After a long hiatus, the Texas vs. California update is back!
The update, focusing on news about the two biggest states in the union, and contrasting the the red and blue state models of governance for each, was a regular staple of the blog a few years ago, but as I got busy I fell behind, and the links kept piling up. As a result, this update is extra huge and some of the news here is very old indeed, with some links dating back to 2017. Recently I’ve been updating and triaging so I can finally publish this. I’ve tried to put the newest and most important stories at the top, but there is stil some old news of note further down.
According to a new U.S. Census Bureau report, of the 15 fastest-growing cities larger than 50,000 people, seven are in Texas including the top three: Frisco, New Braunfels, and Pflugerville. Frisco’s growth rate was 8.2 percent, some 11 times faster than the national rate of 0.7 percent.
Of the cities with the greatest population gain from July 1, 2016 to July 1, 2017, San Antonio, Texas, took the prize, adding some 66 people every day. Texas had the most cities in the top 15 of this category as well with five making the list and three of the top five overall in addition to San Antonio: Dallas, Fort Worth, Frisco, and Austin.
San Antonio now has more than 1.5 million people and ranks as the nation’s seventh-largest city, just behind Philadelphia. Fort Worth, meanwhile, knocked Indianapolis, Ind., out of the top-15 with a population of 874,168. Houston is America’s fourth-largest city and is also the most diverse large city in the nation.
In a stunning procession in December, California lost the leadership of three iconic firms — Hewlett Packard Enterprise, Oracle and Tesla — all to Texas, which this year even took the Rose Bowl’s place in hosting the college football playoff. In addition, many California tech firms, including Uber and Lyft, as well as Apple, have been shifting jobs outside the state.
This has been widely described as California’s “tech exodus.” Though it’s still less than a torrent and more a steady, long-term drip, it augurs some very bad trends. In recent years, California has been losing market share of innovative industries compared with 11 states with high concentrations of innovation-oriented firms, according to research by Ken Murphy, a professor at UC Irvine’s business school.
Since 2005, California’s share of the number of firms in the innovation sector (composed of 13 of the nation’s highest-tech, highest R&D advanced industries) has shrunk while competitors like Florida, Oregon, Arizona and Utah have expanded their share slightly.
The pandemic-induced push to move work online could hasten this shift. With 2 out of 3 tech workers willing to leave the Bay Area if they could work remotely, Big Tech could readily spread talent and wealth to other states.
Increasingly, California’s cities must compete with metro areas in Texas, Tennessee and even parts of the Midwest. Housing prices are a particularly critical concern: California has all three of the most unaffordable metro regions for first-time home buyers, according to a recent AEI survey, and six of the top 10. The flow of tech workers during the pandemic has gone to places like Phoenix, Dallas-Fort Worth and Raleigh, N.C., and away from big coastal cities with higher living costs.
Software-based tech companies can access knowledge workers outside California, and often at lower costs. At the same time, states like Texas and Arizona have been sought to replicate the California formula for tech industry growth — public university expansion, more suburban housing and public investment in downtowns, all meant to appeal to workers and their bosses.
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But more recently, as the tech industry becomes more virtual and services-based, the companies’ workforces have less of a need to all be in one place. While these companies create vast wealth for a relatively small group of people, this is not a formula for broad-based economic prosperity.
In contrast to the old Silicon Valley, the Bay Area has become “a region of segregated innovation,” as described by CityLab, where the upper class waxes, the middle class wanes, and the poor live in poverty that is unshakable.
The state leadership’s cavalier response when major employers depart is to assume that California will continue to create new businesses to replace the high-paying jobs lost.
Yes, venture capital is piling into tech startups, driven by the low cost of money and pandemic disruption, and the state is expecting $26 billion more in revenue this year in part because of the roaring initial public offering market. But brushing off recent departures as part of a routine industrial cycle is naive and allows politicians to avoid making choices that would keep entrepreneurs, their businesses and good jobs in California.
California already has the nation’s highest income tax, with the top marginal tax rate at 13.3%. A new proposal, Assembly Bill 1253, would add three new tiers of surcharges on people earning $1 million a year and above. Lawmakers also introduced Assembly Bill 2088, which would apply a 0.4% wealth tax on net worth above $30 million. Neither bill passed the Legislature last month, but both may come back in the new legislative session.
Tech companies may be adept at avoiding taxes, but their top managers, investors and most skilled employees could see these measures as more reasons to leave — particularly when competing states like Texas, Tennessee, Nevada and Florida have zero state income taxes.
