California

California is America’s largest state, a nation-state really, with an economy larger than all but seven nations. It is the site of the world’s most advanced technology, yet it is a place with plenty of Third World neighborhoods. And it greeted the 21st century with Third World-like rolling blackouts of electricity. The state’s growth has been extraordinary. The Census Bureau estimated that California had a population of nearly 37 million in 2008, far ahead of second-place Texas, with 24 million people. Metro Los Angeles had 13 million people, second only to metro New York City’s 19 million; the San Francisco Bay Area had more than 7 million, not so far behind Chicagoland’s 9.6 million. The Central Valley and mountain counties had 7 million people, which equates to only 19% of the total state population. San Diego County, with 3 million people, was the sixth-largest county in the United States. California owes its preeminence not only to its natural advantages, including its vast geographic area, but also to its human ingenuity. Los Angeles, despite having little in the way of natural resources and no natural harbor, is the nation’s leading port and biggest manufacturer, as well as the world’s entertainment center. The Bay Area, which once made its living by exporting food, is now the global leader in computers and high technology. But the state is not without contradictions. California loves its physical environment, but it also has the largest urban sprawl in the United States. It likes to think of itself as cutting edge, even as it watched the electricity flicker early in the decade. It likes to see itself as the nation’s political leader, but it is well to the left of America’s ideological center. In the half-century after World War II, California was a magnet for migrants, a promised land where dreams could be realized. But from 2000 to 2008, some 1.4 million Americans left California for places east and north, even as 1.8 million foreign immigrants moved in. In 2007, nearly half of the state’s people were ethnic in origin: 36% were Hispanic and 12% were Asian.

Most of all, California is a place that is always changing: Its economy has been transformed several times over, its population has been transformed by one group of newcomers after another, and its politics are periodically transformed with the suddenness of an earthquake. If other states have changed gradually over time on an analog scale, California has changed sharply on a digital scale. So it has been from the beginning. In 1848, when California passed from Mexico to the United States by the Treaty of Guadalupe Hidalgo, it was sparsely populated, inhabited by a few thousand Indians and Mexicans and by a few hundred U.S. soldiers and men on the make. Then in 1849, gold was found in Sutter’s Mill and thousands of people arrived in the Gold Rush. Within months, San Francisco became one of America’s 25 largest cities. The big money was made not by the miners but by the grocers and dry-goods merchants and transportation entrepreneurs who provisioned them, such as the Big Four—Crocker, Hopkins, Huntington, Stanford—who built the Central and Southern Pacific Railroads. Many of the laborers were Chinese, and California whites, angry at low-wage competition and fearful of an Asian tidal wave, were the impetus behind the aptly-named Chinese Exclusion Act of 1882, which suspended legal Chinese immigration and was not fully repealed until 1965.

The railroads sold off vast chunks of the Central Valley to large farming operations and enticed settlers with low fares to newly platted suburbs in the Los Angeles Basin. Engineers built great aqueducts that stretched hundreds of miles, from Yosemite to San Francisco and from the Owens River to Los Angeles. Without a water supply, the cities would not exist. Early-20th-century California was affluent and cultured, containing great universities such as the University of California (Berkeley) and Stanford and fine museums and libraries. It was America’s window on the Pacific, alert to developments in China and Japan, Hawaii and the Philippines, and it was eager to extend America’s economic reach and military strength. Nevertheless, as author Carey McWilliams wrote, California was an “island” separated from the rest of the country. Then in World War II, California became one of the great defense industry states, building ships and airplanes by the thousands. Millions of Americans came and millions stayed. The population rose from 7 million in 1940 to 17 million in 1963, when California passed New York as the nation’s most populous state.

The heads of the big units of government and business planned California’s future—leaders such as President Franklin D. Roosevelt and industrial mogul Henry J. Kaiser, who constructed vast shipyards and steel and aluminum factories. Republican Gov. Earl Warren husbanded tax monies to build schools and freeways in the years after the war. Educators Robert Sproul and Clark Kerr transformed the University of California into what Kerr called “the multiversity,” and Democratic Gov. Pat Brown completed the vast system of canals and aqueducts that brought water from the wet north to the dry south. But the real engine of growth was the little people who took advantage of this infrastructure and built a humming economy. When California’s defense plants closed down after World War II, government and civic leaders imagined that hundreds of thousands would head back east. Instead, as urbanologist Jane Jacobs pointed out, one-eighth of all the new jobs in the nation in the late 1940s were created in metro Los Angeles. This small-scale growth, multiplied thousands of times over, helped make California the nation’s largest state.

