Democratic California’s Cautionary Tale

Democrat DonkeyIt’s become fashionable among certain conservatives, libertarians, and assorted free-market types to claim that Republicans are no better than Democrats. Both parties, according to the disenchanted, have lost their way. Both parties are controlled by establishment cronies, who support big government of one sort or another.

But conservatives who are disillusioned with Republicans need to remember just how much is at stake if Democrats take over. To indulge in understatement, California offers a cautionary tale.

In the name of saving the planet, and helping the poor, Democrats win votes in California. Assisting these Democrats is the most powerful coalition of leftist oligarchs in the history of the world. But the planet is not better off and California’s poor get poorer. How can this be?

Absolute Power Corrupts Absolutely

Since at least 2006 — the year Governor Arnold Schwarzenegger, a moderate Republican, totally capitulated to the Democratic establishment — Democrats have exercised absolute power in California. Their ongoing agenda, much of which has already been implemented, offers insight into just how different Democrats are from Republicans — even those watered down Republicans who struggle to earn votes from true conservatives.

California’s Democrats, in pursuit of environmentalist perfection, have legislated artificial scarcity of everything necessary to civilized life: land, housing, electricity, gasoline, water, transportation, and quality education — you name it. California has the most expensive homes, the highest utility prices, the worst roads, and failing schools. Behind the high-minded environmentalist rhetoric stand oligarchs who profit from scarcity; established corporations, public utilities, large landowners, and “green” entrepreneurs.

It’s no exaggeration to say California is a left-wing, Democrat-ruled oligarchy. If anyone thinks they aren’t poised to take over the rest of the United States, think again. California is merely the epicenter of an uncontained nationwide leftist oligarchy that now controls nearly all traditional media, online media, social media, academia, and the entertainment industry. It has also co-opted most major corporations and government bureaucracies, and draws additional support from powerful government unions as well as most private sector unions.

All of this elitist support is self-serving. All of it is hypocritical. All of it is deeply cynical, and utterly indifferent to working Americans.

California’s Proposition 10 offers an excellent example of how Democrats think. This deeply flawed state ballot initiative addresses the high cost of housing in California by authorizing cities and counties to impose rent control on all rental units, right down to the second homes that middle-class Californians may own in order to earn supplemental income. The negative consequences of a measure like Prop. 10 are obvious not only to anyone with a basic understanding of economics but also to anyone with plain common sense.

If Prop. 10 passes, what few incentives remain for investors and developers to build new housing in California would be further undermined. Who would want to invest in new apartment construction if the rental income from those apartments could be frozen by the whims of populist Democrats as they exert their influence on the local city councils? And what landlord would want to invest to maintain or upgrade their rental properties, if the rental income they can recover on their investment is frozen via rent control? And what renter will move into more appropriate housing as their life circumstances change, if moving means losing the favored low rent they currently enjoy?

Not one Republican supports California’s Prop. 10, but plenty of Democrats do, including the notorious U.S. Rep. Maxine Waters, U.S. Senate candidate Kevin de León, and Los Angeles mayor and future presidential contender Eric Garcetti. And behind these Democrats, also endorsing Prop. 10, are California’s all powerful public sector unions, including the California Teachers Association, the California Nurses AssociationAFSCME California, and SEIU California. And, of course, the California Democratic Party.

Prop. 10 is an example of how Democrats are making California’s housing shortage worse instead of better, but it’s not the only one. Also appearing on California’s statewide ballot next month are Prop. 1, which would borrow $4 billion to build “affordable housing,” and, Prop. 2, which would use state tax revenues to build more government-run homeless shelters. It is possible, if not likely, that every one of these propositions will pass.

Scandalous Inefficiency, Unassailable “Compassion”

Democrat “solutions” to the housing crisis aren’t limited to the state ballot, however. In Venice Beach, California, along one of the most expensive, touristy stretches of coastline in the world, are now permanent homeless encampments. To address the challenge, Los Angeles city officials are proposing to build a homeless shelter on 3.2 acres of vacant city-owned property less than 500 feet from the beach. This property, nestled in the heart of Venice’s upscale residential and retail neighborhoods, if commercially developed, would be worth well over $200 million. Imagine what could be done with that much money.