Another law, Assembly Bill 5, which limits contract employees, could prove damaging to small startup business that cannot afford many full-time workers. And for some industries, particularly those involved in energy-intensive industries like cloud computing and advanced manufacturing, California’s energy prices — one of the highest in the continental U.S. and double the cost in places like Texas — are another incentive to move commercial activities elsewhere.
As the catastrophic state of California’s finances finally begins to set in among politicians, anti-tech media personalities, and far left cultural influencers, the narrative on California’s techxodus — that is, the migration of California’s technology industry out of the state — has shifted from mockery, and “we’ll be better off without you,” to a far more sober, and increasingly-desperate “leaving California is immoral.”
As it is simply too embarrassing for politicians to admit the state needs the technology industry after more than a decade of antagonizing the men and women who built it, and as it is political suicide for incumbent politicians in a one-party state to admit that every one of the problems we’re facing has been created by our elected leaders, a moral argument for tech’s responsibility to California, and specifically the Bay Area, has recently been produced. It goes something like this: young ambitious people moved to the state, and struck gold. But rather than “give back” to the land, they’re leaving with resources they “took” from the region. Like the milkshake guy from There Will Be Blood, sucking oil from the earth. Like the evil army people from Avatar, and their unquenchable thirst for unobtanium.
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The thing I like least about the folks who leave SF + Silicon Valley for Texas and Miami and wherever else is the crapping on the place they left *after* they've extracted all they can from it.
The Bay Area helped you build your immense wealth and that's the thanks it gets. smh.
— Tiffani Ashley Bell (@tiffani) December 9, 2020
“Extracted,” she says. Smh. A week or so later, in the psychotic San Francisco Board meeting where our local representatives voted 10 to 1 to officially condemn Mark Zuckerberg for donating 75 million dollars to a hospital (really, this happened), the word came up again. When the floor was opened to the public, an activist downplayed what was, as Teddy Schleifer reports, “the largest single private gift to a public hospital ever,” and accused Zuckerberg of “extraction.” Our local politicians did not think this strange.
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I take extreme issue with the notion that industry leaders have taken something from the “community,” defined here as the “talent,” the “incubators,” and the “mentors.” This is precisely the opposite of reality. The men and women leaving are the talent, they have started the incubators, they have built the companies, they have funded the startup ecosystem, and they have mentored countless young people. This is the “network.” They are the network. Technology workers do not “extract” value from the region, they are what makes the region valuable.
California is beautiful — San Francisco is truly, I think, one of the most beautiful cities in the world — but the soil isn’t made of magic, there’s no such thing as digging for microcode, and the Bay Area’s nativist, anti-immigration political climate has certainly not created the tech community, which is populated largely by immigrants, be they from out of the state or out of the country.
Among many things, including talent, opportunity, and soft power, the technology industry has brought tremendous tax revenue to the Bay Area. The budget of San Francisco literally doubled this decade, from around six billion to over twelve billion dollars. With our government’s incredible, historic abundance of wealth, the Board of Supervisors has presided over: a dramatic increase in homelessness, drug abuse, crime — now including home invasion — and a crippling cost of living that can be directly ascribed to the local landed gentry’s obsession with blocking new construction. This latter piece is important, as it appears to be the only thing our Board cares about. This is because significantly increasing the local housing supply would decrease the value of the multi-million dollar homes almost every single one of our Supervisors owns, and we could never have that.
These past ten years I often wondered where the city’s money went. Could the leadership really be this stupid, or was there corruption? Turns out both. We’ve recently discovered our politicians are literally criminals, but they’re also bad at crime.
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The Bay Area housing, homeless, and drug crises are all exacerbated by the state government, which is as incapable of managing its finances as it is incapable of managing its public land; we are now teetering on the edge of true financial ruin in a state of endemic, constant wildfire. But let’s take a closer look at this issue of money. On one hand we have insane, nativist property tax codes, which punish new homeowners at the expense of longtime landlords, and on the other our income taxes have skyrocketed. Since income taxes are structured progressively, the state has backed itself into a position of extreme uncertainty, as the top one percent of earners pay half the state’s taxes — while politicians argue the state’s wealthiest men and women, who already pay more in taxes than the wealthiest men and women of any other state and most free countries in the world, are not paying their “fair share.” As if rudimentary economic threats were not enough, politicians have made cultural platforms of their anti-technology, anti-industry attitudes, and have done everything in their power to drive our top one percent of earners out of the state. In this, our politicians are succeeding.
