Karl Marx wrote, "History repeats … first as tragedy, then as farce." Nothing better describes how California, with its unmatched natural and human riches, has begun to morph into what the premier California historian Kevin Starr has called "a failed state" – a term more usually applied to African kleptocracies than a place as blessed as the Golden State.
The tragedy begins with the collapse of a governance system once widely hailed as a leader in efficiency and foresight but which now perpetually teeters at the brink of insolvency and suffers among the worst credit ratings of all the states. Only 20 years ago, the state’s fiscal debt per capita was just below the national average; now it ranks consistently toward the bottom No surprise, then, that California routinely ranked as the "worst governed" state in America.
This poor performance has consequences, particularly in terms of business. Today, CEOs rank California as just about the worst place to do business in the country, and have for a remarkable eight years in a row. And it’s not just the plutocrats who are angry; a survey by the economic forecasting firm EMSI shows that, in 2011, California also ranked 50th, just ahead of Michigan, in new business startups.
Unlike my conservative friends, I do not think the fault lies entirely with the Democrats. Instead, it has to do with the total eclipse of the state’s once-lively two-party system. As Starr has noted, California’s golden age of governance from the 1940s to the 1960s was largely a bipartisan affair, with power shifting between the parties. "Despite their differences," Starr writes, "Democrats and Republicans saw sufficiently eye-to-eye" to embrace policies that drove California’s growth.
Progressives, for their part, often suggest this paradigm died with the 1978 passage of Proposition 13, which diminished local government and concentrated fiscal power in Sacramento. Yet even as late as early 1990s, when the state was facing a dire recession due to the end of the Cold War, liberal Democrats such as Assembly Speaker Willie Brown and state Sen. John Vasconcellos managed to work well with Republican Gov. Pete Wilson and business leaders like Peter Ueberroth to force policy changes that helped spur the state’s last sustained recovery.
The more recent demise of California governance stems from demographic trends and political miscalculations that have turned our state increasingly into something akin to Mexico under the old dictatorship of the PRI (Institutional Revolutionary Party). Wilson’s decision to embrace the anti-illegal-immigration measure Prop. 187 as part of his 1994 re-election strategy helped precipitate this shift. Although Prop. 187, which passed easily, helped in the short run, it crippled the Republican Party in the ensuing decades.
Before 1994, Republicans were capable of winning upward of two-fifths of the Latino vote. But after that, as the Latino portion of the electorate grew, from 7 percent in 1980 to more than 21 percent today, these voters became, much like the African-American vote, essentially a bloc owned by the Democrats. In 2010, Jerry Brown won nearly two-thirds of their votes in his bid to return as governor. Asian voters, despite their decidedly middle-class and entrepreneurial bent, sensed the whiff of nativism among Republicans and also turned to the Democrats. With minority communities’ share of the electorate growing every year, the GOP essentially has backed itself into permanent minority status.
This has set the stage for a bizarre political farce, where minority representatives in Sacramento – with few exceptions – consistently vote against the interests of their own constituents on issues such as water allocations in the Central Valley or regulations that boost energy and housing prices. In their clamor to join the "progressive" team, they, in effect, are placing the California "dream" outside the reach of the state’s heavily minority working class.
It’s almost surreal to see people who represent impoverished East Los Angeles and Fresno, for example, vote exactly the same way as those who represent rich, white and older voters in Marin County and Westside Los Angeles. You don’t have to watch "Downton Abbey" to see "upstairs, downstairs" politics. Despite mouthing progressive rhetoric, California’s minority legislators seem intent of creating an increasingly feudalized California.
And what of the middle class – once the bastion of both the GOP and the kind of "responsible liberalism" that promoted growth under the late Gov. Pat Brown? This largely Anglo group has been shrinking, both for decades as a percentage of California’s population and, during the past 10 years, in absolute numbers. From 2000-10 the number of non-Hispanic whites in the state dropped from 15.8 million to 14.95 million.
Increasingly, the residual California middle class is either part of the public sector nomenklatura or the swelling ranks of retirees. These people often feel no compulsion to leave California for the reasons – such as weather and high property taxes – that drive their counterparts out of places like New York or Illinois. In contrast, the productive, working-age private middle class, harassed by taxes, regulations and soaring costs, increasingly appears more of an endangered species than the famed Delta smelt.
Of course, there remain pockets of private sector strength, such as Silicon Valley and Hollywood, as well as the various biomedical and biotech companies that still thrive in places such as Orange County and San Diego. These, however, increasingly represent legacy industries, beneficiaries of past accomplishments and better entrepreneurial conditions. Yet, even here, despite the current tech boom, California’s position over the past decade has declined relative to more business-friendly states.
In the immediate future, we should expect more of the same from our one-party government. Flush from the passage of Prop. 30, tax increases backed by public sector unions, there is little to restrain them beyond occasional resistance from Gov. Brown. Having made California’s income taxes the highest in the U.S., legislators and local officials are already busily concocting new taxes, fees and another spate of bond issues to prop up the nation’s most-cosseted public sector, and, of course, fund its rich pensions at the expense of mostly middle-class taxpayers.
