The Golden State Is Crumbling


The recent announcement that California's unemployment again nudged up to 12 percent—second worst in the nation behind its evil twin, Nevada—should have come as a surprise but frankly did not. From the beginning of the recession, the Golden State has been stuck bringing up a humbled nation's rear and seems mired in that less-than-illustrious position.

What has happened to my adopted home state of over last decade is a tragedy, both for Californians and for America. For most of the past century, California has been "golden" not only in name but in every kind of superlative—a global leader in agriculture, energy, entertainment, technology, and most important of all, human aspiration.

In its modern origins California was paean to progress in the best sense of the word. In 1872, the second president of the University of California, Daniel Coit Gilman, said science was "the mother of California." Today, California may worship at the altar of science, but increasingly in the most regressive, hysterical, and reactionary way.

California's dominant ruling class—consisting of public-employee unions, green jihadis, and Democratic machine politicians—has no real use for science as Gilman saw it: as a way to create prosperity for its citizens. Instead, the prevailing credo of the state has been how to do everything possible to return to its pre-settlement condition, with little regard for what that means to the average Californian.

Nowhere was California's old technological ethos more pronounced than in agriculture, where great Californians such as William Mulholland, creator of the Los Angeles Aqueduct, and Pat Brown, who forged the state water project, created the greatest water-delivery system since the Roman Empire. Their effort brought water from the ice-bound Sierra Nevada mountains down to the state's dry but fertile valleys and to the great desert metropolis of Southern California. Now, largely at the behest of greens, California agriculture is being systematically cut down by regulation. In an attempt to protect a small fish called the Delta smelt, upward of 200,000 acres of prime farmland have been idled, according to the state's Department of Conservation. Even in the current "wet" cycle, California's agricultural industry, which exports roughly $14 billion annually, is slowly being decimated. Unemployment in some Central Valley towns tops 30 percent, and in cases even 40 percent.

And now, notes my friend, Salinas Mayor Dennis Donohue, green regulators are imposing new groundwater regulations that may force the shutdown of production even in areas like his that have their own ample water supplies.

Salinas was the home town of John Steinbeck, author of The Grapes of Wrath and great chronicler of Depression-era California. Today for many in hardscrabble, majority-Latino Salinas, home to 150,000 people, The Grapes of Wrath is less lyrical than real. "California," notes Donohue, a lifelong Democrat, "remains intent on job destruction and continued hyper-regulation."

California's pain is not restricted to farming towns. The state's regulatory vigilantes have erected a labyrinth of rules that increasingly makes doing almost anything that might contribute to increased carbon emissions—manufacturing, conventional energy, home construction—extraordinarily onerous. Not surprisingly, the state has not gained middle-skilled jobs (those requiring two years of college or more) for a decade, while the nation boosted them by 5 percent and archrival Texas by a stunning 16 percent over the same time period.

There is little chance that the jobs lost in these fields will ever be recovered under the current regime. As decent blue-collar and midlevel jobs disappear, California has gone from a rate of inequality about the national average in 1970, to among the most unequal in terms of income. The supposed solution to this—Gov. Jerry Brown's promise of 500,000 "green jobs"—is being shown for what it really is, the kind of fantasy you tell young children so they will go to sleep.

Many Californians who aren't slumbering are moving out of the state—and not only the pathetic remains of the old Reaganite majority. According to the most recent census, those leaving the state include old boomers, middle-aged families, and increasingly, many Latinos as well. Outmigration rates from places like Los Angeles and the Bay Area now rival those of such cities as Detroit. In the last decade, California’s population grew only 10 percent, about the national average, largely due to immigrants and their offspring. Population increases in the Bay Area were less than half that rate, while the City of Los Angeles gained fewer new residents—less than 100,000—than in any decade since the turn of the last century!