The infusion of migrants transformed California politically. Before the war, this was a Republican state, with progressive leanings. Political struggles took place inside the Republican Party. The in-rush of the GI generation, with its allegiance to the New Deal, and the building of auto and steel factories, which unionized their workforces, transformed California into a two-party state. These new migrants were middle and working class, family men and women enjoying a life in suburbs in the lovely California climate. Warren’s progressive Republicans remained dominant through the mid-1950s, but with Brown’s election as governor in 1958, a group of talented liberal Democrats took over. Things turned sour in the mid-1960s, when student rebellions starting at Berkeley and the Watts riot upset the New Deal order. Californians responded by calling in a disillusioned New Dealer espousing the conformist cultural conservatism of the GI generation, Ronald Reagan. California was a harbinger: It showed the nation where it would go next in the 1980s.

In 1974, California elected Democrat Jerry Brown as governor, entranced for a time by his fresh vision of Baby Boomer liberalism. California’s laid-back lifestyles became a magnet for highly educated Boomers, lawyers, scientists, techies, and show-biz types. Nearly 40 years later, they remain a force, although, like the Reaganites before them, not the only force in the state’s politics. California voted Republican in every presidential election from 1968 to 1988. Brown’s administration was not wholly successful on policy. Voters froze property taxes by passing Proposition 13 in 1978, rejected Brown’s bid for the U.S. Senate in 1982, and ousted three of his state Supreme Court justices in 1986. Republicans followed Brown in the governorship: George Deukmejian, elected in 1982 and 1986, and Pete Wilson, elected in 1990 and 1994.

In the 1980s, California’s defense industry boomed and Silicon Valley flowered south of San Francisco. Immigration continued, in vast numbers, with newcomers living in the dirty stucco bungalows and garden apartments that white blue-collar workers left behind in neighborhoods south and east of downtown Los Angeles. Large swaths of the San Fernando Valley became mostly Latino. Public policy increasingly was set by Willie Brown, speaker of the California Assembly from 1980 to 1995 and later by the Democratic Legislature. In the 1990s, disaster struck in several forms. Defense industry cutbacks hit the Los Angeles area hard, costing hundreds of thousands of jobs and sending housing values plummeting. Television screens were filled with news of floods and earthquakes, of riots and trials. California government responded competently to the natural disasters, less well to those that were man-made. Official Negligence, the definitive story of the Rodney King case, is a story of public-sector incompetence as dismaying as that spotlighted for the nation in the O.J. Simpson murder trial. In the 1990s, California also lost many of its trademark big businesses to mergers and relocations.

In the past two decades, California’s current demographic and political trends were set. Since 1990, California has had an outflow of people to other states offset by an even larger inflow of people from other countries. In the first half of the 1990s, about 2 million Californians, mostly white and affluent, left for other Western states or moved east, while immigrants kept arriving. The Census Bureau reported that California’s Hispanic population rose from 16% in 1980 to 32% in 2000 and to 36% in 2007. The Asian percentage was 5% in 1980, 11% in 2000, and 12% in 2007. The pace accelerated from 2000 to 2007, when domestic out-migration was 1.4 million and foreign in-migration was 1.8 million. Los Angeles County is what New York City was 100 years ago: the great entry point in the United States. The county has the world’s largest numbers of Mexicans, Iranians, Samoans, Filipinos, Salvadorans, Armenians, Guatemalans, Koreans, and Thais outside their native lands. Even far Northern California is 15% Hispanic. The farmlands of Imperial County are three-quarters Hispanic. Asians make up half the population of the west side of San Francisco and Los Angeles County’s San Gabriel Valley, and more than one-third in the south end of San Francisco Bay, from Palo Alto and Fremont south to San Jose.

