Sunday, April 22, 2012

The land of fruits and nuts

That's how the late Lewis Grizzard was wont to describe California on occasion.  The label seems to be more than adequately confirmed by an article in the Wall Street Journal this weekend.  Here's an excerpt.

Nearly four million more people have left the Golden State in the last two decades than have come from other states. This is a sharp reversal from the 1980s, when 100,000 more Americans were settling in California each year than were leaving. According to Mr. [Joel] Kotkin, most of those leaving are between the ages of 5 and 14 or 34 to 45. In other words, young families.

. . .

"Basically, if you don't own a piece of Facebook or Google and you haven't robbed a bank and don't have rich parents, then your chances of being able to buy a house or raise a family in the Bay Area or in most of coastal California is pretty weak," says Mr. Kotkin.

While many middle-class families have moved inland, those regions don't have the same allure or amenities as the coast. People might as well move to Nevada or Texas, where housing and everything else is cheaper and there's no income tax.

. . .

Of course, there are plenty of jobs to be had in energy, just not the type the new California regime wants. An estimated 25 billion barrels of oil are sitting untapped in the vast Monterey and Bakersfield shale deposits. "You see the great tragedy of California is that we have all this oil and gas, we won't use it," Mr. Kotkin says. "We have the richest farm land in the world, and we're trying to strangle it." He's referring to how water restrictions aimed at protecting the delta smelt fish are endangering Central Valley farmers.

Meanwhile, taxes are harming the private economy. According to the Tax Foundation, California has the 48th-worst business tax climate. Its income tax is steeply progressive. Millionaires pay a top rate of 10.3%, the third-highest in the country. But middle-class workers — those who earn more than $48,000 — pay a top rate of 9.3%, which is higher than what millionaires pay in 47 states.

. . .

A worker in Wichita might not consider those earning $250,000 a year middle class, but "if you're a guy working for a Silicon Valley company and you're married and you're thinking about having your first kid, and your family makes 250-k a year, you can't buy a closet in the Bay Area," Mr. Kotkin says. "But for 250-k a year, you can live pretty damn well in Salt Lake City. And you might be able to send your kids to public schools and own a three-bedroom, four-bath house."

According to Mr. Kotkin, these upwardly mobile families are fleeing in droves. As a result, California is turning into a two-and-a-half-class society. On top are the "entrenched incumbents" who inherited their wealth or came to California early and made their money. Then there's a shrunken middle class of public employees and, miles below, a permanent welfare class. As it stands today, about 40% of Californians don't pay any income tax and a quarter are on Medicaid.

It's "a very scary political dynamic," he says. "One day somebody's going to put on the ballot, let's take every penny over $100,000 a year, and you'll get it through because there's no real restraint. What you've done by exempting people from paying taxes is that they feel no responsibility. That's certainly a big part of it.

And the welfare recipients, he emphasizes, "aren't leaving. Why would they? They get much better benefits in California or New York than if they go to Texas. In Texas the expectation is that people work."

There's much more at the link.  Disturbing reading - even despair-inducing if you happen to live in the formerly Golden State - but according to friends who live (or used to live) there, it's a fair assessment.  (I can't comment from my own experience, as my last visit to California was about six years ago.)



Johnny D. said...

Born and raised there, but on the eastern side at the foot of the Sierra's. That's a whole different world from the western side, and I'd argue it's one of the most beautiful and rugged places on our planet. I'd go back in a minute except for what's outlined in this post. It's pretty much true from my perspective - even though folks on the eastern side have fought against it for as long as I can remember, the flatlanders (as we call them) have managed to infect that area too. Sad.

Anonymous said...

It is as Mr Kotkin describes, and worse. My husband and I are hanging on by a thread in this godforsaken state. We're not on welfare (and don't ever intend to be!!!), but our net income goes down every year thanks to the lousy economy, high gas prices and overall cost of living, various tax hikes, fees up the wazoo for small businesses, and our income not being able to keep up. Unfortunately we but don't have the necessary up-front funds to relocate and start over elsewhere, so we're stuck. Between Calfornia's ridiculous income tax, federal income tax, and punishing self-employment tax for my husband, we never have enough cash and are always one disaster away from ruin. Buying a house? Impossible for us. The outlook for living here is indeed despair-inducing, and you haven't even touched on high crime rates, especially because of drug trafficking gangs and violence "imported" from south of the border. It's The Tarnished State now, it's golden past long gone.

I wish we could get the h3ll out.

Purple Magpie in Central Califreakia

Anonymous said...

My uncle lived in Canoga Park, (LA suburb). He was calling California The Land Of Fruits and Nuts
50 years ago.

I passed through twice and plan on never going back.

perlhaqr said...

Unfortunately, many of those California expats leave because CA sucks, and then get where they're going and start trying to make it just like "back home". :(

diesel smoke said...

This state has been run by the nuts for a long time. Why would anybody vote the guy back in that is a major reason for the money issues. The unions want theres, they don't care or understand the long term problems they have promoted by voting for governer moonbeam the first time or the third time. The roads suck, can't afford to fix them, because the fuel taxes went to bribe the welfare pigs.