Going back to Cali has changed to Fleeing from Cali
By Peter Huxley
California enjoyed a lot of demand for people to live there because the rest of the country a) had been deindustrialized, and b) was shoring-up high California taxes, reimbursed by federal bursars. Take those away, and add business-unfriendly tax policies, and family-unfriendly social trends, and whaddaya got? An exodus the likes of which the country has never seen. Starting with corporations. If they leave, the jobs leave, the value of real-estate flatlines, and other people will worry their assets will lose still more value – and you get a snowball effect.
The weather, alone, is not enough to keep the 15 million of the wealthiest Americans living along a swath between San Diego and Marin County. Expecting these people to stay would be like expecting the wife of a man who was an unemployed meth addict, who was bad in bed and unfaithful to her, to stay with him, because he looked good. Yeah, looks ain’t everything. And neither is weather. It’s actually pretty superficial when you get down to it. And places like the Appalachians or Blue Ridge or Smokey Mountains having *one* bad season (next to California’s *no* bad seasons), is not a deal-breaker.
On Leaving California… California is in pain, under anesthesia. I’m not even from there, but came to be near one side of my family. We didn’t talk much, though, and soon there was no point. I found a bunch of people surviving, but few people living, in Coastal California.
To be clear, not all of California is a spiritual wasteland. The rural parts – the Central Valley and the North – are like the ‘Midwest’ of California. No, it’s mostly the Coast, and, as I leave, I have an earful for them.
You’re supposed to tolerate betrayal in coastal California. Being treated well, even by ‘friends’ is not an inalienable right; it’s a commodity. Thankfully, I was jolted by another event and chose to leave.
If you took every hackneyed stereotype about California, and creatively wove it into a narrative designed to maximally harm someone (phoniness, craziness, flakiness, selfishness, materialism, envy, insecurity, hollowness), you would have the last year for me, with the exception of one kind woman I dated, and a few real friends and family. Truly; some scenarios a good writer could not come up with.
Having lived many other places, I attribute those phenomena to culture of a deep, concealed pain and being too insecure to admit it. Coastal California has an over-abundance of seekers; always has. There are undeniable indicators. Almost everybody is over-spending, working jobs they dislike for a little more money and yet waiting to retire, or dreaming of doing something else. Sex is commoditized and – bizarrely – cheapened. Divorce and mental illness and turnover and cheating and impotency are ubiquitous. Most everyone I knew (people earning well into six-figures and typically considered ‘successful’) has to get high or drunk every day to deal with life. That is the norm. Seriously. And from what I can see, addictive and indulgent behaviors only increase there, with more wealth. I have a collection of ‘rich guy’ stories you’d only find in coastal California.
The prevalent culture is comprised of people so picked-over and/or insecure that they feel like they’re a failure if they say ‘mercy’ or ‘this hurts’, *because* of the participatory myth of it as a promised land, which is a sort of an opiate. People smiling through tears saying, “California is awesome.” And you are looked-down on if you leave. Sort of like poor people voting Republican; they blame themselves for being unsuccessful, and they are the most vehement defenders of philosophy or an ideology that does not serve them. So it’s never discussed. So it was sort of like living in a commercial, or The Matrix, with phoniness that something healthy in you knows to reject.
My experience, again, was punctuated, and I chose to just leave – but it was not easy. Others might be like frogs in slowly-boiling water, and never be galvanized to get out.
It’s easy to be cavalier and say I’m being overly-sensitive, and maybe I am just not that cool, or it’s a phase in my life, but I saw this as an undergrad at Berkeley 20 years ago, and I did not see the prevalence and acceptability of those behaviors anywhere else, including other major metro areas outside California in which I have lived. And like I said, beside my personal insights, there are a dozen indicators of discontent that are forbidden to be discussed.
There are exceptions (people and pockets), of course, and if you have made Coastal California work – more power to you. I don’t feel bad that I could not. Stereotypes, in some measure, are earned. Like a hundred books and songs, I’m exploding the California myth, which would not exist if there were not *also* a lot of great things about the state (enterprise, talent, innovation, infrastructure, jobs).
On the balance, though, especially as I get older, I think how people treat other people is more important than any commodity, and cannot itself be commoditized. In the end, that’s all life is: how you treat others and the moments you experience with others.
And yes, though it’s fading fast as I heal, I am a little bitter. But I am not bitter because I left (it should be clear I have nothing to hide). I felt/saw/knew all this when I was there. I am bitter because I lost time, and because I put real value in people and a culture that, in the end, was not worthy of me. I overstayed, for sure, and that’s my fault, and probably my insecurity.
I bothered to articulate this to explain myself, sure, but also in case anybody reading this feels like they’re alone and their Spidey-sense (and common sense) detects an inconsistency between a culture that gives a pass to practices that are psychologically, patently, incongruous with happiness, and ubiquitous addictive behaviors, on the one hand, and an unquestioned superiority on the other. Maybe if I got a few different bounces, I’d still be there, in slowly-boiling water, but life is short. We get just a few shots at love, at real happiness, at abundance. I’ll cash in a few social points with people who know I am incapable of either repression or not examining life, if I can possibly help someone else escape the injury I did.
How California is collapsing… The homelessness problem isn’t just Los Angeles; it is every city in Coastal California. And it isn’t because a ‘free’ market. It is the result of a restricted market; it is the result of policy. All this talk about Reagan stopping mental health service funding is hokum. This problem ramped-up the last 8 years. Yes, there are veterans from wars. Yes, they have higher incidents of mental health issues. Yes, there is a dot-com boom, and too many people rushing to Coastal California. But the biggest piece of this – that explains why California is broke despite high taxes, the worsening of the problem under progressive policies – has nothing to do with mentally ill people, or veterans, or high-paying jobs on California’s coast.
