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Alone at the hellm, state Democrats are increasingly divided over whether government should stroke or retard economic growth. Is there a third way?

April 01, 2001|David Friedman | David Friedman, a contributing editor to Opinion, is a Markle senior fellow at the New America Foundation

Since 1995, when its last recession ended, California has built a powerhouse economy and created more than 2 million jobs, an all-time record. Most states would celebrate such a stunning success. In California, however, an anti-growth backlash is shattering the state's Democratic center-left coalition and gaining steam--just as its economic future turns uncertain.

Split largely along class lines, wealthier Democrats increasingly recoil from the economic and social demands of their less fortunate party members, particularly the surging Latino community. Their anti-sprawl obsessions, perhaps inadvertently, feed anti-immigrant activism. Urban environmental constraints such as new storm-water regulations and the still-unresolved "brownfields" land-reuse standards stymie inner-city school and infrastructure construction. Even as the state's less privileged seek the wherewithal for social advancement--ample water, energy and education, for example--more affluent Democrats want to reverse course.

Ensuring economic opportunities for the widest range of people was once a crucial goal of progressive politics. Robust employment growth enhances social mobility, reduces crime, improves health and fattens public budgets. As late as the 1994 gubernatorial elections, California Democrats built their electoral message around rescuing the state from what they portrayed as a bottomless, Depression-era economic calamity.

Then the economy markedly improved. Statewide employment grew 3.4% a year, 50% faster than the national rate. Buoyant industrial machinery, metal, chemical and electronic-component production boosted manufacturing employment by 127,000, while the nation was shedding more than 250,000 blue-collar jobs. A series of Republican blunders marginalized the state GOP. State Democrats suddenly found themselves alone at the helm of an unheralded industrial miracle.

These fortuitous circumstances, however, allowed an anti-growth agenda to emerge, spearheaded by Bay Area and western Los Angeles County politicians, disaffected academics, environmentalists and NIMBY homeowners. They regarded economic development as synonymous with spewing filth into the air and water, snarling traffic, carpeting pristine lands with ghastly urban sprawl and luring hordes of people to already overcrowded areas. California's resilient capacity for growth and for fostering widespread upward mobility was condemned as a disease, not a blessing.

In budget debates, anti-growth Democrats elevated conservation over social priorities. Legal and bureaucratic maneuvers to thwart development, including urgently needed programs like urban school construction, sprung up. A few high-end industries like movies or the Internet might be allowed to expand, but, otherwise, the state's no-growth elites yearned for a Starbucks society.

These sentiments increasingly conflicted with Democrats who represent the working class, immigrant groups and less-developed regions of the state. Growth remains essential for these constituencies' economic and social well-being.

Although often skeptical of corporate motives, pro-growth Democrats were willing to support economic development to generate jobs and to boost tax revenues. They pushed for increased infrastructure and social spending. During the 1990s' boom, they emerged as California's most effective development advocates.

Inevitably, the party's anti- and pro-growth forces collided. When the scale of California's energy debacle became apparent earlier this year, a pro-growth faction, led by Gov. Gray Davis, suspended some environmental regulations to speed up power-plant construction. This outraged coastal, no-growth elites. Many privately hoped the energy shortage would scare away prospective residents or consume a budget surplus that might be spent on undesirable "growth-inducing" programs.

Conflict also erupted over the state's proposed "zero emissions vehicle," or ZEV, mandate, which would force major automobile manufacturers to subsidize electric and alternative-car sales in the state. Mainstream environmentalists want car makers to meet fixed, inflexible sales goals. Pro-growth Democrats, who think electric vehicles are an impracticable affectation, would allow auto makers to satisfy the new statewide obligations in part by investing directly in underprivileged communities.

The sharpest disagreements may center on education. Inner-city communities with burgeoning, younger populations desperately need new schools to ease overcrowding and replace decrepit facilities. Environmental bureaucracies closely aligned with no-growth interests, however, have been unable to resolve such issues as defining safe cleanup standards for previously used inner-city properties. To the dismay of pro-growth Democrats, urban school construction has been curtailed by this debate. Even highly motivated officials like the new Los Angeles Unified School District leaders have been unable to site a single new facility in the urban regions they serve.

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