Krugman Credits Cali's Comeback to Fighting 'Fanatical' Conservatives on Tax Hikes

New York Times columnist Paul Krugman was giddy over a triumph of the liberal vision in the supposedly resurgent California economy in Monday's "Lessons From A Comeback." The state has overcome a "fanatical conservative minority" to push through "desperately needed tax increases." But is California really back?

....California has been solidly Democratic since the late 1990s. And ever since the political balance shifted, conservatives have declared the state doomed. Their specifics keep changing, but the moral is always the same: liberal do-gooders are bringing California to its knees.

A dozen years ago, the state was supposedly doomed by all its environmentalists. You see, the eco-freaks were blocking power plants, and the result was crippling blackouts and soaring power prices. “The country’s showcase state,” gloated The Wall Street Journal, “has come to look like a hapless banana republic.”

But a funny thing happened on the road to collapse: it turned out that the main culprit in the electricity crisis was deregulation, which opened the door for ruthless market manipulation. When the market manipulation went away, so did the blackouts.

Undeterred, a few years later conservatives found another line of attack. This time they said that liberal big spending and overpaid public employees were bringing on collapse.


Again, however, reports of the state’s demise proved premature. Unemployment in California remains high, but it’s coming down -- and there’s a projected budget surplus, in part because the implosion of the state’s Republican Party finally gave Democrats a big enough political advantage to push through some desperately needed tax increases. Far from presiding over a Greek-style crisis, Gov. Jerry Brown is proclaiming a comeback.

After claiming that "a liberal majority has been effectively hamstrung by a fanatical conservative minority," Krugman concluded:

So is California still the place where the future happens first? Stay tuned.

Conn Carroll of the Washington Examiner splashed some cold water on Krugman's California dreaming, unearthing "9 facts Paul Krugman left out of his California Comeback column," including the fact that California has the nation’s highest unemployment rate, the nation’s highest poverty rate, the highest taxes, and that past tax revenue projections have been over-optimistic, lending a dubious sheen to the state's projected budget surplus.