The #1 article on the Guardian’s site (the British newspaper, not the SF alt-weekly) is an article from their Sunday sister paper, the Observer, titled Will California become America’s first failed state? As any of you who’ve read Calitics for the last few months or years know, our answer is likely to be “yes.” But it’s still worth examining why that’s the case, and whether the Observer article really gets to the heart of the problem.

First, I think it is worth defining what the “California Dream” is. I think it is actually a broad and yet deeply fundamental concept. The dream is that anyone can come to California, enjoy its natural beauty, and reinvent/find/embrace themselves here, all enabled by the availability of basic economic security and prosperity. That’s really what it’s about, the notion that people can create, innovate, dream, and be themselves in this beautiful place, and do so without having to worry about how they’ll make ends meet, because the state has backed policies that will ensure such fundamental prosperity.

That dream is now dead. Anyone who says otherwise is either lying, totally unfamiliar with California in 2009, or actively promoting and aiding the death of that dream.

It died because of the specific way we went about implementing that dream. In the second half of the 20th century, the California Dream was enfolded within a specific set of land use policies that ultimately undermined the progressive aspects of that dream. Whereas California of the 1960s provided free schools, a generous welfare state, and invested in infrastructure, all of which enabled people to come here and actualize their self-potential, California of the 2000s traps most of its residents in a spiral of downward mobility that endangers not only their ability to be who they want to be, but their ability to be healthy, to be fed, to survive.

This has happened because those that benefited from the earlier iteration of the California Dream, which was predicated on suburban sprawl, have decided to pull up the drawbridge behind them, to blow up the public services that made the Dream possible, and to hoard the remaining benefits and wealth for themselves at the expense of everybody else. The California Dream was about providing a good and secure life to everyone. Now, it is about denying that Dream to everyone who wasn’t able to buy a home before 2000, who wasn’t able to attend college before 1992, who doesn’t make enough money to afford their own health care.

Even though the Observer article mentions the state’s governance crisis, the issue of land use and sprawl, and briefly discusses possible solutions like the Constitutional Convention, the article still misses something fundamental, because it doesn’t examine the political culture now at work here in California – a culture where a small number of people are locking out everyone else from being able to enjoy the California Dream.

What this means is that, as I wrote back in the summer of 2007, we must redefine the California Dream for the 21st century – we must find new ways to provide the security and prosperity that enables people to enjoy the natural and psychic benefits California offers.

But to do that, we have to first challenge and ultimately defeat those who have decided to hoard and exclude.

More below.

Central to the Observer’s article is a discussion of “where did it all go wrong?” And they look in precisely the right places – sprawl. Whether it’s agricultural sprawl in Mendota, or suburban sprawl in Riverside, the causes and consequences are exactly the same. California chose to grow in unsustainable ways, into unsustainable places, through an unsustainable overuse of resources. Mendota is suffering because arid fields were watered to grow cash crops for big agribusiness. Beth Court in Moreno Valley is suffering because arid fields were developed to grow cash crops – mortgages, furniture, etc – for big developers and big businesses like Wal-Mart.

But Mendota and Moreno Valley are just the leading edge of a deeper problem. Their collapses shouldn’t, in themselves, cause a state to fail. When you look at the underlying landscape, however, you can see how they were the first dominoes, certainly the hardest hit dominoes, of a system that had become designed to fail.

The California Dream of the 1960s was the product of a political revolution in the late 1950s – 1958, to be precise. Sick of Republican do-nothing rule, Californians turned en masse to liberal Democrats like Pat Brown and Jesse Unruh to manage and preserve their prosperity, to build the freeways and aqueducts that sustained their suburban dream, to build the schools and colleges that would allow their kids to live the dream as well.

But when this dream ran into trouble in the 1970s, Californians faced a crossroads. Would they redefine the terms of the dream, to be more inclusive, but less focused on freeways, cars, and the single family home? Or would they find ways to artificially prolong the 1950s for as long as possible by protecting the existing homeowners at the expense of those on the outside and those not yet born? As we know, the latter course was chosen. Prop 13 created a homeowners’ veto over virtually all of state government, ensuring that California would never be able to do anything with its government that did not meet with the approval of a vocal minority of self-interested homeowners.

The 1978 system was about more than a tax revolt. It was about preserving the 1950s vision of white suburbia from any and all efforts to change it. Although Prop 13 wasn’t responsible for NIMBY efforts to kill affordable housing, or new hospitals, or LA subway lines, or urban density, it was done at the same time and for the same reasons.

