Can Ontario learn from California ?
California Needs To Revive Progressive Practices: FCPP - Frontier Centre for Public Policy
In the past few years, Mr. Kotkin notes, California has lost 700,000 jobs – among them, 400,000 manufacturing jobs and 130,000 Silicon Valley jobs. For the first time since the Great Depression, personal incomes are falling and middle-class Californians are fleeing. (Between 2004 and 2007, California lost – net – 500,000 residents; in 2008, it lost another 135,000.) Unemployment officially approaches 13 per cent, one of the highest rates in the country. In Fresno, described by some as “California’s Detroit,” unemployment reaches 40 per cent. In Los Angeles County, 20 per cent of the population (2.2 million people) receive social welfare.
Who fled California? Mostly, Mr. Kotkin wrotes, middle-class workers – people who earned between $35,000 (U.S.) and $75,000. The result of this exodus, he said, is a two-tier society: “a lucrative one for the wealthy and for government workers … a grim one for the private-sector middle and working class.”
Anti-Private Sector Policies
California has always been governed by “progressives,” he writes, by trend-setting leaders who invested aggressively in “middle-class infrastructure” – highways, schools, hospitals, docks, water management, public parks and clean air. But the progressives of yesteryear understood the fundamental need of middle-class workers: jobs.
The progressives who govern now have turned against the private sector, imposing one of the most burdensome tax regimes in the U.S., largely destroying the small-business sector that produces most of the jobs. These progressive have also turned against the suburbs, where the middle-class has traditionally thrived, directing people instead into densely populated inner cities where the public sector can more efficiently engineer “sustainable housing.”
“This new urban model will apply not to the wealthy progressives who own spacious homes in the suburbs, but to the next generation, largely Latino and Asian,” Mr. Kotkin observes. This fashionable repudiation of the suburbs will not work, he writes. More than 80 per cent of Californians either own their own homes or aspire to own them. By the thousands, Californian refugees are now finding jobs and “sustainable housing” on their own – in the suburbs of Houston and Phoenix.
Mr. Kotkin writes that a coalition of environmentalists and public-sector unions run the state – and spends lavishly. (From 2003 through 2007, state and local government spending increased by 30 per cent.) “In the past, both [Republicans and Democrats] had to answer to middle- and lower-class voters sensitive to taxes and dependent on economic growth,” he writes. “But these days … power is won largely by mobilizing activists and public employees.” The results can be seen in the utopian reach of state legislators: California’s Global Warning Solutions Act will (according to a study by economists at California State University) reduce the state’s GDP by $182-billion in the next 10 years – and cost 1.1 million jobs.
'Smart Growth' Strategy
California often points to companies such as Disney, Google, Hewlett-Packard and Apple (and scores of smaller innovative companies) as evidence that the state is pursuing a successful “smart growth” strategy. But Mr. Kotkin notes that these companies have moved most of their middle-class workers to other states.
He recommends a return to the progressive practices of the past. First, California should shift its priorities – for example, by ending the lavish pensions provided to public-sector bureaucrats. Second, it should invest once again in “middle-class infrastructure” – ports, bridges, highways and sewers. He notes that California’s ports are so congested that the state exports dockyard jobs north (to Canada) and south (to Mexico).