California is Dead (No, Seriously)

The Covid-19 crisis has led to bull markets in technology stocks, suburban homes, and tedious think-pieces about Why Things Are Different Now. Before the last bubble pops, allow me to sneak in one more: California is dead — and not in the pretend way of NYC.

California is actually dead.

Of course, as a legitimate operating concern, California has been a zombie for a while, its last great hurrah the mobile technology boom that began in the late 2000s. What's #DifferentNow is that California as an idea — which has always been more important than California as a collection of people, institutions, and crumbling infrastructure — is also dead. And all of us, not just Californians, should be mourning: California was an important idea.

Like all great ideas, it was multifaceted, but if I had to summarize, I'd say this: California was a permanent frontier. A place where weirdos and utopians and political radicals could seek change. Where kids and immigrants could flee discrimination. Where people with silly or stupid or unrealistic dreams could give them a go without East Coast gatekeepers interfering.

Would any of those people actually be better off in California? Net-net, maybe? It didn't matter, because the idea was the thing, a beacon that called on society's fringes to make worlds better than the ones they'd left behind. The only crazy part was that some succeeded.

Plus, even if they didn't, they got to enjoy California, whose natural beauty overwhelms and whose culture makes it easy to just show up. I wouldn't call it a welcoming culture, per se. It's that nobody cares. Each of us is merely one mote of dust in a cloud of cosmic consciousness. Why would we worry about connections or credentials or attire? California ain't — or at least it wasn't — the Ivy League. It had a seemingly infinite potential to channel the energy of its newcomers.

But all good things come to an end, and California's time is ending. Some of those escapees bought houses in Berkeley and passed Proposition 13. Some of the disruptors hired MBAs from Havard and lobbying firms in D.C. Aspiring film auteurs became stewards of superhero movies instead.

Now, with Covid raging and fires raging and rolling blackouts recurring, we reach one unavoidable conclusion: Shit is fucked.

How did it happen? While it's impossible to track all the changes in the cloud of cosmic consciousness that led to our current predicament, here are three big reasons:

I. Proposition 13, not enough home building, etc.

Laying my cards on the table, I'm basically a Georgist. But even if you don't believe, as I do, that all of society's problems could be solved with better land-use policies,* you can still see how California's are uniquely destructive.

Prop 13, for example, keeps property taxes artificially low for Californians who were lucky enough to buy homes before the run-up in prices. Artificially low property taxes lead to artificially scarce housing inventory, which might be okay if new construction were allowed — but new construction isn't allowed thanks to the nation's craziest zoning laws. So we end up with sprawl, as young and low-income Californians must live further and further (and further) out of job centers to make ends meet. And while sprawl is aesthetically and environmentally deleterious, it becomes downright combustible when fires sweep through the state, since the further out you are, the more likely you'll be living in places where fires rage.

Am I saying that, with better land-use policies, California wouldn't need to deal with fires? No, of course not, you ruffian. But this example is indicative of California's biggest problem: It makes everything substantially more difficult than it needs to be. Thus, California's uniquely broken land-use policies relate to our particularly cataclysmic fire seasons relate to our state's ever-increasing livability problems.

As one of the aforementioned weirdos might have said in the 70s: "It's all connected, man."

II. The dominance of the technology giants (but not for the reasons you think)

I have complicated views about the technology giants that I won't try to summarize here.** From a California-centric standpoint, my main problem with them is that they're not only dominant but also well-managed. They innovate and beat back competitors with startling efficiency, suggesting they channel their talent in particularly efficacious ways. And while that might seem like a weird complaint, management — at least as it's currently practiced — roughly boils down to caring intensely about what people are doing, whether that's through quarterly goals or performance reviews or surveillance. Management is East Coast values codified, a problem for a place whose cultural superpower has always been not caring about what people are doing. True, it can be great for the elite college grads who increasingly populate technology companies and want to be told — explicitly — what hoops to jump through.*** But it's brutal for the weirdos who push things forward. Google's famous "20% innovation time" policy might work for the latter, but it doesn't work for the former, which is probably why the company chucked it in 2013.

Of course, all this might be a fine in a world that had many viable tech companies, but that's no longer the world we live in. If you're a talented engineer who wants to do his or her best work (or who wants to afford a house and/or family in California), maybe you feel forced into accepting a job at a big tech company. Maybe you initially feel excited to "Innovate At Scale" but soon find yourself focused on hitting quarterly goals and copying your competitors' features and integrating acquisitions. Maybe you start justifying it to yourself, thinking, "Well, okay, this isn't what I had in mind, but surely our users benefit from having Stories on Instagram?" Eventually, the justifications run out, and you find yourself feeling that your position in the dust cloud of cosmic consciousness has become disassociated from the broader galactic narrative. That the step changes you wanted to make have been lost in a morass of marginal optimization. Maybe you start a cryptocurrency side project.