Increasingly, California no longer beckons ambitious newcomers, except for a handful of the most affluent, best educated, and well connected. Through the 1980s and even through the late '90s, the aspirational classes came to California. Now they head to other, more opportunity-friendly places like Austin, Houston, Dallas, Raleigh-Durham, even former “dust bowl” burghs like Des Moines, Omaha, and Oklahoma City. Meanwhile, Golden California, particularly its expensive, ultragreen coast, gets older and older. Marin County, the onetime home of the Grateful Dead and countless former hippies, is now one of the grayest urban counties in the country, with a median age of 44.

Of course, the self-described "progressive" mafia that runs California will point to Silicon Valley and its impressive array of startups. But for the most part, firms like Google, Twitter, and Facebook employ only a small cadre of highly educated workers. Overall, during the past decade the state's high-tech employment fell by almost 4 percent, while Texas's science-based employment grew by a healthy 11 percent. The sad reality is that turning T-shirt-wearing kids like Mark Zuckerberg into multibillionaires doesn't do much to reduce unemployment, which even in San Jose—the largely blue-collar "capital" of Silicon Valley—now hovers around 10 percent.

Magazine cover stories and movies cannot obscure the fact that entrepreneurial growth—the state’s most critical economic asset—has now stalled. In fact, according to a study by Economic Modeling Specialists Inc., last year the Golden State ranked 50th among the states in creating new businesses.

California remains rich in promise, home to spectacular scenery; a great Pacific location; leading firms like Apple and Disney; and a still-impressive residue of talented, diverse, entrepreneurial, and ingenious people. But the state will never return until the success of the current crop of puerile billionaires can be extended to enrich the wider citizenry. Until the current regime is toppled, California's decline—in moral as well as economic terms—will continue, to the consternation of those of us who embraced it as our home for so many years.

This piece originally appeared at The Daily Beast.

Joel Kotkin is executive editor of and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

Photo by wstera2.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Good by California

Kind of a shame what is transpiring in the Golden State. As a native of California, born in the 40's I grew up in what was a very good period of time for the State. After graduation from College and returning from Vietnam it was only natural to return to San Diego where I grew up. Stayed in California a number of years, actually left for a few years then returned. during the recession of the early 90's I lost my job via downsizing with a large Construction / sand and gravel mining company. I lived in Littlerock located in the northern edge of LA County. Needed a job as I was raising a soon to be teenage daughter, and feel back on my teaching certificate. Taught in the Littlerock High School for awhile then was hired to teach middle school at the local school district. While at the High School I really got my eye's openned related to what was transpiring in the educational system and in the community as a whole. Had been somewhat isolated in Littlerock. Quite a shock for someone who had been raised in an typical 1950's middle class surburan setting.

Knew then, 1994 it was time to leave. No way would I have let my daughter attend Littlerock High School. One could already see the beginnings of the break down in social order, gangs from "down below" LA coming into the area, taxes were going up and response from government going down, et cetera.

The area where I lived was quite rual still but that was changing also with subdivisions being built and more and more people, crime on the rise and the like. Begun to notice the turn over in the neighborhood also. Think the final straw was when my best friends decided to return to the State of Washington. At that time, the area was in a major depression as the Federal Govt. cut funding for the B-2 Bomber with the insueing layoff at Rockwell. I think that was who it was. Anyway, the highly skilled workers, the associated engineers and technical staff type people were leaving in droves. The area went from a place where kids could play outside without fear of being kidnapped to an area where one had to watch them all the time. The final straw was when the county government started to raise and raise taxes while providing fewer services. The welfare rolls expanded as a result of the spin off of the well over 1,000 highly paid people left because of the B-2 shut down.

I also decided it was time to go. Could not deal with the increased crime, the gangs coming in, and fearfull for the well being of my daughter. Most would think I am crazy, a California Native leaving and re-locating in the upper mid-west but I love it here. Good schools, nice people, a great work ethic, and in general people who take care of their homes, make sure their kids are being raised and schooled right, low crime, low taxes, responsive government and the like.

My advise would be to anyone who can, LEAVE. The grass is greener on the other side.

