An article has recently appeared which documents the decline and fall of the former Golden State. The state is bankrupt and looks like being beyond repair. What was once dubbed the sixth largest economy in the world is tanking. The author, Troy Senik, sets the scene thus:
For many decades now, Americans have seen California as a harbinger of promising things to come. Today, however, California has become a warning sign. Beset by economic disaster and political paralysis, the state is in the midst of a systemic crisis. And while the meltdown has certainly been accelerated by the recession of the past two years, its causes involve two decades of poor judgment, reckless mismanagement, and irresponsibility. How California got into this mess has a lot to teach the rest of the country; how it gets out will say a great deal about America’s prospects.
The causes are several. The lessons are salutary, for those prepared to learn. A few key matters stand out--and bear an eerie resemblance to New Zealand. The first is the destructive influence of state employee unions.
The most egregiously coddled of the state’s favored constituencies are California’s public labor unions. This is partly the result of their bloated ranks: The percentage of unionized public employees in California is 20% higher than the national average. Even more important, though, is the unions’ outsized influence. Awarded collective bargaining rights with nearly every sector of government during the 1960s and ’70s, the unions subsequently exploded into a political force to be reckoned with and a primary cause of California’s fiscal hemophilia.
Perhaps the most vexing labor organizations are the teachers’ unions. These groups were the driving force behind Proposition 98, locking in mandatory spending on public education without regard to any other fiscal considerations. But that’s only where their transgressions begin. In 1992, the California Teachers’ Association — by far the most powerful teachers’ union in the state — blocked a ballot initiative to promote school choice in the Golden State by physically intimidating petition-signers and allegedly placing false names on the petitions. When asked about his union’s opposition to the measure, the CTA president responded: “There are some proposals that are so evil that they should never even be presented to the voters.”
And in 2000, when testing results revealed that two-thirds of Los Angeles public schools were ranked as failures, the president of the United Teachers of Los Angeles announced that his union would accept a proposal for merit pay only on “a cold day in hell.”
The result of the teachers’ flight from responsibility has been unadulterated dysfunction. In Los Angeles schools, one out of every three students drops out before graduation. And a research team from the University of California, Riverside, recently concluded that by 2014 — the year all students are required to be proficient in math and English under No Child Left Behind — nearly every elementary school in the state will fail to meet proficiency standards. Yet despite the atrocious performance of California educators, it is nearly impossible to fire an incompetent teacher (the percentage of California teachers terminated
after three or more years in the classroom is just 0.03%). For example, in a May exposé on the Los Angeles Unified School District, Los Angeles Times reporter Jason Song revealed: “The district wanted to fire a high school teacher who kept a stash of pornography, marijuana and vials with cocaine residue at school, but a commission balked, suggesting that firing was too harsh. L.A. Unified officials were also unsuccessful in firing a male middle school teacher spotted lying on top of a female colleague in the metal shop, saying the district did not prove that the two were having sex.”
But no matter how egregious their misconduct, California’s public-school teachers can always skirt the consequences. With 340,000 members statewide, the California Teachers’ Association is perhaps the most powerful interest group in state politics.
Whilst the teachers unions in California are systematically destroying public education by putting their members interests above students and parents we can see echoes and adumbrations of the same realities in New Zealand. Maybe not as extreme, but the underlying realities are the same. The teachers unions in New Zealand indirectly control the state schools. Educational standards are parlous. We believe the unions and vested interests are so powerful here that they will be successful in undermining the present governments attempt to introduce national standards testing through the schools. Since the government clearly does not want a fight with the teachers unions here, in the end it will capitulate.
Then there is the issue of extreme environmentalism in California:
Beyond empowering would-be potentates, environmental fetishes have also placed an enormous burden on California’s economy. A fascination with “smart growth” — typically a euphemism for privileging elite (and dense) urbanism over suburban development — has radically restricted the ability to build new housing units in the state.
This has created huge and unsustainable bubbles that price the middle class out of the housing market, and inevitably lead to dramatic crashes. What’s worse, the problems only compound over time: As the Cato Institute’s Randall O’Toole has pointed out, median California housing prices were twice median family incomes in 1960, four times in 1980, five times in 1990, and eight times in 2006. As a result, nine of the ten housing markets hit hardest by the recent downturn were in California. Meanwhile, high-growth markets with low regulation (such as Houston) have weathered the housing crisis essentially intact.
The environmental movement’s failure to acknowledge the exigencies of a state with more than 36 million people has also crippled California’s ability to develop infrastructure and tap vital resources. Ignoring the state’s decentralized population and native car culture, greens have pined after quixotic public transportation projects like high-speed rail (which received nearly $10 billion on last fall’s ballot), while doing nothing to address the fact that more than 80% of the state’s urban interstates are congested.
In California’s Central Valley, one of the most productive agricultural regions in the world, farmers have lost access to more than 150 billion gallons of water because of environmentalist efforts to protect a local species of bait fish — efforts that are estimated to have taken as much as 85,000 acres of farmland out of production.
And in a state that is estimated to have 10.5 billion barrels of untapped oil reserves off its coast — enough to replace all of California’s oil imports for 30 years — new offshore drilling leases haven’t been issued in four decades.
Finally, there’s California’s fevered response to global warming, the perfect issue for a state that prides itself on elegant alarmism. In 2006, the Golden State passed the Global Warming Solutions Act, essentially a statewide ratification of the Kyoto Protocol. Under this regime, California will have to lower its greenhouse-gas emissions to 1990 levels by 2020. With the state expected to add 15 million net new residents in that 30-year period, California is unlikely to meet its reduction targets without massive economic regression. Estimates of the plan’s eventual costs to California families have been as high as $3,800 a year.
Yet California’s politicians continue to insist that the Solutions Act will be an economic boon, sparking a revolution in “green jobs.” Such is the fate of Californians: to live in a state where environmentalism is a religion and economics
a superstition.
The article goes on to document Governor Schwarzenegger's failure to reform the State, although he had a unique historical opportunity to do so. Now, with a budget deficit out of control, systemic spending increases locked in, large tax increases, and a huge decline in state services, Californians are voting with their feet and moving to other states in the Union.
Just about every madcap measure put forward to President Obama has already been tried in California (cap and trade, green job revolution, public health care, running huge public sector deficits. The consequences are disastrous and will be felt for decades to come. California may well become the dust-bowl that Oklahoma was in the thirties.
This article can also be read at the Contra Celsum library, here.
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