Such success in driving top earners from the state only further exacerbates the state’s political disasters, with our government of bloated, corrupt services now starving for income. This has in turn increased the political appetite for all manner of draconian, anti-business practices among politicians with no apparent ability to conceive of the second order effects of their legislation, a deficiency in basic intelligence that led, for example, to the unmitigated disaster that was AB5. In other words, everything is structured to further deteriorate.
Beleaguered San Francisco restaurants are struggling with a recent citywide rise in burglaries, including a slew of brazen break-ins at popular restaurants between the Thanksgiving and Christmas holidays. It’s a situation many restaurant owners say is exacerbating an already bleak outlook for the local food scene.
San Francisco Police Department data shows burglaries in the city climbed from 4,918 reported incidents a year ago to 7,248 as of Dec. 27. The data does not specifically show how many restaurants have been affected, but the rise in burglaries is reflected in the stories being told by business owners in interviews and on social media. It’s a hard reality for local restaurants that have now gone almost 10 months with diminished revenue, forced hibernation periods, and only occasional approval for indoor and outdoor dining service.
In mid-December alone, San Francisco’s nostalgic Toy Boat Dessert Cafe posted on Instagram about having had its door kicked in during an attempted burglary. Also in the Richmond District, Cassava took to social media to post about losing roughly $3,000 worth of equipment, including iPads, after a break-in. And Epic Steak and Waterbar on the Embarcadero each lost a similar amount when thieves stole alcohol and damaged property.
Owners say the shelter-in-place order provides thieves with opportunities to break into businesses. Streets are empty because people are staying home. The ghost-town effect is increased as a growing number of restaurants and other businesses are either permanently or temporarily closed. The break-ins are all the more painful when restaurants aren’t even bringing in income to cover the cost to repair or replace stolen or damaged items.
(Hat tip: Instapundit.)
Jerry Lyons, 31, had spent his entire adult life committing crimes. He had dozens of arrests in California — attempted robbery, burglary, evading police, driving a stolen vehicle, weapons charges, drug charges, shoplifting, trespassing, etc. — but kept getting turned loose until Thursday, when he finally killed somebody. Sheria Musyoka, 26, was an immigrant from Kenya who had graduated from Dartmouth and moved to San Francisco with his wife and three-year-old son. Lyons was behind the wheel of a stolen car when he killed Musyoka.
Despite improvements, the official poverty rate remains high.
According to official poverty statistics, 14.3% of Californians lacked enough resources—about $24,300 per year for a family of four—to meet basic needs in 2016. The rate has declined significantly from 15.3% in 2015, but it is well above the most recent low of 12.4% in 2007. Moreover, the official poverty line does not account for California’s housing costs or other critical family expenses and resources.
Poverty in California is even higher when factoring in key family needs and resources.
The California Poverty Measure (CPM), a joint research effort by PPIC and the Stanford Center on Poverty and Inequality, is a more comprehensive approach to gauging poverty in California. It accounts for the cost of living and a range of family needs and resources, including social safety net benefits. According to the CPM, 19.4% of Californians (about 7.4 million) lacked enough resources to meet basic needs in 2016—about $31,000 per year for a family of four, nearly $7,000 higher than the official poverty line. Poverty was highest among children (21.3%) and lower among adults age 18–64 (18.8%) and those age 65 and older (18.7%). The overall poverty rate went unchanged between 2015 and 2016, following two years of decreases.About four in ten Californians are living in or near poverty.
Nearly one in five (18.9%) Californians were not in poverty but lived fairly close to the poverty line (up to one and a half times above it). All told, two-fifths (38.2%) of state residents were poor or near poor in 2016. But the share of Californians in families with less than half the resources needed to meet basic needs was 5.6%, a deep poverty rate that is smaller than official poverty statistics indicate.
The number of homeless Californians in the Los Angeles county has reached 58,936, New York Times reported this weekend.
But Californians don’t seem to be the priority of democratic governor Gavin Newsom.
Under an agreement between Gov. Newsom and Democrats in the state legislature, low-income adults between the ages of 19 and 25 living in California illegally would be eligible for California’s Medicaid program, known as Medi-Cal.
State officials estimate that will be about 90,000 people at a cost of $98m a year.
This decision will make California the first state in the US to pay for illegal immigrants to have full health benefits.
