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Eureka!: How to Fix California Paperback – March 31, 2012

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Editorial Reviews

Review

 “California is in great need of fresh and creative thinking if we are to fix its economic and fiscal problems and recreate the sense of optimism and opportunity this state has always embodied. Eureka! Is chock full of interesting ideas and insights that should help start a badly needed conversation about how to put the gold back into the Golden State. It is a straightforward, timely, and valuable reading for anyone interested in the role of taxes and fiscal policy in one of the world's largest and most innovative economies.” — Charles Schwab, founder and chairman, Charles Schwab Corporation



 “Those who think of economics as 'the dismal science' will stand up and cheer after reading this book. Dr. Laffer is optimistic about California's future, and with good cause: if we follow his sound advice, the state's future will indeed be golden once again.” — Christopher C. Cox, former U.S. House leader (R-CA) and chairman, U.S. Securities and Exchange Commission



 “Dr. Arthur Laffer provides a clear-headed diagnosis of how California ruined its prosperity and writes a realistic prescription to recover its future. Eureka! How to Fix California offers a glimmer of hope for every Californian and a cautionary tale for every American.” — Tom McClintock, member of Congress (R-CA)



 “Art Laffer’s unprecedented analysis of California’s fiscal and economic policies show without a doubt that the most effective fix to the state’s problems is a low flat tax. Eureka! is a wake-up call to all Californians that we need another Prop. 13-style revolution if we are to turn around the state.” — Jon Coupal, president, Howard Jarvis Taxpayers Association



 “The Golden State has become the Golden Bust thanks to dysfunctional policies in Sacramento. Arthur Laffer provides a policy roadmap for how to fix what has gone terribly wrong in a state that was once America's richest, most dynamic and most desirable place to raise a family and grow a business. Every citizen and every politician who cares about California's future should read this book.” — Steve Moore, editorial writer, Wall Street Journal

About the Author

Distinguished as “The Father of Supply-Side Economics” for his economic acu­men and influence in triggering a worldwide tax-cutting movement in the 1980s, Arthur Laffer was a member of President Ronald Reagan’s Economic Policy Ad­visory Board during both of Reagan’s terms. Laffer served as a distinguished professor at the University of Southern California and at Pepperdine University, and was also a member of the board of directors at Pepperdine. Previously, he was a professor at the University of Chicago and a consultant to Treasury Secretary William Simon, Defense Secretary Donald Rumsfeld, and Treasury Secretary George Shultz, under whom he was named the first-ever Chief Economist at the Office of Management and Budget. He received his B.A. from Yale University and his M.B.A. and Ph.D. from Stanford University, all in economics.

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Product Details

  • Paperback: 300 pages
  • Publisher: Pacific Research Institute; 1 edition (March 31, 2012)
  • Language: English
  • ISBN-10: 1934276189
  • ISBN-13: 978-1934276181
  • Product Dimensions: 7.5 x 0.7 x 9.2 inches
  • Shipping Weight: 1.1 pounds (View shipping rates and policies)
  • Average Customer Review: 5.0 out of 5 stars  See all reviews (6 customer reviews)
  • Amazon Best Sellers Rank: #1,295,312 in Books (See Top 100 in Books)

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Eureka! How to Fix California offers a conservative economist's analysis of what caused California's economic problems, and how they can be solved. The author's methods are to compare states' gross domestic product and then to see how this relates to government policies.

Chapter 1 introduces incentive economics as the idea that governments set the incentives, positive or negative, for economic decisions by citizens. The three main variables are taxes, spending, and regulations. We can predict behavior based on these incentives.

Chapter 3 compares states with the lowest and highest tax rates, and finds that with no income tax, the growth rate is 54.3% higher. He points out that right to work states have higher personal income growth than the US average. Forced union states have lower personal income growth than the US average. There is a constant net migration of individuals from forced union states to right to work states. He also points out that a state that relies on a progressive income tax is going to have more volatile changes in its revenue during business cycles.

Chapter 4 studies the historical effect of adopting a state income tax, and shows that it slows relative growth.

Chapter 5 shows that because of net migration out of California, and because those moving out earn more than those moving in, California loses 44 billion dollars each year. Taking the additive effect of those who have previously left, he estimates that California gives up about $500 billion per year because of the cumulative effect of growth depressing policies over the past 2 decades. This is severalfold larger than the state budget of a little over 100 billion dollars per year.
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Finally, a realistic road map to fix California. Eureka! examines California's economic history: when we did things right (Prop. 13), where we went wrong (gutting the Gann spending limit), and what to do now to turn California around and put the state on a trajectory of economic growth and prosperity. A must read for all Californians and politicians of all stripes.
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This book is full of charts and numbers. It is also dense and not an easy read.

What's wonderful, agree with them or not, the authors dig through these numbers, analyze them and come up with constructive solutions. I live in California so the book is more relevant to me than perhaps it will be to others: perhaps. For there is the saying that "as goes California goes the nation" and we tend to lead in idiocy. But the book provides insights that cross all states and indeed countries. What does it take to be and remain competitive? What policies promote growth and which kill it? All here.
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