David Friedman

Building a durable political consensus in favor of growth is crucial if California is to generate sufficient economic opportunities in the future. Anti-development fashion now holds sway among the state's most privileged, well-organized communities. That's why even Depression-level job losses in the Bay Area have been met with indifference, if not secret glee. Should these perspectives continue to gain traction in Sacramento, they will choke off the remarkable economic performance achieved by California's fast-growth regions.

But convincing key political interest groups… more

California's gubernatorial election has mistakenly focused on a purported statewide industrial meltdown that simply does not exist. No one disputes Sacramento's maddening financial irresponsibility. Yet, as large as the budget deficit may be, it remains a small fraction of the state's trillion-dollar economy.

The crucial issue is whether our political leaders can protect and enhance the gains made by California's fast-growing regions, collectively an economy as big and dynamic as Texas. And then they must explain how Los Angeles and the… more

Spurred by the recall, California's industrial demise is everywhere declared, but never seriously examined. The state's economy is said to be in a "nosedive." Everyone is leaving for someplace else. Pundits speculate that Sacramento politicians are trying to force a federal bailout by deliberately making things as bad as possible.

None of this is true. Despite a well-deserved reputation for tax and regulatory excess, most of California is far outperforming the U.S. economy. The state's real problem is that its two… more

News that major U.S. technology companies, among them IBM, plan to export thousands of high-skill jobs overseas indicates that worrisome trends in the U.S. economy will probably strengthen. Optimists contend that such "workforce flexibility" guarantees that something new -- the Internet, biotechnology -- will turn up to create similar high-paying jobs and carry the economy forward. But rather than triggering real economic development, moving white-collar jobs offshore underscores how reliant the U.S. economy has become on inflating high-end wealth and… more

For the second time in a decade, California's economy seems headed for calamity. The state's budget shortfall is approaching $40 billion, companies are shedding jobs, government employees face imminent layoffs and the costs of doing business continue to rise. In some business circles, California is rapidly reclaiming its early-'90s reputation as one of the worst places in the country to invest in and grow a business.

There is also bad news for the state's dominant liberal leaders. By refusing to slow… more

Newly revised economic data vividly illustrate the difficulty of the choices confronting California legislators as they try to close the state's $35-billion budget deficit. Not only has the current recession claimed many more jobs than previously estimated, but the state's private sector, the major source of tax revenue, is shrinking at an alarming rate.

Since March 2001, when the downturn began, California has lost a net 370,000 private-sector jobs. That's 75% of the loss in the early 1990s recession, regarded… more

Even before the collapse of the stock market and the recession of 2001 dispelled the illusion that we had escaped the business cycle, there were reasons to doubt that America was truly experiencing the miraculous rebirth that some people claimed it was. Although productivity, after years of stagnation, did increase during the boom years of the past decade, even at its late-1990s peak the economy did not produce jobs any faster or for a longer period than previous expansions had.… more

We do not lack for challenges in the coming year. Terrorism, the public financial meltdown and a still struggling economy command everyone's attention. Yet, one of the least discussed issues may prove to be among our biggest tests: Can America's unprecedented consumption windfall continue unabated?

The problem is hidden in headlines like, "Consumers Save the Weak Economy Yet Again!" They suggest that, despite the record contraction of U.S. production sectors, trillions of dollars wasted on sock puppets or cell phone… more

Over the last three years, California's economic reputation has fallen from one of the best in the nation to the worst. Repelled by what they consider anti-business policies and saddled with soaring costs, defense, film and small and medium-sized companies in every economic sector are moving or expanding elsewhere.

This isn't good news for Democrats, who control the Legislature and occupy every statewide office. Worse, even if the stock-market collapse and national slowdown caused part of the problem, California's economic slide… more

It was, by any measure, a bitter setback for Northern California. Blessed with seemingly insurmountable advantages, and so very close to a victory for the ages, everything suddenly, relentlessly, went sour.

The San Francisco Giants' ugly collapse against the gritty Anaheim Angels? To be sure. But the same story could be told about the formerly high-flying Bay Area more generally.

Both team and region have squandered opportunities most others only dream of having. Each profoundly failed to live up to expectations.… more