You wouldn't know it by paying attention to the goings-on in Sacramento these days, but California is mired in one of the worst economic crises we've experienced in several decades. Over the Labor Day weekend our friends at the California Budget Project charted the depths of that crisis in a new study, "In The Midst of the Great Recession: The State of Working California, 2009."

The CBP's study has already been getting media coverage for its stat that 2 of 5 working-age Californians are jobless. But the report gives a fuller picture of just how bad things are out there. Among the conclusions:

• California has about the same number of jobs in July 2009 that it did in January 2000 - in other words, the recession has wiped out a decade's worth of job growth. Add in the fact that we have 3.3 million more people of working age and you can see how severe the recession is.



• Job losses have been more severe - in both overall number and the rapid rate of decline - than in any previous recession (at least those with available data).



• Wages are declining across the board, but the top wage earners have seen increases, and the top 1% is taking a share of the overall wealth at a rate unseen since the Roaring '20s, which as we know ended so well.



• More and more people are beginning to exhaust their unemployment benefits, a situation likely to worsen as high unemployment lingers for several more years.

There are several important conclusions I take from this study. You're unlikely to ever see these in what's left of the major media in this state, and even Democrats in Sacramento don't seem to be touting these stats or conclusions as evidence of a need for change.

1. Arnold Schwarzenegger is a job killer. He and his allies at the Chamber of Commerce like to tout their opposition to so-called "job killer" bills that usually increase taxes or regulations on businesses. And yet after 6 years of these policies California is far worse off than we were at the depth of recession that ultimately cost Gray Davis his job. If Democrats ever wanted evidence that anti-tax, anti-regulation policies are an economic disaster, California in 2009 is it.



2. Sacramento has nothing - nothing whatsoever - to offer the jobless or to this state's future. As I often remark, the only words forbidden to be spoken within the halls of the state Capitol are "economic recovery." Both Republicans and Democrats have agreed that their #1 task isn't economic recovery but to eviscerate government when it is most desperately needed; they merely disagree on the particulars. Economic recovery should take precedence over nutty demands to cut spending, but in Sacramento, it's been the other way around.



3. Specifically, we have yet to see *any* plans from either party in the state legislature for producing meaningful, lasting economic recovery. California voters took matters into their own hands last November by voting for Proposition 1A, to create 160,000 short-term jobs and 450,000 long-term jobs by building a high speed rail system. But HSR, to name but one example of possible government job creation programs, has very few defenders in the Legislature, and plenty of opponents (including Democrats like Sen. Alan Lowenthal).



4. Lacking any plan for economic recovery or job creation, the factors identified in the CBP report are going to get much worse. Wages will continue to drop for everyone who isn't already wealthy, as persistent unemployment perpetuates a weak economy and fuels a deflationary cycle.

So what do we do about this?   Read More »