Add up enough such feelings and enough such actions, and California's long-run innovative potential suffers.

III. Looming fiscal death spiral

Finally, there is California's looming fiscal crisis, which will almost certainly be its death knell.

California's revenues come primarily from its high income taxes, which, while not pleasant to pay, at least fetch us top-notch amenities like award-winning schools and phenomenal transit. Whoop, sorry, wait a minute — I got California confused with somewhere that has a functioning state government. In reality, California's tax system is a fiscal stimulus program for the Sacramento Metro Area.

Moreover, because of Proposition 13, California has created a system in which rich, aging property owners are subsidized by the highly skilled serfs who work the land. (Artificially low property taxes need to be covered somehow.) Because of Covid-19 and the partial embrace of remote work it has facilitated, those serfs are now free. In a better world, most would stay, but in this world, where they're literally being smoked out of their apartments, maybe the decision to leave becomes easier. The combination of climate change and terrible forest management practices will make California unlivable long after the Covid-19 crisis subsides. (And if you think California is going to tackle forest management on a reasonable timescale, then as a counter I would point to anything the public sector in California has ever tried to do, ever.)

Suppose, then, that a tiny fraction of the serfs leave to work remotely, have families, or breathe. California would immediately face a scary situation. With its most essential tax-payers gone, it would need to hike taxes, prompting more departures in a hard-to-arrest cycle. Of course, California's rapidly graying population of property owners could cede some of their privileges, but that won't happen. California will become older and less dynamic in the process. (Of course, low-income Californians will continue to flee the state in search of a better life, which has been happening for years now; ironically, they seem to be searching in red states like Texas.)

Are my fears overblown? Probably. I guess I've been slightly on edge for some reason. But even small marginal changes can precipitate meaningful impacts.

I know this post sounds bitter, but that's because it's about something I love: I love California. To explicate all the ways would turn this into a tedious and cloying LiveJournal entry. Growing up here filled me with a sense of infinite possibility. It provided me with more advantages than I can count, including a world-class college education for not-much-money. Increasingly, that feeling and those advantages feel like a temporary wave — one that's finally breaking against the dysfunctional society we've built.

California's fake progressivism — "you are welcome here [so long as you don't live in my neighborhood]" — has always been irritating. But increasingly, it feels downright evil. What the fuck is the point of progressivism if not to use the government to solve problems that only it can solve? To harness California's incredible natural advantages? To give anyone, from anywhere, the opportunity to chase their dreams or change the world or just build a damned life?

It should fill California's progressives with shame that Texas, Florida, and Georgia seem to be doing more for human flourishing than California****. But it won't. We'll continue to bury our heads in our N95 respirators and think up new captions for the "dog-in-a-burning-building" meme. We'll skim the Times for the latest Trump-related outrages while ignoring the many legitimate reasons Americans don't trust progressives to run things anymore. We'll post furiously and impotently and pointlessly about the problems someone else should solve.

Whoop, sorry. I guess this did become a LiveJournal entry.

But I'm sad. I'm sad because I don't want to live in an America without a functioning California. What would that even mean? I honestly don't know. Optimistically, maybe the Californian spirit gets uploaded into the cloud and sharded across infinitely many Zoom instances. Or perhaps it creeps into the college towns, Heartland communities, and secondary tech hubs where a small subset of tech employees, creative types, and young people relocate. Maybe it moves to Atlanta, along with an increasing proportion of the movie business. Or maybe it even migrates up to Washington state, becoming — like Washington's anchor companies Amazon and Microsoft — more professional, more grown-up, less utopian.

More realistically, I think it results in a stodgier, sadder, and more pessimistic country.

Congratulations, Californians, you've killed California.

*And, more seriously, a philosophical reorientation toward rewarding effort/ingenuity rather than luck/plunder

**If you're interested, they boil down to the following: I agree with nearly everything Ben Thompson writes on Stratechery, but I get the feeling that I'm slightly more concerned about the long-run cultural consequences of social media and algorithmically-mediated communication more broadly (hence this book I wrote).

***Lest you think I'm judgmental, I'm talking about me: I switched from finance to Data Science and moved into management, which is about as hoop jump-y as you can get. I think management, properly practiced, is a beautiful thing, which I hope to write more about soon. But this post is definitely a "Do as I say, not as I do" situation. (Which, if you want to get real meta, is the cultural problem from which all others stem: We live in a society that increasingly rewards talking rather than doing. I assume it's gotten worse thanks to some combination of social media and too many college graduates with nothing productive to do.)

****Strictly speaking, this is true only for people who are lower-middle-income and above. If you're truly poor, living in one of these states is likely far worse than living in California. For all of our (many!) frustrating qualities, we try to take care of our most vulnerable in a way other states don't. Of course, even there, California's homelessness crisis is proof that we're failing.