Joel Kotkin’s War on California

Anytime there’s an effort to promote progressive, sustainable policies for California’s future, Joel Kotkin is right there to argue why it’s a terrible idea and we should just continue with the same 20th century policies that have brought us the Great Recession.

But his latest screed tops everything else he’s written. In a remarkable article titled The Golden State’s War On Itself, he acknowledges the death of the California Dream – and then proceeds to blame progressives for killing the dream, despite the fact that it’s been conservative Republicans who have governed California for the last three decades and who have had the most success implementing their policies:

What went so wrong? The answer lies in a change in the nature of progressive politics in California. During the second half of the twentieth century, the state shifted from an older progressivism, which emphasized infrastructure investment and business growth, to a newer version, which views the private sector much the way the Huns viewed a city-as something to be sacked and plundered. The result is two separate California realities: a lucrative one for the wealthy and for government workers, who are largely insulated from economic decline; and a grim one for the private-sector middle and working classes, who are fleeing the state.

This is a taste of the overall thrust of the article. It is as wrong as the day is long – but this “blame the victim” argument, designed to let conservatives off the hook for the damage they have wrought in California, has to be pushed back against strongly.

More below.

Kotkin’s overall concept is of an “older progressivism” that was unfailingly pro-business – which, if you had even the slightest knowledge of Hiram Johnson, Upton Sinclair, or Culbert Olson you’d know wasn’t remotely true, they were anti-corporate crusaders who aroused the strong ire of business – which at some point was replaced by an anti-business progressivism that has driven jobs out of the state.

None of this is true. While early 20th century progressives fought big business tooth and nail, people like Pat Brown instead focused on using government to provide economic growth, security, and prosperity. That emphasis has never changed for progressives.

But what did happen was that in the 1970s, conservatives used an economic crisis to begin destroying the Pat Brown California which had done such a good job of spurring innovation and job creation.

Nowhere in Kotkin’s essay will you find ANY mention of Proposition 13 or the right-wing assault on state government. Nowhere will you find any discussion of three decades of state government policy designed to give business exactly what Kotkin says it deserves – less regulation and less taxes.

Kotkin also tries to blame public sector unions for the crisis – it’s a grab bag of conservative bogeymen, strung together with flawed history and flawed facts.

Let’s look at some examples. Here’s Kotkin on the crucial turning point of Jerry Brown’s first governorship:

The decline of progressivism continued under the next governor: Pat Brown’s son, Edmund G. “Jerry” Brown, Jr., who took office in 1975. Brown scuttled infrastructure spending, in large part because of his opposition to growth and concern for the environment. Encouraged by “reforms” backed by Brown-such as the 1978 Dill Act, which legalized collective bargaining for them-the public-employee unions became the best-organized political force in California and currently dominate Democrats in the legislature (see “The Beholden State,” Spring 2010). According to the unions, public funds should be spent on inflating workers’ salaries and pensions-or else on expanding social services, often provided by public employees-and not on infrastructure or higher education, which is why Brown famously opposed new freeway construction and water projects and even tried to rein in the state’s university system.

In other words, Kotkin says Brown slashed spending on infrastructure in order to please the unions.

This just isn’t true. As I explained in my recent article on the Brown governorship in California Northern Magazine Brown had actually alienated his progressive base, including unions, with his austerity budgets.

Brown didn’t slash spending in response to union demands. He did it in response to the 1974 recession, as one of his first acts in office. By 1977 the surplus he’d hoarded had generated outraged calls from liberals for using that spending for property tax relief to targeted homeowners as well as on social spending. In 1978, as a result of Prop 13, Brown called for and implemented further austerity, including cuts to state worker pay, benefits, and jobs.

Contrary to Kotkin’s claims, Brown wasn’t hostile to infrastructure. He just didn’t think it made a lot of sense to spend money on 1950s infrastructure, and subsequent events have proved him right. Brown played a key role in getting solar and wind energy projects approved – the wind farms you see at the Altamont, Tehachapi, Pacheco, and San Gorgonio passes were all built with help from Governor Brown. And Brown established the state’s first high speed rail project in 1982.

