Red California, blue California

Signs of renewed economic vitality emerge where liberal elites cluster. Funny, that


Andrew Leonard
February 3, 2010 4:25AM (UTC)

Albeit small and tentative, signs are beginning to emerge that California's economy may finally be headed on a solid path towards recovery. The state's finances improved marginally in December -- General Fund revenues came in $481 million higher than estimates contained in the most recent budget had predicted.

But the recovery is highly uneven, reports the Wall Street Journal's Cari Tuna. Coastal California is on the upswing while the inland regions are mired in an ongoing slump.

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Unemployment rates are dipping and home prices are rebounding in the San Francisco Bay area, which is driven by its technology industry and exports, and in coastal Southern California, where entertainment and other industries are starting to benefit from the economic thaw. But in the state's Central Valley and Inland Empire regions, where the downturn struck earlier and harder, unemployment rates are still rising and the battered construction industry keeps shedding workers.

There's an obvious reason for the disparity. The Central Valley and Inland Empire were epicenters for the most outrageous speculative excesses of the housing boom. In contrast, the San Francisco Bay Area and coastal Southern California feature highly diverse economies that weren't completely devastated by the collapse of a single sector.

There's also an intriguing political dimension to the bifurcated economic outcomes. The Bay Area and coastal California trend liberal, while inland California is far more conservative. And that's worth pondering, when we think about how California's woes have been seen through a political prism in the larger national debate. Conservatives like to portray California's busted budget and reeling economy as the logical outcome of over-reaching big government combined with overly restrictive regulations. Liberals point to the strait-jacket imposed by Proposition 13 arguing that the requirement for a two-thirds majority to pass tax increases makes the state almost impossible to govern effectively.

Complicating the issue is the fact that it is very, very hard to separate out the extent to which California is ungovernable, or governed badly, and the extent to which the state's woes are due to the normal gyrations of the business cycle. It could of course be both -- a perfect storm of a dysfunctional state smashing into a horrible recession. But it is at the very least ironic, and should be food for thought, that the liberal hotbeds of elites who might be willing to pay higher taxes in order to help fix the state's finances are a lot more flexible and economically vibrant than the conservative redoubts taking the brunt of the damage.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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