03/28/2024

California in Danger: Why the Dream is Dying and How We Can Save It

California today is frequently held up as a progressive model for the rest of the United States. In 2011, California had a $27 billion budget deficit. Today, it has a $19 billion budget surplus. In 2012, Californians voted to raise income taxes, particularly on the wealthy, to increase funding for under-performing schools. The state is a renewable energy leader. And its leaders are standing up to President Donald Trump on everything from immigration to marijuana to offshore oil drilling.

But a closer look reveals deeper problems. California is the most expensive state for housing in the country after Hawaii, and today is suffering from one of the most severe homelessness crises in its history. In the face of a housing shortage, Millennials, renters, and employers are fleeing the state. High housing prices siphon away from the productive economy $140 billion annually. At the state and local level, Democrats and progressives have responded by mandating and extending subsidies for low-income housing. But not only are the subsidies and mandates inadequate to meet demand, they also serve to make housing more expensive for the middle-class.

. . . In truth, California is neither progressive nor a model for other states. What’s behind California’s high cost of living are tax, regulatory, and other policies that are regressive and parasitical. Well-financed NIMBY (Not In My Back Yard) activists and a small minority of labor unions defend exclusionary laws that prevent homebuilding, in both cities and suburbs. Public employee unions maintain retirement benefits far larger than those received by most private sector workers (and taxpayers). And well-connected energy companies win large state contracts which contribute to rising electricity rates and air pollution.

California maintains its reputation as a progressive leader by greenwashing the scarcity and brownwashing the exploitation created by state policies and interest groups. NIMBYs insist they are protecting the natural environment as they prevent greater urban density and promote cattle ranching, which threatens the biodiversity of California’s oak woodlands. Gov. Brown deploys apocalyptic rhetoric regarding climate change as his administration shuts down the state’s largest single source of low-carbon energy. And state officials defend immigration as they maintain and defend a system of semi-indentured servitude for immigrants.

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