Yesterday, we wrote about the
refusal of California's political and media classes to face up to the depths of the Golden State's troubles these days. Yet, as Steven Greenhut
reminds us over at
Cal Watchdog, it's easy to overlook the contribution that policy think tanks in the state make in reinforcing this denial. We've
taken our hacks at the Public Policy Institute of California before, but it bears pointing out that the PPIC has done a great deal to
softpedal the state's grim economy. Contrary to what these folks might have you believe, just because firms aren't moving their headquarters doesn't mean they're creating jobs here. Irvine's Joseph Vranich, who helps California firms expand and relocate elsewhere, can tell you that his business is
booming. Now, Santa Monica's Milken Institute is getting in on the act, with a
new study claiming that California is among the best in the nation at retaining highly skilled workers.
The release of the study coincides with an Institute-sponsored "State of the State" conference in Los Angeles today. This conference included appearances by the usual political hacks and crony capitalists (or, in the case of
Gavin Newsom, both), as well as a one-on-one session featuring Jerry Brown and Michael Milken himself. (Brown apparently said that he wouldn't take a pension until he'd passed pension reform, then later admitted he was joking.) For us, the timing couldn't be worse, as the last thing the attendees need to be told about the economy is what they want to hear. The study argues that California remains an excellent place for highly skilled technology workers, and its conclusions call for increased public education spending. Yet most everyone who actually lives and works here could tell you that the real story is a lot more complicated than that.
Back in July, we (and Palo Alto economist Steve Levy) noted that California's economy was taking on a
schizophrenic character: while some sectors, notably the
tech firms of San Francisco and Silicon Valley, are showing robust growth, the recovery isn't pulling many other sectors along. Insofar as the Valley is looking for people with very specific sorts of skills, this explains why the good times there haven't translated into any sort of broader recovery in the state. Unemployment and poverty in California are as
grim and as persistent as ever, and Sacramento remains determined to
wage war on the private economy here. You can even argue (as we have) that the growth in the tech sector is largely a factor of Ben Bernanke's quantitative easing; the VCs on Sand Hill Road, after all, are usually near the front of the line any time the Fed decides to print a few hundred billion dollars into existence. We would also point out that high technology may face new hurdles once AB 32 goes into effect; it'll be much harder to operate things like
server farms when the cost of power skyrockets. The point being that California's hostility to industry is not without consequences, and more are likely on the way.
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