THE HIGH-TAX, BIG-GOVERNMENY REDISTRIBUTIONIST STATE

Wealth, Poverty, and Flight: The Same Old State of California

By Victor Davis Hanson

National Review
January 1, 2019

Insulated coastal elites, impoverished immigrants, and a fleeing middle class

California ranks first among the states in the percentage of residents over 25 who have never finished the ninth grade— 9.7 percent of California residents, or about 4 million Californians. It also rates 49th in the number of state residents who never graduated from high school — or about 18 percent of the current population.

In other words, about 7 million Californians do not possess a high-school diploma, about equal to the size of the nine counties of California’s Bay Area, roughly from Napa to Silicon Valley. In some sense, inside California, there is a shadow state consisting of high-school dropouts that’s larger than 38 other U.S. states.

Yet California also is home to some of the most highly educated municipalities in the United States. In fact, Palo Alto claims that 40 percent of its city population has an M.A, degree or higher, making it No. 1 among American cities with a population above 50,000.

In the same ranking of wealthiest communities, two other California municipalities, nearby Cupertino and Mountain View, were also in the top ten. How can a single state be calibrated as both so educated and so uneducated?

In many global ratings of world research universities, California has four universities (Cal Tech, Stanford, UC Berkeley, and UCLA) in the top 20 — more than any other single nation except the United States itself. Yet the 23-campus California State University system — the largest university in the world — has a student body in which about 20 percent are not proficient in English. The remediation rate (unable to meet minimum college admittance standards in math and English) of incoming freshmen was about 35 percent — at least until such gradations, along with required remedial education, were recently considered archaic, offensive, or worse, and thus scrapped.

To fathom California’s near medieval asymmetry, ask how a state with such high taxes can offer such poor services. The top California income-tax rate is 13.3 percent (the nation’s highest). The state’s average sales tax is (conservatively) about 8.5 percent (ninth in the nation). California’s bewildering combined array of gasoline taxes are about 55 cents per gallon and rising (second-highest in the nation).

In exchange, California public-school test scores rank between 44th and 46th in the nation. Its roads and infrastructure are rated in various surveys between 42nd and 45th. Driving from the state’s interior to the coast on roads mostly unchanged from 45 years ago takes about twice the time as in the past — if carefully planned at particular times and days of the week.

One no longer just drives on any two-hour or longer journey in California. Instead, he navigates, with the planning, apprehension, and wariness of a 16th-century galleon captain sailing to the New World.

What is going on?

Three concurrent — and yet antithetical — trends explain the malaise, though they’re rarely talked about. Indeed, one of the landmarks of the new California mentality is denial and self-righteousness that assume it is illiberal to notice that a quarter of the nation’s homeless population sleeps on California streets, or that violent crime is 20 percent higher in California than the national median, or that San Francisco ranks No. 1 in per capita property crime rates of all the nation’s largest cities.

The Keep

First, lots of highly educated people have congregated in California’s coastal corridor of some 30 million from La Jolla to the Napa Valley. Google, Apple, Facebook, and assorted appendages enjoy market capitalization in aggregate well over $3 trillion dollars. The coast of California faces a booming Asia of China, India, Japan, South Korea, and Taiwan, not a tired and shrinking Europe mired in European Union bureaucratic suicide. The California coast is where steel, plastic toys, and Hondas arrive and everything from California almonds to airplane parts leave. Three of the top five ports in the country are in California — the top two in Long Beach and Los Angeles.

No wonder that communities such as Atherton, Hillsborough, Brentwood, and Los Altos Hills rank near the top of the nation’s richest municipalities as measured by average household income. California has more billionaires than any other state. The state’s elite universities (Cal Tech, Stanford, UC Berkeley, UCLA, USC, UC San Diego) are on the coastal corridors, as are most of its UC campuses and private elite undergraduate colleges. The corporate headquarters of Silver Lake, Disney, Oracle, Gap, Intel, and Kaiser Permanente are too.

