Federal Californication

One of the main reasons that the US is a federation, that Australia is a federation and that Europe will never be a federation is that a federalist model is the only governing model that can accommodate diversity.

There is a perverse irony in that the political parties that claim to be so pro-diversity want a governing model that homogenises.

Federalist governing systems work on the very basic principle that local problems need local solutions.  Because, god forbid, the health and education issues in far north Queensland might be different to inner city Sydney might be different to regional Victoria.  And the costs and issues of running a business Hobart might be different to those in Melbourne.

The perpetual nationalisation of policy in Australia into the hands of a bureau-techno-cratic elite based in Canberra leads to not only bad policy badly implemented but turns State Governments into glorified local councils barely able to manage rubbish collection and libraries.  Reference Lord Mayor Dan.

One of the other costs of centralisation and nationalisation is that bad polices can’t be exposed through competition.  Reference industrial relations.  This also creates HUGE moral hazards in that the price of bad policy is not paid by those responsible for the bad policy (or those who elected those responsible for the bad policy).  Reference Victoria, Queensland, Tasmania.

America, however, retains some modicum of functioning federalism.  For all the BS about the electoral college and the 2 senators per state, it is these federalist brakes that prevent the Californication of the USA.

Put aside the outdoor toilet that San Francisco has become.  Consider this:

Rampant shoplifting leads to another Walgreens closing in S.F.

this is the third such closing in 12 months.

After months of seeing its shelves repeatedly cleaned out by brazen shoplifters, the Walgreens at Van Ness and Eddy in San Francisco is getting ready to close.

California has the highest level of homelessness in the US.  Why?  Because the Californian Government has among the highest taxes in the US and uses those taxes to welcome the homeless from all across America.

Now accelerated by Corona2020, the wealthy Californian tax payers are leaving to lower tax destinations.  While Victorians can leave Victoria, they aren’t able to go to lower tax destinations.  Fairness you know.

But it’s not just about tax:

Under California law, theft of less than $950 in goods is treated as a nonviolent misdemeanor. The maximum sentence for petty theft is six months in county jail. But most of the time the suspect is released with conditions attached.

The staff at this Walgreens:

 say there is nothing they can do. They say Walgreens’ policy is to not get involved. They don’t want anyone getting injured or getting sued, so the guys just keep coming in and taking whatever they want.”

Getting sued.

This is how federalism is mean to work.   Bad governments get exposed through competition and not underwritten by citizens in other states.

Would it were only so possible in the land of Oz.

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13 Responses to Federal Californication

  1. Roger

    This is how federalism is mean to work. Bad governments get exposed through competition and not underwritten by citizens in other states.

    Our federation has evolved precisely so that doesn’t happen.

    A major reform would be to return income tax powers to the states, which had them until 1942when the war emergency saw the Commonwealth’s taxing powers extended at the states’ expense.

    But do you hear any state or federal politicians talking about this?

    It seems they’d rather live with the regular bun fights over funding caused by the vertical fiscal imbalance.

  2. stackja

    ALP like it. Gough liked his bureaucrats tame.

  3. Ben

    Just look at the electricity policy, to see The Transition in action. I don’t mean a transition from coal to solar (although that’s being forced in), I mean a transition from state accountability to central planning…

  4. John Bayley

    ..the wealthy Californian tax payers are leaving to lower tax destinations.

    And taking their – socialist – voting habits with them.
    Like the Victorians moving to Queensland.

  5. RobK

    One of the other costs of centralisation and nationalisation is that bad polices can’t be exposed through competition.
    I retain some small degree of utopian hope from my youth that technology can and will facilitate smaller jurisdictions with a higher degree of autonomy for exactly that reason.
    It’s a long shot.

  6. 2dogs

    Bad governments get exposed through competition and not underwritten by citizens in other states.

    For that to work, insolvent states must be wound up.

  7. H B Bear

    Federations only work if citizens can vote with their feet.

    Victorianstanis are under defacto house arrest and other juristions will charge you around six figures in Stamp Duty to buy/sell a median priced house. And COAG actively works at reducing any possible distinction between State laws. Horizontal fiscal equalisation means States do not bear the consequences of their policies and shift them across the country.

    No, the Federation is working just the way most politicians intend it.

  8. H B Bear

    I blame the Hawke Keating regime.

    Why? The High Court gave them a massive free kick with The Tasmanian Dams case. Tasmanian’s almost deserve their massive transfer payments given their loss of autonomy, not that they would seem keen to use it anyway.

    Of course, all Canberra Lieborals would vote against an attempt to centralise Commonwealth power.

  9. Squirrel

    “The perpetual nationalisation of policy in Australia into the hands of a bureau-techno-cratic elite based in Canberra leads to not only bad policy badly implemented but turns State Governments into glorified local councils barely able to manage rubbish collection and libraries. ”

    Yes – and that elite, and all the others who dwell within The Bubble, only ever elect Labor and Green politicians to represent them (aside from a token Liberal as second senator) – so often they are a contrarian indicator of the national mood.

  10. proeng

    Have not read it all but Switzerland is a Federation where the states (cantons) have real power and do the taxation. Further, each state has citizen initiated referenda as does the whole federation. The citizens have real power and can refuse budget items. The people there have refused a basic wage. Germany is also a Federation where states have taxing powers.

  11. cuckoo

    Saw a piece on the ABC evening bulletin last week. It was a gloating, lip-smacking item about Democrat voters who are moving to Texas, and how they might flip the state. The particular Dem they interviewed was female (of course), black (of course), but interestingly was working on her family’s ranch. While proclaiming her progressive credentials, she mentioned almost incidentally that her reason for moving from New York to Texas was “the economy”.

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