CA: "Death of the Dream" (long, but good) - Part I

[Porsche-O-Phile]

Very pointed and interesting Newsweek article. Pretty-much spot-on (although I disagree with a lot of the potshots taken against Arnold Schwarzenegger and a few other things). Pretty much gets it right though. Sums up my reasons for leaving very, very well - there's no silver bullet to CA's problems here...

- - - - -

http://www.newsweek.com/id/185791/page/1

- - - - -

For decades, California has epitomized America's economic strengths: technological excellence, artistic creativity, agricultural fecundity and an intrepid entrepreneurial spirit. Yet lately California has projected a grimmer vision of a politically divided, economically stagnant state. Last week its legislature cut a deal to close its $42 billion budget deficit, but its larger problems remain.

California has returned from the dead before, most recently in the mid-1990s. But the odds that the Golden State can reinvent itself again seem long. The buffoonish current governor and a legislature divided between hysterical greens, public-employee lackeys and Neanderthal Republicans have turned the state into a fiscal laughingstock. Meanwhile, more of its middle class migrates out while a large and undereducated underclass (much of it Latino) faces dim prospects. It sometimes seems the people running the state have little feel for the very things that constitute its essence—and could allow California to reinvent itself, and the American future, once again.

The facts at hand are pretty dreary. California entered the recession early last year, according to the Forecast Project at the University of California, Santa Barbara, and is expected to lag behind the nation well into 2011. Unemployment stands at roughly 10 percent, ahead only of Rust Belt basket cases like Michigan and East Coast calamity Rhode Island. Not surprisingly, people are fleeing this mounting disaster. Net outmigration has been growing every year since about 2003 and should reach well over 200,000 by 2011. This outflow would be far greater, notes demographer Wendell Cox, if not for the fact that many residents can't sell their homes and are essentially held prisoner by their mortgages.

For Californians, this recession has been driven by different elements than the early-1990s downturn, which was largely caused by external forces. The end of the Cold War stripped away hundreds of thousands of well-paid defense-related jobs. Meanwhile, the Japanese economy went into a tailspin, leading to a massive disinvestment here. In South L.A., the huge employment losses helped create the conditions conducive to social unrest. The 1992 Rodney King verdict may have provided the match, but the kindling was dry and plentiful.

This time around, the recession feels like a self-inflicted wound, the result of "bubble dependency." First came the dotcom bubble, centered largely in the Bay Area. The fortunes made there created an enormous surge in wealth, but by 2001 that bust had punched a huge hole in the California budget. Voters, disgusted by the legislature's inability to cope with the crisis, recalled the governor, Gray Davis, and replaced him with a megastar B-grade actor from Austria.

Yet almost as soon as the Internet bubble had evaporated, a new one emerged in housing. As prices soared in coastal enclaves, people fled to the periphery, often buying homes far from traditional suburban job centers. At first, it seemed like a miraculous development: people cheered as their home's "value" increased 20 percent annually. But even against the backdrop of the national housing bubble, California soon became home to gargantuan imbalances between incomes and property prices. The state was also home to such mortgage hawkers as New Century Financial Corp., Countrywide and IndyMac. For a time the whole California economy seemed to revolve around real-estate speculation, with upwards of 50 percent of all new jobs coming from growth in fields like real estate, construction and mortgage brokering.

As a result, when the housing bubble burst, the state's huge real-estate economy evaporated almost overnight. Both parties in the legislature and the governor failed miserably to anticipate the impending fiscal deluge they should have known was all but inevitable.

To many longtime California observers, the inability of the political, business and academic elites to adequately anticipate and address the state's persistent problems has been a source of consternation and wonderment. In my view, the key to understanding California's precipitous decline transcends terms like liberal or conservative, Democratic and Republican. The real culprit lies in the politics of narcissism.

California, like any gorgeously endowed person, has a natural inclination toward self-absorption. It has always been a place of unsurpassed splendor; it has inspired and attracted writers, artists, dreamers, savants and philosophers. That's especially true of the Bay Area—ground zero for California narcissism and arguably the most attractive urban expanse on the continent; Neil Morgan in 1960 described San Francisco as "the narcissus of the West," a place whose fundamental asset was first its own beauty, followed by its own culture of self-regard.