So there is a separate state of Coastal California, a manor of prosperity. And it is probably the richest urban area in the world, or rather in the history of civilization — drawing on its geostrategic location, long coastline, weather, climate, blue-chip universities, and high-tech industries. Residents have the disposable income and leisure to live the life of aristocrats — and do so if gauged by their lifestyle choices, travel, hired servants, and appurtenances.

California residents buy far more Lexuses and Mercedes than people buy in any other state; 16 percent of all in-state car sales are luxury brands. The reigning ideology of aristocratic wealth, however, is neither conservatism nor blue-stocking Republicanism, but a strange blend of capitalism and socialism.

Or, rather, it’s explained best in the medieval terms of absolution and penance: a Gallic-like psychological syndrome of wanting lots of money in the concrete but in the abstract justifying such retrograde appetites by promoting cultural progressivism, with the caveat that the wages of entitlements, high taxes, illegal immigration, radical environmentalism, soaring home prices, multiculturalism, and diversity do not really affect those in Palo Verdes, Malibu, Healdsburg, or Menlo Park.

In other words, the costly effects of green mandates on power and gasoline, the rising bloated diversity bureaucracy in the public schools and colleges, the release to the ocean of millions of acre feet of precious stored water in reservoirs, and the $100 billion high-speed-rail debacle under way in Fresno and Kings County are simply the psychological atonements for living the life in a cloistered Versailles.

The Grapes of Wrath — in Reverse

Second, in the last decade and a half, about 6 million Californians over the age of 25 left the state; in the last 30 years, perhaps 10 million fled. There are no accurate statistics on the political ideologies of the departed or even their actual numbers. But most studies suggest that the reasons for radical outmigration were quality-of-life complaints, soaring home prices and taxes, poor state services, failing infrastructure and schools, and rising crime.

The emigrants in aggregate likely mirrored the old core of conservative support in California that once elected Governors Ronald Reagan, George Deukmejian, and Pete Wilson.

In many state-by-state rankings of the “business climate” (regulations and taxes), California now rates anywhere from 47th to last. Translated, that means that small-business operators relocated to more business-friendly states (for example, 60,000 Californians on average have left for Texas each year of the last decade), as did retirees on fixed incomes and young people shut out of the high-priced coastal housing market. According to one study, at least 13,000 companies fled the state over the last decade.

And the results have been striking in political terms.

In the last election, there was no Republican senatorial candidate on the ballot. Nor is there a Republican holding any statewide office. Republicans in 2016 lost seven congressional seats in California — many of them well after Election Day, as apparent Republican winners were buried by a sea of late-arriving “harvested” absentee ballots. Of the state’s 53 seats, only seven now remain Republican.

Certainly, the missing 10 million-plus who left California over the last generation and their absent offspring help explain why Hillary Clinton won the state by well over 4 million votes. It is not just a conservative perception that migration out of California has largely been an affair of the middle and upper-middle class who tired of California’s regulatory morass, or of those who, after cost-benefit analyses, have sought a more lucrative retirement elsewhere. Would-be Calexit leader Shankar Singam, in a recent television appearance, was unapologetically candid in celebrating the departure of the middle class from California. Indeed, he saw it as a sort of win-win bargain for the state: The tired people are leaving, and the energetic people are replacing them. So Singam argued that the United States “should be grateful for us” for ridding the state of its middle class: “If everyone in the middle class is leaving, that’s actually a good thing. We need these spots opened up for the new wave of immigrants to come up. It’s what we do.”

The Crime Whose Name Must Not Be Spoken

Third, both legal and illegal immigration have also radically changed the demography of the state. It is not just that about 40 percent of the nation’s 11–20 million immigrants live in California, a state in which now one in four residents was not born in the United States.

