One, there is a lot of oil and gas in the Monterey Shale formation. It is located right in the center of the state, ideal in terms of exploitation and transportation. Drilling off Big Sur would be one thing, drilling in the scorched, godforsaken West Side foothills, where nary a Bay Area professor or Santa Monica lawyer has ventured, is quite another. In Montecito or Lafayette, you can get fined for painting your house off-pink; out here you can move nine mobile homes behind it, dig some holes for outhouses, string Romex, create a low-rent compound — and the most regulated state in the nation becomes the most wild. At some point soon, fracking and horizontal drilling will start in earnest. The money will flow to ensure funding for one-third of the nation’s welfare recipients, for the schools that rank 48th and 49th in the nation, for the unfunded $300 billion in pension liabilities, for ad hoc, stopgap tinkering on the murderous sections of the 99 and 101, and for the environmentalists to save the next bait fish in line.
Two, you can clone elsewhere Silicon Valley, but as yet, not quite replace it. Yes, I know Sacramento is taxing entrepreneurship to death, and forcing relocations to Texas and the like. But that said, Silicon Valley grew where it did for three reasons and they have not much changed since my graduate days at Stanford when I saw it take off.
First, the corridor between the great universities Stanford and UC Berkeley ensured highly educated engineers, MBAs, lawyers, and professionals in general. Both universities, Stanford particularly, are doing quite well, and their expertise is now more embedded in private enterprise than ever, despite the cheap Occupy Wall Street/May Day rhetoric of the student plazas. Other nearby subsidiaries — UC Davis, UC Santa Cruz, several CSU campuses, Santa Clara, etc. — serve as satellite multipliers and purveyors of expertise. Second, the coast that’s nearby Silicon Valley faces an ascendant Asia, not a dying Europe. That means not just proximity to markets, but a blending of culture, particularly of highly intelligent and aspiring Asian professionals and immigrants, and a steady hand on the pulse of Chinese, Japanese, South Korean, and Taiwanese popular tastes. Third, there is a hip, cool culture in the Bay Area. I am not too fond of it, given its manifest hypocrisies that emulate medieval penance and exemption. The more one thirsts after riches and gives lip service to multiculturalism, the more the metrosexual hipster decries capitalism and seeks his apartheid world apart from the logical wreckage of his own ideology.
But I am also not stupid. When I sit in a café on University Avenue, the energy of the green, the gay, the feminist, the Obamaized techie, the Facebooker, et al is manifest. That sense of living in the “right” zip code means that they are willing to buy overpriced hovels and fork up astronomical prices for pedestrian food. Weird — but weirdly dynamic all the same. An engineer would rather have his family live in a 1,000 square-foot box in Mountain View than bring them up in a palace in Tulare. Most simply love Silicon Valley cool as much as much as I am glad to leave it each week.
Farming Cannot Move
The third and final reason why California sort of works when it should have gone broke long ago is, of course, the point of this essay — agriculture. You cannot pull up your pistachio orchard and transplant it to Texas or start almonds over in the Nevada desert. Agriculturalists hate what the state is doing to them: a cynical effort to overregulate, grow inefficient confiscatory government, overtax, and generally insult the entrepreneur on the cynical theory that farmers are going nowhere and so should pay bureaucrats a premium for allowing them to profit. And at $7,000-8,000 an acre profit, Jerry Brown’s high-speed rail, or Solyndra, or the Voice of Aztlan theatrics are small costs of doing business.
Tech income, oil and gas income, and farm income are pretty balanced and diverse incomes for the foreseeable future — and well apart from tourism, Hollywood, Napa Valley, banking, finance, and construction.
The Weirdest Place in the World
So California is both more poorly managed than any time in its past, more divided between rich and poor, more fragmented by opportunistic ethnic identity politics, more impoverished by massive illegal immigration — and never more naturally wealthy. The other day I drove through the verdant Central Valley on Manning Avenue. Each acre I zoomed by is producing thousands of dollars in global profits. At I-5, I looked out at fracking country, before descending into the land of Facebook, Google, and Apple — all on mostly poor roads, with terrible drivers and third-world public rest stops, and now and then passing inferior schools.
California may be in awful financial, social, civic, and political shape — but it is far, far from broke.