California and western Europe: Resting on their laurels

In his excellent column, Dan Weintraub asks this important question:

Do the voters of California want the kind of fundamental change in their government that Schwarzenegger is seeking to enact? They clearly wanted change two years ago, when they took the extraordinary step of tossing out a governor midterm and replacing him with a Hollywood movie star and businessman who had no prior experience in government. And they seem to still yearn for change today, if polls showing widespread dissatisfaction with the status quo are accurate. But just what kind of change they want remains a mystery.

In this way California reminds me of western Europe. The electorates in Europe are clearly disaffected by the lack of progress made by the establishment politicians currently in power. But whenever they are faced with the prospect of real reform, they balk. Witness the success of the no campaigns against the EU Constitution in France and the Netherlands (which was largely based on fear of liberalization and globalization) and the surprisingly poor performance of the pro-reform coalition under Angela Merkel in the last German parliamentary elections. In both California and western Europe, the people recognize the need for change, but are too wedded to their belief in the "social model" to actually stomach reform. As pleasant and mild the climate is in both places, they are both hemorrhaging business to their pro-business neighbors in Nevada and eastern Europe. The tax burden in California and the mass unemployment in western Europe may be bearable enough now for both places to trudge along on the strength of their attractiveness and past industrial dynamism. But even the most prosperous economies in the most beautiful locales cannot rest on their laurels forever. And sooner or later, the tough choices will have to be made. If we make them now, by the time many of us reach retirement, our economies might provide us with quite comfortable lives. If we don't, you can find me blogging my golden years away in Nevada, or perhaps Estonia.