Three Important Axioms

Greetings from the Left Coast, where we here at Left Coast Blues do the heavy thinking for those who just can't be bothered.

As you think about what you heard in last night's State of the Union Speech - or read about what you didn't hear if you're among those who had more important things to do than listen to another campaign speech - please keep three important things in mind. In fact, we would do well to remember these three things any time we're listening to a politician, and any time we're about to step into a voting booth. (Or sit down at the kitchen table to fill out that mail-in ballot if you're like us Washington voters who don't have voting booths anymore.)

1. The government cannot give anything to anybody without first taking it from somebody else.


2. When someone receives from the government something they did not work for, it means that somebody else worked for it without receiving it.


3. The government cannot create wealth. It can only redistribute it.

If you stop and think about these axioms, you will find that they logically lead to several other conclusions, one of which is: The government cannot create jobs - unless they're government jobs, which then increase the tax burden on the private sector, thus reducing wealth creation and the ability of the private sector to create jobs. The best that the government can do is to try to create an environment in which the private sector can flourish.

Who does create jobs? Well, it's well known that most jobs in this country are created by small businesses - a fact that's at least given lip service by the current administration. Who are the people who start small businesses? They are people who have managed to accumulate enough wealth that they're willing to take a financial risk in order to try to create more. It takes capital to start a small business. It takes more capital to run it for the first few years and (hopefully) nurse it into sustained profitability. That capital typically comes out of the savings of the person who started the business - who typically works extremely long hours for little or no pay in the hope that the business will pay off before the savings run out.

These are the "rich" people that the Democrats want to pile even more of the tax burden on. Problem is, when you take their wealth away, fewer businesses - thus fewer jobs - get created. Plus the incentive to work those long hours is reduced when you know that a bigger chunk of what you're working for is just going to be taken away from you anyway.

So keep those things in mind - particularly when you hear the wild claims about how many jobs were "created or saved" by the stimulus package, and the calls, which will become louder and more numerous as we approach the mid-term election, for a "jobs package" that will spend even more money that we don't have in an attempt to create jobs.

Print out the three axioms above. Tape them to your bathroom mirror. Read them out loud several times a day. If enough people really came to understand the truth in them, we would really start to see some change we could believe in.

Thanks for listening.

How Did We Come to This?

Greetings from the Left Coast, where we here at Left Coast Blues do the heavy thinking for those who just can’t be bothered.

Today we set our sights a little closer to home. We here in the great State of Washington are facing some pretty serious budget shortfalls. We’ve been hearing that budget cuts alone can’t address all of it – there will simply have to be some tax increases. In fact, Governor Christine Gregoire told us in December that she “can’t live” with the level of cuts that would be necessary to deal with a $2.6 billion budget deficit – “…That’s not my values, and I don’t believe it’s the values of the people of the State of Washington,” she told us.

She may be right – after all, the handwriting was already on the wall when the people of the State of Washington re-elected her in 2008. The Seattle Times (not exactly a bastion of conservative thought) reported in July, 2008, that state spending had increased by $8 Billion during her first term of office – a 31% increase in the two-year general-fund budget. At the time the article was written, the Senate Ways and Means Committee was already predicting a $2.7 Billion shortfall when the time came in January 2009 to write a new two-year budget…and at that time, the recession was just beginning to be felt here in Washington.

We managed to skate by for the last year with some creative accounting and Federal "stimulus" money, but we're now halfway through the budget period, and it's becoming clear that we're in serious trouble for 2010.

During the 2008 campaign, things were still going pretty well here in Washington... and Gov. Gregoire was quick to jump on the “blame Bush” bandwagon: if Washington State should happen to sink into recession, she told us, we should blame Bush, not her. ("Pay no attention to those Democrats behind the curtain!") Of course, according to the U.S. Constitution, Congress controls the purse strings of the federal government, and the Democrats have held majorities in both houses of Congress since 2006…but I digress.

Let’s take a closer look look at the math. The Times article cited above only dealt with the General Fund portion of the budget. If we look at all three components of the budget - the General Budget, the Capital Budget, and the Transportation Budget - you'll find that the budget grew from $52.2 Billion in the 2003 - 2005 biennium to $69.2 Billion in the 2007 - 2009 biennium. (The biennium runs from July 1 of an odd-numbered year through June 30 of the next odd numbered year, which is why the dates look a little funny.) That's a $17 Billion increase - almost 33%. Population growth from mid-2003 to mid-2007 was only about 6.5% (from a little over 6.1 million to about 6.5 million). That means that the state budget grew at almost five times the rate of population growth!

By the state’s own figures, since the beginning of the recession, nearly 13% of manufacturing jobs and nearly 27% of all construction jobs in the state have been eliminated. The seasonally-adjusted unemployment rate hit 9.3% in October – up a full 3 percentage points from the year before. Have a similar percentage of State government jobs been eliminated? Um…no. In November, 2008, The Seattle Times reported that there were roughly 66,000 state employees. That was down about 1,200 from early August, 2008, as a result of a hiring freeze, but much of that decrease was in seasonal jobs with parks or the Department of Natural Resources. The State’s 2009 State Workforce Report reported total employment at 65, 290 as of June 30, 2009. That’s a drop of only about 1%.

But that’s the pattern we’ve seen over and over again from Democrat-controlled governments: during good times, government spending increases way out of proportion to any other measure of population or economic growth – then when the bad times hit, gosh, we simply can’t reduce spending by that much! It would require cuts to vital services and too much hardship for people who have become dependent on that government spending. And I will guarantee you that any cuts that are proposed this year will be the most visible and painful that the legislature can find – because maximum visible pain means maximum odds that voters will accept tax increases instead of insisting on budget cuts.

If you want to see where that pattern ultimately leads, just look two states to the south. California’s plight was highlighted by The Guardian in the U.K. last October in an article entitled “Will California become America’s first failed state?” Unfortunately, The Guardian fails to answer its own question of “where did it all go wrong?” other than to highlight the effects of the crash of the housing market.

American Thinker does a better job of identifying the causes of California’s demise: “California is facing economic failure resulting from years of a liberal legislature pursuing a liberal version of utopia.” After years of tax-and-spend policies, the voters finally revolted and insisted on lower taxes. Unfortunately, that same liberal legislature refused to rein in spending, ultimately bringing the state to the crisis it faces today, with unemployment over 12%, its government bonds rated barely above “junk,” and so many people leaving the state that it could lose a Congressman when the 2010 census is tabulated.

Want to end up like California? Then let Gov. Gregoire and the rest of the Democrats in Olympia keep on running things, and I guarantee you that’s where we’ll end up. It’s past time for Washingtonians – and all Americans – to start holding our politicians accountable for their actions. That means insisting on fiscal responsibility from them, and voting out the people who don’t get the message. That also means paying sufficiently close attention to politics that you know who’s fiscally responsible and who isn’t.

Thanks for listening.