California's Economic Collision Course: Immigration and Water

[Leo the Dog]

California's Economic Collision Course: Immigration and Water
Thomas Del Beccaro

You have heard it before: “As California goes, so goes the nation.” If that is the case, the national economy will be harmed for decades to come because of California’s misplaced priorities today. Indeed, by emphasizing high-speed rail over water and failing to deal with its debt crisis, California poses a long-term threat to our national economy and is on an economic collision course of increased immigration and lack of water.

California has more than 38 million residents. Despite net losses of millions of residents to other states, California continues to grow through immigration. Latinos now equal the number of non-Hispanic whites in California. With projections that show California’s population reaching 45 to 50 million within 20 years, you would think job creation would be job one for Jerry Brown.

Sadly, that is not the case today. Despite a much-heralded recovery in the media and by Governor Jerry Brown, California still has one of the nation’s highest unemployment rates. Also, more than 30% of the nation’s welfare recipients are Californians – even though California has just 12% of the nation’s population. It is not surprising, therefore, that California is ranked number one in poverty.

The cause for those bad statistics is bad government policy. California is the most regulated, highest-taxed, most in-debt state in America. According to government data, from the municipal to the state level, California governments have more than $1.1 trillion in debt – much of that tied to pensions.

Beyond debt, Governor Brown recently signed a huge tax increase featuring a top rate of 13.3%. Overall, California taxes are 42% higher than Texas. California also has the most extreme/job-threatening global warming law in the world, which includes a 15-cent gas tax increase slated to take effect in 2015 – on top of the already record gas prices.

High debt, high taxes, high regulations and high poverty are not exactly the foundation on which to add 7 to 12 million people. California’s private sector needs an economic recovery far more robust and broad-based to absorb those new people. Unfortunately, California continues to make bad decisions with long-term implications.

Perhaps worst among them is Brown’s decision to make high-speed rail a higher priority than water. Over the last 7,000 years, California has endured droughts that have lasted up to 20 years, according to Scott Stine, a professor of geography and environmental studies at Cal State East Bay. California is in year three of its current drought, which is projected to result in economic losses of $2.2 billion to California agriculture in 2014 alone according to a UC Davis study – not to mention the loss of over 17,000 jobs.

To combat the lack of water brought on by drought and environmental policies that favor fish over people, California farmers are behind a drilling boom – for groundwater. The problem is that, at current rates of consumption, some believe California could run nearly dry of groundwater within two decades.

Unlike his father Edmund G. Brown, Sr., who focused on water, Jerry Brown would rather see $68 billion spent on high-speed rail – a project for which there is no significant consumer demand and, like most every rail system, will likely require endless public subsidies and therefore add to the debt crisis. Brown recently killed a proposed water bond of $11.4 billion because he said it would “break the bank.” Apparently $68 billion won’t break the bank, but $11.4 billion would.

Instead, after California Republicans fought for a greater emphasis on water storage, Brown agreed to a bond that spends $2.5 billion on water storage – a figure woefully short of what is needed. Obviously, Brown thinks high-speed rail is 27 times more important than water storage.

Neither that water bond nor any other state level effort currently underway will sufficiently add to the amount of available water now or in the future. Water equals jobs, however, and without a far-reaching effort such as building 60 desalination plants at the same cost as the high-speed rail project – plants that won’t need future subsidies, the California economy is on an economic collision course with immigration.

California’s debt crisis will hobble its economy as well. Even Chicago’s Rahm Emanuel was honest enough to say that pension debts were deterring businesses from locating in Illinois. In California, despite what some say could be more than half a trillion dollars of public employment retirement-related debt, there is literally no concerted plan for addressing the issue – tinkering yes, real reform no.

Unless California addresses its long-term water needs and debt crisis, the already overburdened private sector will not be able to handle the coming population influx. Instead, California’s welfare rolls will swell, adding to its debt crisis.

In 2009, California sent out IOUs to creditors when hard pressed for cash and borrowed billions from the federal government. A decade from now it could be much worse. Rather than leading the national economy, California could well be holding down America’s economic growth.

Source: http://www.forbes.com/sites/thomasde...ion-and-water/

CA will see significant challenges in the coming years. I guess the question this article presents is: Water or rail?

