California Lost

A friend and I like to joke that when one of the wags on the Wall Street Journal’s editorial page can’t come up with something to write about, they just scan the San Francisco Chronicle or the Los Angeles Times. For a conservative, looking for something to criticize in California is like shooting fish in a barrel (please note that fish in a barrel are protected under the California Environmental Quality Act).

But conditions in California have become so bad that they’ve drawn the attention of the New York Times editorial pages. In the past month, two pieces have run in the Times acknowledging the systemic failures of the Golden State. One was by Brett Stevens, the other by Ezra Klein. Brett writes from the viewpoint of a conservative, so what he says is predictable. But Ezra writes as a liberal coming to terms with the California condition. As such, he starts to go in the right direction — and then stops and ends up walking around in circles of equivocation. Read the piece and you’ll see what I mean.

The fact that the Times, the diary of American liberalism, is criticizing the state of California, even just a little bit, is indicative that something is terribly wrong. And this is concerning to the extent that the Biden Administration is said to be looking to California as a “laboratory” for public policy.

I lived in California for 45 years, from 1970 to 2015. During that time, I took full advantage of everything it had to offer: spectacular geography, from the beaches of San Diego to the majesty of the Sierra range; temperate weather, if you don’t count the Mark Twain summers in San Francisco; the sensuality of Napa and Sonoma; the great (and once affordable) system of public universities; the free-flowing and innovative arts culture, from the Beats and the Dead to Michael Tilson Thomas and Richard Diebenkorn; and the libertarian social culture.

And despite all that — maybe because of it — things went wrong in California. To borrow a phrase from Hemingway, it happened gradually, then suddenly.

The bookends of this change were Pat and Jerry Brown. Pat Brown was governor of California from 1959 to 1967. He was a builder — the public university system, the water system, and the highway system all expanded under his leadership. Pat’s son Jerry served as governor twice for a total of 16 years. Jerry’s greatest contribution to governance was his fiscal prudence. He ran a tight ship during his second tenure, turning the state’s $27 billion deficit into his famous “rainy day fund” of more than $17 billion.

But he wasn’t a builder like his dad.

I remember a meeting in 2012 that Mike Milken hosted with Gov. Brown and about 20 business leaders to have a candid off-the-record discussion about the state of the state. We covered a lot of ground, but over and over the discussion kept getting back to the difficulty of getting anything built in California — how the state had gone from NIMBY (Not In My Backyard) to BANANA (Build Absolutely Nothing Anywhere Near Anything). The frustration in the room was palpable.

Nearly 10 years later, things have become worse. Jerry couldn’t even get his pet project, the bullet train, built. It’s now nothing more than a bloated high-speed train from Merced to Bakersfield. Housing can’t get built, pipelines can’t get built, a water system built for a population of 15 million is buckling under a population of 34 million and the state’s biggest utility is starting wildfires because of equipment that hasn’t been maintained for more than 50 years.

Granted, growth has been spectacular in the tech sector. California’s network of innovative culture, universities, skilled labor and capital resources have created the biggest explosion of wealth in the history of the world.

But here’s a scary fact — if you took Silicon Valley out of California it would be a failed state. And while California’s leaders love to talk about sustainability, they have built a system of public finance and governance that is totally unsustainable.

Consider the fact that California’s progressive tax system means that roughly 60 percent of the state’s income taxes are effectively paid by just 150,000 taxpayers. If they all decide to move to Arizona or Austin, where does that leave the state?

California can keep ignoring the $1 trillion liability it is carrying for public pensions until it can’t.

It can keep ignoring the need for affordable housing (high-density, suburban in-fill, etc.) or it can keep enduring the squalor and heartbreak of public homelessness.

Let’s not even get into the fact that more than $12 billion of fraudulent unemployment claims have been paid out by California over the past year, including several to prison inmates, one of whom signed his application “Dianne Feinstein.”

California can keep being weird (to quote Ezra Klein) or it can have a cup of strong, black coffee and realize that it’s approaching the tipping point of gradually to suddenly.

Because when suddenly comes, it’s too late.