Perhaps the first politician to intuit how the combination of Baby Boom liberals—or “gentry liberals,” as California political analyst Joel Kotkin calls them—and immigrants would come to dominate California politics was Bill Clinton. After carrying California 46%-33% in the 1992 general election, at a time when the state was presumed to be part of a Republican “lock” on the presidency, he assiduously returned again and again, courting Silicon Valley entrepreneurs, Hollywood celebrities, feminist icons, Asian contributors, and Latino politicians. The Democratic trend was helped along by the response to Proposition 187, which denied non-emergency government spending on illegal immigrants and their children and became a central issue in state politics in 1994. Gov. Wilson, trailing state Treasurer Kathleen Brown (Jerry Brown’s sister) in polls and concerned about fast-rising state spending on illegal immigrants, supported Prop 187; although he was careful to differentiate between illegal and legal immigrants, he also ran ads showing Mexicans sprinting across the border and stating in ominous tones, “They keep coming.” Voters made that distinction, too: 59% of all voters and about one-third of Hispanics voted for the proposition. Wilson won a decisive victory, 55%-41%, but one that came with considerable collateral damage to his party. In 1996, Clinton carried California and Republicans lost their briefly held majority in the state Assembly. Republican George W. Bush’s courtship of Hispanics enabled him to run with 29% and 34% of the Latino vote in 2000 and 2004 respectively, but GOP nominee John McCain’s share fell to 23% in 2008. Asians, who seemed to rally to Republicans when predominately black rioters looted Los Angeles’s “Koreatown” in 1992, went with Democrat Al Gore in 2000 (remember his visit to the Buddhist temple in Hacienda Heights?), and cast nearly two-thirds of their votes for the Democratic presidential tickets in 2000, 2004, and 2008.

The gentry liberals provided the other building block for California’s Democratic majorities. They were repelled by the Republican Party of U.S. House Speaker Newt Gingrich and President George W. Bush, of Christian conservatives and gun-rights activists. They were similarly repelled by the conservative brand of California Republican, who habitually denounced immigration and championed opposition to abortion rights. As a result, Democrat Gray Davis was elected governor by 58%-38% in 1998, and Gore carried the state by 53%-42% in 2000, even though Bush spent $20 million on California media and Gore not a penny. In 2002, Davis, with low job ratings after the 2001 electricity crisis, was re-elected by only 47%-42%, but Democrats won every statewide office for the first time since 1882.

Those results seemed to establish California as a solidly Democratic state. And the cataclysmic event of 2003—the recall of Gov. Davis and the election of Republican Arnold Schwarzenegger to replace him—seemed to be a major exception. But in the end, the exception has proved to be the rule. The recall was a response not so much to Davis, who had been trying to hold down the Democratic Legislature’s spending, as to a political governing class that had insulated itself largely from public control. The California Legislature adopted redistricting plans that seemed to provide zero chance of change in party control. The collapse of revenues after the dot-com bust of 2000 and the collapse of the electricity deregulation system made Davis vulnerable, although he had little to do with either one. The feckless effort of a few conservatives in early 2003 to gather signatures for recall petitions fizzled until U.S. Rep. Darrell Issa, a wealthy Republican businessman, revived it with a large infusion of his own money and Davis unwittingly stimulated it by signing a bill authorizing driver’s licenses for illegal aliens and by unilaterally raising the license-plate fee. By July, it was apparent that Davis’s foes would obtain enough petition signatures to force a recall election, which would also allow voters to choose a successor to Davis if the recall passed. Relatively few signatures are needed to get on the ballot, and only a plurality is needed to win. The election was scheduled for October. Conservatives Issa and Tom McClintock got their names on the ballot. Prominent Democrats pledged to support Davis. Then in August, Schwarzenegger went on NBC’s Tonight Show and surprised his political advisers by announcing he would run. Dejected but realistic, Issa got off the ballot. Democratic Lt. Gov. Cruz Bustamante got on, while saying he wanted Davis to stay in office.

In October 2003, the recall of Gov. Davis won 55%-45%, and on the replacement ballot, Schwarzenegger won 49% of the vote to 32% for Bustamante and 13% for McClintock. A solid majority in this Democratic state had voted for Republicans. Turnout was way up from 2002—from 7.5 million to 9 million—and Schwarzenegger received more votes in 2003, 4.2 million, than Davis had in 2002, 3.5 million. Schwarzenegger’s election seemed to mean the end of insider politics in California and the beginning of plebiscitary politics. Television stations rushed to set up news bureaus in Sacramento, and newspapers headlined state government news. Schwarzenegger was the first governor since Brown to get such news coverage. Taking advantage of it, he got busy, ordering an audit of state government, forcing the Legislature to repeal driver’s licenses for illegal immigrants, and pushing through changes in workmen’s compensation laws. He put two bond issues on the March 2004 ballot, campaigned for them vigorously, and saw them passed with 63% and 71% of the vote. He forced the Legislature to accept his budget by using his star power and threatening to take the issue to the people. California voters seemed to be in line with their new Republican governor.

