2019-11-11_Bloomberg_Businessweek

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◼ REMARKS Bloomberg Businessweek November 11, 2019

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● Thestate’sstruggleswithnatural

disastersandinequalityamplify

America’sownanxietiesandhopes

● ByEsméE.Deprez

Morenation-statethanU.S.state,Californiais a landofsuper-

latives:themostpopulous,themostprosperous,hometothe

mostcompaniesintheS&P500,thefifth-largesteconomyin

theworld.Itsscalealsomakesit oneofthemostpowerful,

muchtotheannoyanceofDonaldTrump’sWashington.Lately,

however,thestateis alsothemostincendiaryintheunion—not

justbecauseofitswildfiresandaccompanyingblackouts,but

alsobecausethey’vesparkedheateddebateoverwhetherits

futureremainsgoldenoris inexorablyineclipse.

Justpastnoonundertheclear,blueskyofHalloween

day,KurtMikellreturnedtosurveywhatremainedofhis

mulchandcompostdepotdownhilloftheRonaldReagan

PresidentialLibraryinSimiValley,Calif.TheEasyFirehad

tornthroughMikell’s5 acres,aboutanhour’sdrivenorthwest

ofLosAngeles,leavingthegreenandbrownhillssplotched

withblackandstripedinfire-retardantred.It wasthesec-

ondtimeinMikell’s 20 yearstherethatwildfirehaddestroyed

whathe’dworkedhardtobuild.Buthe’sundeterred.“Iseea

dirtycanvasthatI’mgoingtocleanupandrepaint,”hesays,

“andit’lllooknicerthanit didbefore.”

Anhourlater,ontheothersideofthehillfromMikell’s

property,MaryLouSchakouripulledintothedrivewayof

herfour-bedroomtracthomewhereshe’slivedsince2013,

afterfleeingthepriormorningwithhertwocryingyoung

daughters.It wasthefamily’sfirstevacuation;theyreturned

tofinda lingeringsmellofsmoke,butthepropertywas

otherwise unscathed. “I don’t feel safe here anymore,” she

says. “I’m more scared of fires than earthquakes. I don’t

want to stay.” She’s thinking of North Carolina.

The fire season that provoked those conflicting reactions

also inspired think pieces, Twitter threads, and TV talking-

head commentary predicting widespread financial ruin, voter

rebellion, environmental catastrophe, political upheaval,

and mass emigration. “It’s the end of California as we know

it,” self-proclaimed “California nationalist” Farhad Manjoo

wrote in the New York Times. On Fox News, Tucker Carlson

declared California a “disaster” and “not civilized.” There

was pushback, of course. “California has a hell of a lot more

going for it than you’ll ever hear from our jealous critics and

gasbag pundits,” wrote Los Angeles Times columnist Steve

Lopez. “The state has worked for over 40 years to success-

fully reduce emissions—but that never gets mentioned when

hillsides burn,” wrote Alissa Walker, the urbanism editor of

the blog network Curbed.

The state has long lent itself to caricature despite its

incredible diversity of geography, population, and culture.

California amplifies America’s own anxieties about setbacks—

anditshopesandresiliency.A lotofthecountryis conflicted

aboutthepositionsCaliforniaholdsonmanyissues:thepol-

iticsofTrumpandresistancetoTrump;incomeinequality;

and,ofcourse,climatechange.Trumphasstirredopposition,

tweetingcriticismofGovernorGavinNewsom’shandling of

thefiresandresurrectinga vaguethreattowithholdfederal

fundingtohelpaidrecovery.Thechaosofwildfiresandblack-

outscomesamidthebackdropofa housingaffordability crisis

fueling one of homelessness, with cities across the state see-

ing double-digit increases in the numbers of indigents sleep-

ing in cars and on sidewalks, in parks and doorways, and

under bridges and highway overpasses.

William Deverell, a historian of the American West who

teaches at the University of Southern California-Dornsife

College of Letters, Arts and Sciences in Los Angeles, has

watched many times as the national zeitgeist tests the health

of the American Dream through an examination of the for-

tunes and misfortunes of the Golden State. This time feels

different: the impact more personal, those affected more

helpless. “I used to roll my eyes,” he says about criticism of

the state. Now, “the sheer difficulty, if not intractability, of

these challenges seem of a scale that frightens me.”

Beyondnaturaldisasters,Californianshaveenduredone

self-inflicted mess after another throughout the past two

decades: the dot-com bust, an electricity crisis, a divisive

gubernatorial recall election, a budget debacle amid the

Great Recession. In the early 2000s, the state’s electric-

ity industry almost collapsed amid shortages and rampant

market manipulation that triggered widespread black-

outs, tripled consumers’ energy bills, and forced power

companies into bankruptcy. The crisis helped bring down

then-Governor Gray Davis and led to a recall election fea-

turinga pornstar,a rocksinger,a formerchildactor,and

evensmutpeddlerLarryFlyntontheballot.Intheend,

amega-celebrity-cum-political-neophyte named Arnold

Schwarzenegger claimed victory. It was a time when

California was not just a basket case but a political joke.

More than most states, and even the federal government,

California has built into its fiscal framework a progressive tax

structure that relies heavily on those with the most money

to help care for those with less. That leaves it overly depen-

dent on its wealthy residents: The top 1% of taxpayers pro-

vide about half the personal income tax revenue. That means

that recessions and bear markets can cause massive defi-

cits. The state budget had barely recovered from the gap-

ingholesleftbythedot-combustwhentheGreatRecession

andhousingmarketcollapseleftit broke.Californiafaceda

$40billion shortfall in 2009 alone, bigger than some states’

entire budgets. Some 30,000 teachers received pink slips

during the recession. Lawmakers blew through budget dead-

lines while debating tax hikes vs. spending cuts, forcing the

state comptroller to pay bills literally with IOUs. Pundits

called California the next Greece.