We share a similar story,

We share a similar story, but I haven't mustered up the courage to leave just yet. I lost my job in mid-2009 and being that I'm in the 50's, haven't been able to secure another job. It's really hard because I have so many years of experience, I went to college and am a hard worker. I've since had to rely on a few credit cards to help me scrape by which has caused my credit score to drop from over utilization. Well, to my surprise, apparently employers are now checking credit scores during background checks, which could explain why I've landed almost 10 interviews and had each one not make an offer. Since learning this I've been working on some DIY credit repair strategies trying to get my credit profile back on track so I can find work. If this doesn't work and I'm still unemployed I might consider moving back to the east coast to live with my parents and help take care of them. Scary prospect, but that's the state of the Golden state.

It is crazy to see one of

It is crazy to see one of the most populated states in so much trouble? But what other states are bad or even worse off? Come discuss this economic crisis on an open platform:

California in decline

Good riddance.

They cast the votes; they deserve the consequences.

California's dominant ruling class

Man, you nailed it! But I'd add that the REPUBLICAN party in CA is also to blame. They don't provide an organized alternative to the "ruling class". They are focused on social issues (gays, abortion, etc) rather than saving this state from the garbage heap of history.

What a waste. It just shows that most 'normal' folks don't like anti-business, nanny state legislation.

And I love the attitude - 'if you don't like it, leave' - grow up, fool.

California leads the way ...

From the gold rush to the ipad.... California leads, other states follow. The state had a tea party in 1973; it was called Proposition 13. It gutted property taxes and sowed the seeds of the current revenue collapse. Tax breaks for the Googles of the world made it worse. The state borrowed to make ends meet but now it doesn't have the revenue to pay it back. The famed UC system that had the world's best public universities is in tatters. California public schools are broke.

In 2013, forty years after California, America will have its tea party... with foolhardy tax cuts and corporate breaks... give it another 20-30 years. America will have its back to the wall. And we won't all fit in Canada.. or want to fit in Mexico. Remember, California leads.

Gary W, Las Vegas NV
"truth alone wins"

Good lord. Another

Good lord. Another California-bashing article from Joel Kotkin? I don't think he even bothers to write new articles anymore. He just takes his old articles and rearranges the paragraphs.

To Joel and everyone else who hates California: If you don't like it here, then leave. You have 49 other states to choose from.

EXCELLENT and accurate article

EXCELLENT and accurate article. "Green jihadist and Democratic machine politicians"'s a bit of a troll to say it like I am going to but I think it's true or I would not say it: these people are UN-AMERICAN and they are THE ENEMY. WWI we beat Imperialism; WWII, Fascism; WWIII, Communism; WWIV is in progress right now, the Green Jihadists" vs. Humanity.

Put another way: In case anybody has forgotten, the purpose of a Nation- State is to: 1. provide physical security; 2. provide a stable currency; 3. provide a predictable system of law; AND 4. Assist the private sector as to education, research, infrastructure, and exploration. When that's all being attended to, a wealthy society can afford #5 a safety net and it should. When all that's done I really don't think it matters what else the government does, as long as it neither interferes with the first 5 things nor diminishes social cohesion.

The "green jihadists" are antithetical to ALL of those purposes, and AFAIK do nothing positive on any legitimate environmental issues.

PS: I don't include public employee unions in my clip from the article intentionally. Unlike most elected Democrats, they are victims and at worst fellow travelers. I speak as the former leader of the 5,000 unionized City employees of my home town, formerly one of the three State-wide leaders of the largest public employee union in my State (and in the US for that matter). I have some experience with the connections between public unions and the Democratic-Environmentalist Axis on the national level as well, having been there when the choice of Carter and of Clinton was made.