For the 2018-2019 tax year, the bill was sent to the Newsoms on September 28, 2018. The two installments were due in December 2018 and April 2019, and the bill became delinquent on July 1, 2019. They finally paid their second installment, along with about $3,000 in penalties, on September 3, 2019. This is significant because the Newsoms’ Fair Oaks mansion was purchased for $3.7 million cash in November 2018. Newsom’s spokesman claims it was the Newsoms’ cash even though there is no documentation of that; the home was purchased in the name of Gavin Newsom’s cousin and longtime PlumpJack business partner, Jeremy Scherer.
If the Newsoms had $3.7 million in cash lying around, why wait to pay $22,000 in property taxes until the next year and incur a $3,000 penalty? Wealthy people aren’t in the habit of paying thousands of dollars in penalties.
In 2018 the Newsoms were sent a supplemental property tax bill on May 15, covering a revaluation and some school and health bonds. That bill was due in two installments; the installments became delinquent June 30 and October 31, respectively.
He finally paid them on December 10, 2018, along with $750 in penalties.
The last time their property tax bill was paid on time was when they received the “sweetheart” cashout refinancing deal in December 2017 ($3,225,000 cashout on a home worth $3,500,000) – presumably because the bank would only close the loan if the property taxes were paid at the same time.
“EVERYONE IS FROM California. Are they kicking y’all out?” asks a curious bureaucrat at the Department of Public Safety in Plano, a city near Dallas. In the previous week she had helped 20 people from California apply for a Texas driving licence. Those keeping score in the contest between the two states do not have to look far to notch up points for Texas. On the way to the state Capitol building in Austin to interview Greg Abbott, the governor, your correspondent discovered that her driver had recently relocated from southern California to start a family in a more affordable city.
Between 2007 and 2016 a net 1m American residents, or 2.5% of the state’s population, left California for another state. Texas was the most popular destination, attracting more than a quarter of them. More Americans have left California than moved there every year since 1990, though immigrants still arrive from abroad.
Companies are also moving. Last year McKesson, a medical-supplies company, and Core-Mark, a supplier to convenience stores, shifted their headquarters from California to Texas, as did Jamba Juice, a smoothie company. Many Californian firms are also adding jobs outside the Golden State. Charles Schwab, a financial-brokerage firm based in San Francisco, received more than $6m in incentives from Texas, and by the end of this year will have more employees there than in California.
What explains the one-way traffic? There are four reasons for California’s weaker position. First, it has become very expensive, especially for housing. “If there’s one risk factor in this state, it’s affordability,” says Gavin Newsom, California’s governor. “The thing we most pride ourselves on—the California dream, a notion of social mobility that we export around the world—is in peril.” A third of Californians are thinking of moving out of state because of the high cost of housing, according to a recent survey by the Public Policy Institute of California, a non-profit research firm. Most of those leaving California for Texas earn less than $50,000 a year and have only a high-school education…
The middle class is also struggling. In California home-ownership rates are at their lowest level since the 1940s and among the lowest in America, with black and Hispanic families particularly hard hit. In the past ten years around 75,000 new housing units received permits annually, only 40% of the projected need. “From the perspective of a young, upwardly mobile family, California is nearly impossible, unless you have rich parents, rob a bank, or get money from your firm going public,” says Joel Kotkin, a professor at Chapman University, who believes that the state is experiencing a new kind of “feudalism”, where the ultra-rich thrive and others suffer.
As a symbol of how out-of-reach the once accessible state has become, last year the small house that was the setting for “The Brady Bunch”, a television show in the 1970s about a middle-class Californian family, sold for a whopping $3.5m, nearly double its asking price. Companies expanding elsewhere find that many employees are happy to give it a go in a state where they can afford to buy a house and raise a family.
The states also have wildly different tax regimes, which is a second reason for Texas gaining favour as a destination. With a top rate of 13.3%, California has the highest state income-tax rate for top earners. Texas does not charge residents a state income tax. Instead, they pay higher property taxes to local governments, and the state gets most of its money from a sales tax. Because of recent changes to the tax code, residents of California and other high-tax states will no longer be able to deduct all of their state and local taxes from federal payments, which could further dampen people’s willingness to remain in the state.
