Are the recent raves about a new California renaissance true?
Rolling Stone magazine just gushed that California Gov. Jerry Brown has brought the state back from the brink of "double-digit unemployment, a $26 billion deficit and an accumulated 'wall of debt' topping $35 billion."
Unfortunately, California still faces existential crises.
The unemployment rate just went back up in July to 8.7 percent. That is significantly higher than the current national average of 7.3 percent. Such a high rate of joblessness is a bad omen when the Democratic-controlled state legislature is pushing for the mandatory minimum wage to reach $9.25 in a little over two years.
The "wall of debt" is not $35 billion. According to the State Budget Crisis Task Force report that was issued in January, California debt ranges from a minimum of $167 billion to a staggering $335 billion.
To close the budget deficit, Brown cut expenses, but he also just raised already-high income, sales and gas taxes to the nation's top levels. We won't know the full effect of those costs on either businesses or the ongoing exodus of the more affluent for months to come.
Yet why was California ever in a fiscal crisis at all?
World food prices are soaring. California has the best soils, weather and farmers in the world. Silicon Valley hosts Apple, Google, Intel and Facebook. The state hosts some of the nation's largest corporations like Wells Fargo, Chevron, Hewlett-Packard and Safeway.
The movie industry in Hollywood, tourism from Disneyland to Yosemite, the Napa wine industry, and vast deposits of gas and oil should make California more prosperous than Switzerland. Its top five universities -- Caltech, Stanford, UC Berkeley, UCLA and USC -- usually rate among the top 20 worldwide.
Yet despite what God and man in the past have given the state, California has often squandered its inheritance. For all its costly investments in wind and solar power, California electricity rates are the steepest in the nation.
The tab falls most heavily not on the green elites of the affluent coastal communities, but on the poor and middle classes concentrated in the hotter and colder interior. For many in Fresno or Bakersfield, keeping on the air conditioning when August temperatures hit 100 is a fantasy from a bygone age.
Californians pay among the highest gas prices in the country. Again, those astronomical costs seem surreal, given that the state sits atop huge untapped deposits of gas and oil.