That a solution so scandalously inefficient could even be considered by the Democrats running City Hall in Los Angeles offers additional insights into the Democrat mind. Solving the homeless crisis really isn’t their goal here. Rather the intent is to create additional government-owned properties, hire additional government bureaucrats, while pretending to solve a problem. Should the Venice Beach property be developed as currently proposed, well connected construction contractors will rake in government funds, so eventually a few hundred homeless people will find shelter. Meanwhile, tens of thousands will remain outdoors.

Democrats, and not Republicans, made California’s housing unaffordable by passing restrictive laws such as CEQAAB 32SB 375, and countless others at both the state and local level. At the same time, it is Democrats, and not Republicans, who are inviting in the world’s poor en masse to come and live there. An estimated 2.6 million illegal aliens currently live in California. But the rhetorically unassailable compassion exhibited by these Democrats does nothing to alleviate hardship in the nations where these refugees originate, because for every thousand who arrive, millions are left behind.

The result? While California’s Democrats, and not Republicans, engineer a shortage of housing supplies, their welcoming sanctuary policies engineer a burgeoning housing demand. This is the deeply flawed, misanthropic vision Democrats have for America. Democratic power is rooted in wishful thinking by the naïve, and by the savvy because of epic greed. Republicans, no matter how tepid their convictions may be, would never have done to California what these Democrats have done. And it’s not even close.

When conservatives and libertarians think about where to cast their vote, they should look west to California, and think very hard about whether or not they want to live in a nation ruled by Democrats.

This article originally appeared on the website American Greatness.

California’s Socialist Oligarchy: Making the State Unaffordable

Touted as the “fifth-largest economy on Earth,” and recently heralded as delivering the “greatest increase in average income,” these statistics obscure an alarming reality. California has become a feudal state, where the benefits of prosperity are unequally distributed, rewarding corrupt plutocrats and punishing ordinary working families. Joel Kotkin, a fellow in urban studies at Chapman University in Orange, California, characterized California’s current political economy as “Oligarchical Socialism.” This is a perfect description of a system that destroys the middle class at the same time it protects the ultra rich.

California’s leftist oligarchy benefits financially from precisely the depredations they accuse conservatives of committing. They have enacted policies that are designed to make California unaffordable to all but the wealthiest residents, and hostile to emerging small businesses, at the same time as their preexisting wealth and politically connected corporations reap enhanced returns and profits.

Plenty of Land, Impossible to Build

Nowhere are the consequences of California’s oligarchical socialism more evident than in the cost of housing. State legislation has made it nearly impossible for developers to construct new housing outside the so-called “urban growth boundary.” Instead, development is redirected into the footprint of existing urban areas.

While there is a natural tendency as population increases to see higher density redevelopment in urban cores, by restricting outward expansion of urban areas, the value of the limited remaining eligible land becomes artificially inflated. But established landowners and large development firms benefit from these restrictions. They are able to withstand years, if not decades, of expensive permitting delays and endless litigation. They are able to afford millions in permit fees because these costs are offset by their ability to sell residence units—from high-rise condos to detached single family dwellings—at prices far beyond what they would cost in a normal market.

These billionaire business interests get richer, while ordinary Californians who want to own or develop land cannot afford to go through the permit process. Meanwhile, the median cost of a home in California is $539,400 — nearly 2.5 times the national average of $216,700. And that’s not even in the tougher markets.

With all land development, environmentalist laws such as California’s Environmental Quality Act (CEQA) create additional barriers. California’s legislature has now made it necessary for new home construction to be 100 percent “energy neutral” by 2020. Not only does this require installation of photovoltaic roof panels, but also more expensive insulation, as well as more expensive appliances that use less energy (and also happen to be less durable and don’t work as well). These mandates make homes less livable, for example, requiring smaller windows in order to make the homes easier to heat and cool.

The amazing fact that California’s legislators willfully ignore is the incredibly abundance of expanses of land that remain virtually empty in this vast state. California is only 5 percent urbanized. According to the American Farmland Trust, of California’s 163,000 square miles, there are 25,000 square miles of grazing land and 42,000 square miles of agricultural land; of that, 14,000 square miles are prime agricultural land. In other words, you could put 10 million new residents into homes, four per household, on half-acre lots, and you would only consume 1,953 square miles. If you built those homes on the best prime agricultural land California’s got, you would only use up 14 percent of it. If you scattered those homes among all of California’s farmland and grazing land—which is far more likely—you would only use up 3 percent of it. Three percent loss of agricultural land, to allow 10 million people to live on half-acre lots!

