California ~ From Golden State to failed state

From Golden State to failed state

The California dream of security and prosperity is dead. To revive it, we must change our government, and the way we live

Comments 94
Robert Cruickshank guardian.co.uk, Saturday
17 October 2009 17.00 BST

California has become a failed state. Its political system is unable to resolve a financial crisis that has prevented us from using government to end high unemployment and restore the California dream.

California's crisis is by no means unique. Other states face serious budget problems, including Pennsylvania and New York. Yet none of those states possess the iconic presence of California, the state that more than any other symbolised American prosperity in the latter half of the 20th century.

California's failure causes deeper angst. If California cannot survive this crisis, then some very basic assumptions about American civilisation must be questioned. Perhaps that civilisation is no longer tenable in its present form.

The California dream is a fundamental expression of the human desire for something more than the ability to put food on the table. California has been a place where people can create and innovate, and do so without having to worry about how they will make ends meet, because the state has backed policies that will ensure basic economic security and prosperity.

That dream is dead. Policies enacted in the second half of the 20th century ultimately undermined it. Sprawling suburbs and farms, wasting land, oil, water and money, produced a state whose economy and finances were vulnerable to resource shocks. Few worried about those risks at the time, and instead credited the suburban model for enabling California in the 1960s to provide free schools, a generous welfare state and strong infrastructure, all of which allowed people to come here and realise their potential.

The tax revolt of the late 1970s dismantled the dream in order to enable a select few to continue enjoying it. When the oil crisis and its induced inflation suggested that the suburban version of the dream was unsustainable, large corporations and the white middle class chose to restructure state government to cut off everyone else from public services while preserving their own subsidies.

Proposition 13 was the most important piece. It kept property taxes low for those who already had homes or who could afford to buy them, at the cost of supporting the colleges and other services that provided the earlier prosperity. It also required a two-thirds vote of either the state legislature or the voters to raise a new tax and pass a budget. The new rules gave conservatives veto power, and they have expertly wielded it ever since.

As wages stagnated and jobs became scarce – a product of the neoliberal consensus that swept Britain and the United States after 1978 – a series of asset bubbles papered over the basic revenue problem and created just enough jobs to preserve the illusion of prosperity. When those bubbles burst in 1991 and 2001, crisis seemed imminent – but further budget cuts combined with new asset bubbles led Californians to forget those problems.

By the present decade, most California residents were trapped in a spiral of downward mobility that, in the absence of a government that has the money to provide modern services, endangered not only residents' ability to realise their dreams, but also their ability to be healthy, to be fed, to survive.

The question facing Californians is how to revive the dream. This should not be as difficult a task as it might first seem. Californians have frequently changed the way they govern themselves in the 240 years since European administration first began here in Monterey. Constitutional change is certain to occur. What has not yet been decided is who will lead it, and what kind of state it will produce.

A constitutional convention is a necessary part of the solution. Our government is set up to perpetuate the exclusionary model of the late 20th century, designed to support unsustainable and inequitable use of natural and financial resources. A new state constitution that untangles the Proposition 13 knot and provides for greater democracy, including the restoration of majority rule for all state financial decisions, would enable residents to rebuild a public sector capable of providing prosperity.

A new constitution would merely be the technical framework of a renewed California, and it will never be written without a vision for how to revive the dream. The new California must be built upon sustainability. An urban population, using fewer resources and served by a more extensive public sector, reliant on high-speed trains and solar panels instead of freeways and coal plants, would be more prosperous and better able to meet the challenges of the 21st century.

The alternative is a California that more closely resembles the world of Charles Dickens than that of the Beach Boys. Conservative politicians, including those running to replace Arnold Schwarzenegger in next year's gubernatorial election, are already telling voters that the solution to the crisis includes more of the same – more budget cuts, more wasted resources. Unless a more sustainable alternative is offered, California's failure will become complete.

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