Why California Is the Most Wasted State of Them All

My colleague from the philosophy department was becoming increasingly angry. He was trying to be polite, but it was clear that he was raging inside. After a few minutes, he smiled a very strained smile and excused himself.

Our conversation was about California, or to be more specific, California governance. As readers can imagine, he was bullish on how the Democratic Party governs the state, California being perhaps the most one-party state in the USA. Every statewide election has gone to a Democrat in the last decade, and Democrats have a supermajority in the state legislature, which means that there is no meaningful Republican opposition and whatever the Democrats want, they get.

The unions representing government employees effectively run the legislature.

Not surprisingly, California governance is squarely progressive. The unions representing government employees effectively run the legislature, and as a result, pay, benefits, and pensions for those workers increasingly are straining the state budgets. (Steven Greenhut, a libertarian journalist based in California, has documented the unsustainable growth of government in that state for nearly two decades.) Yet, the state continues to march politically and economically in the progressive direction as though the laws of economics didn’t matter.

For the most part I have observed progressive California from far away, but my life took a different turn a few years ago, and the state is becoming my new home. I married a retired nurse from Sacramento in 2018, and because of health issues with her adult daughter, she has to remain in that city, something not in our original plans. Because my school’s campus either has been closed or severely restricted during the COVID-19 lockdowns, I have spent most of the past year working from my wife’s home.

Living and working in California has offered me the opportunity to observe California progressivism up close, and it has been an interesting experience. Yes, the state where I officially reside, Maryland, is famously one-party and progressive, but the progressivism of California makes Maryland’s legislature look almost red state by comparison and surreal in some ways.

The California legislature in its progressive wisdom effectively decriminalized theft as long as thieves take less than $950 worth of merchandise.

For example, the California legislature in its progressive wisdom effectively decriminalized theft as long as thieves take less than $950 worth of merchandise, officially reducing such theft to a misdemeanor but in effect making it legal, since progressive California prosecutors don’t like to be bothered by petty criminals. In practice, that means consumer goods are much harder to find in California stores than one might experience elsewhere. For me, the difference was quite revealing, as I recently returned to Maryland after spending close to nine months in Sacramento.

When I go to the Walmart near my wife’s home, I find that many things openly on display in Maryland are behind locked cases in California. Furthermore, California’s draconian labor laws mean Walmart has fewer employees, so if I wish to purchase something I easily could buy in Maryland, I have to wait for a long time and often I just walk away because no one is available to open the glass case. Yet, even with these provisions, shoplifting losses for California retailers are enormous, and the state’s pro-theft laws have encouraged organized grab-and-run rings.

My progressive colleagues, like my philosophy professor friend, see no problem with such developments. To them, the real thieves are the capitalists, the retailers like Walmart which refuse to pay “living wages” to their employees, and, according to Senator Bernie Sanders, the capitalists have “been looting” Americans for years. Thus, the wave of theft in that state is a positive development, according to progressives.

It isn’t difficult to expose the vast array of sins (economic and otherwise) committed by the California political classes.

I can go on, but it isn’t difficult to expose the vast array of sins (economic and otherwise) committed by the California political classes, and I liken this kind of punditry to swinging a bat in a room full of pinatas—one simply cannot miss. Steven Greenhut has been exposing California’s follies for years. However, perhaps the best recent commentary I have read on the progressive mentality that governs the state comes from blogger Mike Solana, who deftly skewers progressive politicians from the Golden State who now accuse the tech industry of having “extracted wealth” from California before leaving for the greener pastures of lower-tax havens such as Texas and Florida.

Solana’s rip is worth the read if for no other reason than that he exposes the cluelessness of progressive politicians and pundits, and one can be assured that progressive politicians will fit Tallyrand’s description of the Bourbons: “They had learned nothing, and had forgotten nothing.” Yet, Solana also is puzzled as to why Bay Area politicians who fail spectacularly also win landslide elections:

Nothing in San Francisco can be set on a path to slow correction until at least six of the eleven district board seats along with the mayorship belong to sane, goal-oriented leaders cognizant of our city’s many problems, and single-mindedly focused on solving them. These politicians will likewise need to be extremely well-funded. This is to say we need a political class, funded by a political machine, neither of which currently exist. Even were both the class and the funding apparatus to rapidly emerge, and even were the new political coalition to win an undefeated string of miracle elections, it would take four years to seize meaningful political power from the resident psychotics in charge, who, as per the last election, appear to be very popular among close to ninety percent of voters (a curiosity for another wire). This is to say nothing of the broader Bay Area political toxicity, nor the state political dynamics, which are poised to exacerbate every one of our problems. It is a multi-front political catastrophe.

During the COVID-19 pandemic, which California politicians—and especially Governor Gavin Newsom—mismanaged spectacularly, California voters overwhelmingly chose the progressive status quo. While writers go on and on about the mind-boggling politics of California, the voters continue to send the left-wing progressives into office at all levels of government. While some might believe that “education” is the key to the so-called self-governance of democracy, voters in California clearly are choosing their candidates for reasons other than demonstrating wisdom in office. Indeed, why voters insist on putting the worst on top is perhaps the most intriguing question one asks about California politics.

