The WSJ Kicks California

Allsyia Finley provides Joel Kotkin plenty of space to give California greens a beat down.   The WSJ also offers a sequel as Arthur Laffer breaks out his napkin to provide another round of "Laffer Curve" advice for California with its proposed 13.3% state tax rate.   It is sunny, blue skies and 72 degrees today and I'm going to the beach.  I hope to see Kotkin and Laffer there.  

UPDATE:  A basic idea from economics is that when "supply is inelastic" that you can tax this input without it moving to another sector.  In English, if quality of life in California is unique, then wacky state policy will lead to less exodus than what would happen if Michigan pursued similar policies.   California's unique asset is its quality of life and given that celebrities gravitate here (because of the quality of life), there is a synergistic effect. Over the last week, I have spotted Michael Jackson's daughter Paris shopping at the same supermarket as me and last night I ate dinner 8 feet away from Denzel Washington.  He didn't recognize me so symmetry doesn't always hold in the model. He was wearing a UCLA sweatsuit --- so I appreciated his loyalty for my current team.   So, my point is that Kotkin and Laffer are correct about their debate points but wrong about their big points.  They need to read up on differentiated products and cases when locations are substitutes but not close substitutes.  Market power matters and Sacramento knows this.