California is the future

by Peter Leyden and Ruy Teixeira, A Medium Corporation

America is stuck between two historical eras. That’s the best way to understand the strange, unprecedented politics of Trump, the political polarization and paralysis of government, the deep dissatisfaction of public opinion, the lack of trust in all institutions — all of it.

The post-Industrial era that blossomed in the second half of the 20th century is over. That world of secure manufacturing jobs, generally homogenous societies and respected traditional institutions is done. And while it’s over from a dispassionate historical perspective, it’s markedly not done in the minds of many. This is half the problem: Too many people are hanging onto a worldview and way of life that is fast slipping away. The other half of the problem is that almost no one knows what will replace it.

To that we say:

California is the future. That’s the best way to understand the way forward for America, and ultimately the world. California is roughly 15 years ahead of the rest of America in confronting the very different realities of the 21st century.A world of transformative new technologies with capabilities that we are only just beginning to fully comprehend and harness. A polyglot world of diverse mixes of races and ethnicities that are both super-creative and periodically combustible. A world that increasingly is shaped by climate change and the immense challenges it poses for all of us.

California not only has faced up to the 21st-century challenges, but it’s begun to seriously adapt to them. Californians saw waves of new technologies early, then got a jump on leveraging and accommodating them, and occasionally constraining them. They began integrating a massive influx of Latino and Asian immigrants, coping with diversity in schools and work, and coming to terms with whites being the minority. Californians took a beating in climate-related catastrophes like the recent drought, and have aggressively moved forward with some of the most ambitious clean energy and sustainability measures in the world.

California is the future of American politics as well. The once Red and now deep Blue state has largely figured out a new political way forward for itself and by extension for America — as well as for other democracies — that’s up to the new realities and immense challenges of the 21st century. This is the most important insight for this historical juncture, this time of despair. It’s also the most difficult point for Americans on the east coast and the heartland to accept. But there is a compelling case to be made, based on data and an understanding of history, that what’s happening right now in California is going to come to the rest of America much sooner than almost anyone thinks.

The Takedown of the Old Order

If you were a political strategist looking to make California a model of how America could change for the better, what would you do? First, the Republican party and the conservative movement that captured it essentially would have to be neutralized — completely discredited and marginalized to the sidelines of politics. California would have to get beyond dealing with crazy conservative ideologues who could not face up to the real world of facts and let go of outdated ideas already proven not to work. No bipartisan dealing with zealots, no trying to pry one brave soul from a ridiculous pledge of no new taxes. No, the whole party must be decisively beaten — so decisively that it would take at least a generation for the party to get back on its feet again. In California, that very mission was accomplished by the Democratic Party and the voting public. Now the state is totally run by Democrats. All statewide offices are controlled by Democrats, and both Houses of the Legislature have Democratic super-majorities.

This takedown of the Republican Party was the precondition to clear the public policy space to get truly innovative and future-oriented. The flip side of the Republican party take-down was the reinvention of the Democrats — which is well on its way, though still a work in progress. California Democrats for the most part are not constrained by old-school, 20th-century policy solutions. They genuinely are groping their way forward towards a new set of 21st-century policies and solutions. They are guided by a familiar set of progressive values that tries to look out for everyone over the long term. It’s a more people-oriented politics, not tethered to 20th-century welfare state liberal solutions. Californians have a healthy respect for the role of the market — but not harsh right-wing orthodoxies that see the market as always superior to government.

The main insight about Californians is that they are not enamored of old ways or old ideas. The people are truly innovative and more apt than anywhere else in the country to try new things out. This general impulse for innovation is complemented by an unusual initiative system that ensures that its politics is guided by periodic populist impulses. Watching the results of California’s initiatives is like studying the id of California’s electorate. Every couple of years the political terrain is reshaped by the evolving will of the people — for better and, it must be admitted, sometimes for worse. In recent years it’s been for the better as increasingly clear guidelines have been set for state and local policy makers. The result is an emerging progressive agenda for the 21st century. It’s the building blocks for a resurgent Democratic party not just in California, but in the rest of America as well.