Typical wisdom says that voters “vote for their pocketbooks,” but the progressives whom the lower-income voters overwhelmingly choose to elect are responsible for California having the nation’s highest poverty rates. Furthermore, for all the anti-wealth rhetoric that California’s progressive candidates spew out, the very poor and the very rich voters in California tend to choose and support the same candidates, and the Democratic Party is the party of choice of the state’s large number of billionaires.

There is little or nothing that the current progressive state government has done that promotes the promotion of real wealth in California, yet even as state authorities actively destroy economic opportunities, the voters respond by demanding more of the same. That would seem to be a mystery, but maybe not. Let me explain.

In the past few years, wildfires have ravaged huge tracts of mostly public land in California (and in much of the West, although California has been hit the hardest). There are many reasons for the fires, the most obvious being that most of California receives little rainfall and many fires occur in mountainous terrain, where it is difficult to fight them. But there is much more, and most of it has to do with progressive policies. Even the George Soros–funded Pro Publica recognizes the role of fire suppression-based land management practices in making the fires worse:

The pattern is a form of insanity: We keep doing overzealous fire suppression across California landscapes where the fire poses little risk to people and structures. As a result, wildland fuels keep building up. At the same time, the climate grows hotter and drier. Then, boom: the inevitable. The wind blows down a power line, or lightning strikes dry grass, and an inferno ensues. This week we’ve seen both the second- and third-largest fires in California history. “The fire community, the progressives, are almost in a state of panic,” (Tim) Ingalsbee said. There’s only one solution, the one we know yet still avoid. “We need to get good fire on the ground and whittle down some of that fuel load.”

Yet, the progressivist religion that defines the Democratic Party in California cannot acknowledge that the leave-nature-alone policies could have anything to do with the scope and intensity of the wildfires. Instead, the powers that be have decided that climate change—and only climate change—is responsible, and the way to deal with the problem is to impose draconian rules that make life difficult for most people living there, from outlawing new natural gas residential hookups to its infamous “road diets” imposed to discourage people from driving cars. Despite the fact that California politicians, such as Gov. Gavin Newsom, claim that these policies will significantly reduce global temperatures and make wildfires less intense, the reality is quite different, as California accounts for less than 1 percent of so-called greenhouse gases in the world.

Perhaps the most symbolic action by California’s government of progressive arrogance is the continued development of the “bullet train,” an ambitious (to be charitable) project to build high-speed rail from San Francisco to Los Angeles. Under urging from then governor Jerry Brown, voters in the Golden State in 2008 agreed to permit a bond issue to begin funding what Brown claimed would require a maximum of $33 billion. California’s mountainous terrain forced design and route changes, turning the LA-SF “dream” into a train that would run between Bakersfield and Merced, two cities in the flat Central Valley. To make matters even worse, passenger rail service via Amtrak already exists in the valley, and even if everything were to go to plan (a heroic assumption, one might add), the bullet train would save only forty-five minutes in travel from the existing route.

As the proposed length of the bullet train becomes shorter, the costs continue to skyrocket. The original $33 billion estimate now has ballooned to more than $100 billion—if the project even is completed. Yet the project continues to live. Last year I spoke to a former coworker of my wife who enthusiastically supports the rail project. When I asked her about the cost and the fact that there really is no demand for this service, her response was instructive: “But we NEED trains!” Never mind that this is a boondoggle that dwarfs almost anything else we know as government waste; never mind that California taxpayers are being forced to fund a massive wealth transfer to politically connected contractors in which there are all costs and no benefits. The state “needs” trains.

My faculty colleague also became angry at my panning the California bullet train, and I have wondered why progressives are so defensive about this project. There is no doubt that it is a huge waste of money and that the passenger-mile costs are well above anything else that exists in public transportation, but that doesn’t seem to matter. One would think that “good government” progressives would see the disconnect here.

One possible explanation comes from Murray Rothbard, who recognized that progressives ultimately are at “war with nature.” While Rothbard was writing about egalitarianism, nonetheless one can argue that progressive policies are aimed at producing very different outcomes than what would happen if people were free to make their own choices, and especially choices with their own money.

Because of the rise of the tech industry, California has seen an increase in wealth that probably is unprecedented in the history of this country—and maybe the world. Not surprisingly, the state’s tax take has massively increased in the past two decades, with the percentage of income tax revenues rising dramatically as tech entrepreneurship has created a new billionaire class. While one can think of these new billionaires as a new class of wealthy, in many ways their outlooks (at least after they become wealthy) often reflect the outlooks of the wave of entrepreneurs such as Andrew Carnegie who developed new technologies, put them to economic use, created vast amounts of wealth, and then created the foundations that ultimately would be governed by a wealth-destroying philosophy of progressivism.

