08 May 2008

California the Golden State: Drowning in Debt, Energy Starved, Mis-managed

California's big industries have stopped building facilities in the Golden State. Instead, the motto is "anywhere but in California!" The government of California has been dominated by anti-business interests, making it plain to large businesses that California has other, larger priorities.
...heavy manufacturing and other energy-intensive industries have been fleeing the Golden State in droves for lower-cost locales. Twenty years ago or so, you could count eight automobile factories in California; today, there’s just one, and it’s the same story with other industries, from chemicals to aerospace.

...The shortages are starting to rattle some Silicon Valley heavyweights. Intel chief executive Craig Barrett, for instance, vowed in 2001 not to build a chip-making facility in California until power supplies became more reliable. This October, Intel opened a $3 billion factory near Phoenix for mass production of its new 45-nanometer microprocessors. Google, meanwhile, has chosen to build the massive server farms that will fuel its expansion anywhere but in California. The most celebrated is an enormous installation along the Columbia River in The Dalles, Oregon, a facility that will house tens of thousands of computers, requiring mind-boggling amounts of power. A 1.8-gigawatt hydroelectric power plant will offer Google power for a small fraction of what it would cost in the Golden State. The irony is that the Silicon Valley companies that have become the face of California’s twenty-first-century economy are increasingly building the facilities that will give them their future value in other states.

...Despite California’s desperate need for more power, opposition to energy projects remains nearly as prevalent today as at any time during the previous three decades. State law explicitly prohibits the construction of new nuclear plants, and legislative efforts last summer to repeal it went nowhere, even though more and more states are looking to nuclear power as a clean energy alternative. A de facto moratorium on conventional coal-fired power plants (which generate half of America’s electricity) has been in place for decades in California; none exists anywhere in the state. Environmental groups like the Sierra Club and Environmental Defense are working to get dams torn down, even though large-scale hydropower supplies nearly one-fifth of Californians’ electricity.

...Even renewable energy projects can have trouble getting off the ground, often because of Not-In-My-Backyard objections. “NIMBYism is a huge problem in our state, a whole creature unto itself,” says Joe Lyons, a lobbyist for the California Manufacturers Technology Association. “It cuts across all sectors. Even in the most remote locations, where you wouldn’t think it would be difficult to site a new project, or even on federal lands, it is still extremely difficult and there is always opposition.” For instance, attempts to build a geothermal facility on federal lands deep within the Modoc National Forest face relentless opposition from Indian tribes, which consider the site sacred. Local hostility also threatens to hold up construction of several major transmission lines designed to bring more than 5,000 MW of power from renewable energy sources to Southern California consumers.

...Given all its failings, what sort of leadership example does California offer the rest of the country? It’s hard to claim credibly that California illuminates the world when it has trouble illuminating itself. Further, California’s particular path makes sense only if the rest of the country refuses to follow it. The state’s lawmakers and regulators have enacted policies that for several decades have allowed Californians to feel good, even smug, about their environmental credentials. Yet California’s economic prosperity has relied on the fact that other states have built power plants and established sensible regulatory regimes that don’t force businesses to flee. The power plants scattered throughout the western United States, as well as the factories in the American Midwest and South, have consistently saved California from the folly of its own anti-energy agenda. __CityJournal
You should not think that California's mismanagement at the state government level is limited to the energy and environmental sectors. California's huge, mounting budget deficit is affecting its ability to provide medical care and quality educational services. California's government seems confused about the basic concept of fiscal management.

The Golden State is being deluged by impoverished, uneducated, often violent illegal immigrants from South of the border. The immense burden this human wave throws onto the law enforcement, medical services, and educational departments of both state and federal government agencies is ever growing--with no end in sight.

California is losing its large industries and employers at just the time when it needs the revenue that they represent.

It is not likely that California government officials will ever wake up from the reactionary leftist slumber that has taken them captive. The public of California--increasingly dominated by non-tax payers from the South, appears not to notice or not to care about the lack of responsibility or absence of fiscal sanity in Sacramento.

If California is the trend-setter for the US, the rest of the US can only hope that in this case California stands alone.

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Blogger SwampWoman said...

Well, Florida legislators are dead set on following California's example.

Thursday, 08 May, 2008  
Blogger al fin said...

All politicians look stupid close up. California's politicians and bureaucrats would look stupid a galaxy away.

Thursday, 08 May, 2008  
Blogger Robert said...


I honestly think California is just leading the pack. I live in Oregon and most of our politicians tend to have left wing/socialist positions and policies. I am very surprised Google has decided to locate here as the states is not all that business friendly, additionally illegal immigration is also a major problem in Oregon and throughout the nation. Might I recommend recent book by Pete Murphy titled 'Five Short Blasts' ' A new economic theory exposes the fatal flaw in globalization and its consequences for America' I would be interested in your opinion of the book.

Thursday, 08 May, 2008  
Blogger al fin said...

Google chose the Dalles because of the big hydroelectric generating plant there. Of course if the enviros shut off the hydro because of the salmon, they might have a problem.

I'll take a look at Murphy's book. When it comes to grand economic theories (and most other grand theories), I am a reflexive skeptic, but I do look at the evidence.

Thursday, 08 May, 2008  
Blogger neil craig said...

The great advantage of a federal systyem over unitary government is that if a government gets it right or wrong it provides an example to its neighbours whereas in a unitary system it just screws up & says we had no alternative.

As my mother used to say "If you can't be a good example at least you can be an 'orrible warning".

Tuesday, 20 May, 2008  

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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