Statistically, if California were a separate country (which many throughout the US believe is so) it would be one of the largest economies in the world. It cannot be lost on the national economy that more than 10% of the nation's population live in California and therefore, so it has not less than 10% of the housing market. The largest number and percentage of cars sold in the world in any one region are sold in California. And, where do so many car companies have design centers, but in and around Los Angeles. The ports of Los Angeles, Long Beach, San Diego, Ventura and Oakland are some of the busiest ports of entry from Asia. California remains the bread basket of the country. Having just spent a week in both Calgary, Alberta, Canada and Minneapolis, MN, I was not surprised to find the food markets having several rows of food products with California labels; especially fruit and vegetables. Make no mistake, but that the purported budget resolution is a joke, filled with smoke and mirrors. At the same time as the state is taking a greater percentage of the real property tax dollar from the counties, county tax assessors are reducing the valuations of real properties (many purchased within the last 5 years), thereby further reducing real property tax revenue. And, many of these properties are both assessed lower and appraised lower than the amount owing on the first deeds of trust! What happens to the credit markets when California cities and counties begin filing bankruptcy (as Orange County had done)? Our politicians and economists must take their heads out of where the sun doesn't shine and address California's insolvency; otherwise, we will have our own Iceland on our hands, with a far worse national and global implication. The California system of budget by proposition must be thrown out, replaced with an affordability indexed budget based upon actual revenues limiting spending. As the consumer is learning - if it is not in your pocket, you cannot spend it! Just my two cents!

Comments (2)

Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

I'm not sure of a lot of what you wrote.  The one long paragraph format is just too hard to read. 

What I did pick up is that, since California is so large, the rest of the country should make a significant contribution to it's well being.  I could be wrong about what I read.  However, if this is in your message, I suggest that Californians look to themselves for fixes and not to the rest of the country. 

Californians made their bed and now they're stuck with trying to remake it.  We can help by buying your fruits and vegetables, but we can't subsidize your energy needs when you decide to forego your own resources. 

California is a treasure.  There's really no other place in the country like it.  However, from my perspective in the east, it has been led to financial ruin by sacrificing sound financial management of resources for social engineering. 

If California doesn't want to develop it's off shore oil resources, fine.  But, don't expect the rest of the country to subsidize your energy needs. 

I love California as do most Americans but we've seen it used by social engineers to the detriment of Californians and the rest of the country's citizens.

 

 

Jul 22, 2009 09:34 PM
Louis Esbin
Law Offices of Louis J. Esbin - Santa Clarita, CA

Lenn,

Sorry for the pagination.

The point is that, yes, California created its problems, but the rest of the country cannot ignore what impact its financial crisis may have on the rest of the country.  Certainly, I would not suggest, as I have not suggested with regards to CIT Group, the banks, AIG, or the car companies, that the government should intervene.  When the profit is not socialized, as it was not, so too, the losses should not be socialized!  The California proposition process is at the root of the problem, along with the "social engineering," as well as is the greater increase in its population that takes without paying taxes.  As far as the resources, not far from my office you can walk into the hills and come out with oil on your shoes, yet much of those resources remain off limits.  Not only would California benefit from tapping those resources, but so would the rest of the country!

One thing, though, remember that "We the People" make up the "United States," not the "united States," as it was known by prior to the Civil War.

Lou Esbin

Jul 23, 2009 06:21 PM