https://www.nationalreview.com/2022/01/trouble-in-paradise-the-crumbling-california-model/
California is broken, but it is not doomed.
S ome horrified conservatives dismiss California as the progressive dystopia, bound for bankruptcy and, let’s hope, growing irrelevance. Progressives, for their part, hail the Golden State as the avatar of a better future, the role model for a new, more environmentally friendly and socially just economic order. They often dismiss critiques as conservative misinformation.
Yet California is not doomed, at least in the near term, nor is it anything like a model of social democracy. As long as its tech oligarchs produce enormous profits and generate wealth, California remains fiscally flush for the near term, and the evolving economy, long on digitization and constant entertainment, works to the state’s historic strengths. Key industries such as space and biomedical research also offer promise.
The big problem with the California model is that it does not work for most Californians, who suffer from the highest poverty rate (cost of living adjusted) in the country. Despite being home to three of the nation’s four most expensive housing markets, California has among the lowest cost-adjusted median income of any state, as demographer Wendell Cox notes. Although not particularly hard hit by pandemic fatalities, California continues to recover more slowly than the rest of the states and now suffers the highest unemployment rate in the country — including nine of the 16 metros with the greatest joblessness. Even as the tech oligarchy has reaped record profits and expanded its wealth to unprecedented levels, California ranks as the second-worst place to find a job of all the states. Thank God for Hawaii!
A New Economic Model?
Flush from his recall triumph, Governor Gavin Newsom, along with the legislature, seems determined to double down on his attempt to shape California as the model for the progressive future. He claims that our state is “the envy of the world” and the model of social justice. “Unlike the Washington plutocracy,” he boasts, “California isn’t satisfied serving a powerful few on one side of the velvet rope.”
We can see, in aggregate numbers, some justification for crowing. A writer at Bloomberg claims that the state has “the best economy” in the world, pointing to the bloated stock prices of the major tech firms, soaring home values, and the enormous wealth creation accruing to a relative handful. Other writers insist that California will continue to dominate most of its key industries, owing to its innovation and capital resources.