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Less Sanguine Forecasts of California in the 1990s

December 22, 1991

Iwish I could share James Flanigan's enthusiasm about the prospects for the state's economy in the 1990's, "For California, the '90's Will Be Nothing to Fear" (Dec. 1). But, sadly, his arguments ring hollow.

Flanigan states that slow productivity growth will turn around for California in the '90s. To find that delivering more crops from less water or putting more homes on less land will increase productivity is absurd. Neither water nor acreage has served as any constraint on farm output, home construction or pricing. And prior constraints are what productivity is about.

Productivity increases are most easily achieved in, and they most readily impact, manufacturing-based economies. That was the secret of California's success in the '80s. But arrogant environmental, employment and housing policies are driving those businesses to neighboring states. The residual effect will be to move more toward a service economy. And the strong national shift in that direction in the late '60s and '70s seems to coincide with slow productivity growth.

The experiences of Eastern Europe and the Soviet Union illustrate that demand for housing does not result in affordability or adequate supply in stagnant, over-regulated economies. And accounting methods are not going to change that. The biggest constraint on affordable housing is not the cost or availability of land, it rests with the fees and compliance costs developers must incur and the not-in-my-backyard philosophy of the "haves" in California.

The educational system is a disaster. The wealthy (who build and maintain their own private schools), the elderly and parents of adult children will not part with the tax dollars to provide decent public education. And the educational establishment is more concerned with addressing cultural heritage than providing basic knowledge and learning skills.

To favorably compare California today with New York of the early 20th Century is silly. By driving manufacturing from the state and replacing skilled and semi-skilled jobs with janitorial and fast-food restaurant positions, we have removed rungs on the economic ladder that were climbed by the immigrants of early 20th-Century New York. And by allowing our once exemplary public education system to decay, we've removed a few more rungs.

Flanigan concludes his article: "Keep that promise, and California's future will be awesome." The problem is that the promise is not being kept and there is hardly any indication that the voters of this state have any intention of making the sacrifices necessary to keep it. Our entrenched political leaders certainly are not showing us the way.


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