In the wake of the Guardian’s article on whether California is a failed state we’re seeing a lot of other publications take up the same question, with varying results. Perhaps one of the most ridiculous and absurd attempts to discuss the issue was in TIME Magazine last week. The author, Michael Grunwald, claims California is “thriving,” that the California Dream is still alive, and that we should stop our “whinery.” The nut of the piece:

Ignore the California whinery. It’s still a dream state. In fact, the pioneering megastate that gave us microchips, freeways, blue jeans, tax revolts, extreme sports, energy efficiency, health clubs, Google searches, Craigslist, iPhones and the Hollywood vision of success is still the cutting edge of the American future – economically, environmentally, demographically, culturally and maybe politically. It’s the greenest and most diverse state, the most globalized in general and most Asia-oriented in particular at a time when the world is heading in all those directions. It’s also an unparalleled engine of innovation, the mecca of high tech, biotech and now clean tech. In 2008, California’s wipeout economy attracted more venture capital than the rest of the nation combined. Somehow its supposedly hostile business climate has nurtured Google, Apple, Hewlett-Packard, Facebook, Twitter, Disney, Cisco, Intel, eBay, YouTube, MySpace, the Gap and countless other companies that drive the way we live.

The article goes on for a couple pages in this vein, so I don’t want to dignify it with too much of my precious time. Suffice it to say that a state with a 12.2% unemployment rate is not “thriving” and that much more importantly – and totally ignored by Grunwald – is that the conditions that produced the innovation and entrepreneurial success he extols is gone. Our educational system is in collapse, meaning we won’t be able to produce the ideas and creators to sustain the next generation of products, technologies, and companies. Grunwald can’t look at a timescale of, say, 1995 to 2007 and assume that means California in 2009 is doing fine.

Especially since his article is little more than 2003-era boosterism that assumes if a few iconic business are doing fine (and many of them are not) then the state as a whole is doing fine. Grunwald’s notion of the “California Dream” appears to be one where a handful of well-known businesses are still identified with the state, and everyone else is just assumed to benefit from being near them, like the average joe who winds up at a Hollywood restaurant near a star and his agent. Grunwald prefers to sweep under the carpet mass unemployment, the collapse of social services, increasing inequality, and the evaporation of the hopes and dreams of millions. The article is a cruel insult to a state that is in very real crisis, and needs to find solutions, fast.

Of course, one can’t really expect much else from TIME Magazine. A more insightful look at California’s problems comes from, of all places, an article by John Judis in The New Republic. Titled End State: Is California Finished? it does a far better job of diagnosing California’s very real problems. Judis paints a picture of a state that is becoming the living embodiment of John Edwards’ (and before him, Governor Otto Kerner) famous claim about “two Americas.” Judis recognizes that the root of California’s problems is racial.

California’s crisis, as read in Judis’ article, is that its white residents have refused to include their Latino neighbors in the prosperity of the California Dream, and instead acquiesced to the Republicans’ demand to scale back Pat Brown’s California in order to prevent it from benefiting the non-white. He does not quite come out and say it, but he puts all the pieces on the table. The conclusion is not only obvious, but inescapable:

There are places in California’s Central Valley, and in the exurbs where Countrywide, Wachovia, and IndyMac sold subprime mortgages, that look like downriver Detroit, but, in Menlo Park and in Oakland’s Rockridge area, where I stayed during my recent visit, there were few visible signs of trouble. That’s because, like its educational system, California’s economy is pretty much divided in two….

What’s important are the huge disparities between regions. The unemployment rate in Silicon Valley’s San Mateo County is 9.2 percent, less than the national average, and unemployment is even lower around Santa Barbara or in Marin County. But it is 15.7 percent in the Stockton area, 16.7 percent in Merced, and a whopping 28.7 percent in Imperial County near the Mexican border–heavily Hispanic areas dependent on agriculture and home construction. The disparities in these figures largely reflect what is produced in those areas and who lives there….

In the past, immigrant farm laborers or roofers or grocery clerks could hope that their children would work their way up the occupational ladder–perhaps by getting a well-paid job in California’s auto or aircraft industry. But, for the last two decades, these kinds of middle-income jobs in manufacturing and office work have been disappearing in the state.

There’s no doubt that California’s economy exhibits a high degree of racialized inequality, which manifests itself in, and then is reinforced through, the state’s undemocratic politics. And yet I think Judis is wrong to assume that our state’s economic crisis is solely a product of racial inequality. Many in the white middle class, those who threw the nonwhite overboard from 1978 onward, are now experiencing some of the same problems that Judis ascribed to the nonwhite populations. The collapse of education, especially higher education, is a dagger aimed directly at the heart of the white middle class’s ability to perpetuate itself. As the California Budget Project realized in 2007, young college graduates have seen their incomes collapse during this decade. They too are being shut out of the California Dream by those who benefited from it. It’s not just white against nonwhite, but white homeowner over 45 in a coastal county against virtually everyone else.

Judis did make the initial connection between racial inequality and Republican politics, and understands that the GOP is a central part of California’s crisis:

The biggest reason for this paralysis is the radicalization of California’s Republican Party. By now, this is a familiar part of the American political landscape. But it all began in California. When Brown took office, California politics was still dominated by liberal Democrats and progressive Republicans. By the mid-1960s, conservative Republicans, fueled by the backlash against the civil rights movement, the campus rebellion, and the counterculture, began to oust Republican progressives.

As I  explained at the beginning of 2009, conservative racial backlash politics goes beyond the internal battles in the 1960s GOP. Prop 13 and the subsequent logic of anti-tax politics are still deeply intertwined with it, as white Californians believe that their tax money will be used by government to help the “undeserving.” The only difference between 2009 and 1979 is that today, many whites are now included in the “undeserving” class.

And that, along with the state’s rich diversity and the “post-racial” attitudes among the youngest generations in the state – we who never bought into the idea that for the California Dream to survive, it had to be defined as being for the benefit of whites and nobody else – we have the opportunity to renew California’s Dream by tearing down the entire edifice of Republican backlash politics. We won’t produce economic security for all unless we include all in the process of building it. We won’t fix our broken politics and broken government until we include everyone in the process of fixing it. That includes the state’s large and underrepresented Latino population, but it also includes African-Americans, Asian-Americans, and everyone else currently denied access to the prosperity and democracy that California once stood for.