The 15 Year Time Delay

We can hear the objections: “But California is a deep blue state whose trends do not apply, and will never apply, to red states and purple states in the rest of the country.” No, that’s just wrong. California was a reliable red state for decades before it turned blue in response to the new realities of the 21st century. From the time of Eisenhower through the first George Bush, California always voted Republican in presidential elections with the one exception of the LBJ landslide (when even California could not vote for Goldwater.) Other statewide offices like governors and senators were frequently occupied by Republicans as well.

That began to noticeably shift in the 1990s when California shifted to the blue side of the Presidential column with the 1992 election of Bill Clinton — and it has been increasingly true since then. Republican statewide officers were key players through the 1990s and were active in the legislature into the early 2000s — which accounted for the political paralysis of the state during that period.

Uncompromising Republican ideologues kept the state government hostage and thus paralyzed until they eventually got squeezed off the political map and California government could function again. Does that political dysfunction sound familiar? It’s Washington D.C. right now.

This brings up the most remarkable, though controversial, part of the California is the future frame: The 15-year time delay. Modern California politics prefigures American politics by roughly 15 years. The clearest example is the resurgence of American conservatism itself — starring Ronald Reagan. Reagan won the governorship of California in 1966 from a liberal Democrat incumbent about 15 years before he did the same thing to become president of the United States in 1980.

All kinds of conservative milestones beyond the rise of Reagan emerged in California about 10 to 15 years before analogous developments happened in America at large. The draconian tax cut revolt of California’s Howard Jarvis (of Proposition 13 fame) in 1978 prefigured Newt Gingrich’s 1994 revolution in which Republicans rode similar sentiments and took over control of the U.S. House of Representatives for the first time in about 40 years. California passed a series of initiatives aimed at stopping the influx of immigrants in the 1990s (starting with Proposition 187 in 1994) that has eerie parallels with the rise of the national Tea Party in the 2010 election. And California went through the Trump drill in 2003 when an angry electorate frustrated by paralyzed state government elected as governor a Hollywood celebrity with no experience in government — Arnold Schwarzenegger. Close to 15 years later an equally frustrated national electorate narrowly went for Trump.

The California story did not end well for Schwarzenegger or the Republicans. The obsession with tax cuts at any cost led to slashing cuts in popular public programs, ignorance of needed investment in infrastructure, and the creation of huge budget deficits — alienating almost everyone. The large numbers of Latinos, Asians and their allies who had borne the brunt of anti-immigrant measures came of age politically — and they did not forget who was to blame. And climate denial made Republicans look either ignorant or corrupt to the growing ranks of millennials and college-educated professionals.

The turning point came in a 2005 special election where a conservative reform agenda of initiatives was decisively defeated statewide. From then on Schwarzenegger moderated his stances, and started playing ball with the increasingly progressive Democratic legislature. By 2010 Democrat Jerry Brown was back in his third term as governor with large Democratic majorities that started remaking California. (More on this part of the story later in this series.)

The 21st Century Democratic Agenda

This brings up another objection to the California is the Future theme: “But California has so many problems. The housing costs are skyrocketing. Their public education system is struggling. They had to ration water!” Let us be crystal clear: California by no means has everything figured out. The state faces huge challenges. But welcome to the 21st century. America and the rest of the world face huge challenges too. The global economy of the last 30 years has created massive inequalities that are unsustainable for democratic society, and they must be rectified. New technologies are bringing huge changes to how we get work done and how people make a living — or not. Climate change is closing in and humans simply must transition off carbon energy and onto clean energy as fast as possible.

