When Biden took office, one of his first acts was the elimination of our border security. Like a power-hungry dictator, Biden simply decided to ignore our immigration laws. His catastrophic border policy resulted in untold millions of unidentified foreign citizens from around the world pouring into our country. Its impact is now being felt in cities across the country. The worst is yet to come. PETER LEMISKA - AND WE'RE ALREADY THERE!!!
Saturday, June 9, 2018
CITY JOURNAL - BROWNOUT: The Fall of California Under Mexican Occupation
FROM THE MAGAZINE
Brownout
Despite glowing media coverage and its departing governor’s claims, California faces a future loaded with problems.
Jerry Brown’s long political career will likely end in January
2019, when the 80-year-old’s second stint as California governor concludes. In
the media’s eyes—and in his own mind—Brown’s gubernatorial encore has been a rousing
success. His backers say that he has brought the state back, economically and
fiscally, from the depths of the Great Recession, which hit California harder
than it did the rest of the country. Brown has enacted an array of left-liberal
policies, to the delight of progressives, and positioned California as a
blue-state role model for the American future. A decade of phenomenal growth
among Silicon Valley’s landmark companies has boosted the state’s image and
helped restore its overall economy. Democrats hope that California will provide
a template for reestablishing their appeal to voters nationwide.
But the state’s boom shows signs of leveling off: after growing
much faster than the national average for several years, the economy, notes a
recent report by the Los Angeles Economic Development Corporation, has now
fallen to around the national average; the state is no longer generating income
faster than its prime rivals such as Texas, Washington State, Oregon, or Utah.
California Lutheran University forecaster Matthew Fienup suggests that the
state’s economic growth could fall below national norms if current trends
continue.
The growth that so impressed over the past five years has masked a
multitude of policy sins, and as California’s economic engine slows down, the
underlying problems are becoming harder to deny. People are moving out in
greater numbers than they’re moving in. Rates of job creation—and the types of
jobs being created—vary widely according to geography. The high-tech hubs of
San Francisco and Silicon Valley have added tens of thousands of well-paying
jobs during Brown’s tenure, but the rest of the state hasn’t done nearly as
well.
Brown has put California on a fiscally unsustainable path. A
disproportionate share of the funds paying for his ever-expanding progressive
agenda derive from Silicon Valley’s capital-gains tax revenues and inflation of
the state’s coastal real-estate prices. Any slowdown in the tech money machine
or drop-off in property values could prove disastrous for Sacramento’s
budget—California gets half its revenue from its top 1 percent of earners.
According to Pew, this makes it the major American state with the most volatile
finances. Both U.S. News & World Report and the Mercatus
Center ranked California 43rd among the states in fiscal health. And that was
during an economic boom.
Brown’s departure will also remove the last (if only partial)
restraint on progressives in the state legislature, who largely do the bidding
of California’s powerful public-employee unions and the green lobby. These
forces will pressure the next governor to ram through even stricter
environmental laws, more onerous labor regulations, and a single-payer
health-care system. California’s teachers are even pushing for an exemption
from state income taxes.
California was once ground zero for upward mobility. No more.
During the new millennium, the Golden State has become increasingly bifurcated
between a small but growing cadre of elite workers and a far larger pool of
poorer families barely scraping by. Wide disparities have opened up between the
ultra-rich and a fading middle class. The Brown administration has largely
ignored the state’s poor and struggling rural areas as it pursues its agenda of
remaking California into a progressive paradise. The bill—socially,
economically, and fiscally—is coming due.
Throughout much of the twentieth
century, California was a population magnet, growing ever more economically
vibrant as it attracted the ambitious and the entrepreneurial from other
American states and from around the world. Now the state’s long-running population
growth is leveling off. During the last decade, high taxes, rising housing
costs, and constrained economic opportunity have sent many California residents
in search of greener pastures. Domestic economic migrants are pursuing their
American dreams in low-tax, pro-growth states like Arizona, Nevada, and Texas.
With fertility rates already below replacement, the state’s
population growth fell below the national average for the first time last year.
