For far too long now discussions of California political economy have been dominated by neoliberals. Republican neoliberals are overt in their desire for an economy based on oligarchy – a wealthy few get to prosper at the expense of the basic economic security of everyone else. Democratic neoliberals have usually wanted to smooth out the edges of this rough beast, supporting tax and spending cuts and deregulation in the hopes that enough debt can be spread around to make up for the loss of shared prosperity – but otherwise have consistently gone along with the Republican efforts to channel wealth upward.
The economic policies of the last 30 years in the US emphasized debt, tax and spending cuts, and deregulation as the magic ingredients for growth. It worked, on occasion, but never for more than a few years at a time, never for most Californians, and did not produce ANY long-term value, stability, or security. California’s version of these policies emphasized the housing market, especially over the last 15 years but really ever since 1978 (or am I one of the few people to remember California in the 1980s?).
Where that wasn’t sufficient to create jobs, big business and their political lobbying arms (the Chamber of Commerce, the Republican Party) went further and argued that supposedly high taxes and supposedly onerous regulations were driving jobs away. Nevermind the fact that the economic booms we did have in the 1980s, 1990s, and 2000s showed that the state had no problem creating businesses and jobs – the problem was instead sustaining them and spreading the wealth around, which neoliberalism makes impossible.
Unfortunately some leading Democratic politicians in this state see fit to repeat the neoliberal argument that high taxes and regulations will drive businesses away. Recently more voices are challenging the neoliberal consensus, urging California to adopt different, progressive policies to build on California’s remaining strengths and resist calls to go back one more time to the neoliberal trough, to try and float one last bubble-based boom.
What these folks point out is that California needs government policies that provide both flexibility and basic security, instead of giving power and wealth to a small elite in a process that increasingly traps Californians in a rigid system of debt and inequality.
Richard Florida provides one of the most insightful examinations of the economic crisis and how it will reshape American economic geography. He argues that the current recession may well resemble the Long Depression of 1873-1896, which dramatically reshaped where economic growth took place. The small manufacturing towns of Lowell and Rochester were replaced by large urban centers like Detroit and New York City as engines of growth. And not surprisingly, the Progressive Era quickly followed, motivated largely by a desire to make the cities more livable and more equitable.
The places that will thrive, Florida argues, are those urban centers that can provide support and opportunity for people to create, produce, and just plain work sustainably and with security:
The United States rose to economic preeminence by periodically developing entirely new systems of infrastructure-from canals and railroads to modern water-and-sewer systems to federal highways. Each played a major role in shaping and enabling whole eras of growth.
The Obama administration has declared its intention to open the federal government’s pocketbook wide to help us get through this recession, and infrastructure spending seems poised to play a key role. Done right, such spending could position the United States for the next round of growth. But that will entail more than patching up roads and bridges.
Florida is directly challenging the neoliberal consensus that jobs grow through some sort of “voodoo economics” – that if you cut it (taxes, spending and regulations) they (jobs) will come. This is nonsense. What he instead points out is that a modern economy requires a modern level of services. We need passenger trains, well-funded schools (from kindergarten to grad school), health care, and a dense urban landscape that can affordably house all these workers instead of exhausting our water resources, pushing people into known fire zones, and raising the planet’s temperature in order to sustain sprawl.
Another voice that