At first this high self-regard inspired some remarkable public achievements. California rebuilt San Francisco from the ashes of the great 1906 fire, and constructed in Los Angeles the world's most far-reaching transit system. These achievements reached a pinnacle under Gov. Pat Brown, who in the 1960s oversaw the expansion of the freeways, the construction of new university, state- and community-college campuses, and the creation of water projects that allowed farming in dry but fertile landscapes.

Yet success also spoiled the state, incubating an ever more inward-looking form of narcissism. Even as the middle class enjoyed "the good life"—high-paying jobs, single-family homes (often with pools), vacations at the beach—there was a growing, palpable sense of threats from rising taxes, a restless youth population and a growing nonwhite demographic. One early expression of this was the late-1970s antitax movement led by Howard Jarvis. The rising cost of government was placing too much of a burden on middle-class homeowners, and the legislature refused to address the problem with reasonable reforms. The result, however, was unreasonable reform, with new and inflexible limits on property and income taxes that made holding the budget together far more difficult.

Middle-class Californians also began to feel inundated by a racial tide. This was not totally based on prejudice; Californians seemed to accept legal immigration. But millions of undocumented newcomers provoked fear that there were no limits on how many people would move into the state, filling emergency rooms with the uninsured and crowding schools with children whose parents neither spoke English nor had the time to prepare their children for school. By 1994, under Gov. Pete Wilson, the anti-immigrant narcissism fueled Proposition 187. It was now OK to deny school and medical services to people because, at the end, they looked different.

Today the politics of narcissism is most evident among "progressives." Although the Republicans can still block massive tax increases, the predominant force in California politics lies with two groups—the gentry liberals and the public sector. The public-sector unions, once relatively poorly paid, now enjoy wages and benefits unavailable to most middle-class Californians, and do so with little regard to the fiscal and overall economic impact. Currently barely 3 percent of the state budget goes to building roads or water systems, compared with nearly 20 percent in the Pat Brown era; instead we're funding gilt-edged pensions and lifetime guaranteed health care. It's often a case of I'm all right, Jack—and the hell with everyone else.

(continued...)

[Porsche-O-Phile]

The most recent ascendant group are the gentry liberals, whose base lies in the priciest precincts of San Francisco, the Silicon Valley and the west side of Los Angeles. Gentry liberalism reflects the narcissistic values of successful boomers and their offspring; their politics are all about them. In the past this was tied as much to cultural issues, like gay rights (itself a noble cause) and public support for the arts. More recently, the dominant issue revolves around environmentalism.

Green politics came early to California and for understandable reasons: protecting the resources and landscape of the nation's loveliest landscapes. Yet in recent years, the green agenda has expanded well beyond that of the old conservationists like Theodore Roosevelt, who battled to preserve wilderness but also cared deeply about boosting productivity and living standards for the working classes. In contrast, the modern environmental movement often adopts a largely misanthropic view of humans as a "cancer" that needs to be contained. By their very nature, the greens tend to regard growth as an unalloyed evil, gobbling up resources and spewing planet-heating greenhouse gases.

You can see the effects of the gentry's green politics up close in places like the Salinas Valley, a lovely agricultural region south of San Jose. As community leaders there have tried to construct policies to create new higher-wage jobs in the area (a project on which I've worked as a consultant), local progressives—largely wealthy people living on the Monterey coast—have opposed, for example, the expansion of wineries that might bring new jobs to a predominantly Latino area with persistent double-digit unemployment. As one winegrower told me last year: "They don't want a facility that interferes with their viewshed." For such people, the crusade against global warming makes a convenient foil in arguing against anything that might bring industrial or any other kind of middle-wage growth to the state. Greens here often speak movingly about the earth—but also about their personal redemption. They have engaged a legal and regulatory process that provides the wealthy and their progeny an opportunity to act out their desire to "make a difference"—often without real concern for the outcome. Environmentalism becomes a theater in which the privileged act out their narcissism.

