Maybe we just had it too great out here in California. Perfect weather. World-class universities. High-paying middle-class jobs. Reasonably priced housing. Silicon Valley entrepreneurs. The Beach Boys. California girls. Hollywood. Disneyland.
Now the state is crumbling fast into the ocean. Still can’t beat the weather—until unemployment forces you to move to South Dakota. Home ownership, even after the recent crash, has long been out of reach for most middle-class families. A middle-class incomes starts at $100,000. Apple computers are stamped with “Designed by Apple in California. Assembled in China.” Movie production increasingly shifts to Vancouver, Louisiana, and even Michigan. Disneyland promotes “Gay Days.”
After more than four decades of policy disasters at all levels of government, California was struck in 2008 by a “perfect tsunami” of policy and social disasters from which it will take a long time to recover, if it ever does.
What follows is a summary of some of the disasters that have built up over time and now are swamping California.
The Immigration and Nationality Act of 1965 allowed virtually open borders. This began a series of waves of immigrants who have used more state services than they paid for in taxes, leading to higher taxes and a “balanced budget” that hasn’t really been balanced in a decade. A 2009 study by the Federation for American Immigration Reform found that the cost to California taxpayers for illegal immigrants for prisons, schooling, healthcare, and other services is $13 billion per year—exactly the cost of new taxes imposed this year by Gov. Arnold Schwarzenegger and the state legislature, supposedly to reduce the state budget deficit.
A state that voted for Nixon, Reagan, and Bush I has since voted for Clinton, Gore, Kerry, and Obama. Small wonder, since 70 percent of immigrants vote for the Democratic Party. At the federal level, there is not much difference between the parties. (We are now seeing President Obama do a tongue-untied impersonation of President Bush II.) But at the state and local levels, Republicans usually are fiscally more prudent and more sensible on the “social issues” (although often worse than Democrats on police-state issues).
In California, a two-thirds vote is required in the legislature to pass a state budget. That means Republicans, with about 42 percent of votes in each house of the legislature, can still moderate Democrats’ spending-and-taxing obsession. But the disastrous terms of President George W. Bush and Gov. Arnold Schwarzenegger have made the Republican Party toxic; rolls of registered Republican voters are declining fast. In addition, the 2010 U.S. Census threatens to alter the political landscape radically, potentially giving Democrats a perpetual two-thirds majority.
The number of immigrant voters keeps increasing, as does the number of their children born here. Even if the Obama administration doesn’t use “sampling” to rig the 2010 U.S. Census, every decision it makes will be in favor of Democratic constituencies.
The Census promotes what Steve Sailer calls “rotten boroughs,” in which noncitizen immigrants (legal or illegal) are counted along with citizens:
For example, in the 2002 midterm election in Southern California’s beachfront Congressional District 46 (17 percent Hispanic), 173,000 voters participated in the election of immigration-restrictionist Republican Representative Dana Rohrabacher. Next door in . . . Orange County’s gritty District 47 (65 percent Hispanic), prominent Democratic fundraiser Loretta Sanchez triumphed despite just 68,000 votes being cast.
Granted, with regard to Proposition 8 in the 2008 election, Latinos, like blacks, voted more strongly against the same-sex “marriage” absurdity than did whites. But Latinos also strongly voted for state legislators who favor same-sex “marriage”—and back higher spending, higher taxes, and more social engineering.
As with the rest of the country, the 1960’s counterculture ripped apart the social fabric of California. And as elsewhere, once they got in power, the “if it feels good, do it” generation imposed vast new controls on everyone in society, especially through child “protection” edicts.
By the 1970’s, California’s divorce rate was much higher than in the rest of the country, increasing the number of households for the same number of people. This boosted housing costs that until the 1970’s had been near the national average (with cheaper winter heating bills).
In 1972, California voters imposed on their posterity the California Coastal Commission—an unelected, unaccountable bureaucracy that severely limits development, or even housing alterations, along the state’s 1,100-mile coastline. This also greatly increased housing costs.