[pdxtex]

or people! i dont think moratoriums on legal in migration are that far fetched. if the boat can only handle so many people, why let more on board? california is america's social and environmental policy proving ground which many americans ultimately benefit from, but at what cost to californians already living a strained life?

[Crawford]

CA HSR, while a good idea in theory, is probably not a super-smart investment in an age of limited resources. The costs are outlandishly high, the ridership projections kind of suck, and NIMBYs will probably delay it until we're all dead. And the decentralized nature of the state will make it really tough to equal HSR in other nations. I mean, if you're headed to LA, chances are your destination is nowhere near LA Union Station.

If I had that exact same money, and had to spend it on transit, I think urban transit investments and more moderate but comprehensive improvements to existing intercity rail infrastructure would make more sense.

And, yeah, water is kind of important, too, I'd say. SoCal seemed scary dry last time I visited (last Feb., usually the rainy season, I think).

[sopas ej]

Originally Posted by Leo the Dog

Source: http://www.forbes.com/sites/thomasde...ion-and-water/

More conservative op-ed drivel. Just look at the writer's bio. And the fact that he contributes his musings to an already highly capitalistic conservative rag?

Next.

[sopas ej]

Originally Posted by Crawford

CA HSR, while a good idea in theory, is probably not a super-smart investment in an age of limited resources. The costs are outlandishly high, the ridership projections kind of suck, and NIMBYs will probably delay it until we're all dead. And the decentralized nature of the state will make it really tough to equal HSR in other nations. I mean, if you're headed to LA, chances are your destination is nowhere near LA Union Station.

Most everyone's destination isn't near LAX either.

If high-speed rail connected California's major cities, it would be a viable transportation option, and I think many people would ride it. I know I would. People in Fresno might even consider commuting to jobs in LA or SF.

[mhays]

This guy has a logic problem. Let me begin: If those problems are as bad as he says (which might not be related to "as bad as he thinks"), then why would the state grow so much?

Further, with global warming a given (except among paid hacks and dimwits), wouldn't action by the State be prudent? As for "most aggressive in the world" that's just moronic. Obviously much of the world does far more on transit, growth management, etc.

As for HSR, once you're at the station, there's presumably a local transit network to get you the rest of the way.

[Crawford]

Originally Posted by sopas ej

Most everyone's destination isn't near LAX either.

But that's not HSR's competition. HSR is competing with the automobile, and five LA-area airports.

Chances are one of the airports will be closer to your destination, and certainly driving will get you exactly to your destination. And even for LAX, you're right next to the most important roadway in LA.

[memph]

I don't think people are going to be commuting from Fresno to SF/LA.

I'm mostly interested in the notion that desalination plants won't need to be subsidized. Is water really that expensive in California? And will the agriculture industry be willing to pay the cost of desalinated water? I mean, I'm guessing right now they just have their own wells so they're probably paying relatively little?

[mello]

Concerning water the CA Coastal Commission which IMO has held back massive amounts of economic opportunity in this state while doing some good for the environment I will admit is now dragging the desalinization process to a halt. A plant is about to come on line in Carlsbad and the next one furthest along in the process is in Huntington Beach. The HB plant has just hit a huge snag with the CC and it is virtually an identical copy to the Carlsbad facility?

12 plants are planned throughout the state but it looks like it will take a very long time to bring these much needed resources to fruition because of the bureaucratic mess they will be tied in. Also Solar Energy is a huge water saver because power plants are very water intensive. If distribution centers, warehouses, and office parks start putting solar on their roofs along with 4 to 5 million single family homes the water savings will be huge!

[krudmonk]

A bulk of our poor live in the Central Valley and will be more connected to growth in the larger metros through high-speed rail. It probably won't be daily commuting, but many people who commute long distances currently have irregular (not M-F, 9-5) hours already.

[edluva]

Originally Posted by Crawford

But that's not HSR's competition. HSR is competing with the automobile, and five LA-area airports.