I’ve criticized Brown’s tendency toward austerity in the past, and I’ll surely do so again. But that tendency wasn’t there in order to channel money to unions. It was there because that’s who Brown is. Look at these news reports of Governor Brown from the mid-1970s. He famously responded to liberal complaints by saying “it’s not because I’m conservative – it’s because I’m cheap.”

Kotkin also ascribes to progressives beliefs actually held by Republicans:

The new progressives were as unenthusiastic about welcoming business as about building infrastructure. Fundamentally indifferent or even hostile to the existing private sector, they embraced two peculiar notions about what could sustain California’s economy in its place. The first of these was California’s inherent creativity-a delusion held not only by liberal Democrats. David Crane, Governor Schwarzenegger’s top economic advisor, once told me that California could easily afford to give up blue-collar jobs in warehousing, manufacturing, or even business services because the state’s vaunted “creative economy” would find ways to replace the lost employment and income. California would always come out ahead, he said, because it represented “ground zero for creative destruction.”

Just so we’re clear, Kotkin is quoting David Crane – a libertarian devotee of Milton Friedman and Arnold Schwarzenegger’s “top economic adviser” – as being a “progressive.” Once again we see Kotkin misstating the facts and distorting the truth.

Kotkin spends some time slamming AB 32, despite the fact that it has indeed led to the creation of thousands of new jobs in California, acting as one of the few bright spots amidst the wreckage of the Great Recession.

Then he shifts to making discredited claims about high taxes and regulations driving jobs out of California:

The regulatory restraints, high taxes, and onerous rules enacted by the new progressives lead to high housing prices, making much of California too expensive for middle- and working-class employees and encouraging their employers to move elsewhere.

Silicon Valley, for instance-despite the celebrated success of Google and Apple-has 130,000 fewer jobs now than it had a decade ago, with office vacancy above 20 percent. In Los Angeles, garment factories and aerospace companies alike are shutting down. Toyota has abandoned its Fremont plant. California lost nearly 400,000 manufacturing jobs between 2000 and 2007, according to a report by the Milken Institute-even as industrial employment grew in Texas and Arizona. A sign of the times: transferring factory equipment from the Bay Area to other locales has become a thriving business, notes Tom Abate of the San Francisco Chronicle.

Sounds bad – but if you look more closely you see that Kotkin’s point here is inaccurate, flawed and contradictory.

Inaccurate: Jed Kolko of the Public Policy Institute of California looked at the stats, and concluded that claims of mass job emigration out of California were untrue:

Rhetoric aside, California loses very few jobs to other states. Businesses rarely move either out of or into California and, on balance, the state loses only 11,000 jobs annually as a result of relocation-that’s just 0.06 percent of California’s 18 million jobs. Far more jobs are created and destroyed as a result of business expansion, contraction, formation, and closure than because of relocation. Business relocations, although highly visible, are a misleading guide to the overall performance of the California economy. The employment growth rate, which takes into account job creation and destruction for all reasons-not just relocation-is a much better measure of the state’s economy.

Flawed: It wasn’t high taxes and regulations that caused Toyota to close NUMMI. Kotkin assumes people don’t know about the Great Recession or its impact on Toyota’s NUMMI partner, GM, which pulled out of NUMMI when it went bankrupt. Toyota, facing its own financial problems, claimed it couldn’t afford to keep that plant open even though it had been profitable – not because of California costs and regulations but because of global economic conditions. And Kotkin further doesn’t tell you that the NUMMI plant is going to reopen to make Tesla electric cars – the very kind of green jobs Kotkin claims don’t exist.

Contradictory: How could Apple and Silicon Valley have sprouted up and thrived over these last 30 years if Kotkin was right that during that same time, California was suffering under the yoke of progressive anti-business tyranny?

Kotkin then decides to totally misrepresent my own views:

Under the new progressives, it’s always hoi polloi who need to lower their expectations. More than four out of five Californians favor single-family homes, for example, but progressive thinkers like Robert Cruickshank, writing in California Progress Report, want to replace “the late 20th century suburban model of the California Dream” with “an urban, sustainable model that is backed by a strong public sector.” Of course, 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. Robert Eyler, chair of the economics department at Sonoma State University, points out that wealthy aging yuppies in Sonoma County have little interest in reviving growth in the local economy, where office vacancy rates are close to those in Detroit. Instead, they favor policies, such as “smart growth” and an insistence on “renewable” energy sources, that would make the area look like a gated community-a green one, naturally.

