In California, The Future Is Now

By Fred Watson for The American Sun

Observers note that California resembles America’s future with no demographic slice being a majority. Looking at the age pyramid, we know this is a lie as California moves to a Hispanic plurality on its way to a Hispanic majority. America in mid-century will be a quarter or so Hispanic but this of course depends all 2015 trends staying the same. California therefore remains a place where the future is on display for all to observe.

A counter argument can be made that since 1990, California has bled natives, which is something America does not have. There is no release valve like the Rocky Mountain states for Americans to escape to as has happened in California since 1990. California represents a worse case scenario of sorts as a one party state that actively pushes citizens out, hardening its position. It is like an Amish state but for psychotic left wingers. If California is a picture of the future, it is a dark one. Literally.

The forced blackout that affected 800,000 households, which means over 2 million people, was just the first in what appears to be a steady situation that will cover the next decade per PG&E. What is causing this? Wildfire liability. PG&E assumes all downside risk for the wildfires. PG&E does have old infrastructure, and has infrastructure which has had bad maintenance for decades now. Is there greed and corruption at the root of this? A little.

This comes back to bad governance and political games to justify the left’s dominance not just in California but nationally. The real problem is that PG&E is running out a hold on customers in an area that may soon see it obsolete. PG&E is already bankrupt, but no one might want to help it exit bankruptcy. The left’s obsession with attacking fossil fuels at every turn is making the PG&E network and rights near worthless to potential buyers.

Why perform maintenance on a network that is going to be made obsolete by religious hysterics like the climate change crowd? PG&E operates in a state where the newest whims of the left can become life in one legislative cycle, therefore the political risk in all planning is much higher than in other states. Politicians like Gov. Newsom want to make environmental dreams a reality, so mandated no fossil fuel use by 2045 can be on the table. In California, it can become reality because of the one party locked in situation.

That one party situation explains the other problem: immigration. Immigration has created vote banks so gigantic that no politician is ever fearful of being removed except maybe GOP state reps and senators. Immigration has also strained the energy infrastructure beyond what companies like PG&E ever expected. Systems set up in the mid-20th century could not foresee a state of 40 million legal residents, which likely means 48 million when including illegals. Is the demographic make up able to pay the rates PG&E would need to make infrastructure investments and perform maintenance. Flint saw brown water when people could not pay bills. Lights go off when the same happens with electric companies.

This does not touch on the human capital issue. In those places liberals sitting on real estate equity do not want to talk about, the question of who is taking over the maintenance of skilled trades and maintenance occupations lurks. Third world countries are not known for outstanding infrastructure even when the IMF and World Bank creates brand new facilities out of the ground. Someone has to maintain them. The test scores for California students do not look promising. The Boomer generation of long term veterans in these positions is retiring, and what is the pool of talent to replace them that also meets disparate impact hiring demands?

The pundit class will always push how dynamic and strong the California economy is, but side step around who is making the gains. California’s agriculture and natural resource firms are withering on the vine as more power accrues to the tech firms. California’s economy is going through concentration with massive tech firms carrying the load as large parts of the state turns to poverty.

Watch for the economic power within cities to slip to only the firms with the highest margins. More and more firms are fleeing California as California’s deep blue state government mandates more and more social welfare programs for firms to pay for. What is happening is California based firms are relocating their core operations and headquarters out of state (Colorado and Texas are hot spots) while leaving a sales and distribution force in-state. California will see more middle class taxpayers leave.

Firms used to follow the Nike system where they kept marketing, research and operations in America will playing labor and environmental law arbitrage for their blue collar production jobs. The new play on this is with white collar service jobs and California. Distribution networks still need to be based in California, but all other white collar activities can be performed in Arizona and Colorado just as easily as done in California. Arizona has a lot of mid and lower end tech jobs, but watch for Arizona to climb up the tech ladder as California spirals downward. Cities across the country will strip down their Amazon HQ2 proposals to lure other firms to relocate or possibly start second locations.

California is the cutting edge. It always was the start of trends for the rest of America to copy. It still has a lot of accrued cultural power, but the effects have changed. California could be sold as cool and awesome even in the ’90s, but today, the word association for California is more likely to be dysfunctional, deviant or broken. The Santa Ana winds have been known for decades. Wildfire risk has always made flicking a cigarette into the grass a dangerous move. What will happen when the human capital that contained problems is completely replaced? What will happen when more businesses throw up their hands and give up on California? What will happen as more states and municipalities fall under the California/Detroit/Baltimore model of leftist lock on governance? It is easy to guess because you can look at the candles in the windows now.

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