Indeed the emphasis on income taxes, representing now close to half of state revenue, creates perverse economic outcomes. With their funds hidden in overseas accounts and other dodges, Hollywood moguls and their Silicon Valley counterparts may hang around, mouthing progressive shibboleths while dining exquisitely. But there is clearly erosion among the less-glamorous entrepreneurial class. The number of households earning above $300,000 dropped by 45,000 from 2006-09, according to the Department of Finance, while those earning under $100,000 has grown by more than 180,000. It’s likely that Prop. 30 will accelerate this trend.
But it’s not only taxes that will depress growth. Our Mad Hatter one-party, public-sector-dominated state seems keen to press its regulatory assault on employers and job creators. With climate change-related legislation certain to boost already high energy costs, we also can expect industries, from food processing to semiconductors and aerospace, to continue heading to friendlier locales.
Unless these policies are challenged, California will continue to underperform well below its potential. Even worse, a state that created the modern American Dream of upward mobility will continue to devolve toward a kind of neofeudalism dominated by a few rich, with many poor and a well-fed, tenured government caste. The only way to halt this continuing farce in Sacramento is for Californians of all backgrounds to recognize that government that so earnestly claims to serve "the people" is doing anything but that.
Joel Kotkin is executive editor of NewGeography.com and a distinguished presidential fellow in urban futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.
This piece originally appeared in the Orange County Register.
Comments
49 responses to “California’s Politics of Farce”
It makes me sick.
Luke Lea
Despite my strong Tea Party sympathies, I very much agree with Mr. Kotkin’s point about immigration. This country is definitely not well served by stingy immigration policies, and we need to find a way to legalize most of the people who are already here. We need them–they are our primary source of population growth. If there is one truth, it is that countries with shrinking populations do not thrive.
I think people like Pete Wilson, Michelle Malkin, and Tom Tancredo, among others, are not serving the Liberty cause very well. I am very happy to see that this nativist tendency has not done well in the polls. If, as they argue, we have too many foreigners on welfare, then the solution is to cut the welfare rolls, not to expel the foreigners. I think Rick Perry understands this.
I support Obama’s policies on immigration. I only wish he would work to get them through Congress, rather than trying to implement it through arguably unconstitutional executive orders.
Daniel Jelski
Daniel,
I don’t think Michelle Malkin and Pete Wilson are anti immigrant (Tancredo is another matter). I am also a Tea Partier who wants to open up our borders for people who will come here, work, prosper and become American citizens. Traverse the Central Valley and other parts of CA and you will see this is not what is happening in many many places. Instead, too many poorly educated “immigrants” are wards of the state and disproportionate consumers of social services. I, like Victor Davis Hanson and others, have to wonder why it is only people from certain parts of the world (Mexico) who are welcome to break the laws and enter this country illegally. It seems this is the substance of “Obama’s immigration policy” which just coincidentally supplies the Democratic party with more and more voters. Why just unlimited amnesty and open borders with Mexico? Why not India, Poland, Czech Republic, China, South Korea, Nigeria and others? This whole discussion about “immigration” is dishonest. It is yet another racialist fire that Obama and his fellow travelers can stoke.
Yes, I recognize we have number of people here that will not and can not leave. However, before we wave the magic wand of amnesty, let’s at least 1) get serious about border security and 2) start thinking about immigration in a manner that benefits the United States of America (skilled labor) rather than the Democratic party (welfare recipients).
As California goes, so does America. When we have a country that is only able to export entertainment and social media but nothing created by the many, many craftsmen in this land of ours we are looking into the abyss. What we do now is the difference between whether the USA looks a lot like the one we all know and love. When California goes under it will only be a matter of time before the whole country follows.
Our failure to move hispanics in California faster into the middle class, and promote/enable them to participate in American institutions that culturally reinforce upward mobility and communal stability will be the downfall of the state. We cannot have out-of-wedlock birth rates and high-school drop out rates as high as we do with this group. They also account for much of the poverty, heavily dependent on state services, much of the crime, and our public schools are failing them and any chance they have at upward mobility, or competing in the future economy.
The Democrats sort of keep them limping from election to election, doped up on dependency, but even in many other places around the country where hispanics are doing okay, the general trend amongst them seems to favor a large government with many social safety nets by voting in politicians who offer them that… even if it means voting against a fellow hispanic. How can the GOP respond to that?
Hollywood and Silicon valley would be great to have on any state’s resume. But they are not sectors/institutions that the masses can participate in, or have access to. But the ports, energy production, and manufacturing, all three of which helped build the California dream in the first place, need renewed focus as well. I’m all for increasing our high-skilled labor, but there are isn’t any reason for California to be so expensive or so culturally rigid that it can’t compete for jobs in those areas.
If every group who ignores our laws are rewarded for breaking into our Country America is doomed.
If every group who ignores our laws are rewarded for breaking into our Country America is doomed.
Quote :”Karl Marx wrote, “History repeats … first as tragedy, then as farce.” Nothing better describes how California, with its unmatched natural and human riches, has begun to morph into what the premier California historian Kevin Starr has called “a failed state” ”
It has many failings but it is still one of the most attractive destinations for immigrants and likely to remain so for a VERY long time.
thanks mr. Joel Kotkin on your views, as well, the subject of your article. it looks like you really have spend lots of times doing research and gathering data for the column. good job and a thumbs up sign too. cheers.
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