CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, AUGUST 5, 2022, OR THEREAFTER
BY THOMAS D. ELIAS
“’DECLINISTS’ RISE AGAIN, FORECASTING CALIFORNIA DEMISE”
They’re
at it again, the many folks ex-Gov. Jerry Brown derisively called “declinists.”
They have
some ammunition. It’s been more than a decade since California lost its status
as America’s fastest growing state. One new consequence of that is that the
state this fall will lose a little of its congressional representation for the
first time in move than a century.
It’s not
because this state has lost population, other than during the pandemic, which
has killed more than 92,000 Californians so far.
Today’s
declinists are at least as mistaken as Curt Gentry was in the mid 1970s, in his
classically wrongheaded book, “The Last Days of the Late, Great State of
California.”
Gentry
wrote alarmingly of a great earthquake splitting California away from North America.
He foresaw industry deserting, along with population. Wrong, wrong and wrong –
at least so far, about 54 years after his publication date.
But
except for the earthquake bit, today’s denigrators of California see the same
impending disasters. They see the ongoing departures of the headquarters of the
software making Oracle Corp. and Hewlett-Packard Enterprises, a remnant of the
once-dominant computer and accessory firm with the eponymous name, as just the
latest disastrous departure, with many more to follow. They also decry the fact
industrialist Elon Musk became a Texas resident to evade state income tax,
while leaving Tesla’s headquarters and principal factory right where they were,
in California.
And they
ignore the fact that other giants of Silicon Valley, outfits like Google,
Facebook, Mozilla, Netflix, Adobe, eBay and more, are not only staying but
expanding their local footprints.
That’s
largely because universities like Stanford and UC Berkeley are not going
anywhere, continuing to churn out the most inventive minds in America and the
world. That’s why California endeavors last year received more than half of all
American venture capital investment.
Then
there’s the effect of the pandemic on housing: By sending much of California’s white
collar workforce to home offices, the virus changed some conditions and caused
population growth to slow.
That’s
visible in San Francisco more than anywhere else in the state. While real
estate prices and rents elsewhere in California rose or at least remained
stable in most places, they are down from two years ago in San Francisco, which
has seen many workers opt to live farther from work, moving to more countrified
spots, some in other states.
Development
is slowing in the hyper-crowded city. Many already-permitted new developments
there won’t be able to get the capital they need to proceed at least until next
year, report some analysts.
If high
rents have been a cause of slower California growth, perhaps San Francisco’s
newly lower prices will start some recovery from that malady once the
coronavirus threat is gone. It would be silly to expect much growth here while
that plague remains significant.
Meanwhile,
the departure of more than 135,000 Californians (about .0034 percent, not even half
a hundredth of 1 percent) over the last year has already made things a bit more
pleasant, leading to fewer traffic jams and lighter loads on medical facilities
that operated at or beyond capacity for most of the last two years. Also, there
may be less need for heavy investments in new power supplies and a lessened
housing shortage.
In short,
losing a little population might not be such a bad thing.
For sure,
while Texas draws headlines for attracting businesses by promising no state or
local taxes for a decade or more, California continues turning out a far larger
gross domestic product; $2.8 trillion to $1.8 trillion was the margin for the
first three quarters of 2021.
Declinists,
of course, are nothing new. Some of the leading ones of the last decade were
folks in the relocation business, whose public pessimism about California was
largely designed to grow their own bankrolls. But that's not new: as far back
as the 1840s, Horace Greeley, the New York newspaper publisher who advised
youths to “Go West,” was bemoaning the “deplorable confusion and uncertainty”
of some aspects of California.
Like
Gentry’s, his criticisms proved irrelevant. So yes, California has seen slower
growth. But that may not be such a bad thing and it may not last long, either.
-30-
No comments:
Post a Comment