All true. But there is nowhere on the planet better positioned to figure out practical solutions to that complex future than California right now. If the 7.5 billion people on Earth today needed a real-time experiment to design a better way forward, look to California. It’s big enough to be meaningful: California has 40 million people and is the sixth largest economy in the world. Yet it’s small and coherent enough to be quick and flexible. The political playing field has been cleared with one party fully in charge with legislative super-majorities. The foundation has been laid.

Outsiders also under-appreciate how much California has already accomplished in developing and executing a new 21st-century political agenda. For example, on the initiative front, look how the California electorate has evolved in regards to taxes and spending. In 2010, the voters passed Prop 25, which allowed state budgets to pass with a simple majority, rather than the two-thirds margin that had throttled state spending since the days of Prop 13. In 2012, voters approved temporarily raising taxes on those making more than $250,000 a year, and raising sales taxes for everyone, in order to prevent massive education cuts. And in 2016 Prop 55 extended the taxes on those making $250,000 or more for another 12 years.

The legislature has been swinging for the fences as well. California has some of the most aggressive measures in the world related to global warming. California established a Cap-and-Trade program in 2012 and this year extended it until 2030. It has also mandated that half of all its electricity must come from clean energy by 2030. Unlike Trump and his yakking about investment in infrastructure, California this year passed a massive infrastructure law investing in roads, bridges and public transportation that will raise $52 billion from increased gasoline taxes and vehicle fees that everyone will pay. There have also been a slew of laws trying to improve the lot of workers — including the 2016 commitment to raise the minimum wage across the state to $15 by 2022.

It would be a mistake to think the political pendulum has simply swung back to old school tax and spend policies from the 20th-century Democratic party playbook of Liberalism. There’s a new kind of 21st-century playbook being developed that might call for a new label. Californians tend to be more pro-growth, practical progressives. They share many long-standing progressive values like looking out for working people or the poor, but they also are enamored of channeling the power of markets and entrepreneurial energy towards solving problems. They see the potential of new technologies and innovative approaches to solving some of our old problems in new ways. Maybe we’ll call them 21st-Century Progressives. (More on this part of the story later in this series.)

The California Model Works

So how has California’s big, bold progressive political approach worked for the state? It turns out — awesome. The California economy is booming, doing better than the rest of the United States by many standard economic measures. Since Brown started leading as governor, California has added 2.3 million jobs, which leads the nation (from 2012 to 2016, California accounted for 17 percent of job growth in the United States, and a quarter of the growth in GDP.) From 2011 to 2014 coming off the Great Recession, California’s economic growth rate was 4.1 percent. In 2016, California’s rate was still 2.9 percent compared to rival Texas’s paltry growth rate of 0.4.

The San Francisco Bay Area, in particular, has outpaced the rest of the state and the country for at least the fifth consecutive year, according to data from the U.S. Bureau of Economic Analysis. Silicon Valley even beat China’s growth rate of 6.9 percent in 2015. The wealth of this booming economy is not just flowing to a handful of tech bros. Money is moving through all levels of the economy, into construction, restaurants, service work. Anecdotally, the labor supply at all income levels is tight as a drum. But the stats back that up: Wealth is spreading. For example, the state’s per capita income increased 9.5 percent since 2015, the most of any state. Median household income in California stands at almost $67,000, 13 percent above the national figure, and growing faster than the nation as a whole. Two of the top three metro areas for Latino median income are also in California.

To be sure, income inequality is a huge problem in California, as it is throughout the American economy, and there is much to do. And affordable housing is a particular problem in the Bay Area, but that problem is a symptom of success. From 2010 to 2015, the Bay Area gained 531,000 jobs and 487,000 people, but only issued permits for 82,000 new housing units. That translates into a lot of people having a hard time finding a place to sleep. However, the California legislature just in September passed — and Governor Brown signed into law — no fewer than 15 laws all aimed at helping solve the housing crisis. These laws will plow billions into new construction, as well as providing a series of incentives and penalties to encourage housing development, especially for low and middle income Californians. Clearly these laws by themselves will not solve the crisis, but they set the stage for continued robust action on this front.