But it was a different story in 2005. Schwarzenegger planned a frontal attack on the power structure in Sacramento. That year, he put on the November ballot measures that would give the governor new powers to cut spending, to increase the number of years it took teachers to get tenure, and to create a commission to redistrict the Legislature and the California delegation in the U.S. House. He got strong opposition this time. Public employees spent more than $100 million on anti-Schwarzenegger TV ads. One ad featured members of the nurses’ union saying they were not, as he had said, “special interests.” His job rating sunk to under 50%, and the three ballot propositions failed.

These results proved decisive in governance—and in proving California’s strong Democratic allegiance. Schwarzenegger promptly hired one of Davis’s top aides as his chief of staff and swapped Republican advisers for Democrats. He worked closely with Democratic legislative leaders to put $37 billion of bonds on the November ballot, for highways, housing, school construction, and flood control: shades of Pat Brown. The governor and Legislature even reached early agreement on a budget in 2006 and came close to passing a state health insurance plan. All of Schwarzenegger’s bond proposals passed this time, and he won re-election with 56% of the vote. In 2009, when tax revenues came crashing down as the housing crisis and then the recession hit California, Schwarzenegger, like Davis, found himself accepting substantial spending increases and acquiescing in raising the taxes that, in 2003 and 2005, he had said were driving businesses out of the state. He even accepted an increase in the car tax, while much of his energy was devoted to keeping the Bush administration from denying a waiver to California’s carbon-emissions law, signed by Davis in 2002.

Once upon a time, people used to analyze California politics by distinguishing between Northern California and Southern California. Northern California—the Central Valley and the North Coast as well as the San Francisco Bay Area—tended to vote for John F. Kennedy, Hubert Humphrey, Jimmy Carter, and other Democrats. Southern California—Los Angeles County as well as the smaller suburban and desert counties—tended to vote for Richard Nixon, Gerald Ford, and other Republicans. Today the geographic divisions run the other way. The two sides are coastal California and interior California. Coastal California is defined as all of the counties that touch the coast or San Francisco Bay, plus tiny Napa and the Lake and San Benito counties. From 2000 to 2007, coastal California had an immigrant inflow of 6% and a domestic outflow of 9%. That’s a lot of people: 1.4 million immigrants moving in, 1.8 million Americans moving out. The latter moved to places with lower housing prices and more middle-class accommodations: to the Central Valley, to Arizona, Nevada, Texas, and the Rocky Mountain states. Interior California from 2000 to 2007 saw quite different movements—an immigrant inflow of 3% overshadowed by a domestic inflow of 9%. The result was that coastal California grew 4% in those years, less than the national average of 6%, while interior California grew by 17%, more than any state except Nevada and Arizona.

The huge immigrant inflow and domestic outflow from coastal California is making the region an increasingly two-tiered society economically. There is the very affluent elite in the professions, entertainment business, science, and high tech, who live in houses costing millions. And there is a very large body of immigrants, mostly Central Americans living in the modest stucco houses built for middle-income Americans in the 1950s and 1960s, who work double shifts on and off the books in the hopes of making it to a more comfortable suburb. Low-growth policies have limited population growth; coastal California, as a result, grew only 3% from 2000 to 2008. Those policies boosted housing values in affluent areas to astronomical levels, and the subprime mortgage crisis is presumably widening the already wide wealth gap here. Some immigrants thus may be heading home. Nonetheless, affluent elites and low-income immigrants remain united in voting Democratic. Coastal California voted 65%-33% for Barack Obama over John McCain for president in 2008, a higher percentage than in any other state except Obama’s native Hawaii and tiny Vermont. The transformation of coastal California over the last generation can be measured another way: Reagan in 1984 lost the Bay Area 51%-48%; McCain in 2008 lost it 74%-24%. The Democratic trend is even apparent in the far south coast. Orange County and San Diego County voted 75%-24% and 65%-33%, respectively, for Reagan. McCain carried Orange County by only 50%-48% and lost San Diego County by 54%-44%.