It's even more disturbing that many of the primary apostles of this kind of politics are themselves wealthy high-livers like Hollywood magnates, Silicon Valley billionaires and well-heeled politicians like Arnold Schwarzenegger and Jerry Brown. They might imagine that driving a Prius or blocking a new water system or new suburban housing development serves the planet, but this usually comes at no cost to themselves or their lifestyles.

The best great hope for California's future does not lie with the narcissists of left or right but with the newcomers, largely from abroad. These groups still appreciate the nation of opportunity and aspire to make the California—and American— Dream their own.

Of course, companies like Google and industries like Hollywood remain critical components, but both Silicon Valley and the entertainment complex are now mature, and increasingly dominated by people with access to money or the most elite educations. Neither is likely to produce large numbers of new jobs, particularly for working- and middle-class Californians.

In contrast, the newcomers, who often lack both money and education, continue in the hierarchy-breaking tradition that made California great in the first place. Many of them live and build their businesses not in places like San Francisco or West L.A., but in the increasingly multicultural suburbs on the periphery, places like the San Gabriel Valley, Riverside and Cupertino. Immigrants played a similar role in the recovery from the early-1990s doldrums. In the '90s, for example, the number of Latino-owned businesses already was expanding at four times the rate of Anglo ones, growing from 177,000 to 440,000. Today we see signs of much the same thing, though it often involves immigrants from the Middle East, the former Soviet Union, Mexico or South Korea. One developer, Alethea Hsu, just opened a new shopping center in the San Gabriel Valley this January—and it's fully leased. "We have a great trust in the future," says the Cornell-trained physician.

You see some of the same thing among other California immigrants. More than three decades ago the Cardenas family started slaughtering and selling pigs grown on their two-acre farm near Corona. From there, Jesús Sr. and his wife, Luz, expanded. "We would shoot the hogs through the head and sell them off the truck," says José, their son. "We'd sell the meat to people who liked it fresh: Filipinos, Chinese, Koreans and Hispanics … We would sell to anyone." Their first store, predominantly a carnicería, or meat shop, took advantage of the soaring Latino population. By 2008, they had 20 stores with more than $400 million in sales. In 2005 they started to produce Mexican food, including some inspired by Luz's recipes to distribute through such chains as Costco. Mexican food, notes Jesús Jr., is no longer a niche. "It's a crossover product now."

Despite the current mess in Sacramento, this suggests some hope for the future. Perhaps the gubernatorial candidacy of Silicon Valley folks like former eBay CEO Meg Whitman (a Republican), or her former eBay employee Steve Wesley (a Democrat), could bring some degree of competence and common sense to the farce now taking place in Sacramento. Sen. Dianne Feinstein, who's said to be considering the race, would also be preferable to a green zealot like Jerry Brown or empty suits like Los Angeles Mayor Antonio Villaraigosa or San Francisco's Gavin Newsom.

But if I am looking for hope and inspiration, for California or the country, I would look first and foremost at people like the Cardenas family. They create jobs for people who didn't go to Stanford or whose parents lack a trust fund. They constitute what any place needs to survive: risk takers who are self-confident but rarely selfish. These are people who look at the future, not in the mirror.

[Jim727]

Some of this is good, though the rhetoric is arrogant and dismissive, and much of the content (deliberately) misleading. A few notes:

1) L.A. does not have a transit system. It has a freeway system. Big difference.
2) The water projects are phenomenally wasteful (typical of gov't) and paid for by everyone but the consumers of the water.
3) Howard Jarvis's property tax revolt is completely misrepresented. The revolt was based on the simple fact that retirees on fixed incomes were having their homes stolen by tax authorities because they couldn't pay the inflated tax bills. It's the best example in America of the citizens rising up against government and saying ENOUGH!. Needless to say, tax consumers hate Prop. 13.
4) "undocumented newcomers" and "anti-immigrant narcissism" my ass! They are illegal migrants, not immigrants, and objecting to having my home invaded does not constitute narcissism. Prop. 187 had nothing to do with looking "different" - it had to do with stopping balkanization of society, the huge drain on public resources, and the apparent disinclination of the illegal migrant population to participate in assimilation. The author is presenting pure, racist BS.
5) The author's representation of the environmental movement, at least in my area, couldn't be further off the mark if it was deliberate - which it might be.

