WSJ:

With this history at their back, state leaders might have understood that people have a propensity to get up and move when a better life is to be had elsewhere. But no. After more than 150 years of being a destination, California is becoming a place entrepreneurs, investment capital and the hardy workers who made it a global leader in agriculture, technological innovation and scientific research are fleeing. This exodus is the marker of something deeper than a national recession. It’s a sign that the attempts by state leaders to spend their way back to prosperity are killing California.

While it has the sixth highest tax burden in the nation, according to the nonpartisan Tax Foundation, California is facing a breathtaking $40 billion budget deficit this year. This comes on the heels of a decade-long spending spree. Last year the state budget was $131 billion, up from $56 billion in 1998.

Citizens are burdened by all manner of state regulations. To mention just one example, this year a new law enacted by ballot initiative bans cages chicken farmers use on the grounds that it is inhuman to put birds in cages that prevent them from spreading their wings. Complying with the new law will cost farmers hundreds of millions of dollars, which will force many to leave the state. And that will force us to buy our eggs from other states and, possibly, others nations, such as Mexico.

My comment: High taxes, stupid government regulations, economically illiterate leaders, and a large dose of arrogance have led California to the point of being basically bankrupt. This is a perfect example of the free hand of economics in action. Capital will always travel to places where it is treated most kindly. If California wants to tax its residents at a higher rate then other states, if it wants to over regulate industry to the point of making them uncompetitive, if the politicians want to create a haven for illegals and provide them with free everything then the producers in the state will leave the parasites and mooches behind to deal with their $40 billion dollar deficit. Sit and spin. The problem is that the whole country is becoming like California and capital will start leaving the US for Asia . That’s when the capital controls come into play and if you are not out by then you don’t get out. Remember your government looks at you as a resource that it can consume for its own benefit.

John Polomny
The Real Deal