California politics today is dominated by a tension between those who still benefit from the California Dream and those who no longer do, or those who were too young to ever have the opportunity to do so. Our anti-tax politics are based on a fundamental hypocrisy: those who were educated in our schools, who got a heavily subsidized college education, who own homes whose wealth is subsidized by freeways and aqueducts, who were able to start careers and build businesses because the state helped take care of health care costs, they have decided that they’re going to refuse to extend those benefits and opportunities to others, because they believe that doing so will risk their own wealth.

As a result, California has suffered from a generation of inequality, as those who weren’t lucky enough to buy homes before the bubble, who have some money in the bank, who still have a high-income job without student loan debts, are stuck in a state where the California Dream still tantalizes people – nearby but unattainable.

California’s governance problems all stem from this basic political battle. We have a 2/3rds rule hamstringing the legislature because the prosperous beneficiaries of past progressivism wanted stronger safeguards to prevent their wealth from being used to help others enjoy the same benefits. We have land use rules that direct suburban growth into unsustainable places like  Moreno Valley because homeowners in the coastal cities are convinced that to enable more urban density in their communities will result in them losing property value. They fight mass transit solutions that will save Californians money by liberating them from the costs of oil, whether it’s subways or high speed trains, having the effect of denying savings to others in order to protect what they already have.

This dynamic feeds into the main political debate in Sacramento, which is a debate about whether government will be used to help people, whether government will again be used, as it was in the 1960s, to build the California Dream.

Republicans don’t want to use government to do so, and believe that the California Dream should only be available to those with the wealth to afford it. If you can’t afford the cost of the Dream, Republicans argue, then “maybe you shouldn’t be living here” in the revealing words of Chuck DeVore.

Democrats are, as usual, divided. Some understand that government must be used to restore the Dream. Others are afraid to say so, afraid to challenge the post-1978 consensus, perhaps because they instinctively understand that some of their own constituents, certainly the most frequent voters, are those that do not want to give up anything they have to help others enjoy economic security.

And so California slides into collapse.

If we are to rescue California from failure, and if we are to revive the California Dream, we must push hard for a new set of policies and governmental structures that will prioritize mass prosperity and take power away from those who would use their existing prosperity to deny opportunity to others. Here’s some of what that overall agenda should include:

• Adoption of a new system of property taxes, that provide some stability to residential homeowners without privileging a small group. The 1% annual increase limit must be abolished. Progressive property taxes, where higher-value properties are taxed at a higher rate, should be explored and implemented if constitutionally possible. Commercial property taxes must become wholly unlimited.

• Housing policy must shift away from privileging homeowners and toward a more holistic model that provides more encouragement for long-term renters.

• CEQA and other state and local land use policies must be revised to eliminate the power of NIMBYs to block urban density and sustainable mass transit. SB 375 was a good start down this path, but more can and should be done.

• Suburban sprawl must be ended entirely, with urban growth boundaries paired with policies favoring in-fill and dense development in existing urban cores, supported by a robust mass transit infrastructure. This is the successful model used in Portland, Oregon and there is no reason it cannot be adopted here.

• Significant increases in taxation on the wealthy and the upper middle class, with an emphasis on higher corporate tax rates, including an oil severance tax.

• Creation of a universal single-payer health care system.

• Restoration of free higher education, paired with a more robust community college system that can provide training for green jobs.

• Massively expanded public transportation, from a restoration of the illegal raids on transit funding to expansion of streetcars, light rail, commuter rail, and intercity high speed rail.

• State-supported job creation programs, broadly defined.

And of course, key structural governance changes:

• Restoration of majority rule for all budget and revenue decisions at all levels of government

• Expansion of democratic practice, from same-day voter registration to publicly financed elections

• Extension or abolition of term limits

• Meaningful initiative reform

My own view, as I’ve begun to argue lately, is that we will never win the battle to change the way our state is governed unless and until we enfold those process changes into a broader vision of economic prosperity and progressive change.

Californians still want the California Dream. If we are to revive it, we must divorce it from the its 20th century version and create one for the 21st century that is more urban, more sustainable, and more inclusive. To do that we must wage a political battle against those who believe that preserving the status quo is the top priority, whether they are Republican legislators, community NIMBYs, or large corporations.

And the only way we win it is to articulate our vision, to make Californians eagerly want that vision, and to get them mad as hell when they see that vision being denied, blocked, and obstructed.