Instead of allowing land owners to build millions of inexpensive homes on, say, just a small fraction of California’s 25,000 square miles of grazing land, California’s lawmakers want to have “smart growth.” And as prices rise, the solution? On the ballot this November, propositions to enforce statewide rent control, borrow $4 billion to build “affordable housing,” and use state tax revenues to build more government-run homeless shelters. After all, expanding the private sector threatens the oligarchy. Best to expand the public sector.

Plenty of Energy Resources, Unaffordable Energy

While the cost of housing is an obvious example of how California has been turned into an enclave for the super rich and an expensive ordeal for ordinary Americans trying to live there, it is not the only example. California’s legislature has curtailed, if not completely shut down, development of oil, natural gashydroelectric and nuclear power.

In the summer of 2000, during California’s energy crisis, as brown-outs were rolling up and down the state, total disaster was averted because two nuclear reactor complexes, San Onofre and Diablo Canyon, were continuously pumping 4.2 gigawatts of electricity — more than 10 percent of California’s peak demand at the time — into the power grid. But instead of retrofitting, San Onofre was shuttered in 2013 and Diablo Canyon is set to shut down by 2025.

And what’s replacing these power plants? Wind and solar farms, with their intermittent output backed up by natural gas power stations.

If the massive amounts of surplus electricity produced when the sun is shining and the wind is blowing could be stored, it might make sense to decommission clean nuclear power plants and ban development of fossil fuel. But despite decades of research, and dozens of promising but failed attempts, grid-scale electricity storage remains prohibitively expensive. But that’s OK. According to the state legislature, Californians can just pay more. And of course, when consumers pay more, utilities — whose percentage profit is limited by regulation — make far more in absolute profits, since they get to charge so much more per kilowatt-hour. The average cost for electricity is 19.7 cents per kilowatt-hour in California, compared to 13.1 cents per kilowatt-hour nationally.

And there’s no end in sight. True to form, California’s state legislature just passed a law that calls for 60 percent renewable energy by 2030 and 100 percent carbon-free energy by 2045. With hydroelectric and nuclear power off the table, that’s going to be a neat trick.

With oil, it gets worse. We’re not talking about California’s aggressive formulation requirements that make tailpipe emissions cleaner. Perhaps California’s geography justifies this, as offshore winds blow the entirety of coastal city smog into the inland valleys where it is trapped and accumulates. But the reason gas is so expensive in California has little to do with that. It is nearly impossible to maintain refinery output in California, and California’s state gas taxes are among the highest in the nation. Gasoline in California costs around $3.87 per gallon, compared to $2.87 nationally.

While ordinary Californians suffer, left-wing oligarchs prosper.

Green technology entrepreneurs flourish, selling products that consumers are required by law to purchase. Not just solar panels and the related “balance of plant” systems. There are also “negawatts,” a good concept that is being taken to extremes. Sensors and chips designed to make appliances more “energy efficient” are designed by Silicon Valley companies whose prosperity depends on legislative mandates that compel Californians to purchase their products. Promoting the “internet of things” is purportedly justified on environmentalist grounds, while in reality it is a lucrative source of income for high-tech manufacturers, as well as a lucrative means of surveillance and data mining. These new appliances save some electricity. But are they durable? Easy to operate? Do they work as well as conventional appliances? Are they easy to use? Are they inexpensive? No to all.

Plenty of Water, Yet Water Is Rationed

Water is another area where ordinary Californians needlessly suffer inconveniences and pay more.

California receives between 150 and 300 million acre feet of rainfall per year, depending on whether it’s a drought year or a wet year. Regardless of the year, most of that water either evaporates, percolates, or runs off into the Pacific Ocean. And of the roughly 65 million acre feet that are diverted, fully half of it is saved for re-release into the environment, to maintain river flow and to prevent saltwater intrusion into the Sacramento Delta. Of what remains, almost all of it is used for agriculture. Less than 4 million acre feet of water each year are used by California’s households, and less than half that much is for indoor use.