A friend predicted that Coastal California cities would become like Detroit inside a decade. Wages will rise to match the cost of living, unless they destroy jobs through high taxes, increase the number of workers, and produce regulatory barriers to new shelters being built. In the case of California – all this was done – while the poor continued to be taxed, and new workers receive benefits, incentivizing them, as they don’t pay into ‘safety net’ programs.
Socialism is a race to the bottom. It shrinks GDP and grows those in need of ‘safety nets’ vs the availability of ‘ladders’. California’s growing financial problems happened despite having the highest taxes in the nation, and under a Democrat president, Governor, Mayors and City Council members. Don’t get me wrong: RINO republicans don’t care about this stuff, either, but at least their selfishness (wanting lower taxes) doesn’t a) destroy whole regions, and b) grow those receiving welfare and living below the poverty line.
California will continue to raise taxes, except: 1) Residents can no longer deduct state taxes from Federal, under the new tax law. 2) Mortgage Interest Deductions are capped at $500K, which is about the median house cost along the coast. 3) More businesses will leave. Income inequality will grow. They will levy more taxes to ‘fix’ it, not realizing they are causing it. California needs to make California more friendly to businesses and get a handle on illegal immigration. The solution to their problem is *exactly the opposite* of what they think it is, and that is why Trump initiating tax cuts and business-friendly deregulation has kickstarted the economy. The only time what they’re trying worked – high marginal taxes – was when people and corporations could not simply pick up and leave. That would have been the 1950’s, just after WWII. Capital is mobile. It will find an easier course. If you tax people and corporations, they leave. And they will take their jobs with them.
This is what created the Rust Belt, destroying the upper Midwest: hiking corporate taxes. A friend predicted that Coastal California cities would become like Detroit inside a decade. 1) The raised taxes to an unfriendly level. 2) Businesses left. 3) People could not pay their mortgages. 4) There were no new buyers. Eventually, people just abandoned their homes.
I don’t care how good California weather is – without jobs, people will leave. California will be helped, somewhat, by Trump threatening to jail Sanctuary City Mayors, by the border wall. But if they don’t fix their taxes, they will become like Detroit and Cleveland inside 5 years. Ironically, California’s appeal was largely that federal tax hikes made it worse *everywhere* for unemployment, but most especially for the Rust Belt. And people fled to the coasts. But that has been fixed. The dot-com job boom now has to compete with high-paying jobs *everywhere*. The relative scarcity of jobs in ‘flyover states’ kept California artificially appealing. With that changing, Californians will begin to leave in droves, not just because of the growing income inequality and high cost of living, but because of the *improvements* other states are making. Capital is mobile. It wants to find the path of least resistance. Make it hard for corporations and the rich, and they go to where it is easier. It’s a basic principle of economics. And it’s being proven true – again – by Trump, federally, and by California, on a state basis.
Another piece on the Coming California Shit Storm… I’ve written a few times about the Dot-Com VC practice of funding 100 companies each with a few million dollars, and hoping for *just one* to make back all the losses; that’s not sustainable. We’re approaching innovation saturation. There are only so many Ebays and Ubers, Airbnbs. Facebook has a shrinking membership. So, the new startups are slowing – as the number of needs we are discovering can be met online is slowing. And the older companies have reached market saturation. Zuckerberg is losing members and talking about using drones in Africa to get users all over the world. They’re desperate. 80% of the startup jobs are not from ‘unicorns’ or billion-dollar ideas; they’re from the companies that are not profitable. They are running on VC money, providing jobs for workers and prestige for founders, having been *funded*. It’s like being a ‘producer’ in Los Angeles, and it’s actually not that special.
The problem is THE MARKET has not selected these startups, many of them. They’re dead companies walking, and when VC has other options, safer options. This model of funding many of these companies, will not be the most profitable model. Small business numbers are exploding, and startups outside of tech, and outside the SF Bay, will also explode. Tech is becoming lower-hanging, as well. Integration platforms like iPaaS – permitting non-programmers to connect complex applications through drag-and-drop application integration builders – is hurting ‘dev ops’. More and more turnkey products are customizable and modular and don’t require coders. Content Management Systems. And then, there’s India. Their competitiveness is growing. Not an innovative country in the tech space, but damn good at carrying-out design schematics.
There’s a California Bubble. If they don’t stop letting in illegals and keeping people on the dole for votes – if they continue to make their state unfriendly for business – like a bad husband or wife, they’re going to get abandoned.
Detroit used to have the highest on-average per-capita incomes, through the 1970’s. Millions left. Millions…like the millions in Coastal California. What did it? High taxes caused the auto industry to leave the country. If California keeps taxing, the few tech companies still there in 5 years will move to Nevada, where energy costs and taxes are lower. Capital is mobile. It will move.
As for private individuals, and not corporations: people see tens of thousands of dollars less when their taxes come in? People see rising crime and income inequality? People see small businesses extorted for taxes to pay for others? They will eventually exit. Just as globalism fails if even *one* country doesn’t self-sabotage itself and competes fairly rather than restrict itself, socialism doesn’t work if there are more consumer- and business-friendly alternatives open in the market. In this case, those would be: Ohio, North Carolina, Texas, Nevada, Florida, Oregon. Low business and income taxes. Reasonable property taxes. Robust economies that include a middle class and lacking the social ills that seem to be growing in California. People huddled to the Coastal Elite regions like it was a fire, when the Rust Belt was deindustrialized. Well, that’s over. Will this exit rest upon three or four simultaneous factors driving people away??