Only four states—Michigan, Ohio, Wisconsin, and Illinois—are attracting fewer
newcomers per capita. Immigration won’t solve that problem—new arrivals from
foreign countries have trended down over the past decade. Since 2010, Florida
attracted international immigrants at a per-capita rate nearly 70 percent greater
than California’s. Net domestic out-migration, which declined in the early
years of the Great Recession, tripled between 2014 and 2017. Worse, according
to a recent UC Berkeley study, more than a quarter of Californians are
considering picking up stakes, with the strongest proclivity found among people
under 50.
California is aging, too. The state’s crude birthrate (live births
per 1,000 population) is at its lowest since 1907. Los Angeles and San
Francisco ranked among the bottom ten in birthrates among the 53 major
metropolitan areas in 2015. Between 2000 and 2016, San Francisco–Oakland and
San Jose ranked 34th and 47th in terms of millennial growth among the country’s
53 largest metro areas. A dearth of young people would pose particular problems
for an economy like California’s, long dependent on innovation, traditionally
the province of younger workers and entrepreneurs. Seventy-four percent of Bay
Area millennials are considering a move out of the region in the next five
years. Since 2000, Los Angeles–Orange County has seen some of the nation’s
slowest growth of 25- to 34-year-old residents; since 2010, it has remained
substantially below the national average on this measure. The progressive
narrative suggests that those leaving California are poor, poorly educated, or
both. Yet according to the Internal Revenue Service, out-migrant households had
a higher average income than those households that stayed or moved in; even the
Bay Area is experiencing growing out-migration from increasingly affluent people.
Though the new federal tax changes, which will limit state tax deductions, will
likely not affect the wealthiest oligarchs and landowners, they could further
accelerate the departure of the merely somewhat affluent.
The current climate contrasts sharply with the 1950s and 1960s,
when Jerry Brown’s father, the late Edmund G. “Pat” Brown, pursued dynamic
pro-development policies as California’s governor. During those decades, the
state constructed new infrastructure that sparked growth in fields as diverse
as high-tech, aerospace, fashion, agriculture, basic manufacturing, and
entertainment. What was then a model freeway system connected California’s
cities to new middle-income communities in the San Fernando Valley, the South
Bay of San Francisco, Orange County, and along the spine of the San Francisco
Peninsula, which morphed into what we now call Silicon Valley. Pat Brown’s
administrations modernized and extended the state’s water-supply system and
crafted a public university system that was the envy of the nation, if not the
world. Describing Brown’s leadership in transformational terms, biographer
Ethan Rarick called the twentieth century the “California century.”
These reforms sparked a long economic boom not only on the
California coast but also in the state’s massive interior. In those days, the
region had political clout, as Republicans and Democrats competed for votes in
Fresno, San Bernardino, and Kern Counties. Today, the California heartland
tilts Republican but has lost its influence, as political and economic power
has consolidated around deep-blue Silicon Valley and San Francisco.
Like his father, Jerry Brown is a
liberal Democrat, yet he has worked overtime to undermine much of Pat Brown’s
pro-growth legacy. With the cooperation of a compliant state legislature
dominated by liberals, Brown has increased taxes, instituted polices making
energy much more expensive in California than in neighboring states, pursued
regulations causing housing costs to rise to unprecedented levels, and positioned
California as a safe space for illegal immigrants.Brown’s policies embrace the
values not of aspirational California but those of its wealthy coastline
residents. From water and energy regulations to a $15 minimum hourly wage,
Brown’s agenda reflects the ultraliberal political predilections of the Bay
Area. That’s where Brown himself lives, as do many of the state’s political
elite, including Lieutenant Governor Gavin Newsom and U.S. senators Dianne
Feinstein and Kamala Harris. The rest of the state has been pushed to the
political margins and keenly feels its powerlessness. “We don’t have seats at
the table,” laments Richard Chapman, president and CEO of the Kern County
Economic Development Corporation. “We are a flyover state within a state.”