Taxes on businesses are increasing, too. In the past six elections California voters have approved more than 800 local taxes on businesses and residents, according to Larry Kosmont of Kosmont Companies, an economic advisory firm. (This does not include voters’ decision to raise the income-tax rate on the state’s highest earners.) For example, last year voters in San Francisco approved the controversial Proposition C, which taxes businesses with more than $50m in gross revenues to fund services for the homeless. Companies with fat profit margins can afford higher taxes, but lower-margin businesses cannot, and these are the ones most likely to consider an alternative location.
Third, Texas has pursued a concerted strategy of wooing and cultivating businesses, whereas California has not. This began with Rick Perry, who served as Texas’s governor from 2000 to 2015. He travelled to California and other states on “hunting trips” to poach businesses, ran ads on radio encouraging people and companies to move, and offered large incentives to create jobs in Texas. Mr Abbott has continued with these pro-business policies and still operates a “deal-closing fund” to incentivise businesses to come. He is a cheerleader for his state’s advantages, including low costs, a central location with good airports and a convenient time zone for doing business with both coasts. He describes Texas as “the quintessential free-enterprise state”.
Here’s what the “liberal Californians, go home” crowd misses: The vast majority of West Coast dwellers who make up Bailey’s more than 11,500 Facebook followers lean conservative.
And after spending a few days perusing Bailey’s page, I’d say this comment best sums up its audience: “We fell in love with Texas immediately … we’re conservative Christians who love God, country, freedom, family, gun rights and barbeque.”
Bailey said cost of living and taxes are hot buttons for commenters, but so are gridlocked roads, the homeless and illegal immigration.
The Realtor welcomes people of all political stripes onto her page — after all, she’s in this to make money. And she and her husband, Scott, identify as libertarian.
Our state debt is over $1.5t. We have the highest gasoline prices in the nation. Oh, and we are a sanctuary state that protects all manner of illegal immigrants, no matter how serious the crimes they’ve committed. Think Jose Garcia Zanate who killed Kate Steinle. He had been deported seven times but was out and about on the streets of San Francisco with the blessings of SF law enforcement; they aim to protect the criminals at the expense of the law-abiding. ICE is the enemy in sanctuary cities and states, the thugs are victims.
State taxes in California are the highest in the nation, as are our sales taxes. We fall nearly last in education. We have the most homeless, the most illegal migrants. The state spends $30.b on illegal immigration per year. Like all cities run by progressives, our entire state is a disaster of Democratic making. San Francisco, Los Angeles, and San Diego have been overrun by homeless people, most of them drug addicted and/or mentally ill. Entire areas of these cities are befouled by used needles, feces, trash, garbage, rats and now diseases long-thought to be extinct in the West. Persons who work in downtown Los Angeles have contracted typhus! As true in other cites long run by Democrats (Chicago, Baltimore, Seattle, Detroit, Flint) it is the implementation of ridiculous utopian Marxist policies so beloved by progressives that has destroyed these once grand cities. Socialist strategies always fail. Democrats cheat, (ballot harvesting) are re-elected, and the state continues to decline. Venezuela is the current example of the massive failure of socialism on the world stage. What is happening there is beyond tragic; the people are starving in every sense of the word. But will our own Alexandria Ocasio-Cortez condemn socialism? Absolutely not. She, Bernie Sanders and their fellow travelers mean to take this country the way of Venezuela, the road California has already been on for too long; possibly too long to ever recover. This state is slowly becoming a third-world nation. But, as in Venezuela, the rich and politically powerful stay rich, keep their mansions and their private planes unperturbed by the devastation they generate.
First, the problem of corruption must be addressed. It’s no secret that public unions rule the legislative process in this state. They’re even funding the redecorating of the Lieutenant Governor’s office, using money confiscated from the state’s lowest-paid workers. De-funding the unions through an “Uncheck the Box” campaign aimed informing union workers that they can opt out of union dues (opt-outs made possible by the Janus decision) should be a top priority for activist groups in the state. De-funding the unions will have a positive domino effect on everything in California.
Corruption in the regulatory process, at the state and local levels, is rampant and an open secret. Lately the Los Angeles Times has done a great job of investigating the problems with homelessness and trash piles, but their investigations stop short of fully placing blame where it belongs. People who are truly fed up with the condition of our state need to put their money where their mouth is and fund true investigative reporting (because you know Silicon Valley won’t be capitalizing any non-socialist journalistic startups).
Next, laws which prioritize criminals, homeless bums (as opposed to those who are homeless because of mental illness), and illegal immigrants over the state’s children and families must be revised or abolished. Did you know that a homeless bum’s shopping cart (which they stole from some business somewhere) is considered their “home” or “property” and cannot be taken away from them? Homeless people with true mental illness should be treated with the dignity they deserve (as Kurt Schlichter said on KABC today), and not left on the streets to fend for themselves.