Chances are one of the airports will be closer to your destination, and certainly driving will get you exactly to your destination. And even for LAX, you're right next to the most important roadway in LA.

actually, LAX is HSR's competition. a two hour flight (including security and other airport BS) is no different from a 2 hr 40 minute train ride. the need to get from the station/airport to your ultimate destination is an issue regardless of whether you fly or ride. add to that the fact that the 405 and a host of other LA freeways are useless for half of the day anyway. add another hour on either end of your trip if you fly and, depending on which part of the respective metro you live in, HSR can easily beat flying if not for the headache saved alone.

so the question is not whether local transit is widespread enough for HSR, but rather, how much will HSR bolster metro rail ridership. for the remainder of the metro with diminished rail access, it might even still be a tossup depending on ticket prices/distance to regional airports. but for substantial parts of the metro which are within shooting distance of a train station, the scale will dramatically tip in favor of HSR, even for those choosing to drive to the station. believe me, as a regular LA-SF traveler, avoiding the headache of flying alone sells itself.

so yes, HSR will be in direct competition with flying. just look at passenger flight data for taipei-kaohsiung before and after taiwan's HSR system opened. mind you Kaohsiung MRT's ridership is more on the scale of San Diego's than LA or SFs, and its network consists of two lines, so that "connectivity" excuse is bankrupt in lieu of Taiwan HSR's success

[LosAngelesSportsFan]

Originally Posted by sopas ej

More conservative op-ed drivel. Just look at the writer's bio. And the fact that he contributes his musings to an already highly capitalistic conservative rag?

Next.

exactly.. what a dumb editorial. Not even worth the time to respond to the bullshit that was in there

[sopas ej]

Originally Posted by memph

I don't think people are going to be commuting from Fresno to SF/LA.

If high-speed rail existed, why wouldn't they? Maybe not droves of people, but some people might do the commute. And Fresno has a Cal State campus; I think high-speed rail would be a boon for their students. They could possibly use it to do internships in LA and SF and then be able to go home in a relatively decent amount of time.

Originally Posted by krudmonk

A bulk of our poor live in the Central Valley and will be more connected to growth in the larger metros through high-speed rail.

PRECISELY. High-speed rail would open up economic opportunities for a lot of people who would then be contributing to California's economy. High-speed rail is well worth the investment.


Regarding desalination (desalinization?) plants, I remember reading an article some years ago that desalination plants should only be considered a last resort due to its very high cost because they require a lot of energy, plus they're also bad for marine life. Apparently they kill fish and other sea creatures by basically sucking up large amounts of ocean water along with the fish and other sea life in it, and it creates some kind of residue layer or something. But maybe the technology has improved since I last read the article?

[ardecila]

A single HSR train can let passengers off at Sylmar, LA Union Station, and Anaheim. That's direct competition with Burbank and John Wayne airports.

I agree that HSR may not be appealing to people on the Westside who are using LAX but there are so many areas that are closer to the rail corridor. Even some Westsiders who are driving may still switch to HSR if there is parking in Sylmar.

[Shasta]

Conservatives have been trying to write of California for years. Similar to how progressives are waiting for all of Texas to go up in oil/gas/chemical flames.

I dig California. That said, the water issue is a big deal but it's a big deal in most places in this country.

[llamaorama]

CA HSR, while a good idea in theory, is probably not a super-smart investment in an age of limited resources. The costs are outlandishly high, the ridership projections kind of suck, and NIMBYs will probably delay it until we're all dead. And the decentralized nature of the state will make it really tough to equal HSR in other nations. I mean, if you're headed to LA, chances are your destination is nowhere near LA Union Station.

If I had that exact same money, and had to spend it on transit, I think urban transit investments and more moderate but comprehensive improvements to existing intercity rail infrastructure would make more sense.

And, yeah, water is kind of important, too, I'd say. SoCal seemed scary dry last time I visited (last Feb., usually the rainy season, I think).

By the time this stuff is built, mini robot pods cars or shared group vehicles might be a thing. They'd cover the last mile much better than public transit.

Sadly, that is not the case today. Despite a much-heralded recovery in the media and by Governor Jerry Brown, California still has one of the nation’s highest unemployment rates. Also, more than 30% of the nation’s welfare recipients are Californians – even though California has just 12% of the nation’s population. It is not surprising, therefore, that California is ranked number one in poverty.

How much of all this is fundamentally related to California being a major center of produce growing and at one time, homebuilding? This is different from some eastern state where poverty is caused by lack of better paying jobs. Rather in California, poverty is geographically sited in the state because it happens to have a lot of jobs, that don't pay much.