Though widely praised by left-wing think tanks and progressive
foreign governments, Jerry Brown’s policies have unquestionably exacerbated
income inequality in California. According to the Social Science Research
Council, California now has the highest levels of income inequality in the
United States. In the last decade, according to the Brookings Institution,
inequality grew more rapidly in San Francisco than in any other large American
city; Sacramento ranked fourth on this measure. California is home to a disproportionate
share of the nation’s wealthiest people, including four of the 15 richest on
the planet. Yet more than 20 percent of Californians are considered poor,
adjusted for housing costs. That’s the highest percentage of any state,
including Mississippi. According to a recent United Way study, close to one in
three California families is barely able to pay its bills. Los Angeles, by far
the state’s largest metropolitan area, has the highest poverty rate of any
large region in the country. In the 4 million–strong Inland Empire, a
population nearly as large as metropolitan Boston suffers one of the highest
poverty rates among the nation’s 25 largest metro areas.
Between 2007 and 2016, according to an analysis of Bureau of Labor
Statistics data, the Bay Area created 200,000 jobs paying better than $70,000
annually, but high-wage jobs dropped both in Southern California and statewide.
The number of blue-collar jobs, some of which pay well, has dropped by 500,000
since 2000 and by more than 300,000 since the Great Recession. Minimum-wage or
near-minimum-wage jobs accounted in 2015–16 for almost two-thirds of the state’s
new job growth, according to the California Business Roundtable—and the new $15
minimum-wage law, set to phase in over the next half-decade, will hurt such
entry-level employment, research suggests.
The number of high-paying business- and professional-services jobs
is now growing at a rate considerably lower in Silicon Valley and San
Francisco, moreover, than it is in rising boomtowns such as Nashville,
Dallas–Fort Worth, Austin, Orlando, San Antonio, Salt Lake City, and Charlotte.
Most other California metro areas, including Los Angeles, are doing far worse
when it comes to job growth in this area. The Inland Empire saw a 7 percent
loss of such jobs between 2015 and 2016. As for tech jobs, between 2015 and
2017, San Francisco and San Jose added 23,000 jobs in the science, technology,
engineering, and mathematics (STEM) fields, for a growth rate of 4 percent and
7 percent, respectively. But the greater Los Angeles area, by far the state’s
largest urban center, gained only 6,500 STEM jobs, for a growth rate of just 2
percent, well below the national average. Even worse, the Riverside–San
Bernardino area added barely 900 STEM jobs, for a growth rate of about 2
percent.
Blame some of this weakness on the Brown administration, for
putting the squeeze on the state’s business community. Brown’s aggressive
stance on energy and climate issues—unrealistic renewable-energy mandates and
reduction targets for fossil-fuel emissions—has placed California at war with
industries such as home building, agriculture, and manufacturing, says
economist John Husing. California’s industrial electricity rates are, as a
consequence, twice as high as those in Nevada, Arizona, and Texas—the states
that have emerged as California’s main competitors for business and residents.
Much of California’s overall job growth—40 percent—during the last
decade has been concentrated in the prosperous Silicon Valley and Bay Area,
which account for about 20 percent of the state’s population. The majority of
the state’s population lives outside the Bay Area and, generally speaking, the
farther you go from there, particularly inland, the worse the economic
situation gets. Among the nation’s 381 metropolitan areas, notes a recent Pew
study, four of the ten with the lowest share of middle-class residents are
Fresno, Bakersfield, Visalia–Porterville, and El Centro. Three of the ten
regions with the highest proportion of poor people were also in California’s
interior. Southern California has lagged its northern rivals, too, leaving
whole swaths of the region in poverty.
Many Californians living in the inland areas had hoped that the
coastal boom would spill eastward, as skilled workers headed out in search of
more affordable living. That’s how it had always worked before. In the 1980s
and 1990s, middle-class Californians flooded out of the costly coastal urban
centers and into the interior counties, running from Riverside to the Central
Valley adjacent to the Bay Area. That flood, though, has slowed to a trickle.
Prior to the 2008 housing crash, the Inland Empire annually gained as many as
90,000 domestic migrants, largely from the coast; in 2017, a mere 15,000
relocated.
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