California not your plaything

Social progressives are a malignancy upon California. The reduction of the 8th largest world economy to near bankruptsy is a blame placed squarely on their doorstep. Their dismissal and marginaliztion would be the greatest singular blessing upon this suffering state since the viaduct. Let us pray that redistricting will be the catalyst. Fortunately, like forms of biological cancer, social progressivist excesses end up being self-destructive to their ambitions for a narsissistic utopia underwritten by the current and future wealth of citizens in California. When there is no money to misguidedly spend, the feel-good machine stops. These ideologues who know best for all will try to preserve their well-paid/well-benefited cadre of bureaucrats, but the bottom line CANT be spun. An awakened California tax payer will balk to continue the nightmare. Much like chemotherapy, Californias debt crisis will render the state dangerously ill, but will also kill the parasitic stranglehold of liberal social progressivism on the tolerant hearts and minds of Californians. Sadly, until then, all must suffer for the delusions of a few self-annointed know-it-alls.


California the Golden state, Obama and the Democrats model for American future, is fast becoming the poster child for an bankrupt third world State!

An unholy alliance of Socialist Democrat politicians, Unions, and Illegal Aliens supporters are feasting at the trough of tax payers paid benefits while taxing & regulating business and the tax paying public into poverty.

The pandering of Left Wing Democrat Politicians to their constituency of Unions, Illegal Aliens and open border supporters, are driving business and citizens to other states & countries, while leaving the parasites & welfare leeches in an increasing bankrupt, crime ridden, dysfunctional state!

For years California has ignored economics 101 and imported Criminals, Uneducated Parasites, and poverty from Mexico, which increased Medical, Welfare, Crime, Prison, etc. & adding a estimated 22 billion per year to Calif. State expense to support the invading horde of Illegal Aliens while exporting business and educated tax payers.

Like all Socialist countries the results have been a astronomical increase in social welfare, schooling, prison cost etc. and a lowing of Living standards, Heath care, Education standards, Tax receipts & finally Bankruptcy.

The policies of Obama and Wash. DC Democrats are intent on following Calif. policies and Pro-Illegal Aliens, Pro-Unions and Anti-tax paying citizens and are endorsing the same socialist process of rewarding the Corrupt, Stupid, Foolish, Lazy, Greedy & Criminal while punishing the responsible, honest, law abiding & hard working citizens of American.

Failure to abide by our Constitution against invasion & enforce our Immigration laws and constraints on wages and benefits for public employees will result in turning the Golden State into MexiCalif and the end of the Calif. Dream and the beginning of the MexiCalif. Nightmare!

Amnesty & Citizenship as a reward for their invasion of the USA, with chain immigration will result in the rest of the USA turned into a Spanish speaking third world cesspool and follow California into a polluted, over populated, Spanish speaking, third world Nation of Crime, Corruption, Poverty, Cruelly & Misery modeled on Mexico!

This will result in a population depending on Welfare and the Democrat party, thus assuring the lock on power for the Socialist Democrat party of the United States of Mexico!

crumbling golden state

I read the whole article, and no where did I read any mention about the role massive unending 3rd world immigration , both legal and illegal, has played in the destruction of california.
The authors refusal to admit the connection in his article is the elephant in the room, and just as big a factor in the destruction of the golden state than any that he mentioned in his aerticle.
Multiculturalism, our new national religion, has a cost, one of them is the destruction of the social cohesion of a community, another, is a population that is now less educated than nearly all states in the country, and a lack of civic pride and involvement. Combine that with ethnic tribal politics and you have an unworkable and ungovernable state.
There is no way we can adress the problem if journalists are either too terrified or too politically correct to discuss it.

Destruction of agriculture?

Mr. Kotkin,

California's got a lot of self-created problems, no doubt, but it's hard to take seriously yet another claim that "California agriculture is being systematically cut down by regulation" when just last week the 2010 crop tally came in --- and ag sales set a record.

Perhaps there's an economic nuance that can square your claim with the statistics, but it seems a stubborn fact to just ignore.

The US dollar lost 15% of

The US dollar lost 15% of its value this year. Ag sales in CA increased by 8%. You figure it out. It's not nuance. It's hard reality.

California lives

The "paean to progress" that made California a global leader in "human aspiration" was based on economic progress, clogged highways and inflated housing values, all based on the rape of its land and huge debt.

Those days are gone, but still, as you write, "California remains rich in promise, home to spectacular scenery; a great Pacific location; leading firms like Apple and Disney; and a still-impressive residue of talented, diverse, entrepreneurial, and ingenious people."

