Sunday, April 22, 2012

California Feudalism

Back in 2000, Thomas Sowell's wonderful Basic Economics: A Common Sense Guide to the Economy was first published. It's seen the publication of three additional editions, with some revising and updating. But in the first edition (remember, this was written before 2000), Sowell spends some time discussing California and the housing boom (bubble). Sowell makes the oh-so-salient point that the restrictions on land use in California--in particular, those of coastal regions like San Francisco and Marin County--were a primary cause of skyrocketing real estate prices.

And this, by the way, indicates something often ignored or not understood by people generalizing about the housing bubble--or housing crisis--in the United States: it was initially limited by location. Note that most economists, politicians, pundits, and the like talk about the bubble as having started around 2001. But in California--and some other places--it started much earlier. In fact, trouble was already brewing in the California housing industry long before the sub-prime crisis, long before the housing bubble is said to have "burst."

In the years before the nation's bubble burst, the top growth industry in California was the repo industry, as upper class lifestyles financed by dot-com money hit a wall. People were desperate to hold on to their homes--which they had paid through the nose for--and thus assets like luxury cars were the first to go. Not many people recognized this, given that repo numbers are hardly common knowledge. But if the information had been readily available, no doubt many would have seen the coming storm.

But back to Sowell's point, the impact of restrictions on land use in California. Marin County is beautiful. I know people who live there and the open spaces around homes, the roads uncluttered with development, make it a wonderful place to live, to raise a family. If, of course, you can afford it. Because the restrictions on development are severe, people of lesser means simply cannot live in the immediate area, by and large. Even those with what we would call decent jobs--like maybe managing a retail store--don't make nearly enough to buy into the area.

Thus, the majority of people employed at local businesses--even many of the owners of local businesses--don't get to live in the area, with the people they serve on a daily basis. And the area is no urban hub, to be fair, but there are substantial numbers of businesses there to serve the region's quarter of a million or so residents. The restrictions on growth and development mean cheap housing--in the form of apartment complexes and the like--are a no-no. Thus, it's near impossible for the population to grow significantly, if at all.

According to the U.S. Census, Marin County's population grew by just 2% from 2000 to 2010. As one can see by looking at the other data, Marin County is rich, white, and older than the rest of California. Use the Census page to compare your own county of residence with Marin. See how you stack up. Me? I'm in Miami-Dade County. We saw an 11% increase over those same years. And our median income level is half that of Marin County. Here are the key stats for our purposes, though:
Marin County:  
Land area in square miles, 2010            520.31 
Persons per square mile, 2010              485.1
That is one small number--the second one--for a county so close to a major urban center (San Francisco). Loudoun County, Virginia--the richest county in the United States--has a population density of 605.8. Nassau County, New York--another very rich county--has a density of 4704.8! Morris County, New Jersey--also very rich--is at 1069.8. The richest county in Texas--Fort Bend--comes in at 679.5.

There can be some very valid and unavoidable reasons for low population density, of course. But for a nation whose population is growing at a rate of even just 1% a year, room has to be made, where possible. The other counties noted above all had much higher increases than Marin County for the same period, 2000-2010. Fort Bend's was over 65%. Loudoun's was 84%. Yet, Marin County's sits at--again--just over 2%. That's .2% a year. Almost insignificant growth.

The evidence very clearly suggests what Sowell claimed: restrictions on land use and development are being used to maintain a lifestyle for the rich, white, older residents of Marin County. Middle and lower class peoples are being kept out, except when they are needed for work. And not-so-oddly, Marin County is a liberal and Democrat stronghold.

This situation is not limited to Marin County, alone, in California. But it would appear there are consequences for maintaining such limiting structures. According to Joel Kotkin, many young families have had enough of the gatekeeper mentality of California's wealthy elitists:
Nearly four million more people have left the Golden State in the last two decades than have come from other states. This is a sharp reversal from the 1980s, when 100,000 more Americans were settling in California each year than were leaving. According to Mr. Kotkin, most of those leaving are between the ages of 5 and 14 or 34 to 45. In other words, young families...
As a result, California is turning into a two-and-a-half-class society. On top are the "entrenched incumbents" who inherited their wealth or came to California early and made their money. Then there's a shrunken middle class of public employees and, miles below, a permanent welfare class. As it stands today, about 40% of Californians don't pay any income tax and a quarter are on Medicaid.
In California, you're an aristocrat, you work for the State, or you're a peasant. There's not much else, these days. Yet, amazingly, California is the de facto capital of liberals and progressives, particularly in those regions--like Marin County--that so typify this class system. It remains a lock-solid "Blue State," an easy win in the column of the Democrats for Presidential and Senate elections. And that begs the question: what are people smoking out there?

Cheers, all.

2 comments:

  1. Do you really think Obama and the Democrats care that tax payer,s and businesses are leaving Calif. and being replaced by uneducated welfare Democrats?

    Obama has agenda but its is not good government, not making this Nation better, not about its citizens welfare its about turning this Nation into a one party rule..in other words a dictatorship.

    Poverty, government dependency and Democrat votes are Obama,s and the Democrats objective!

    Amnesty and chain immigration will increase the number of all three by many, many millions.

    Normal people thinks no one would be diabolic and sick enough to purposely use policies to reduce the Nation and its population to a state of Poverty, Crime, Misery and Corruption, but you would be wrong!

    If reducing Calif. and this Nation to a suburb of Mexico and this Nation to a bankrupt Third World Slum is necessary to accomplish their goal that is a price Obama & the Democrats are more than willing to pay.

    The more Democrats can decrease Education achievement, Reasoning ability, Punish success, Reward failure and increase, Poverty, Welfare and the Entitlement mentality the more Democrat voters they make.

    The last piece to achieving their goals of controlling this Nation is nearly in place.

    Amnesty for the 12 to 30 million criminals and uneducated invading Illegal Aliens. That with chain Immigration for the ones still left in Mexico and Latin American and with a Prolific breeding rate will assure Red States are turned blue and a Democrat majority forever with a Third World Slum here of Crime, Corruption, Poverty and Misery modeled on Mexico and controlled by the Socialist/Democrat party of Northern Mexico!

    We know Obama loves the poor, because he has made so many of them and they vote for Democrats. Poverty has soared under Obama, with the number of Americans in poverty increasing to the highest level in the more than 50 years that the Census Bureau has been tracking poverty. Over the last 5 years, the number in poverty has increased by nearly 31%, to 49.7 million, with the poverty rate climbing by over 30% to 16.1%. Obama has also been the food stamp President, with the number on food stamps increasing during his Administration to an all time record high of 47.7 million, up 80% over the past 5 years.

    It is all about Power, Control and the Democrat party and how to use lies, false compassion, poverty and government dependency to enslave a free people and a great Nation!

    ReplyDelete
  2. "Do you really think Obama and the Democrats care that tax payer's and businesses are leaving Calif. and being replaced by uneducated welfare Democrats?"

    Well...no. :)

    Thanks for the comments.

    ReplyDelete