State’s Economy Relies on the ‘Idea’ of California

WASHINGTON —  Home prices and job expectations may still be low from San Benito to San Diego, and half the BMW’s in Brentwood still have tears in their headlights. Yet, California is coming out of its early 1990s economic doldrums with an unsung, yet all-important advantage over much of the nation: the continued viability of the idea of California and the state’s position as a global crossroads.

The idea of California, proven from mission days onward, is simply that the Golden State is where America is tilting as its destiny unfolds. That was true when the region was the early 19th-Century meeting ground of Britain, Spain, Russia and the United States, and it is still true as the next decade prepares to replace an Atlantic, Anglo-Saxon century with one looking toward the Pacific.

No such reassurance can be voiced about the many other regions of the country also emerging from the rolling slumps of the last 15 years. The best days of Pennsylvania and Ohio steel towns are long gone. Connecticut has real cause to worry about retaining its status as the nation’s highest-per-capita-income state. Parts of the oil-producing Southwest have already seen their best rigs and biggest payrolls. And the future of many small towns in the Great Plains is bleak enough that some are talking, half-seriously, of turning the region into a giant national park--a tourist attraction of buffalo herds and tumbleweed. Economically, politically and culturally, most of these areas have passed their peak of national importance.

Not California. Granted, Californians have reasons for unhappiness: aerospace in decline; military bases closing; parts of Los Angeles plagued by urban despair; real-estate values well below those of four years ago, and an exodus of the middle-class to Oregon, Washington state, Nevada, Utah and even Oklahoma. But the reason for cheer is that these transient problems in no way signify the end of the California trend that has held sway for a century and a half.

The critical question is simple: Has California’s role in the United States peaked? Parts of the answer may be debatable, but the overall conclusion is most certainly not.

More than 25 years ago, writing about changing patterns of U.S. politics, I coined the term Sun Belt to try to give political, cultural and economic coherence to the burgeoning power axis taking shape from Florida to California. That description stuck. Now, California is losing a number of the attributes that, 25 years ago, seemed to underpin Sun Belt riches, growth and power. The huge military and defense industry buildup that came with World War II is dissipating. The white, suburban culture that dominated national elections from Dwight D. Eisenhower in 1952 to Ronald Reagan in 1984 is yielding to a demographic wave of Asians and Latinos large enough to spur talk of America’s first “Third World” state. And political conservatism has metamorphosed into a populist torrent of term limits, initiatives and other forms of government by petition.

Trends like these would have removed California from the late 1960s conservative Sun Belt that dominated U.S. politics. Not today. A new Sun Belt is emerging out of these redefinitions, and California’s primacy is not at stake. The emerging national and international trends, so tricky for New York and perilous for small-town Missouri, should still favor the colossus on the Pacific for some powerful reasons.

The Still-Burgeoning Sun Belt: It’s now so big--the three Sun Belt buckles, California, Texas and Florida are a decade or two from being America’s most populous states--that the Sun Belt states have lost their shared characteristics and started to develop sub-regional distinctions. Yet, California is still the state predicted to make the biggest population gains, trading on its crossroad status as U.S. political and economic attention turns more to Latin America and the Pacific Rim. For decades to come, the computer tapes of the U.S. Census Bureau will continue providing incomparable advertising copy for Los Angeles banks and San Bernardino real estate.

21st Century Economic Polarization: For most of the last 150 years, California grew up around the egalitarian spirit of gold rushes, logging camps, well-paid defense industries and finally a unionized manufacturing sector able to nurture a blue-collar middle class and endless miles of tract homes. The new California is already more polarized and stratified--with its top 2% or 3% of incomes pulling away from others, reflecting the growing advantages in a service-based economy, of capital, skills and education.

Instead of “Leave It to Beaver” suburbs, the state’s new socioeconomic symbols are the guarded, walled neighborhoods and golf-villa compounds of city and desert, on the one hand, and the bare-bones, lower-middle-class suburbs at the end of crowded freeways, 90 minutes from barely adequate jobs. Then, at the bottom, burned-over slums and low-income sweatshops. This incipient “Brazilianization” does worry Californians--but it is probably a national trend, not a local disqualification.

Plebiscitary Government: Following the same path they blazed in the early 1900s, Californians are once again tilting toward government by citizen initiatives and referendums, term limits and related attempts to curb the ruling political class--to say nothing of proposals allowing citizens to vote by computer and claim a final populist say in approving state taxes or even officeholder salaries. Some Californians feel this is democracy running riot. Perhaps, but it is more likely that the Golden State is in the high-tech vanguard of yet another national trend.

The Pacific Ethnic Melting Pot: The old Sun Belt that came together in the ‘60s was predominantly Anglo, pro-military, with a suburban mind set and memories of simpler days. The new California is increasingly reflective of its Pacific Rim and south-of-the-border populations. This is almost certain to be a strength--not just in helping California reorient its economy in these directions, but even in providing young workers to pay painful FICA taxes and keep Social Security payments coming to largely Anglo retirees in five or 10 years.

California, Texas and Florida as Economic Windows on the World: Each of the three Sun Belt buckle-states are being reoriented outward by both ethnicity and economic opportunity. If the governor of Massachusetts is describing New England as America’s window on Europe, Florida is America’s window on the Caribbean and Latin America; Texas our principal window on Mexico, and California is America’s principal window on the Pacific Rim and secondarily on Mexico. As America’s economic, culture and politics move south to Latin America and west toward the Pacific, California is still the prime-location crossroads.

Of all the sections of this country hurt by the rolling downturns of the 1980s and early 1990s, California--in contrast to New York, the steel towns or the Great Plains--is probably among the least jeopardized by long-term trends. Former military bases in the desert will be quickly transformed into something else. Unsold homes in Riverside or Orange counties will soon see their share of birthdays and Christmases. Americans in the 21st Century will still be coming California’s way. For if the idea of California has changed from the familiar one of two or three decades ago, that’s because the idea of America has changed in much the same way.*