The author is a whack job.

[nostatic]

Originally Posted by Jim727

The author is a whack job.

and/or a moron.

"Of course, companies like Google and industries like Hollywood remain critical components, but both Silicon Valley and the entertainment complex are now mature, and increasingly dominated by people with access to money or the most elite educations. Neither is likely to produce large numbers of new jobs, particularly for working- and middle-class Californians."

Who exactly does he think works in "Hollywood"? He has no clue about the industry or the tech sector.

[Porsche-O-Phile]

Still, I find the crux of it to be pretty much correct. He correctly nails the state's current political stalemate as the direct result of a bunch of squabbling politicians - notably the extreme environmentalists, the suck-ups to the public employee sector, etc.

LEGAL immigration and the industries/businesses so created are perhaps one of the best chances we have at saving the state. This I agree with. I did notice how he deliberately avoided the issue of illegal immigration though (well, he touched on it, but only just...) Illegal immigration DEFINITELY is a huge drain on state resources and is dragging us down collectively - fast. This was glossed over.

The core issue regarding narcissism was spot-fkin'-on, IMHO. The arrogant hubris of this state's population (most epitomized by liberals in S.F. and Hollywood and west L.A.) is stunning, even for someone who's lived here for 10+ years.

[Jim727]

The public sector clearly has some 'splaining to do - in my city 21% of the city employees make over 100K/yr. That's insane, and they don't want to give up the teat.

I think it's curious that with all the panic and dealing about the budget crisis - and it is that - nobody was willing to even mention cutting off the hemorrhage of tax dollars to illegals who have no right to any of it. Anyone have a good handle on what percentage of the public's money heads down that drain?

As for narcissism, I completely disagree with you, Jeff. Perhaps in your area it's true, but I've been in California since 1972 and those types are few and far between. Gavin Newsom and his bunch have "issues", but where I live it's a good bunch of people.

The author is a whack job (and/or a moron).

[Zeke]

A few years of negative population growth won't hurt a bit. In fact, if those that have the most babies in CA would stop, we'd be in fine shape in no time. As it is, 1 in 5 in LA county get gov't assistance money. A soon as that stops, the budget will balance.

However, the flock will return. If you had a choice of living w/o any money in the ice and snow or in the sun, where would you be? Being a 2nd generation native of CA, I just wish everyone would go home.

[Porsche-O-Phile]

LA is a narcissist's dream. One of the reasons I can't stand going up there.

I agree with you 100% on the illegals thing. These folks should be rounded up and immediately deported en masse. No more debate, no more bull, no more screwing around. Party's over. If their family members don't like it they can join 'em back in their country of origin too. Or they can stay as citizens. The family doesn't get extended "de facto" citizenship anymore. End of discussion.

That'd go a long way towards fixing the problem. One problem with the article I had was the implication that we could replace tens of thousands of educated, skilled workers with some third-world pig butchers. C'mon. I get the point that immigration represents an opportunity to solve some of our problems, but we also need to encourage DOMESTIC immigration - as in, "encouraging skilled and educated individuals to come here". Right now all we do is tax the living Christ out of them and make them feel inferior to the illegals they're being forced to subsidize - all in the name of liberal "equality". What a crock.

This state has ALWAYS had a history of speculation and boom/bust times. All the way back to the Gold Rush. Before that even. I doubt it's going to end anytime soon. There will be another bubble in CA before too long - maybe over pig farms. Who knows? But is it going to be enough to offset the collapse of the last two? Doubt it. Somewhere in this mess, SUSTAINABLE, CONSERVATIVE approaches to growth need to be adopted.

[Jim727]

Jeff, now we're on the same page! Come visit - we'll show you what California can really be like.

Milt, agree completely on a smaller population - depending on who it is that flees the state.

