Tuesday, December 22, 2020

California - The First State To Go Bankrupt? Has Its Financial Death Spiral Begun? Part 2

We have often spoken about how California politicians have destroyed what was once the most desirable state to live in. As a result of their incompetence, the state is now plagued with high taxes, high crime rates, high utility costs, high crime rates, high homeless rates, low performing public schools, continual forest fires, high unfunded financial liabilities, etc. As a result, for the first time ever, residents and businesses are leaving the state for better quality of life and economic freedom.

The latest discussion on the failure of California politicians can be found at:


That post got a lot of interest so let’s continue that discussion today and dive deeper into what is going on in the state because of a failed political class:

1) An article on the US First Reporting website reported that the large out migration of residents could actually reduce the number of state representatives in the House of Representatives by one seat, an unprecedented occurrence for a state that has always been in a growth mode:
  • Hans Johnson is a demographer with the Public Policy Institute of California: “This is a real sea change in California, which used to be this state of pretty robust population growth. It hasn’t been for some time now. But it’s now gotten to the point where the state is essentially not growing population-wise at all.”
  • The state has lost population three years in a row which has never happened before.
  • Last year it had its third highest loss of residents ever.
  • Consider the opinion of San Francisco real estate broker Scott Fuller: “I never wanted to leave California. It’s the most beautiful state with the best climate. I think the tipping point was continued tax increases and even more proposed tax increases. … I have absolutely no regrets.”
  • Besides the ongoing issues listed above, e.g. high taxes, high crime, etc., the overlay of the pandemic and the state’s political class, e.g. Gavin Newsom, imposing draconian lockdown measures and penalties have also driven residents and companies out of the state.
  • Frustration has gotten so bad about the pandemic restrictions that those residents staying behind have mounted a recall petition drive for the governor.
Thus, as the quality of life suffers, residents leave and take with them their jobs, their tax revenue and apparently maybe a seat in Congress.

2) Consider some observations from the Three Percent Nation website:
  • The homeless problem has gotten so bad in California that phone apps now exist that show where the homeless folks in California are publicly going to the bathroom in order to help app users to stay away from those areas.
  • We have previously shown how this aspect of the horrible California homeless problem has caused both environmental damage and has led to the revival of ancient diseases, e.g. typhus.
  • Public defecation and urination has resulted in toxic runoffs into streams and the Pacific Ocean leading to water and fecal pollution.
  • The EPA sent the California governor a letter alleging that “the state’s lack of urgency on homelessness threatens public health by polluting nearby water with untreated human waste. It then issued a notice to San Francisco accusing it of violating the federal Clean Water Act.”
  • Some waterways have shown e coli contamination which can cause disease in humans.
So, in addition to high taxes, high crime, high homlessness, etc. we can now add water pollution and health crises to the problems that California politicians have caused.

3) Elon Musk of Tesla and Space X fame has not only moved his residence from California to Texas but also decided not to manufacture his electric trucks in California but in Texas. He laid out his reasons for moving in a recent interview:
  • “We are a bit worried about not being able to resume production in the Bay Area, and that should be identified as a serious risk,” said Musk. “The expansion of shelter-in-place, or as we call it, forcibly imprisoning people in their homes, against all their constitutional rights, is, in my opinion, breaking people’s freedoms in ways that are horrible and wrong, and not why people came to America and built this country. What the f***!”
  • “If somebody wants to stay in the house that’s great. They should be allowed to stay in the house and they should not be compelled to leave. But to say that they cannot leave their house and they will be arrested if they do… this is fascist. This is not democratic. This is not freedom. Give people back their godd*mn freedom … Everything people have worked for all their lives is being destroyed in real time. I think the people are going to be very angry about this and are very angry.”
I am sure he is not alone when it comes to Californians leaving the state to find more freedom after what California politicians have done to their freedom, politically, personally and economically.

