To call California a failed state and ungovernable would be hyperbolic—it is home to more millionaires than any other state. But California also has the nations highest poverty rate and the most food stamp recipients, and policymakers have done little to address profligate spending, unfunded pensions, and ever-growing retiree health-care obligations. So its equally wrong to say that the Golden State is enjoying an economic turnaround.
You wouldnt know much of this from reading Timothy Egans recent column in the New York Times touting a Golden State revival. Egan is an experienced practitioner of a burgeoning new journalistic subgenre that describes a state emerging from a decade of fiscal darkness to reclaim its place as an innovative, diverse, entrepreneurial haven. Its a compelling tale, and some of it is even true—but as Egan and others tell it, its incomplete.
About this time last year, Egan visited San Simeon, home of the glorious—if currently parched—Hearst Castle, and declared that the Golden State is looking toward tomorrow once again. Parts of it, anyway. The golden California dream has never been brighter for those who can afford life along the coastal strip. If youre living in La Jolla, Newport Beach, Santa Monica, Monterey, Palo Alto, or San Francisco, youre probably doing well. Drive an hour to the east from any of these places, and the landscape is much different physically and economically. Inland California, from Imperial in the south to Modoc in the north, remains one of the poorest regions in the nation. Though the state unemployment rate fell in February to 8.1 percent, inland unemployment ranges from 9.5 percent in Riverside to 25.9 percent in Colusa. Of the 20 counties in the United States with the largest unemployment rates, 11 are in California.
Egan returned last week to sing the praises of Jerry Brown, Californias once and future governor. Its unfair to give all credit for the Golden State revival to Jerry Brown, Egan allows. Nevertheless, Brown, who announced last month he would seek yet another term, deserves the lions share. How so? Brown is one of the greatest cheerleaders California has ever known. He claims credit for 1 million new jobs and proudly boasts of signing legislation that will raise the states minimum wage (and therefore the cost of labor to employers) to $10 an hour. Egan acknowledges some lingering problems that Brown must tackle. He gives one sentence to unemployment, which remains well above the 6.7 percent national average; makes dismissive mention of the drought—a recent major rainstorm was welcome, but its hardly enough to end the water emergency; and briefly nods to pension reform. But Egan says nothing about poverty, welfare, or food stamps, and he flatly denies that the California exodus ever happened. Hed rather joke about the unlikely prospect of Amarillo, Texas luring Google and Facebook away from Silicon Valley, neglecting to mention how both companies—along with Apple, Cisco, Intel, IBM, and Oracle—are expanding operations around Austin and Houston. Or that Tesla, the Silicon Valley-based, federally subsidized, luxury electric-car maker, wont be locating its new $5 billion lithium-ion battery factory in California. Its considering Arizona, Nevada—and Texas.
Rather than confront these realities, Egan indulges in more mythmaking. The California Renaissance myth rests primarily on the idea that the 2012 income-tax increase, which raised the top marginal rate for the states highest earners to 13.3 percent, averted fiscal catastrophe. Californias nonpartisan Legislative Analysts Office projects a surplus of about $5 billion, which seems like good news. Enjoying the good news requires looking away from the states wall of debt, which Brown—to his credit—often mentions in speeches. But Browns wall consists only of the $24.9 billion the legislature borrowed from education and other special funds to balance the states byzantine budget over the past several years. The governor himself ignores the much larger wall of debt: between $330 and $600 billion in unfunded public pensions, health care, and bonds.
Egan concedes that Californias proposed high-speed rail system may be a spoiler to Browns recovery narrative. But the governor would prefer to gaze at the future. We have to think three or four generations down the road, Brown says. In medieval France they could commit to building a cathedral thatd take 200 years. Yes, but Californians werent committing to a 200-year-plan when they approved high-speed rail in 2008. The measure promised an affordable train ride from Los Angeles to San Francisco in less than three hours starting in 2029, at a cost of about $40 billion. Today, the official construction estimate is $68 billion, and the final cost is likely to be higher.
Egans piece appeared hours before the Wall Street Journal published Allysia Finleys weekend interview with Tulare dairy farmer and nut grower Mark Watte, which painted a different picture about Californias past, present, and future. Federal and state efforts to restore fish habitat in the San Joaquin and Sacramento Rivers, Watte explained, have led to fewer water deliveries to Central Valley farmers. California farmers now must pay up to $1,300 for an acre-foot of water (enough to submerge an acre of land in one foot of water). Only a few years ago, an acre-foot of water cost as little as $40. Meanwhile, Finley writes, some farmers are drilling deeper wells at a cost of $1 million per hole. She notes that half of Americas fruits and vegetables, more than 98 percent of the nations almonds, pistachios, and walnuts, and one-third of U.S. dairy exports come from the Central Valley. As Californias farmers go, so goes the nation.
Egan and Brown are right about one thing: California remains a place with ample opportunities for people—at least some people—to succeed. But its promise is imperiled by legislators and elected officials, who give little thought to the consequences, intended or otherwise, of their policy choices. A genuine California resurgence is possible. But the only renaissance underway right now is in the heads of certain politicians—and their friends at the New York Times.