[billyboy]

5) The author's representation of the environmental movement, at least in my area, couldn't be further off the mark if it was deliberate - which it might be.

Obviously you have never been in a business that they have deemed to be wrong.

[JavaBrewer]

Get out of Long Beach already will ya...

[Porsche-O-Phile]

I'm working on it.

I'm doing one better - I'm getting the hell out of CA entirely.

[nostatic]

Originally Posted by Porsche-O-Phile

LA is a narcissist's dream. One of the reasons I can't stand going up there. .

So how much time have you actually spent in "LA"? And how many "liberals" from "Hollywood" and "west LA" do you know well?

We all know you're bitter, but seriously, get a grip...or leave before your head explodes

[Porsche-O-Phile]

Lived there from '99 to '02 - Palms & Sepulveda (approximately). Worked in Brentwood for the first year and SMO for the last two.

Trust me. L.A. is narcissist central. It's obnoxious.

[chapo]

Dems and Arnie [closet dem] are killing us. Barbara and Mz. Fstien have ruined this state. It started with Cranston,and continues now. BTW I teach,which brings up a whole new bunch of problems regarding tenure etc. Most teachers are in it for the bennies and retirement, not little Johnnie getting a 4.0

[m21sniper]

Originally Posted by Porsche-O-Phile

Trust me. L.A. is narcissist central. It's obnoxious.

My ex partner told me the same thing when he moved to LA. He utterly hated it, and moved on to texas within a year (Dallas area). He loves it there.

[Danimal16]

Having dealt with the environmental regulatory situation in the state, there is no doubt that there is a relationship between "do gooders" large engineering and construction conglomerates and the state regulatory bodies. And what is ironic about it is the "do Gooders" are being manipulated by the other two. The amount of money generated by constant and unscientifically supported environmental legislation in the state is mind boggling. Just look at the items in the budget that are for land conservancies. The implementation of septic management systems, AB 885 is the most blatant example of this and it shows the very real and dangerous shift from the regulatory focus of the past on the manufacturing and business sector to individual citizens. I would bet money that there will be other examples of this for property owners.

The real estate boom is, IMHO, brought on by the failure of the state leadership at all levels to focus on sustainable funding. Property tax reform, i.e. prop 13 is now coming to haunt the state. This led to the current overvaluation of real estate, or at least paid a huge role in it. Think of it, if the revenue source for government is in large part dependent on the sale of real estate why not let the stuff just go up and up. I am no expert on the financing or the details of the economy, but the dependency on real estate transactions must shape the policy minds of local and state politicians. It will get far worse before it gets better.

And yes there is an attitude that has developed in the state that I noticed in the mid 1980s that is not similar to the attitude of the old timers of my youth. It is a beautiful state that is not what it was. Very sad.

[scottmandue]

Originally Posted by milt

I just wish everyone would go home.

+10,000

People go through he11 and high water to get here then do nothing but beyotch.

Sure there is a lot wrong with Cali... I have been to about half the states and have yet to find Nirvana... even in Hawaii.

[Porsche-O-Phile]

I hear ya'. One thing I learned back in my flying days was that no matter where you land, you can ALWAYS find something to like about a place. By contrast, you can always find something to hate about a place too - it comes down to attitude. For all my grumblings about CA (particularly southern CA) I really AM trying to be objective about it. There are some wonderful things about living here. I love the sun. I love the palm trees and the beaches. I love being able to see the ocean and then turn around and see snow-capped mountains. Blue skies. Opportunity. A culture that values ENJOYING life. Being able to wear jeans to work without the pretentious stuffiness of, say, the east coast. A culture that values people on their contributions, rather than their "old money" connections or place in the good-old-boy network. All that is wonderful and liberating and led me to fall in love with this place.