And what does the California public think about what’s going on around them in California, if not in the country as a whole? They largely love what they are seeing. Voter appraisals of the job performance of Governor Brown and the state’s legislature were at record highs earlier this year, with Brown’s approval rating over 60 percent, and the state legislature pushing 60 percent, the best in nearly 30 years. Since then approval ratings for Brown and legislature have subsided somewhat, but remain strongly positive.

A solid majority of Californians, at 54 percent, believe the state is generally moving in the right direction, compared to just 36 percent who say this about the nation as a whole. Just for context, Americans give Trump an approval rating hovering around 38 percent, and they rate Congress, controlled by Republicans, at around 15 percent. (More on this part of the story later in this series.)

A New Civilization, Really

Here’s the really mind-boggling part: What’s happening in California now and in the coming decades could be understood as the design of a new civilization. Yes, you read that right: civilization. The best way to understand that is to pull back from the froth of stories and tweets today and try to see what’s going on from the big picture, with an historical perspective. What will people in 50, 100 even 500 years from now think about what went on in the first half of the 21st century?

From that vantage point, it will be clear that the planet went through fundamental system changes on an historic level. One, the world went all digital. Everyone from advanced economies and societies though developing ones moved fully onto digital infrastructures, everything became increasingly computerized and instantaneously interconnected, and that allowed for a reorganization of pretty much everything. Two, the world went fully global. For the first time ever humans organized at a planetary scale, partly though the new technologies, but also through the inexorable enmeshment of 10 billion people on a relatively confined space. Three, the world went sustainable. Building on the new generation of technologies, devising new ways to organize our resources globally, humans will have figured out a way to stabilize the climate and manage life on earth. If we don’t figure that out, those people in 500 years won’t be around to look back on our deeds.

The point is that the level of change coming to the world is at best awe-inspiring, at worst overwhelming. The level of system change is only just beginning to dawn on people with foresight. Ultimately, this level of change must be civilizational. The last time we saw this level of fundamental system change was the Enlightenment, which in American terms is the time of the Founding Fathers. That’s the kind of time we’re in again today.

Back then, ground zero for the Enlightenment was London circa 1650 to 1780. The people of that time initiated all the big systems that defined the coming centuries: Financial capitalism with its stable monetary system that enabled robust international trade. The beginnings of representative democracy that for the first time processed public opinion of at least some large classes to help steer government. The start of the Industrial Revolution that could scale up fledgling manufacturing and lead to a much more prosperous world. The shift to carbon energies, starting with coal, that would power that industrial civilization. The development of public media, starting with nascent newspapers and pamphlets, that educated the new voters and economic middle classes.

These core systems of the Enlightenment held together more than 200 years of expansion, prosperity and progress. (To be sure, there was extraordinary collateral damage and suffering along the way too.) But now these core systems are almost all ready for fundamental reform, and, in some cases, outright replacement. Think about each of these systems and how flawed and ineffective they currently are: Finance-dominated capitalism. Representative democracy now paralyzed in most western nations. The decline of industry as a source of jobs. Outdated and unsustainable carbon energies. Struggling public media. Time for a change, a really big change, a civilizational change. (More on this part of the story later in this series.)

Ground Zero: San Francisco

So keep an eye on California. In particular, closely watch the San Francisco Bay Area, the region that encompasses Silicon Valley, as our ground zero for 21st-century civilization building. This is the London of our time. Just like London was not the only place for Enlightenment innovation at that time (France, Germany, and even the fledgling United States had a role), the San Francisco Bay Area is not alone. There are other urban centers in American and throughput the world playing a role, but you can’t beat California for its singular importance right now.