4) While California politicians have failed the state residents on broad major issues and topics, taxes, education, housing, etc., they have also failed on smaller, project-oriented efforts. Nowhere is that more obvious than with the their failed bullet train plans that was supposed to make traveling from northern California to southern California fast, efficient, and environmentally friendly:
  • The bullet rain concept never really got off the ground and is now really a dead issue/project.
  • Minimal infrastructure for the train was built and just the consulting fees alone far exceeded the budget for those fees, wasting millions of taxpayer dollars in the process.
  • The waste, and possible corruption, is so bad that employees of a consulting firm who worked on the project have been told to shut up or risk losing their jobs.
  • This gag order has raised suspicions that the state government politicians and bureaucrats created a project that was over budget and had safety hazards built into the design.
  • One of the employees is Mark Styles: “I was told to shut up and not say anything. I was told that I didn’t understand the political arena the project was in. I told them I am not going to shut up. This is my job.”
  • Another former employee, Todd Bilstein, stated that he was told to not provide bad news: “If I was to give a talk at a construction conference, I would say they were not following generally accepted project management principles.
  • President Trump summed up the failure in a tweet: “California has been forced to cancel the massive bullet train project after having spent and wasted many billions of dollars. They owe the Federal Government three and a half-billion dollars. We want that money back now. Whole project is a ‘green’ disaster!” They have wasted taxpayer money. In essence, they owe the taxpayer billions of dollars.”
  • The project started 10 years ago and was supposed to be finished and operational by 2022, which is not going to happen.
Usually, when government goes after whistleblowers there is some kind of nefarious and/or criminal behaviors under the surface that insiders do not want to see come to the surface. But just another failure of state politicians, who can screw up on a grand scale or a much smaller scale.

5) The following video clip is interesting in that it lays out the reality that for decades, the state of California has been run by and influenced by four powerful families: The Gettys, The Newsoms, The Pelosis, and the Browns. These families have members that have been California mayors, governors, and members of Congress. 

Given such an incestuous and long term set of relationships, relationships that have been very profitable for all parties involved, it should not be a big surprise that the state is in such bad condition. Eventually, power becomes absolute power and that corrupts absolutely and self enrichment becomes more important rather than the quality of life of the voters:


6) As we just asserted, long time political power often results in financial gain for those in power. Consider the case of a member of one of the four families mentioned above, California governor Gavin Newsom, as reported by the Daily Wire website:
  • According to a San Francisco television station, several companies, partially owned by California governor, Gavin Newsom, in total received almost three millions in COVID stimulus relief from the Federal Government.
  • Keep in mind that Newsom and his family tree are rich beyond just about every American’s imagination.
  • KGO News, “discovered discrepancies” that “appear to raise questions” about how much relief went to businesses under the umbrella of the PlumpJack Group, a hospitality management company founded by Newsom in 1992. Its properties include wineries, bars, restaurants, and a boutique hotel.”
  • While Newsom placed his financial interests in a blind trust when he became governor, his sister is still the president of the company.
  • One of the companies got $1 million in taxpayer money under the covid stimulus program under an arrangement to save jobs which simple math would show that the number of employees involved divided into the $1 million would come out to $160,000 per employee, far more than any of them were earning pre-covid.
  • This was far more (7X) than the average company in California received for the same number of employees.
  • Keep in mind that Nancy Pelosi was instrumental in writing that covid stimulus package and that she is Gavin Newsom’s aunt.
The rich get richer and the really small American businesses that really needed the money got shut out.

That will do it for today, more insanity from the most insane state: Out migration continues to happen, the “four families” that rule California (sounds like a Mafia movie idea), the California rich get richer, the failed high speed train boondoggle failure and a possible coverup of the failure, homelessness causes serious pollution in the state, and Elon Musk checks in on why he left the state.

While we think that California is a prime state to attain the title, “First American State To Go Bankrupt,” in the next few posts we will cover other states that may beat California to the steps of bankruptcy court.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:



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