Why It Is Hard to Fix California

“Maybe we can start again, in the new rich land–in California, where the fruit grows. We’ll start over.” – John Steinbeck, The Grapes of Wrath 

America is the greatest nation on Earth–and California, by virtue of its population, wealth and natural resources, its greatest state. With its natural beauty–from the hard rock coast of North California to its redwood forests, from the Napa Valley to the San Francisco Bay, from Malibu to Newport Beach, from Dana Point to La Jolla–it is inconceivable that God did not foreordain that Californians would wake every morning with gratitude in their hearts for the great good fortune of living in such a wonderful place.

It is home to America’s high tech capital, Silicon Valley, and its giants–like Apple, Intel, Cisco and Oracle, to name but a few. In Southern California it is home to Hollywood and the vast entertainment industry of motion picture arts and sciences. The state’s universities, from Stanford and UC Berkeley to Cal Tech, UCLA and the Claremont Colleges, are among the finest in the world. Its agricultural production, especially from its Central Valley, is the largest in the nation. 

But as wealthy as California is, the California dream is not what it used to be. Everyday Californians are leaving the state for somewhere else, and those that remain are not quite as well off. The good news is that California’s problems are mostly of its own doing–and because they are political they can, with the right arguments and the right politics, be fixed. But there are big challenges.

For over a century California has led the American experiment in Progressivism. Indeed California’s governor in 1912, Hiram Johnson, would found the Progressive Party and serve as running mate to Theodore Roosevelt on the presidential ticket that lost to the Democratic (but equally Progressive) candidate Woodrow Wilson. Johnson would bring to California a series of progressive reforms–the initiative, referendum, and more–that left the California constitution so amendable as to look more like a set of statutes than a real constitution, and changed almost unconsciously how Californians think about politics.

With the initiative process, both liberal and conservative causes could be realized. Liberal public employee unions, most notably the California Teachers Association, could lock in high levels of education spending with Proposition 98. Fed-up taxpayers could place limits on property taxes with Prop 13. Californians concerned with illegal immigration could pass Prop 187 (if only later to see it fail in court). And those Californians who saw the injustice of state-sponsored racial preferences could ban them with the California Civil Rights Initiative. 

But the initiative process, however satisfying it sometimes seems, has also made electoral politics seemingly less important. Whereas other states fight hard to build political majorities, Californians have been happy to elect Democratic legislatures with the occasional Republican governor, leaving anything of import to a vote of the people every two years with a ballot initiative ginned up by a group of concerned or affected citizens. As a practical matter, winning a Republican majority appears to be just not that important, so far, to California’s political and business elites. 

The result is a state dominated by the Democratic Party and the public employee unions; the highest tax rates in the country; low performing schools; aging infrastructure; and the unenviable distinction of having one out of every three welfare recipients in America living in California. The latter fact, however serious, is not the kind of problem that will rise to the level of a ballot initiative to fix, since the costs are borne by so many people. 

Because of the state’s enormous wealth and tax base, California can afford this kind of extravagance since all the aforementioned quality of life positives outweigh the public policy negatives. And life is just fine for those Californians who have jobs and are fortunate enough to find themselves in the right parts of an information-based economy. The problem is for those who are not. 

California’s population has reached almost 40 million people, itself not a bad thing. But there appears to be a sentiment among the state’s policymakers that the population should really be more like 20 million. They have constructed a regulatory state that restricts the economic opportunity necessary for many of those 40 million people to prosper. Indeed, under both Democratic and Republican administrations, environmental priorities–namely, burdensome and overly strict air quality and emissions regulations–have driven out manufacturing of the kind that might sustain such a large working class. 

Even considering the lower costs of manufacturing abroad, California should have been a competitive place for domestic manufacturing, with such a large population and potential savings from lower transportation costs. But the regulatory burden is such that these jobs have gone to places like Texas and other pro-growth states–as writers like Chuck Devore and William Voegeli have documented so well. 

Although it may be satisfying to point out California’s shortcomings, it is also worth understanding the implications of such no-growth policies. What does it mean for the nation’s largest state to be unable to provide the kind of jobs that would allow its population to move from working-class to middle-class? 

Although California has a substantial number of ambitious and creative entrepreneurs, not everyone can be a software developer, screenwriter, lawyer or architect. One need only turn over an iPhone, and see that it was designed in California and made in China, to understand the point. And although no one has a right to a manufacturing job, the kind of wealth that was created by jobs in the aerospace and automobile industries, and that allowed working-class Californians in decades past to buy homes and move up the economic ladder, have disappeared or are quickly moving elsewhere.  

If this conscious limiting of economic opportunity is the trend of modern Progressivism, it would be good for Americans to know that now. For the net result in California is that it has become increasingly a place with a wealthy upper class that has figured out how to prosper in an information-based economy, and a large working-class that provide low cost services and consumer goods to them. That is a trend that that no one would want to see spread across the nation.

Of course the bet being made by Progressive politicians is that Californians will continue to pay high taxes and tolerate sub-par services, or simply leave, rather than to demand change. That is a risky bet, albeit one that might pay off. Arguing against it is the California dream–from home ownership to middle class prosperity–that simply cannot be achieved with a welfare check or with entry-level service sector job. How long this denial of economic opportunity will continue is yet to be seen.

As one-sided as California is today politically, the failure of liberalism on the national level, described so well in my colleague Charles Kesler’s I Am the Change: Barack Obama and the Crisis of Liberalism, is bound to have knock-on effects in California. The only question is whether Californians can tear themselves away from the state’s many pleasures and take seriously again the hard work of politics. If not, California’s decline will continue, sunshine and all.

Brian T. Kennedy is President of the Claremont Institute and Publisher of the Claremont Review of Books. Mr. Kennedy served as Director of the Institute’s Golden State Center in Sacramento for six years, and his family has lived in California since 1842.