But you also have to (objectively) admit that this state has changed - DRAMATICALLY - in the last five years. It's gone (and is still going) down the toilet at a horrifyingly fast (and accelerating) rate. Migrants and illegals are invading and taking over - turning once nice neighborhoods into ghettos that make Tiajuana look like a model society. The productive are being taxed into extinction. Businesses are being shuttered because it's simply not worth it to carry the deadweight here. Educated, skilled people are fleeing en masse only to be replaced by 20 uneducated immigrants all begging for a handout. The roads suck. The traffic sucks. It's impossible to get anywhere in under an hour. The housing is impossible to afford (even today). And the govenment... let's not even start. It's truly heartbreaking. Despite what y'all might think - I LOVE CA. More specifically - I love what it used to be. But to bury one's head in the sand and think it's still that way, or even that it might return to being that way anytime soon is just foolish. It's Paradise Lost. It breaks my heart. The toughest thing to stomach in this world is unrequited love or being "dumped". That's EXACTLY what I feel like with respect to my love for CA. I've loved this place for a decade and now it just flat doesn't care. It's "dumping" me.

Yes, I'm planning on joining the hundreds of thousands of other educated professional types in the "white flight" exodus from this state, but believe me - I will watch from afar and hope that someday maybe conditions will improve to the point it will be worth coming back. I'll always have a special place in my heart for CA, but given a choice of (1) staying on board the ship that's got a gaping hole in its side and is taking on water and listing 30 degrees to starboard, HOPING that maybe it'll make it or (2) getting in a lifeboat, rowing for shore and watching to see what happens, I'm doing #2.

[Zeke]

Originally Posted by Porsche-O-Phile

I hear ya'. One thing I learned back in my flying days was that no matter where you land, you can ALWAYS find something to like about a place. By contrast, you can always find something to hate about a place too - it comes down to attitude. For all my grumblings about CA (particularly southern CA) I really AM trying to be objective about it. There are some wonderful things about living here. I love the sun. I love the palm trees and the beaches. I love being able to see the ocean and then turn around and see snow-capped mountains. Blue skies. Opportunity. A culture that values ENJOYING life. Being able to wear jeans to work without the pretentious stuffiness of, say, the east coast. A culture that values people on their contributions, rather than their "old money" connections or place in the good-old-boy network. All that is wonderful and liberating and led me to fall in love with this place.

But you also have to (objectively) admit that this state has changed - DRAMATICALLY - in the last five years. It's gone (and is still going) down the toilet at a horrifyingly fast (and accelerating) rate. Migrants and illegals are invading and taking over - turning once nice neighborhoods into ghettos that make Tiajuana look like a model society. The productive are being taxed into extinction. Businesses are being shuttered because it's simply not worth it to carry the deadweight here. Educated, skilled people are fleeing en masse only to be replaced by 20 uneducated immigrants all begging for a handout. The roads suck. The traffic sucks. It's impossible to get anywhere in under an hour. The housing is impossible to afford (even today). And the govenment... let's not even start. It's truly heartbreaking. Despite what y'all might think - I LOVE CA. More specifically - I love what it used to be. But to bury one's head in the sand and think it's still that way, or even that it might return to being that way anytime soon is just foolish. It's Paradise Lost. It breaks my heart. The toughest thing to stomach in this world is unrequited love or being "dumped". That's EXACTLY what I feel like with respect to my love for CA. I've loved this place for a decade and now it just flat doesn't care. It's "dumping" me.

Yes, I'm planning on joining the hundreds of thousands of other educated professional types in the "white flight" exodus from this state, but believe me - I will watch from afar and hope that someday maybe conditions will improve to the point it will be worth coming back. I'll always have a special place in my heart for CA, but given a choice of (1) staying on board the ship that's got a gaping hole in its side and is taking on water and listing 30 degrees to starboard, HOPING that maybe it'll make it or (2) getting in a lifeboat, rowing for shore and watching to see what happens, I'm doing #2.

You contradict yourself. Just go and don't look back.

I'm fed up but I can navigate the city without thinking. I live within a mile of where I was born. I pass my elementary school and boyhood park daily. This is called familiarity. What isn't familiar is the new people here, but there's no place in the nation where I won't feel that.

That's the essence of "hometown." If I could move forward to the past, I'd be there. Clean surf and tan skinny girls everywhere. 356's and woodies.

But, I hate car shows with 356's and woodies owned by fat, balding men with printed shirts depicting Route 66.