I've recently spent a wonderful three weeks hiking in the Southern Cascades, up around Shasta. Hiking on the Pacific Crest Trail, at nearly every turn one is treated with another view of mighty Mount Shasta -- a visual wonder. California is blessed with many such geoographic treats. California's diverse open-minded population can no longer enjoy endless economic growth, but that was never a sustainable idea anyhow, nor one consistent with proper ecology.

So what's wrong pussycat?

Whats wrong?

The central government STILL clings to the idea of better individual living through government intrusion. Sacramento STILL believes there s not a single local problem they cant micromanage better......except the state budget, of course.

You Get What You Vote For

It is sad but California votes for it. Now they leave California and move to other states and vote for liberals who continue the policies of California.

I live in Colorado which use to be a red state. Now it is purple to blue. The Denver Post had an article about people moving into Colorado and the 3 states that had the most people moving to Colorado ....three states run by liberals - California, Michigan and Illinois.

The liberal party is the party of destruction. Look at all the destruction under Obama. Destruction of the greatest health care system. Destruction of the oil and gas industry. Destruction of jobs due to Obama rationed and redistributed health care. Check out jobs created the month before the legislatidn became law and the months after..the decline in jobs created is stunning.

But people continue to vote for it PROUDLY and then run away from the results. It is really sick and sad to watch.

But Al likes it...

It can't be that bad in California if billionaire scamster Al Gore bought an $8.75M 6,500 sq. ft. Montecito seacoast mansion complete with pools, spas and fountains so he can be near fellow greens Oprah Winfrey, Michael Douglas and Jerry Brown.

I'm sure Al brings all kinds of jobs with him: groundskeeping, personal servants, limo drivers, private jet pilots, secret service agents, PowerPoint experts, pool cleaners, accountants, investment advisers, marriage counselors, chakra releasers, dating services, alimony lawyers, international green conference coordinators for places like Bali and other armpits where they hold green conferences, television magnates for Current, anger management experts for both Al and Keith....

California leavin'

My dad moved our family in 1973 from Long Island, New York to Orange County, California to the "planned" community of Mission Viejo. Back then it really was the golden destination. Everything beckoned -- quality of life, schools, jobs. Now in my 40s, I'm looking to move back to New York, completely reversing my dad's long-ago decision. For many, this may seem like a lateral move, but I don't care. I'd rather be in New York with its comparable high taxes but at least with a Democratic governor who seems be to be able to break with policies that don't work. California is beyond a basket case with a legislature that is completely and irrevocably broken and with an overwhelming electorate that couldn't find its way out of a paper bag. Taxes, illegal immigration, "green" legislation...the list goes on. Many of my friends call the high cost of living (figuratively and literally) the "Sunshine Tax." Well, I'm ready for the gray days of fall and winter on the east coast, if it means getting out of California.

Leaving California

You left out the growing welfare establishment, the crime, (even in my Central Valley tough town murders used to be rare). I know lots of professionals, teachers, sales and management people who would be gone in a heartbeat if they weren't upside down. Most of them work in the private sector, make 6 figures and pay substantial taxes. If they go .....

A few years ago I attended a

A few years ago I attended a gold mining conference. The people who attend these conferences are probably the least risk adverse investors you are ever going to encounter; investing in junior gold mining companies. I couldn't help but notice during the presentations how there was considerable expoloration and development activity going on in Nevada; but none at all right next door in California. I thought this strange, given California's history and so I asked why. I was informed that the regulatory environment in California was too hostile so no one would look there.

So people who were willing to build mines in places like Eretria, Central African Republic, Venesuela and Communist China wouldn't even consider looking in California.

When you are considered more hostile to business than Hugo Chaves's Venesuela that's pretty impressive.

Trying to leave

I have been trying to leave for the last year. but our house is under water and we can not afford to go. we are just slowly bleeding to death.