Rather, it is the result of two or three generations of mass influxes of impoverished residents who on average arrive without a high-school diploma, English proficiency, capital, or often legality. California now hosts one of three Americans who are on some sort of federal, state, or local welfare supplement. About a fifth of the state lives below the poverty level. Half of all births in California were paid for by the state-run Medi-Cal program, and 30 percent of Medi-Cal births were to mothers of undocumented immigration status. The San Ysidro border crossing between Tijuana and San Diego is the world’s busiest, where some 70 million people cross on foot and in cars into and out of California each year.

The presence of millions without English and without diplomas helps explain much of the alarming poverty in California, for the most part concentrated away from the coast, in the eastern environs of southern California, some of the coastal foothill communities, and the state’s Central Valley.

The effect of so many immigrant poor has certainly transformed California into not so much two different states as two different worlds: a highly sophisticated, highly regulated, and uniform coastal gentry versus an impoverished interior of largely immigrant and first-generation Californians who have little ability or desire to adhere to California’s labyrinth of rules and regulations. Well over half of all immigrant households in California receive some sort of public assistance. One unmentioned fact of California’s metamorphosis is the kinetic effect of millions of immigrants from the poorest regions of an impoverished Mexico — increasingly the state of Oaxaca — joining one of world’s most highly educated and affluent populations, in the California coastal corridor.

Three houses within a half-mile of my own home have been the scene of gang shoot-outs, illegal trash dumping, and illicit commerce. This week there was one mass robbery attempt (of farm workers) and a shoot-out on the freeway within a two-mile radius of where I write. I found a stolen and stripped spray rig last night in the orchard. In the Central Valley, two illegal aliens in the last two weeks have murdered three innocents, one a policeman. Their stories are now frighteningly predictable and monotonous: false identities, past deportations, prior felony arrests, aid and comfort from accomplices or family members.

It is illegal in California to rent out trailers behind one’s house without proper permits, sewage, or power hookups. It is also illegal to park dozens of unregistered cars without applying for non-use registration. It is not permitted to have dogs that are unlicensed and unvaccinated. And so on.

None of the rules apply, on the unstated theory that enforcement of California’s strict regulations would be impossible, or not cost-effective, or somehow biased or racist. The state, then, assumes that part of the population will be hyper-regulated and pay through the nose for misdemeanor violations as a way of subsidizing the other part that will by hypo-regulated and that cannot be cited for felonious behavior.

Requiem

So why is California a blue state? In part, because its conservative base fled, a future blue-state constituency arrived, and both the very wealthy and the very poor, albeit for quite different reasons, preferred a high-tax, big-government redistributionist state government.

It is easy to envision California largely in a tripartite fashion. One population has wealth and privilege enough to create a garden of Eden, with the proviso that it need not experience firsthand any downsides of its envisioned utopia.

The second population is largely that of first- and second-generation immigrants, millions of them without legality, and many of them poor and dependent on generous state entitlements and the non-enforcement of myriads of rules, and regulations.

Then there is the third zombie population: those who want to, or in fact are preparing to, follow the millions who left. They’re convinced that they lack the connections and clout of the wealthy that would let them navigate around the new regulatory morass, and they pay more in taxes than they receive in state services. In the end, the diminishing middle lacks the romance of the distant poor and the panache of the coastal affluent.

But California is explained not only by sociology but also by psychology. There is a new mentality in which the virtue-signaling elite enjoy the cheap labor of the poor and do not much care about the poor’s inability to access reasonably priced gasoline and electrical power, safe neighborhoods, and quality schools and infrastructure. From their secure keeps, they square that circle by offering generous entitlements, open borders, and progressive empathy — and lots of self-righteous bumper-sticker rhetoric.

At least for now.

If the southern border were to close, if immigration were to become measured, diverse, meritocratic, and legal, if the population were to assimilate more rapidly and eschew identity politics, then perhaps one day the long-gone middle class might rebirth itself, and California once more would be a sane state of three rather than two classes. But for now, that is too many ifs.

EDITOR’S NOTE: As Bob Walsh is fond of saying - “The former great state of California.” And I’ve been calling it the Rusty State instead of the Golden State.