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Jul 31 2012

Mad Max 2: The Road Warrior Meets California

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Sadly, Professor Victor Davis Hanson makes the case for California.

George Miller’s 1981 post-apocalyptic film The Road Warrior envisioned an impoverished world of the future. Tribal groups fought over what remained of a destroyed Western world of law, technology, and mass production. Survival went to the fittest — or at least those who could best scrounge together the artifacts of a long gone society somewhat resembling the present West.

In the case of the Australian film, the culprit for the detribalization of the Outback was some sort of global war or perhaps nuclear holocaust that had destroyed the social fabric. Survivors were left with a memory of modern appetites but without the ability to reproduce the means to satisfy them:  in short, a sort of Procopius’s description of Gothic Italy circa AD 540.

Sometimes, and in some places, in California I think we have nearly descended into Miller’s dark vision — especially the juxtaposition of occasional high technology with premodern notions of law and security. The state deficit is at $16 billion. Stockton went bankrupt; Fresno is rumored to be next. Unemployment stays over 10% and in the Central Valley is more like 15%. Seven out of the last eleven new Californians went on Medicaid, which is about broke. A third of the nation’s welfare recipients are in California. In many areas, 40% of Central Valley high school students do not graduate — and do not work, if the latest crisis in finding $10 an hour agricultural workers is any indication. And so on.

Our culprit out here was not the Bomb (and remember, Hiroshima looks a lot better today than does Detroit, despite the inverse in 1945). The condition is instead brought on by a perfect storm of events that have shred the veneer of sophisticated civilization. Add up the causes. One was the destruction of the California rural middle class. Manufacturing jobs, small family farms, and new businesses disappeared due to globalization, high taxes, and new regulations. A pyramidal society followed of a few absentee land barons and corporate grandees, and a mass of those on entitlements or working for government or employed at low-skilled service jobs. The guy with a viable 60 acres of almonds ceased to exist.

California has many problems.

But, first and foremost is the housing crisis which many decades in the making, has deluded California homeowners that government spending largess is acceptable.

As housing prices skyrocketed, Californians income rose proportionately and as long as more and more folks flocked to California, bidding up the prices, all was right with the world. You see California housing prices since World War II had ALWAYS risen.

Accordingly, the State of California and local governments (city, county, special park districts, etc.) were happy to spend the ever increasing revenues.

And, as government grew and regulations sprouted anew, some businesses left, but who cared?

But, the housing bubble burst.

Who could REALLY afford a Santa Monica home which was built for $20K in the 1950’s and which was now $1.5 million, with a $1.2 million mortgage?

Businesses and jobs left. Productive people retired – others moved to Colorado or Arizona pre-retirement.

State of California budgets ran structural deficits for years, but California borrowed and used accounting gimmicks to push the debt further into the future. Local governments used 1940’s base redevelopment law to “steal” from the state and the schools for their own pet projects, like Civic Auditoriums and Sports Facilities.

The State soon discovered the redevelopment law exploits and Governor Jerry Brown ended the charade.

Now, many California cities are struggling to pay their bills and many either have or are contemplating bankruptcy. No more shuffling of redevelopment money to balance the city budgets.

But, the cities also struggle from more than redevelopment largess. Sweetheart deals with their public employee unions, including the Firefighters and Police have driven their budgets upside down. City managers and other city leaders lined their own pockets while police and firefighter unions helped elect City Councils and County Board of Supervisors who hired their bosses.

Read the rest of Professor Hanson’s post.

How will this Mad Max California resolve?

It may not be an easy ride.

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