If the state suddenly became like South Carolina and opened up a bunch of factories and call centers, there would still be cantaloupes in a field near Modesto needing picking and some desperately poor people willing to work in the hot sun to pick them. Maybe this and limiting immigration would drive wages up by restricting labor supply...or just cause the agriculture industry to become uncompetitive. Which would fix the water problem.

"Business friendliness" is just saying that you are comfortable with seeing your neighbor live in extreme, Mexico type poverty, while your state takes your tax dollars and gives them to a company that will hire a bunch of out of state transplants at a lower wage than you get now. Oh, and all this creates growth, which according to the article is bad. Maybe white people growth is better according to the author...

The funny thing is building HSR instead of water facilities will do the same thing, but without throwing people under the bus. A fast train link will integrate the economies of the poorer valley and bring jobs out of the more expensive coastal metros. If water gets scarce, that will force things that use inappropriate amounts of it, specifically irrigated farmland, to adapt or die.

This whole article just seems like an engineered ideological piece.

or people! i dont think moratoriums on legal in migration are that far fetched. if the boat can only handle so many people, why let more on board? california is america's social and environmental policy proving ground which many americans ultimately benefit from, but at what cost to californians already living a strained life?

Kind of contradictory?

To go with the metaphor; If your lifeboat is sinking, and you know how to swim; you should jump into the water. There is another empty lifeboat over there.

Meaning, I don't get why anyone would advocate trying to "saving" places by going against the very values that make them what they are just because one wants a piece of that. Instead leave them alone, we should focus our energy on improving things elsewhere. California should be a modern immigrant gateway and Texas should put more into education and quality of life to become the new California for the middle class.

[Gordo]

Originally Posted by memph

I'm mostly interested in the notion that desalination plants won't need to be subsidized. Is water really that expensive in California? And will the agriculture industry be willing to pay the cost of desalinated water? I mean, I'm guessing right now they just have their own wells so they're probably paying relatively little?

Wells? No, not so much. Farmers in California get essentially free water from either the Colorado River or Sierra Nevada snowmelt through the California aqueduct. The water rights for both are dolled out through century-old mechanisms that heavily favor agriculture over cities.

There are hundreds of thousands of acres of rice and alfalfa grown in the Imperial Valley (east of San Diego and one of the driest and hottest deserts in the Americas), where farmers are restricted to growing both of those crops due to water rights restrictions (just about the two most water-intensive crops out there).

The water issues in California, and all of the west really, are pretty much entirely political. Market price the water and these issues go away.

[fflint]

Oh, look--a conservative Republican Party operative insists California will implode and thus destroy civilization as we know it, unless and until we adopt the discredited Friedmaniac trickle-down doctrine: no more regulation or taxation of our beloved corporate citizens (but massive transfers of wealth from the public to private for-profit corporations are totally cool!), no more environmental protections, no more public works projects like HSR (but public works projects that could drain the North dry in order to water the ornamental lawns and fill the swimming pools down South are totally cool!), no more immigration (except for when it helps depress Americans' wages!)...

No wonder the GOP is locked out of California governance.

[Leo the Dog]

Originally Posted by sopas ej

More conservative op-ed drivel. Just look at the writer's bio. And the fact that he contributes his musings to an already highly capitalistic conservative rag?

Next.

Is he incorrect that water will be a major factor in CA's future? I thought he brought up very valid points regarding water.

[Leo the Dog]

Originally Posted by Crawford

CA HSR, while a good idea in theory, is probably not a super-smart investment in an age of limited resources. The costs are outlandishly high, the ridership projections kind of suck, and NIMBYs will probably delay it until we're all dead. And the decentralized nature of the state will make it really tough to equal HSR in other nations. I mean, if you're headed to LA, chances are your destination is nowhere near LA Union Station.

If I had that exact same money, and had to spend it on transit, I think urban transit investments and more moderate but comprehensive improvements to existing intercity rail infrastructure would make more sense.

And, yeah, water is kind of important, too, I'd say. SoCal seemed scary dry last time I visited (last Feb., usually the rainy season, I think).

I actually agree with you on this. I'd like to see $68 billion (a very conservative estimate) be spent on local rail. Imagine if LA had an extra $28 billion, SD and SF each had $20B for local rail expansion?! Much better use of money and would increase mobility.