Three of the five most valuable public companies in the world right now are rooted in the Bay Area: Apple, Google and Facebook. The other two of the top five are still tech companies on the West Coast in the form of Amazon and Microsoft in the Seattle region. These companies now occupy the commanding heights of the global economy and the rest of society has started to notice that power and urge them take on more responsibility. The unique users each month for Google and Facebook come close to 2 billion on a planet with a total of just over 7 billion people. And all those companies are still very much ascendant with much more growth to come. Their influence on the world in the coming decade will only grow.

Then one notch down from that group are many more tech companies that are relatively big, just not as big as those top five with market capitalizations of more than $350 billion. Each of these companies, from Intel and Cisco to Uber and Airbnb, are also scaling globally and beginning to make a big impact. Then there are the waves of startups that are like the spawn of the tech giants, with former employees and investors taking their options and investing in entrepreneurial ventures, both for profit and non-profit. Innovation is rippling through all sectors of the economy and society. It’s in the air.

Meanwhile, San Francisco has become a magnet for ambitious Millennials from around the country who want to make their impact on the world. Entrepreneurs of all ages from all over the world are flocking there too. (No wonder the price of housing is going through the roof.) And of course capital is flowing to where good ideas lie. This stew of entrepreneurs, and capital, and future-oriented young people is creating all kinds of opportunities. We cannot predict the exact results of this ferment, but they are sure to be both big and important.

And it’s not just about tech and business. Social entrepreneurs, academics, and innovators in the public sector will help work out the new systems of the new era. Look for all kinds of combinations of talent to work out the early contours of what will be the next reinvention of America, but also the building of foundations for a new civilization. Together they will figure out the protocols for how humans work with increasingly powerful artificial intelligence. They will figure out the early parameters for how we will integrate advanced robotics like autonomous vehicles into our lives. It won’t just be the techies calling the shots but the local governments who set the rules for the streets those vehicles drive on.

The coming decades will see an explosion of innovation in almost all directions. We will have to figure out how far to take biotechnologies and the manipulation of genetics. We will have to figure out how schools will evolve to prepare children for a continuously innovative society. We will have to figure out how to feed everyone in a healthy and sustainable manner in a world of climate change. And how do we finally figure out how to house people of all income levels in a sustainable way in our burgeoning cities? The list of challenges goes on and on, but if what’s going on in California right now is any indication, the solutions will keep coming too.

The Trump Trap and the Progressive Era to Come

So when you despair at the latest outrageous tweet that President Trump fires off, or you grit your teeth at the self-inflicted gridlock of the Republican U.S. Congress, just remember that California is the future. California in the last 15 years has been where America is today. We had that gridlock. We had that polarization. We had a conservative Republican party that refused to face up to the 21st century, that undermined all reasonable movement forward — and California moved on.

The rise of Trump is likely nothing more than the last emotional backlash before America moves forward again. In a sense, we needed Trump to lay out the whole conservative agenda in all its absurdity — denying climate change, demonizing immigrants, calling for tax cuts for billionaires in the face of historic inequality. We needed Trump to once and for all show Americans what rule by and for billionaires, and oil companies, and Wall Street, really means. We needed Trump to get the entire Republican party and conservative movement to embrace truly reactionary ideas in the minds of all the growing constituencies of the 21st century —millennials, people of color, immigrants, college-educated knowledge workers.

One way or another, Trump will eventually crash and take down a good chunk of the Republican establishment with him. The takedown will be thorough, running through the U.S. House and Senate, and into governorships and state legislatures. We’re talking a long-term political takedown that could last for a generation or two. Trump will be more like Hoover. The Republicans back then went down and were crippled for almost 50 years before Ronald Reagan led them out of the wilderness and back to power.

Trump’s going down. Much of the Republican party is likely to collapse with him. The conservative movement in its current form is going to be discredited for many, many years. As that happens, the progressive movement is going to surge on the strength of those growing constituencies throughout the rest of the country. The Democratic party is going to go through an historic revitalization. America is going to turn mostly Blue and go through a fundamental reinvention. And we’re all going to build a digital, global, sustainable civilization for the 21st century.

How do we know that? Because California is the future.


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