I left in 1994. I gave up on the state. Government, regulation and taxes are too big.
California will have to turn into another Detroit before anything changes.
The second coming Jerry Brown will be as useful to California as his governorship in the 1970's. He has not learned a thing in 30 years.

Interesting History Lesson

Didn't William Mulholland drain the Owens Lake dry and piss off a bunch of farmers who didn't want to sell their land for this project? I can't comment about the current issue regarding water, but shouldn't we be more critical of growing water loving crops in deserts and arid environments?

I fail to see how this is what California needs. There's much to argue about "greenies" and silly regulation, but I doubt we need to gut our environment for a better economy.

Certainly there's a better, more moderate way.

The Golden State Is Crumbling

Those of us who follow California demographics have known about the state's out-migration, especially among skilled workers, for a long time. What this terrific article did not state is how the focused, aggressive recruitment of companies by other states is pummeling at California employers and entrepreneurs. Given California's tax base, over-regulation, and stagnant quality of life, this trend will continue unless a drastic turnaround happens quickly. When I recently toured the innovative Youngstown (Ohio) Business Incubator (which generates over $70 million a year from high tech start-ups) with the amazing Jim Cossler, and observed young bright software engineers working in an open space reminiscent of the Silicon Valley because of its incredible international diversity, I asked him how he got these young workers to move to a 'rust belt' city of 40,000. 'Are you kidding?' he said. 'All I have to do is give them the tour. I show them our incredible server & related business support resources, document how they can earn $100,000+ a year, buy a great house on a large lot for $50,000, and drive one hour in either direction to Cleveland or Pittsburgh for world-class sports, culture, and cuisine. It's an easy sell, because the INTERNET AND HIGH TECH CULTURE MEANS YOU CAN LIVE ANYWHERE YOU WANT TO WORK (emphasis mine) and still project an image that you are in California or New York.' In fact, three Silicon Valley companies operate almost solely out of Youngstown now even though their 'corporate address' still says Menlo Park. This is just one example of what many states are doing to raid California. Wake Up, Golden State!

Real Estate Prices Matter

I show them our incredible server & related business support resources, document how they can earn $100,000+ a year, buy a great house on a large lot for $50,000, and drive one hour in either direction to Cleveland or Pittsburgh for world-class sports, culture, and cuisine.

Are those $50,000 houses single-family detached?

How large are the lots?

Sounds almost too good to be true!

Youngstown house prices

The median priced home in Youngstown is 55k according to CNN. So the house on the large lot follows. Yes you see this in smaller towns that have industries that are shrinking, such as Lansing MI, South Bend IN and the like. So you have at least 5 to 8 to one price differentials around the country. Clearly folks are willing to pay a premium for climate, the question becomes when is the premium to high?

Not just California, either

Those of us who follow California demographics have known about the state's out-migration, especially among skilled workers, for a long time. What this terrific article did not state is how the focused, aggressive recruitment of companies by other states is pummeling at California employers and entrepreneurs.

Since the 1980's, my home county, Montgomery County, Maryland has been exporting its private-sector jobs elsewhere, and usually to places south of the Potomac River in Virginia. I believe an over-emphasis on Smart Growth (dating back decades, long before anyone heard of the term); an official policy of making it difficult to access airports by highway; pandering to an especially well-established tradition of the NIMBY (not in my backyard) syndrome among citizen and civic groups; topped off by aggressive recruitment of Montgomery County businesses by Virginia has severely damaged the county's base of employment.


I lived in Damascus in Montgomery Co. for 5 years. Montgomery Co. has a lot of positive aspects. I really like the rolling hills, the trees and the moderate temperatures in the summer. In 1982 I moved to the Dallas suburbs. My salary in the Dallas area was slightly more that what I received in Washington, DC. However, my cost of living dropped by around 40 percent due to the much lower cost of housing and the much lower taxes (no state income tax) in in the Dallas area. In the last ten years, I have gone back to the Washington DC area on business. Occasionally, I check the cost of housing. The cost of housing is still at least 40 percent less in the Dallas suburbs as compared to Montgomery Co.