Typically, a new housing project on private land now takes decades just to gain approval. An initial development proposal of several hundred houses for the middle-class is reduced, after several levels of bureaucratic attrition, to a handful of millionaires’ mansions surrounded by protected wetlands (formerly known as swamps).
This only serves to push development inland. And it was the inland areas, such as Riverside and San Bernardino counties, that saw the immense housing boom of the past decade. They now are suffering most from the housing bust.
Whatever he was as President, Republican Ronald Reagan was among California’s worst governors. His predecessor, Democrat Edmund G. “Pat” Brown, had broken the state budget with excessive spending on state projects. In the 1966 election, Reagan beat Brown by promising to get the budget under control. Reagan also declared, repeatedly, “My feet are in concrete,” a pledge not to raise taxes to pay for Brown’s profligacy.
Once elected, Reagan announced, “That sound you hear is the concrete breaking around my feet.” His billion-dollar tax increase remains a state record; taking into account inflation and population growth, it is double Governor Schwarzenegger’s 2009 tax increase of $13 billion. Reagan’s tax increase eventually led to California’s Proposition 13 tax revolt in 1978. (He then shamelessly used the measure to prop up his campaign for the presidency.) To this day, thanks to Reagan’s irresponsibility, the state never has regained control of its runaway budgets.
Governor Reagan also signed one of the nation’s first permissive abortion laws. With government promotion and tax subsidy of contraceptives and abortions, the state was culling its own citizens, who would soon be replaced by newcomers.
In 1975, “Gov. Moonbeam” Jerry Brown (son of Pat) took office, proclaiming, “This is an era of limits, and we had all better get used to it.” It was the time of oil shortages, gas lines, stagflation, Stanford entomologist Paul Ehrlich’s 1968 Population Bomb, and the Club of Rome’s 1972 study The Limits to Growth. Brown inhaled the doom and gloom as heartily as he did New Age spiritual nostrums and his father’s political opportunism. He sharply cut funding for roads, bridges, and water supplies.
After World War II, it was foolish for Southern California to rip up its fine mass-transit system and even more foolish to use eminent domain to seize people’s homes to build the “freeways.” But by the 1970’s, there simply was no other way to get people where they needed to go. New mass transit, as the Los Angeles subway boondoggles show today, is a costly waste.
Brown’s “era of limits” never arrived. Immigrants kept coming, legally and illegally, from all over the globe. Migrants from other states also came here in greater numbers than those who left (until the 1990’s). The 1970’s saw the computer boom, followed by the 1980’s defense-buildup boom, the 1990’s dot-com boom, and the 2000’s housing boom. Although all of these booms busted, or paused, only the housing boom was phony. The others produced real goods.
The 1978 Proposition 13 tax limitation only cut taxes slightly. Since then, governments have found ways to slide the tax burden back up to its pre-Prop. 13 level. A budget limitation, called the Gann Amendment, lasted only a decade.
Under Jerry Brown, monies not spent on infrastructure were used to purchase perks, pensions, and pleasures for government union workers and to proffer social-welfare payments, even to illegal immigrants. This, too, enlarged Democratic constituencies.
The result is that there isn’t enough money left in 2009 and beyond for the roads and water the state needs.
Jerry Brown is now the state’s treasurer, and he is using his office to enforce anti-global-warming legislation that is destroying businesses and jobs. He is the odds-on favorite to win the 2010 election for California governor. Voters might remember Proverbs 26:11: “As a dog returneth to his vomit, so a fool returneth to his folly.”
In the 1980’s, Ronald Reagan had become president, and Brown was replaced by Gov. George Deuk-mejian. Reagan’s federal tax cuts and stable currency helped to spark a nationwide economic boom that was especially powerful in California, home to Apple, Intel, and thousands of other burgeoning computer companies. Reagan’s defense buildup contributed to the boom, until it began tapering off later in the decade with the end of the Cold War.
But even in the 1980’s, time bombs were being set. Reagan’s Immigration Reform and Control Act of 1986 should have been called the “Democratic Party Recruitment Act.” The amnesty it granted to millions of illegal immigrants transformed them into voters, 70 percent of whom then voted Democratic. And it encouraged other immigrants to come here in anticipation of another amnesty.
