Jerry Brown vs. Chris Christie

More states are realizing that the road to fiscal hell is paved with progressive intentions.

In his January 2011 inaugural address, California Gov. Jerry Brown declared it a "time to honestly assess our financial condition and make the tough choices." Plainly the choices weren't tough enough: Mr. Brown has just announced that he faces a state budget deficit of $16 billion—nearly twice the $9.2 billion he predicted in January. In Sacramento Monday, he coupled a new round of spending cuts with a call for some hefty new tax hikes.

In his own inaugural address back in January 2010, New Jersey Gov. Chris Christie also spoke of making tough choices for the people of his state. For his first full budget, Mr. Christie faced a deficit of $10.7 billion—one-third of projected revenues. Not only did Mr. Christie close that deficit without raising taxes, he is now plumping for a 10% across-the-board tax cut.

It's not just looks that make Mr. Brown Laurel to Mr. Christie's Hardy. It's also their political choices.

When the Obama administration's Transportation Department called on California to cough up billions for a high-speed bullet train or lose federal dollars, Mr. Brown went along. In sharp contrast, when the feds delivered a similar ultimatum to Mr. Christie over a proposed commuter rail tunnel between New York and New Jersey, he nixed the project, saying his state just couldn't afford it.

On the "millionaire's" tax, Mr. Brown says that California desperately needs to approve one if the state is to recover. The one on California's November ballot kicks in at income of $250,000 and would raise the top rate to 13.3% from 10.3% on incomes above $1 million. Again in sharp contrast, when New Jersey Democrats attempted to embarrass Mr. Christie by sending a millionaire's tax to his desk, he called their bluff and promptly vetoed it.

On public-employee unions, Mr. Brown can talk a good game—at Monday's press conference, he announced a 5% pay cut for state workers, and he has proposed pension reform. Yet for all his pull with unions (the last time he was governor, he gave California's public-sector unions collective-bargaining rights), Gov. Brown, a Democrat, has not been able to accomplish what Republican Gov. Christie has: persuade a Democratic legislature to require government workers to kick in more for their health care and pensions.

Now, no one will confuse New Jersey with free-market Hong Kong. Still, because the challenges facing the Golden and Garden States are so similar, the different paths taken by their respective governors are all the more striking. And these two men are by no means alone.

Our states today are conducting a profound and contentious rethink about the right level of taxes, spending and government. Most obvious is the battle for Wisconsin. There Republican Gov. Scott Walker finds himself pitted against public-sector unions that successfully forced a recall election for June 5 after the legislature adopted the governor's package of labor reforms last spring.

Amid the turmoil—Democratic legislators fled the state to prevent a vote, while union-backed protesters occupied the Capitol—Mr. Walker looked weakened. Now he has taken the lead in polls. More than that, voters have taken the lesson: A recent Marquette University Law School poll showed only 12% of Wisconsin voters listing "restoring collective bargaining rights for public employees" as their priority.

Indeed, the American Midwest today is home to some of the biggest experiments in government. Republicans now hold both the governorships and the legislatures in Michigan, Indiana and Ohio, and in Wisconsin they control all but the Senate. In each they are pushing for smaller, more accountable government. The outlier is Illinois, where Democratic Gov. Pat Quinn and his Democratic legislature pushed through a tax increase on their heavily indebted state.

Now ask yourself this. Can anyone look at Illinois and say to himself: I have seen the future and it works?

Indiana's Mitch Daniels, a Republican, is probably the only governor who can truly claim to have turned around a failing state. That may change if we get eight years of Mr. Christie in New Jersey. Louisiana's Bobby Jindal, also a Republican, may be another challenger for the title, having just succeeded in pushing through arguably the most far-reaching reform of any state public-school system in America.

Hard economic times bring their own lessons. Though few have been spared the ravages of the last recession and the sluggish recovery, those in states where taxes are light, government lives within its means, and the climate is friendly to investment have learned the value of the arrangement they have. They are not likely to give it up.

Meanwhile, leaders in some struggling states have taken notice. They know the road to fiscal hell is paved with progressive intentions. The question regarding the sensible ones is whether they have the will and wherewithal to impose the reforms they know their states need on the interest groups whose political and economic clout is so closely tied with the public purse.

Mr. Brown's remarks Monday suggest the answer to this question is no.

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Striking, grappling, Sumo, or mixed rules?

 

The writing is on the wall. California is going to become a failed state. It might not resemble Somalia yet but there are going to be many similarities before it is all over.

As some of you might have predicted, the transition from aerospace and technology to service-sector economy hasn't produced adequate tax receipts for the state to continue to operate like there is no tommorow.

Governor Moonbeam thinks he can use Obama's class warfare schtick to get the masses to vote for the rich to be taxed massively to pay for services and for the highspeed rail debacle.

Californians already pay grotesquely high taxes and mass migration away from the state has been underway for some time. Anyone educated and productive has realized that its time to find another place to live. The state is occupied by non-producers to a greater and greater degree and they're running out of other peoples money.

Eventually we'll see international goods being seized at California ports and other acts of piracy. America is going to have its very own Somalia on the west coast. The Port of Seattle is going to become very very prosperous. At some point even interstate trucking will avoid California altogether. California is already talking about taking control of all business payrolls to insure that they get their cut before they issue checks to workers for their "net pay".

California will default on its debt within the next 12 months. The End.