Interior California is a very different kind of place, with twice as many native-born Americans moving in as immigrants. The income gap is not nearly as wide as in coastal California, and low-income immigrants enjoy at least a somewhat lower cost of living—no Neiman Marcuses here and not so many swap-meets; instead, the area has more Wal-Marts and more Targets. Since 2000, population growth has been vibrant, even frenetic. Interior California grew 18% between 2000 and ’08, accounting for two-thirds of the statewide population growth. But the explosion has had negative consequences. The Inland Empire and large parts of the Central Valley from Bakersfield to Sacramento were subprime mortgage territory. Lending institutions granted immigrants with little income no-down-payment mortgages on $450,000 houses, and blue-collar families fleeing the pricey Bay Area got risky alt-A mortgages on $650,000 tract homes in Stanislaus and San Joaquin counties. In 2004, interior California voted 57%-42% for President Bush, a result similar to that in fast-growing Georgia or North Carolina, and not much inferior to Reagan’s 61%-38% in the same territory in 1984. But the collapse of the housing market hit hard here, and the Inland Empire and the Central Valley had some of the highest foreclosure rates in the country. Interior California trended Democratic in 2008. The swing here was much greater than in coastal California, where political attitudes seem pretty firmly set, and Obama actually carried the interior 50%-48%.

Clearly, coastal California—and the Democratic Party it so heavily favors—is dominant politically. Obama carried the state with 61% of the vote, far above John Kerry’s 54% in 2004. Democrats gained seats in the Legislature, leaving them one vote short in the Senate and three short in the House of the two-thirds majorities needed to pass a budget or to override a Schwarzenegger veto. For a dozen years or more, the majority coalition of ethnic minorities and gentry liberals, financed by Hollywood and Silicon Valley and by the public employee unions, determined public policy. Schwarzenegger’s drive to put policy on a different path crashed and burned in 2005. But there were troubling signs for the ruling coalition. California’s sales tax is the highest in the nation, and its income tax nearly so. The exodus of businesses continues, and in early 2009, the state came close to leading the nation in unemployment. Public employee unions’ success in negotiating salaries and benefits has sent some municipalities hurtling toward bankruptcy. Amazingly, California’s Internet usage by individuals and in schools was lower than the national average. Recent data indicate that the state lost more college graduates than it gained in the first half of the decade. Suddenly it looks as if California has some of the same problems as North Dakota or Nebraska.

The dominant political class’s commitment to environmental causes has a powerful basis in experience. Air pollution, which reached horrifying levels during Reagan’s years as governor, has been vastly reduced by laws pioneered by California that impose tougher restrictions on auto emissions than does the federal government—a huge success in public policy. But some successful policies can have unintended consequences, putting the state at a disadvantage. California’s determination to reduce carbon dioxide emissions, which in the short run are relatively benign, threaten to impose huge costs on the state. The slow-growth policies of coastal California, together with the subprime mortgage abuses prevalent in interior California, have left residents with housing prices in urban areas well above the average person’s reach. A judge’s decision to protect the 3-inch delta smelt by blocking the pumping of all federal and most state water from the Sacramento delta southward , threatens to leave farmland in the most productive agricultural state in the world parched. Traffic continues to worsen, as coastal Californians resist new highways and vote instead for higher taxes to finance mass transit. Meanwhile, California politicians occupy themselves with banning trans fats and blocking new fast-food restaurants in South Central Los Angeles, in hopes of improving the eating habits of city residents, and banning landlords from ascertaining renters’ immigration status even as the state struggles to keep up with services for illegal transplants.

There are also some fragile aspects to California’s governing coalition of affluent white Boomers and struggling immigrants. In 2008, liberals prevailed in the fight to defeat Proposition 4, which would have required parental notification of minors’ abortions. Narrow majorities of African-Americans, Latinos, and Asians voted for it, while whites, with lower birthrates and higher ages themselves, rejected it. In another revealing outcome at the polls, voters approved Proposition 8 banning same-sex marriages. Whites and Asians, perhaps with many gay and lesbian friends and relatives, voted narrowly against it. But blacks, whose turnout increased thanks to the Obama candidacy, voted 70% in favor of it, as did 53% of Latinos. In any case, the results from the ballot issues suggest that the state’s majority coalition, especially in coastal California, is unstable. And it raises the question of whether it can be maintained if analyst Kotkin is right when he writes, “Today our Golden State appears headed, if not for imminent disaster, then toward an unanticipated, maddening, and largely unnecessary mediocrity.”