In 1991, Gov. Pete Wilson, a Republican, raised taxes by seven billion dollars, supposedly to close a budget gap. The budget gap widened, and the state economy got worse, until his taxes expired in 1995 and California joined the national economic recovery—four years late.
In 1994, while campaigning for governor against Kathleen Brown (sister of Jerry, daughter of Pat), Wilson backed Proposition 187, the Save Our State initiative, which ended most state-government benefits going to illegal immigrants. Prop. 187 won with 59 percent of the vote and carried Wilson back to the governor’s mansion. The initiative was overturned in 1998 by a federal court on the grounds that the regulation of immigration belongs exclusively to Washington. Wilson appealed the decision. After his election as governor in 1998, Democrat Gray Davis dropped the appeal. Looking back after 15 years, although Prop. 187 was poorly written, it represented an attempt by state taxpayers to get a handle on the immense costs of illegal immigration. (State Sen. Art Torres branded Prop. 187 “the last gasp of white America in California.” He neglected to say that the measure was supported by many Latino voters who didn’t like their own jobs being taken by new immigrants.)
The state’s problems were masked by the dot-com boom of the late 1990’s, during which the state enjoyed huge budget surpluses. The money should haven been used to cut marginal tax rates or at least put into a rainy-day fund. Instead, Davis and the legislature blew the surpluses by creating new welfare programs and spiking the pensions of government workers.
The latter was a bomb that was detonated by the 2008 stock-market crash. By law, state taxpayers must make up for any pension payments that cannot be covered by state employee retirement investments. Currently, that amount is five billion dollars per year—a figure that may go even higher. City and county pension funds are slamming local-government budgets. In May 2008 the city of Vallejo, unable to meet its pension payments, filed for bankruptcy. More cities may follow.
The housing boom of 1999-2006, though national, had its epicenter in California, largely because of easy loans made to immigrants who did not have the means to repay them. As Steve Sailer observes,
66% of all home value inflation during the Housing Bubble took place in the state with by far the highest percentage of foreign-born residents of any state in the union, California. Roughly the same percentage of all money lost on home mortgage defaults since then has been in California.
Today, there is not one good policy change on the horizon at the federal or state levels. California’s budget deficits, made worse by Schwarzenegger’s tax increases, are so bad that, effectively, the state is bankrupt. No one can control spending. The government workers’ unions are more powerful than ever before. California’s Republican Party is small and shrinking. Immigration is being alleviated only because the Bush-Obama depression is pushing many immigrants to return home to Mexico’s less depressed economy.
In the short run, more pork and “defense” spending will flow here, because House Speaker Nancy Pelosi and other Californians now occupy key positions of power in Washington. Yet increased defense spending, while it fuels the military-industrial-congressional complex, can’t last forever, as California found out in the early 1990’s.
Today, California has a top stratum of Silicon Valley billionaires, Hollywood moguls, government operatives, and drug dealers. There is also a vast and expanding lower class. But because the cost of living and taxes are so high, an annual income of $80,000 places what once was a middle-class family in the lower class.
On March 19, the San Jose Mercury News told the grim tale:
Sacramento—A few miles from the state Capitol, on a pasture of land bounded by a railroad track and the tranquil American River, a large cluster of homeless men and women has settled in what’s been dubbed “Tent City.”
With perhaps hundreds of makeshift tents, no running water or bathrooms, and trash strewed everywhere, the encampment conjures up images of Third World living in America—so stunning that it drew the attention of Oprah Winfrey last month, and then a crush of national and international media coverage.
These were middle-class folks who had lost their jobs, then their homes to foreclosures. Embarrassed, state and local governments moved in and arranged other accommodations for the residents of the new Hooverville. (Perhaps it should be called Bushville, Obamaville, or Arnoldstadt.) But the Tent City is only the beginning.
One thing California always will have is its incomparable weather. Decades ago, if you were down and out, you could sleep on one of the beaches, which were private. But the government used eminent domain to grab the best beaches for itself. Now the curfew, enforced by highly paid park rangers and police, is 10 p.m.