In part, the wealth created permits foundation-financed “visionaries” to demand that resources be directed in a different way than would be done in a market economy, with “serve the people” and “make a difference” as mantras. We see that time and again in California, where tax-engorged “visionary” progressive politicians seize wealth created by private enterprise in order to pursue their own causes such as environmentalism.

Of course, as we already have pointed out, progressive policies tend to make the original problems worse. Not only have progressives made mass wildfires more likely, but they also have been behind the rise in homelessness in California. In the late 1970s, the San Francisco city government instituted rent controls. Not surprisingly, housing shortages followed, and the real price of housing skyrocketed. As shortages became worse, progressive politicians doubled down on the controls. Today, more than five thousand people live on the streets in San Francisco, and the government—bound by its own progressive ideals—is helpless to do anything but hand out money and defend its policies. And this in the city with the most billionaires per capita in the world.

There are three reasons why California governance will not change even as it heads toward a fiscal cliff.

There are three reasons why California governance will not change even as it heads toward a fiscal cliff. First, and most important, progressive ideology is intractable and does not yield to the laws of economics. Progressive politicians are feted in the mainstream media and in California’s left-wing education institutions, and voters don’t seem to want any alternatives. (After all, California “needs” trains.) Politicians who raise questions as to this model of governance can expect to be demonized in the media and will face violent protests if they show up in public venues—and especially on college campuses.

The second reason is that California voters are drawn to progressive Democrats no matter what disasters these politicians might inflict. The highly educated voters do not support progressive Democrats just on economic issues, but also on the highly contentious social issues, and with the 2020 “revolt of the rich” dominating Democratic Party politics at the present, it is doubtful that this current wave of progressive-favoring voters will change direction.

Democrats also have the immigrant vote in their back pockets, and California has seen a wave of immigrants help turn it into a one-party state. For now, the numbers are just overwhelming, and we can expect California to move even further to the left as its housing and poverty problems become worse and Democrats successfully convince voters that free markets are cause.

The third reason things won’t change in California is that progressive government creates its own sets of monopoly rents that are distributed to politically connected interest groups. In the case of the Golden State, state-employee and municipal labor unions are by far the most powerful political entity, and they control vast blocs of voters. Their power was recently demonstrated by their support of the covid-19 lockdowns in the state—during which public employees continued to draw full pay even as the lockdown policies ravaged the state’s tax base.

Should one doubt the power of California’s government-employee unions, witness the “success” of what was called AB 5, the law that almost killed the “gig” industries in the state, putting thousands of freelance writers and musicians out of work. Written by the AFL-CIO (American Federation of Labor and Congress of Industrial Organizations) as a means of ending the Uber and Lyft rideshare services (and protect unionized taxi and public transportation workers), the fallout was so bad that even the legislature had to back off some of the restrictions. Voters did the rest last November when they beat back most of the most onerous provisions of the law. (One doubts that the musicians and writers that lost their jobs changed their progressive voting patterns in the most recent election. Such is the staying power of progressive ideology.)

If one believes that perhaps the wave of progressive voters will become “converted” to a “free minds and free markets” approach (the “left libertarian” position), the experience of New York City should be instructive. In 1975, the economy was in recession, businesses were fleeing the city’s onerous tax rates and antibusiness climate, and city officials were fraudulently selling capital bonds to pay for previously issued capital bonds. (William E. Simon, the US secretary of the Treasury in 1975, laid out the entire scenario in his blockbuster A Time for Truth.)

New York’s problem was obvious—except in the minds of progressives. Where most of us would understand that having unions running away with the budgets while suppressing productive private enterprises is a losing proposition, progressives see a nefarious capitalist plot. That New York City had a relatively brief renaissance in large part because of the deregulation of banking and finance (which was begun by President Jimmy Carter) plays no role in progressive thinking at all.

Unlike New York City, California does not have an economic ace in its pocket. Even though much of the tech industry has prospered during the state’s draconian pandemic shutdowns, the state government (not to mention cities and counties) is facing the worst financial crisis perhaps in its history. Not surprisingly, the progressive response is to increase incendiary rhetoric toward wealth creators and demand even higher taxes and more business regulations.

Progressivism is a utopian philosophy of governance that will never find nor create its utopia. If California voters and politicians do not understand the current crisis and how it came about, they probably never will understand. Instead, we will see the continuous march to perdition as California politicians refuse to acknowledge that they are killing the geese laying the golden eggs.

This article was first published by Mises Wire on January 9, 2021 wit the title “California Is Worse than You Think” and is reprinted with permission.

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2. How the Destruction of Property Rights Made Indigenous People Vassals of the State
3. Is Chinese Culture Opposed to Individualism?

   

About the Author: William L. Anderson

William L. Anderson is a professor of economics at Frostburg State University in Frostburg, Maryland. He has published numerous articles and papers on economics and political economy, including articles in The Independent Review, Reason Magazine, The Free Market, The Freeman, Public Choice, The American Journal of Economics and Sociology, Quarterly Journal of Austrian Economics, The Journal of Markets and Morality, Regulation, Freedom Daily and others.