The only “advantage” this state has that can’t be duplicated in many other locales are two deep-water ports with Pacific Ocean access. That’s it.

“…what do film, silicon and aircraft aluminum decay to?”

Dust. They all eventually form dust. The Dust Belt.

SeanF left a comment…

“…California has faithfully represented the American dream, always a step or two ahead of the rest of the country socially, economically and politically.”

By all that is holy, I hope you are wrong about that.

James

Of all the statistics you can look at, the most predictive one is internal migration. When people begin to vote with their feet, you have a problem. People don’t leave vibrant, safe, growing productive communities. They leave failing ones. California’s internal emigration turned postive ten years ago i.e. more American citizens migrated out of California than into it. It was just such an emigration pattern in the Great Lakes region during the late-60′s and early-70′s that presaged the regions collapse.

Interestingly enough, if you look at per capita figures for small business starts, this 2007 Forbes study ranks Vermont as the most entrepreneurial (550/100,000 people) and Delaware as the least (160/100,000) people.

http://money.cnn.com/magazines/fsb/fsb_beststates/2007/

One explanation of Vermont’s placement is that it’s a rural state, there aren’t many large employers so perhaps some people are self-employed out of necessity? Or perhaps Vermonters really are independently-minded.

p.s. thanks for fixing the filter

[Filter isn't fixed, sorry. If you can email me when your comments disappear it will be easier to recover them. Thanks. Jonathan]

I do know that a few years ago I looked at self-employment and IIRC California, like most blue states, had fewer self-employed than red states. That suggest that they don’t have a particularly strong entrepreneurial culture.

If the new business stats for Cali include the film companies, I wonder what the stats would be without them? Anyone know if the stats include the entertainment industry?

Shannon…see this link on the importance of America’s frontier spirit in economic development.

I think it’s very revealing that, in the “progressive” lexicon, “cowboy” is a term of insult.

Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Saxenian)
http://www.amazon.com/Regional-Advantage-Culture-Competition-Silicon/dp/0674753402

The conventional wisdom is that SV pulled ahead because of its cooperative and open business culture, and extensive partnerships. No idea if that’s true or not, but it does make sense.

p.s. my posts are being blocked by the spam filter for some reason, hence the name changes on the posts.

[Sorry, SeanF. The spam filter is indeed blocking your posts. I'll try to fix the problem but I appreciate your patience in the meantime. Jonathan]

Every place, whether city or nation, is the result of the core beliefs of the people who live there. Their actions, based upon the beliefs the residents hold dear, create what a city is… growing or declining; orderly or lawless; honest or corrupt.

As the population of Los Angeles changes from majority native-born American to majority foreign-born, largely Mexican, the nature of Los Angeles will become indistinguishable from many of the larger Mexican cities… corrupt and violent, with a small, besieged middle class. This is obvious to all who are not blinded by the fraud called multiculturalism. If the beliefs, values, and behaviors of the residents of any two cities are the same, the two cities will inevitably become the same as well.

Immigration used to be a strength of America. But without assimilation to American values and attitudes, that strength is gone… immigration is now a weakness.

Multiculturalism is one of the most stunting beliefs yet devised by an academic elite at war with America… one who accepts it’s precepts cannot ever understand the world, its people, or its problems. Multiculturalism and wisdom are mutually exclusive. Southern California will continue to decay until it is virtually indistinguishable from Northern Mexico because the population, its skill sets, education levels, ideas of proper governance, and notions of the correct overall structure of society, will be the same.

[As an aside: If you see anything above as being racist or bigoted, well, then you are part of the problem. Race and culture are two distinct things. All races are equal, but all cultures are not. Nor are they equivalent, interchangeable, fungible, or "close enough" either. And a culture that accepts high levels of corruption and low levels of education, as Mexico's has for at least a century, is doomed to decay.]

Florida, for example, is much harder hit than California is – despite entertaining a considerably more conservative political climate. Care to explain?

This analysis has little to due with the current crisis. This crisis will be like the energy crisis was to the rustbelt, the last straw that pushed everything over the edge.

I will point out again that circa 1970 the rustbelt looked pretty strong and could point to nearly a century of industrial dominance of not only America but the world. Ten years later is was a disaster area and still has not recovered.

Perhaps California’s natural advantages will win out but again, the rustbelt also had natural advantages. California isn’t the dynamic place it was even 30 years ago. You need to look around and see what countervailing forces can offset the long term trends in California’s decline. California’s trends in education, business, middle-class flight, infrastructure, power generation, size of government etc all point downward.

However I’m not sure about shannon’s point regarding mexican ports dominating Asian shipping to the US. For 2007, Los Angeles and Long Beach processed 40% of all freight entering the U.S., and 80% of imports from Asia. See http://www.manufacturing.net/News-Mexico-Seeks-New-Port-To-Compete-With-US-Shipping.aspx?menuid=286.

Also, if california is no longer the most entrepreneurial state as measured by new business openings, and is no longer generally regarded as having the best public education system, that is news to me! which states replaced us in these categories? do you have any support for those assertions?

It is possible the software industry will decline. However, it is unlikely to relocate. Industries tend to be very geographically sticky because the ecosystem of technical, financial and legal expertise that supports deals, R&D and entrepreneurship is difficult for any single company to replicate elsewhere. That’s why NY still dominates finance and the publishing world and Hollywood still dominates movies.

I guess my meta-point is that while klotkin isn’t entirely incorrect, his article needs to be read critically. It’s not all doom-and-gloom. And, I don’t see the connections to socialism? While comforting to have a label to blame economic misfortunes on, that doesn’t automatically make the label correct. Florida, for example, is much harder hit than California is – despite entertaining a considerably more conservative political climate. Care to explain?

Yes, the public infrastructure is in bad shape. Prop 13 caused a lot of damage and there has been no real investment since the 1970s.

In the 60′s, infrastructure spending was 30% of the state budget, now it is 3%. It’s not about revenues, it’s about priorities.

the state remains the gateway to the Pacific and the rising Asian powers.

Not if longshoreman unions and environmentalist continue to respectively oppose the modernization of the ports or shut them down entirely. IIRC, more asian cargo enters America through Mexican ports than California. The Mexican ports are more modern as well.

…it is the most entrepreneurial state in the country as evidenced by the number (and success!) of new businesses

Was the most entrepreneurial state. All the recent activity in California as been in the computer industry and that industry can pickup and relocate easily and they will do so if things get worse. Every other kind of industry is being systematically driven from the state. When a surfboard manufacture cannot survive in the state due to government harassment, you know things have gotten bad. The rustbelt states where the center of American entrepreneurial right up to the point that they suddenly weren’t. California will be the same.

The public education system is still the finest in the nation…

Was the finest.

California is coasting on the great energy of the period from roughly 1930-1980 when California was a place of dreams, enterprise and big thinking. Now its dominate political culture hates commerce and manufacturing. It is doomed.

Had you told someone in New York city in 1970 that ten years later the city would implode and end up bankrupt and unlivable, they would have thought you mad. Likewise, all the residents of the Great Lake states that possessed so many “natural advantages” when it came to industry would have thought the same. Yet, they collapsed suddenly and never really recovered for the same reasons that California is struggling.

I would be happy to be wrong but the parallels between California and the rustbelt circa 1970 are just to pronounced to ignore. You’re fixated on the glories of the past instead of looking at the long term trends which all point downward.