The Optimistic Conservative’s thing is avoiding optimism about the wrong things. There can be no optimism about the path California has just chosen at the ballot box. There can be only realism. Unlike New York, where voters elected standard-issue tax-and-spend-as-usual Democrats, Californians last week veered leftward in a brake-screeching, tire-squealing skid worthy of a plotless summer blockbuster. Optimism must come from a realistic assessment, not from hoping against hope that continuing down the wrong path will somehow result in being dealt the Neapolitan ice cream card in Candyland.
Californians are clearly trying to kill their state. I don’t think anyone is stupid enough to really believe that the mythical quantity known as “green jobs” is going to save the economy, or that taxes can be increased without killing the jobs that emerge naturally in a healthy, voluntary economic climate.
But it looks like the attention spans of at least some California voters are short enough to prevent them from understanding what the real problem is here. It’s not the public-employee pensions. The pensions are a problem, but they’re not the problem. Spending of every kind is a problem for California; no question about it. But the state’s fundamental, bottom-line, nothin’-ain’t-gettin’-fixed-if-this-one-ain’t problem is that regulation and taxes increasingly discourage all normal forms of economic activity.
California’s problems can be viewed in three dimensions. One is the impact of regulation and taxes. It’s actually the regulation that is tying a millstone to the state’s neck. Taxes are too high, yes, but taxes haven’t created an artificial drought in the Central Valley or prevented any offshore drilling, no matter how environmentally sympathetic. Taxes didn’t impose a decades-old moratorium on building new nuclear power or electricity-generation plants. Taxes aren’t going to drive even more business out of the state, and middle-class homeowners out of their economic viability, with mandated carbon-emission reductions over the coming decade. Taxes are a pain for businesses, but businesses’ utility and employment costs are higher here than in the rest of the country because of the arbitrary effects of regulation – and that just makes the pain bigger.
Lightening California’s draconian, deliberately lifestyle-affecting regulations would dramatically increase the flow of revenues to the state treasury. But the second dimension of California’s problems shows why the political will to do that has such trouble getting momentum. The state is, and has long been, divided geographically – and profoundly so.
“Political California” – the California that other Americans complain of – consists of Los Angeles County, the San Francisco Bay area, and a sprinkling of narrow constituencies that happen to be a majority in a few thinly populated areas (e.g., the Tahoe enclave, the Redwood Coast, and Imperial Valley, east of San Diego). Exurban southern California – Orange County, San Diego, Ventura County, Riverside and San Bernardino Counties – went on 2 November as it always does: for the Republican candidates. Fresno in the Central Valley, at the heart of the man-made, farm-killing drought, has historically been much less reliable for the GOP; its political character has for decades been that of a rural agricultural stronghold for populist Democrats. But the Central Valley went for Whitman and Fiorina this time too.
It’s the power of concentrated numbers that gave Brown and Boxer their big victories. As of today, Brown’s statewide lead over Meg Whitman is about 959,000 votes. The great majority of that difference comes from just three counties. In LA County, Brown’s lead is about 595,000 votes. He’s more than 160,000 votes ahead of Whitman in Alameda County, and more than 135,000 votes ahead in San Francisco County (where he’s beating Whitman by a margin of 78.6% to 18.1% of the vote). Together, these three counties account for more than 890,000 of Brown’s statewide lead.
The county-by-county map, from the Secretary of State website, tells the tale: Whitman won in a substantial majority of the counties, but the voters in the “safe” Democrat strongholds – the oldest and densest urban concentrations – went overwhelmingly for Brown.
The same pattern held true for Fiorina and the other statewide races. The reason this effective political majority buys the facile untruths and bromides of the California Democrat is that the majority is composed of constituencies that seek to profit from that purchase. The constituencies are concentrated in the two megalopolitan urban areas, Los Angeles and San Francisco. They are a tight coalition of victim- and ethnic-politics organizations, welfare organizers and their clients, academics, public policy advocates, service-employee and teacher unions, and dilettantes from the entertainment and tech industries. Their top priorities are welfarism, across-the-board preferences, union benefits, and policy initiatives that create sinecures in government employment, as well as generating new rent-seeking opportunities in environmentalism, health care, and energy.
There is, however, a demographic in this coalition that is less organized, and less motivated by the promise of power – or guaranteed cash flows – to overlook the dysfunctional aspects of what it doesn’t agree with. There are union voters, for example, who don’t really think it’s a good idea to prioritize the convenience of an inch-long bait fish over the California businesses that create jobs and pay taxes. There are people from the productive, privately-employed middle class who harbor vague environmental sympathies – or even very specific and knowledgeable ideas about environmental regulation – but who recognize rent-seeking and constituency-tending at the public’s expense as destructive. There are members of politicized ethnic groups who don’t agree with the use of their memes by everyone else who’s looking for employment preferences or fecund new bases for lifestyle litigation.
This demographic, conflicted for different reasons, will increasingly be confronted, in the next few years, with the consequences of its loyalty to the California Democratic left. This is the third dimension of California’s problems, and may be the one that turns out to be decisive. The trend has been one-way for more than three decades now: toward restricting the people’s economic and political options, while increasing their costs on behalf of economically non-productive constituencies.
Welfare recipients, government regulators, and public-service employees are equally non-productive in an economic sense: they all represent overhead costs. No overhead cost has any inherent “right” to prescribe to the cost-payer the conditions under which both payer and payee will operate. Your electric bill has no “right” to be larger than you want it to be; it’s an overhead cost for which you receive value, but which you naturally seek to minimize. California has effectively been operating for a very long time, however, as if the non-productive, overhead costs of regulation and public welfare ought to have precedence in deciding our collective way of life. Instead of the payer calling the tune, the piper decides what the tune will be and sends a bill.
The consequences are inevitable. But I believe a fourth factor may be the one that turns California around after the big wake-up call we have coming. That factor is the bad housing market. I don’t know how many middle-class Californians are hanging on right now, remaining in homes they’d have to take a loss by selling, but my guess is it’s in the hundreds of thousands (perhaps a handful of million) around the state. For many people, it’s better to stay put, if their jobs or businesses are still bringing in any positive revenue, than to eat real estate losses that could be in the hundreds of thousands of dollars. And the longer these people have to stay in California, the more votes there will still be for a return to sanity in state policies.
There are a lot of residents who would like to follow the exodus to Arizona, Nevada, Texas, Oklahoma, the Dakotas, and the Carolinas. But many of them just can’t today. That may be what saves California. Jerry Brown won’t. No factors will force him to change his political stripes in the next four years. With the possible exception of RINO Steve Cooley as attorney general – a factor that will matter to only some issues – Brown will have a “dream team” of ideologically committed regulatory statists in the executive, and a legislature held by entrenched Democrats who can pass anything they want in the state budget.
This train has been set up to crash. It will; nothing can stop it. Apparently, that’s what it will take to split the Golden State’s Euro-style, anti-middle-class coalition of resentful utopians and rent-seekers. And as other California pundits have already implored America: when the reckoning hits, don’t bail California out.