California

Why California is a Hell Hole and Why the Rest of the Country Will Become One Too

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In his USA Today column, Glenn Instapundit Reynolds looks at Joel Kotkin's new book, The New Class Conflict. Kotkin says the wealth distribution in the U.S., starting with California, is breaking down into a lot of poorish folks and some oligarchs. Reynolds explains:

The oligarchs are assisted in their control by what Kotkin calls the "clerisy" class — an amalgam of academics, media and government employees who play the role that medieval clergy once played in legitimizing the powerful, and in implementing their policies while quelling resistance from the masses. The clerisy isn't as rich as the oligarchs, but it does pretty well for itself and is compensated in part by status, its positions allowing even its lower-paid members to feel superior to the hoi polloi.

Because it doesn't have to work in competitive industries, the clerisy favors regulations, land-use rules and environmental restrictions that make things worse for businesses — especially the small "yeoman" businesses that traditionally sustained much of the middle class — thus further hollowing out the middle of the income distribution. But the lower classes, sustained by government handouts and by rhetoric from the clerisy, provide enough votes to keep the machine running, at least for a while.

This process has gone very far in California, but it's well underway across America. As the Federal Reserve noted last week, despite a booming stock market and several years of "recovery," most Americans aren't doing well. In fact only the top 10% saw their incomes rise between 2010 and 2013.

Read the whole column.

While I bow to no one in my willingness to trash California as essentially unliveable, I think it's time to recognize that it is not the bellwether of conventional wisdom anymore. It's an odd place, with many great attributes, but is it really any more representative (or even as representative) than, say, Ohio or Florida or Texas of where America is headed?

More important, I'm not convinced that the country's economic distribution is as much in the shitter as either Kotkin or Reynolds. There's actually suprising agreement across the researchers who follow this that economic mobility has "remained remarkably stable" for decades now. Seriously.

You can (and probably should) argue that mobility rates can be higher than they are. But you can't in good conscience argue that they are going down. As Scott Winship of Manhattan Institute puts it:

upward mobility from poverty to the middle class rose from 51 percent to 57 percent between the early-'60s cohorts and the early-'80s ones. Rather than assert that mobility has increased, I want to simply say — at this stage of my research (which is ongoing) — that it has not declined. If I include households that reported negative or no income, the rise in upward mobility I find is only from 51 percent to 53 percent, which is not a statistically meaningful increase. But the data provide absolutely no evidence that economic mobility declined, whereas the president said it had fallen by ten percentage points.

For more on all this, go here.