California will serve as the prime testing ground for President Obama’s form of post-economic liberalism. Every dream program that the Administration embraces — cap and trade, massive taxes on the rich, high-speed rail — is either in place or on the drawing boards. In Sacramento, blue staters don’t even have to worry about over-reach because the Republicans here have dried into a withered husk. They have about as much influence on what happens here as our family’s dog Roxy, and she’s much cuter.
California now stands as blue America’s end point, but contrary to the media celebration, it presents not such a pretty picture. Even amidst our decennial tech bubble, the state’s unemployment is among the highest in the country, and is trending down very slowly. Over the past decade, California has slowed as a source of fast-growth companies, as a recent Kauffman Foundation study shows, while other states such as Washington, Virginia, Texas and Utah have gained ground.
Old-style liberals might point out that California’s progressive policies have not done much for the working- or middle-class folks often trumpeted as its beneficiaries. Instead income inequality has grown far more than the national average. True, the fortunate sliver of dot-com geniuses make billions, but the ranks of the poor have swollen to the point that the state, with 12% of the nation’s population, account for one third of its welfare cases. Large parts of the state, notably in the interior regions, suffer unemployment in the 15% range and higher.
Increasingly the state bifurcates between a generally older, predominately white and Asian coast, and an interior increasingly populated by generally less affluent Hispanics and African-Americans. California now ranks near the bottom in science skills, and while its population over 65 is the fifth largest in the nation, the number of those under 35 is only 23rd. And the future looks even bleaker: California’s eighth graders rank a pathetic 47th in terms of science test scores.
So, California is breaking up not along a geologic fault line, but a demographic one. But what does that mean for the country?
There’s already widespread talk of bringing L.A.’s term-limited Mayor Antonio Villaraigosa to Washington for a big cabinet posting, perhaps as Transportation Secretary. All this rewards an empty suit who has presided over Los Angeles’ economic and demographic decline, leading that great city to the brink of bankruptcy, and a political system rife with cronyism.
But in Barack Obama’s America, failure can often pave the road to success. In this age, incompetence is no barrier to promotion, and failed states like California and Illinois are taken not as examples to avoid but as models to emulate.
How has California been able to afford its record of failure?
Who says it has? Stockton declared bankruptcy this summer; Vallejo did so back in 2008. Otherwise, California makes money the old-fashioned way: extortion.
In recent years, California’s business community has accommodated itself to the state’s ever higher taxes and regulations. They acquiesced meekly to the state’s climate change regulations, making the development of anything than largely undesired dense housing developments all but impossible. Industries that use energy — including oil refineries but also chip-makers and server farms — simply go elsewhere, either to another country or across the border to less relentlessly regulated states.
In the battle over the Proposition 30 tax hike, notes small business advocate Joel Fox, Governor Brown and his legislative allies prevented business leaders from opposing the tax hike. “It was a lot of support the Governor — or else,” he says.
In this sense California business has devolved into something analogous to Mexican enterprise under the old PRI regime. If you want to survive, you bow, curtsey and pay up — or else.
I would add Russian and Chinese capitalism to those which California’s resembles.
Well, it all works out until it doesn’t anymore: you don’t notice the dry rot until your house collapses. As the provider of 55 out of the necessary 270 Electoral College votes, California knows that Obama will show up with his tool belt and our checkbook when their House (and Senate) implodes.