This is where Kotkin’s virulent defense of suburban sprawl comes into play. As I’ve written about many times, Californians are already shifting away from that model. Those Californians who insist on defending it are, in fact, the elitists who are building what I’ve called a homeowner aristocracy by preventing greater urban density and the transportation services needed to sustain density. If someone wants to live in a detached suburban home, that’s their right, but people should also have the option of living in an affordable, walkable, dense community if they wish. Many Californians currently want that option but are denied it by policies Kotkin defends which make suburban sprawl virtually the only choice for people looking for housing.

As to the question of “wealthy aging yuppies,” I have railed against those folks when they become NIMBYs, denouncing folks in Palo Alto and Berkeley who fight mass transit (for example) or criticizing LA homeowners who fight density.

Kotkin then concludes by saying that California should, instead of coddling unions, we should attack unions, slash taxes, drill for more oil, and spend billions more on new freeways.

As we know, that is exactly what California has been doing for 30 years. And it has produced the Great Recession that is causing so much suffering across California through our costly dependence on oil, our lack of funding for the public services such as schools, health care, and mass transit that are required to produce economic prosperity in the 21st century.

Kotkin basically thinks California should double down on these failed policies, and justifies it by lying to his readers about who is responsible for the current crisis, setting up a “progressive” straw man to draw attention away from conservative policies he pretends never existed, from conservative governors he pretends California never had (the names George Deukmejian and Pete Wilson do not once appear in Kotkin’s article).

We’ve always known Kotkin is motivated by a desire to fight progressives and preserve the failed policies of the mid-20th century. But in this article he showed that such a defense is no longer possible using intellectually honest arguments, and so he has to instead construct a false version of history in a desperate bid to prevent Californians from holding conservatives and their policies accountable for causing this crisis.

Let’s hope Californians don’t fall for Kotkin’s latest bit of nonsense.

6 thoughts on “Joel Kotkin’s War on California”

  1. “…California’s inherent creativity-a delusion held not only by liberal Democrats. David Crane…”

    He is giving Crane as an example of a not-liberal who holds that view, not painting him progressive.  That said, I agree with your original point:  that he’s ascribing conservative viewpoints to liberals.  I’ve never heard a liberal claim we could move forward as a society by eliminating low-skill jobs, although a conservative relative blew off my wishes for a renewed manufacturing base with an airy hand-wave and “Who cares if we offshore drudgework?”  Well, the folks that used to do that work and support their families with the proceeds care quite a bit.  There aren’t enough high-skill/education jobs to go around, and even if there were, not everyone has the desire or aptitude to hold them.  That doesn’t mean they should be reduced to ragpicking for survival.  I guess those folks should also be offshored.

  2. Kotkin also tries to blame public sector unions for the crisis – it’s a grab bag of conservative bogeymen, strung together with flawed history and flawed facts.

    As a state employee myself, I feel unappreciated.  Every time I think we progressives are making progress in convincing the public of how self-destructive right wing policies and politics are, I find articles like this Economist article and the subsequent comments and I can’t help but feel persecuted.  Most of the people who commented on that article go on and on about the power of public-sector unions but I can’t help but feel that their power is insignificant compared to corporate political power.  I’d bet that the political power one corporation holds far outweighs the power held by all of the California public employee unions combined.  But they’ve been sold on the idea that the problem is us and that if they just get rid of us, everything would be better again.  Or maybe they just want everyone else to be as miserable as they are.  After all, its easier to take something away from others than it is to fight to get it for yourself.

  3. The right is always quick to blame the victim and also quick to defend themselves.  In the comments section of my local paper, The Sacrament BEE, I have been “baiting” them for years.  They believe what they say even if they are totally wrong.  They also believe they will win big in November.  We better prove them wrong or we are truly going over the cliff.

  4. is heavily endowed by real estate billionaires, George Argyros and Donald Bren. It’s little wonder that Kotkin’s formula for prosperity requires more oil wells, more freeways, and more suburban tract homes.

    Mr. Bren (of the Irvine Company) has endowed millions into the University of California as well. He and Argyros are both founders of Orange County’s “New Majority”.

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