You wouldn’t think that were the case if you reviewed California’s new laws regarding water, and the ways they’re going to be implemented. This year California’s state legislature passed a law requiring average daily indoor water use by California residents to not exceed 55 gallons per day, an amount that lowers to 50 gallons per day by 2030. Maybe you’ve encountered the “solutions” that will effect this reduction: Water faucets that spray eight tiny concentrated, 1.0 mm thick jets of water onto your hands, making it difficult to get them wet and nearly impossible to rinse off soap. Or “low-flow” shower heads with the same problem, magnified for anyone who wants to rinse shampoo out of long hair. What about “smart” laundry machinesthat start and stop randomly, ostensibly to save energy and water, that do a poor job of cleaning your clothes. Or supplemental “tankless” water heaters positioned close to your kitchen sink, that cost thousands of dollars and don’t work all that well, in order for residents to avoid running unnecessary gallons down the drain as they wait for the hot water to flow through their pipes.

All this expense and bother, to save what, at a statewide level, amounts to a trivial amount of water. California’s total residential indoor water use represents less than three percent of California’s total water diversions.

And California’s bureaucrats still aren’t done. In a hearing postponed till just after November 6—no coincidence there—California’s State Water Resources Board is expected to mandate increased “natural flows” in California’s rivers, which will create additional water scarcity, especially for farmers.

It doesn’t have to be this way.

Californians could easily escape water scarcity by investing in additional reservoirs, desalination plants, and wastewater recycling. But environmentalists torpedo all of these projects, successfully lobbying for laws that tie every project up in permitting delays that cost millions, if not tens of millions, and take years, if not decades, to overcome. When permits are finally granted, along come the lawsuits.

A good example of a project that makes compelling economic sense, but is bitterly opposed by environmentalists, is raising the height of the Shasta Dam. In exchange for construction costs under $2 billion, an annual yield of a half-million acre feet would be added to California’s water resources. Not only does this amount of water exceed how much water could be saved by additional household rationing, there’s even an environmental benefit, because summer releases of this water from Shasta’s deep, cool reservoir would improve fish habitat on the Sacramento River.

Roads Are Congested, And the State Builds a Bullet Train

traffic-los-angelesThere is nothing more versatile than the common road. On a road, anything on wheels, from bicycles to 80-ton trucks, can get from their point of origin to their destination. The simple flat surface delivers transportation options that nothing requiring rails or runways can hope to match. Moreover, cars and trucks are becoming cleaner and greener every year. One may argue vehemently over how exactly clean energy abundance will be achieved, but only the most pessimistic Luddite might cling to the notion that it will never happen.

Meanwhile, Californians urgently need new roads, wider roads, and upgraded roads. Californians may supplement these new roads with hyperloop technologies, or flying cars and other next generation vehicles, but what California does not need is the much criticized but seemingly unstoppable “bullet train,” a project that fails any rational cost-benefit analysis.

Using the California High Speed Rail Authority’s own projections, the system will not be profitable for 10 years. And what projections! The CHSRA assumes an average ticket price of $60, and average daily ridership of 120,000 people. Will 120,000 individuals actually be willing to spend $600 per month (and that’s only $30 per round trip, half what the High Speed Rail Commission is projecting) to commute from California’s less expensive Central Valley, into their jobs in coastal Silicon Valley and Los Angeles? And so what if they did? California has a workforce of more than 19 million people. How does spending around $100 billion on high speed rail help these other 18.9 million commuters?

To build a road in California takes years of permitting and litigating, then costs far more than it would in other parts of America. Environmentalist restrictionsproject labor agreements, and a bloated, inefficient State Department of Transportation are all contributing factors. Meanwhile, in comparison to other states, California consistently ranks at or near the bottom in terms of pavement conditions and traffic congestion. There is no end in sight.

Housing. Energy. Water. Transportation. These are the basic necessities of civilized life. And for power and profit, California’s socialist oligarchs have made them all prohibitively expensive. The social agenda of California’s Left is well understood. But the punishing economic agenda, engineered by California’s socialist oligarchy, is equally disturbing. It represents a devastating threat to the American way of life.

The second part of this report will identify the special interests that constitute this coalition of scarcity profiteers, and how they might be stopped.