Claremont Independent

The Social Security surplus is drying up, the budget deficit is doubling, and illegal immigration, Islamic extremism, and failing education are hardly about to solve themselves.  So it may seem surprising when we hear from a voice on the right that “the dominant issue in America…and in other advanced industrial economies is class.”  Yet bestselling author Joel Kotkin recently shared with students and faculty at Claremont’s Athenaeum exactly that message.  As  Presidential Fellow of the Roger C. Hobbs Institute at Chapman University and contributor to the Wall Street Journal, New York Times, Washington Post, and The Weekly Standard, Kotkin offered a sobering take on California’s  most pressing economic issues. Though unabashed in his conservative sentiments, he established both his thesis and his credibility through a commanding understanding of the issues and a take-no-prisoners approach to blasting those who’ve compounded the state’s problems.

Sandwiched between a presentation on “Meeting the U.S. Energy Challenges” and a faculty panel on Global Warming the nights before and after, Kotkin clearly felt little need to conform, stating flatly in the opening of his presentation, “While we obsess with climate change and the environment, or race and gender…the fundamental challenge [facing the US] is going to be sustaining upward mobility” for American workers.   As he argued, over the past few decades, California in particular has reverted from a land of opportunity, innovation, and social mobility to a state entrenched in stagnant growth and failing policy.

Kotkin declared that while a city ought to be “taking the working class and moving them to the middle class, and the middle class to the upper-middle class,”—serving   as a “vehicle” of that upward mobility—places like Los Angeles and New York have abandoned this model in favor of the more fashionable “luxury city” image, whose future increasingly “is catering to the elites.”  Citing the recent history of Los Angeles, for example, he lamented, “What we’ve done is driven out industrial enterprises and put in a bunch of hotels and sports stadiums, which don’t exactly produce high wage jobs, and fundamentally LA has become less competitive.”  Downtown LA has turned to an “emphasis on cosmetic projects,” he declared, meanwhile neglecting the real pillars of urban development and prosperity: infrastructure, education and training, affordable housing and blue-collar job creation. 

To ensure the clarity of his message, Kotkin stated, “The more that we target our economy and our society toward servicing the tastes of the very very wealthy, it very often means restraining some kind of development…[and] we end up creating a society which is actually more and more bifurcated between rich and poor.”  While statements like this may have tempted liberal listeners to cheer in agreement, he pre-empted any such unison by denouncing in particular the results produced by so-called ‘progressive’ states. He noted that from 1930 to the 1980s, “Californians generally got richer faster than other Americans.” Yet over the last twenty years,  California “income growth has trailed the national average by a significant margin, and the divide between rich and poor—which of course the left is always upset about—is actually growing faster than [in] the rest of the country.”

Citing a study from the Public Policy Institute of California that ranked the state 15th highest in poverty, Kotkin noted that after cost of living adjustments, California then beats out only New York and D.C.  He argued that California has become in many ways a “holding cell for lunacy,” now paralyzed by the politics of redistribution and regulation.  Blaming “radical greens” for blocking the construction of new reservoirs, the plaintiffs bar for rampant litigation, and a paradoxical appeal toward both egalitarianism and “plutonomy” (an economy serving the most wealthy), Kotkin assailed California’s retreat from sound policy.

Indeed, one of his most caustic indictments was of the mistaken belief that college is for everyone. He scorned the practice of community colleges taking “kids who maybe aren’t academically oriented” and churning them out “with an education in sociology, which as we say in New York: That and a subway token will get you a ride on a subway…[There is] absolutely no use to this degree.”  While graduates of elite schools continue to benefit, the alumni of “diploma mills” would be far better off to fill the “big fat hole in the labor market” of blue-collar jobs. He argued, “The big shortage isn’t in Ph.Ds…it’s plumbers and welders and the basic skills that now cannot be found in the United States.” 

Finally, Kotkin scorned California’s dependence on real estate as yet another contributor to the shift away from worker mobility. “During the last few years, we’ve been living in a fool’s paradise,” he declared, adding that “we’ve been increasingly living from bubble to bubble,” banking first on the dot coms and then the housing market to sustain booming economic appearances.  He noted that during the 1990s we had a broad-based economy with approximately ten percent of job creation related to real estate,  which now contributes fifty percent of job growth.  More alarming, however, was the reported statistic that housing prices in Southern California have risen eight to nine times faster than incomes in recent years; yet in cities like Dallas, Denver, or Philadelphia, those ratios reach only one and a half, three, and four to one respectively.  The consequences of these realities, unfortunately, have been a massive drain on the labor force from other industries, and a situation in which “under ten percent of people in the state could afford to buy a home.”  

Though Kotkin admitted to having “high hopes for the Terminator” to help push reform and revitalize California, he conceded “he seems to have terminated himself.”  However, he retained hope that California might still take steps in the right direction: rethinking Proposition 13 and how this cap on property taxes has distorted the system; constructing a truck toll way from the port of Los Angeles, which would relieve overcrowding and save fuel and time; and promoting the institutions and business climate vital to “a culture of aspiration.”

Indeed, in a presentation that might well have called for a more artificial equality, Joel Kotkin instead provided a refreshingly responsible platform of returning to sound policy and ensuring a future of opportunity for Americans of all classes.  •  Matt Beienburg is a freshman at CMC. Watch Joel Kotkin's talk by clicking here.

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