A cruel indictment of bad policies

Kind of disagreeably antagonistic in his argument but with some provocative questions none the less. From Number One in Poverty, California Isn't Our Most Progressive State -- It's Our Most Racist One by Michael Shellenberger.

Everyone thinks California is our most progressive state. And why not? It imposes the highest tax on the richest one percent. It is aggressively implementing Obamacare. And it is standing up to President Donald Trump on everything from immigration to the environment.

And yet the Golden State is also number one in poverty and inequality in America.

How can this be? Around the world, progressive economies like those of Sweden, France, and Germany, which redistribute wealth through high taxes and generous social welfare policies, boast far less poverty and inequality than other nations.


What gives? And how does California maintain its reputation as a progressive leader given the reality on the ground?

If racism is more than just saying nasty things — if it is, as scholars like James Baldwin, Ta-Nehisi Coates, Michelle Alexander and countless others have described, embedded into socioeconomic structures — then California isn’t just the least progressive state. It’s also the most racist.

Like I say, disagreeably antagonistic but a thought provoking question. And it is not just California. All our most progressive states (Illinois, New Jersey, etc.) and all our most progressive cities have exactly the same pattern of financial instability, high taxes, high regulation, high crime, high inequality, and high poverty rates.

What is it that links good intentions with such consistently bad outcomes? That's for a different post but I believe to be a function, among many things, of different trade-off preferences.

Other interesting points Shellenberger makes:

It’s true that workers in California earn 11 percent more than their counterparts nationally. But that amount is not enough to make up for mortgage payments and rents that are 44 percent and 37 percent higher (respectively) than the national average.

Where 56 percent of Californians could afford a middle-class home in 2012, in the third quarter of 2017, just 28 percent could.

This matters. Homeownership has been the traditional route for the working class to join the middle-class, notes Chapman University demographer Joel Kotkin, who has been ringing the alarm about the crisis for years.

One fact says it all: homeowners have a net worth that is a whopping 36 to 45 times higher than that of renters.

[snip]

“Progressive organizing,” lamented Benjamin Ross in the left-wing magazine Dissent, “evolves stealthily into a defense of the residential status quo. It is a status quo that Beverly Hills is happy to preserve.”

[snip]

While the state has the highest income tax rate for the top tier earners, California also has the nation’s highest sales tax, which is famously regressive.

Meanwhile, two-thirds of the tax relief from Proposition 13, the 1978 ballot initiative that restricted property taxes, goes to homeowners with incomes above $120,000 annually.

How do progressive residents of Elysium protect their wealth across the generations? By allowing homeowners to pass along their low property tax rates to their children.

[snip]

California’s high energy prices and regulatory burden result in the state having fewer high-paying manufacturing jobs relative to other states.

Between 2011 and 2017, California’s electricity rates rose an astonishing five times more than they did nationally, undermining the ability of the state to compete for manufacturing jobs which pay $96,711 per year on average — $40,000 more than the state’s average non-farm income.

It is an almost relentless litany. While I think Shellenberger is broadly headed in the right direction, it is a cruel indictment he draws up.