The true causes of the third-world conditions in Los Angeles and San Francisco must be addressed. Some well-meaning laws or programs relating to homelessness are causing negative unintended consequences. In Los Angeles, some of the blame for the massive trash piles can be placed directly on City Hall – their RecycLA program resulted in massive increases in sanitation costs for businesses and missed pickups.
The state’s ballot harvesting law must be amended. Currently anyone – without ID or training – can pick up a ballot from any voter and turn it in to elections officials. The harvester has to sign their name to the outside of the ballot, but there is no process for elections officials to verify that the person turning in the ballot is the person who signed the outside, or that the name they used is actually their real name. The process is ripe for fraud.
These are all from 2019, and we’re no closer to any of them being implemented…
Lion Real Estate Group LLC, which has about 150 employees and $1 billion in assets under management, is moving its headquarters into office space at 3811 Turtle Creek Blvd., the company’s co-founders said in an exclusive interview with the Dallas Business Journal in January. The fast-growing real estate firm focuses on multifamily investment and is relocating its corporate headquarters to Dallas from Los Angeles.
The company will keep its Los Angeles office to support West Coast operations.
Lion Real Estate Group’s decision to relocate its headquarters to Dallas aligns with Lion’s strategy of acquiring multifamily assets outside of the urban core, both in Texas and in other high-growth cities across the Sunbelt and Southeast, said Jeff Weller, co-founder and managing principal of the firm…
The National Rifle Association, meanwhile, has retained Colliers International to help it scout space for a new corporate headquarters in DFW or elsewhere in Texas in the event it opts to pull the trigger on a prospective relocation from Northern Virginia.
The nonprofit intends to restructure as a Texas-based organization and has formed a committee to explore the prospect, which could include a headquarters move.
In court documents, the NRA asked the U.S. Bankruptcy Court in Dallas, the venue for its Chapter 11 reorganization, for permission to retain Colliers to help it find office space for rent or purchase. The search will mostly likely be focused on the “Dallas-Fort Worth region,” the court documents say.
The first few months of 2021 has sustained the momentum the area saw in 2020 when several companies decided to relocate to North Texas. Last year, one of the biggest corporate relocations to DFW was CBRE Group Inc. (NYSE: CBRE), the world’s largest commercial real estate services and investment firm, which moved its headquarters from Los Angeles to Dallas.
Financial services giant Charles Schwab moved its San Francisco headquarters to the North Texas community of Westlake at the start of this year, in a relocation announced in 2020.
Hundreds of small and midsize firms like Lion Real Estate and Wiley X have relocated to DFW over the last few years.
According to Dallas Regional Chamber, there are 102 major corporations considering headquarters relocation or expansion to North Texas currently.
after lots of planning and due diligence, I decided that Austin was the best place for the next era of my venture capital and venture philanthropy career. With early, but compelling, signals that Austin is emerging as the next great tech hub, I couldn’t be more excited to play a role in helping another part of the country reach its potential. I believe there is an opportunity to get in near the ground floor and build something truly enduring.
Other friends from the Bay Area, like Palantir co-founder Joe Lonsdale, Dropbox CEO Drew Houston and Tesla’s Elon Musk, have made similar moves, along with many other tech industry leaders, so I’m not surprised that a so-called “Bay Area exodus” has become a widely reported trend.
But instead of focusing on the positives of Austin, many exodus narratives have focused on problems with the Bay Area. While critics make some fair points about rising living costs and government overreach, I would argue that Silicon Valley and Austin both have bright futures ahead. The things that made Silicon Valley special are not going anywhere. The Bay Area will continue to be a global hub of innovation that attracts courageous entrepreneurs, benefits from world-class institutions and nurtures talent from leading tech companies — even as Austin offers a remarkable new frontier of opportunity.
New Austinites all have different reasons for why they moved here, of course. My decision to start Breyer Capital Austin, for example, has more to do with Austin’s strengths than any of the Bay Area’s flaws.
For starters, Austin, more than any other city in the country, encourages a culture of interdisciplinary collaboration. Because the city has catered to so many types of professionals, and not just technologists, the depth of talent here is unique. Artists, entrepreneurs, doctors and professors, all at the top of their trade, frequently choose to build things together. By breaking down silos and embracing novel approaches to company-building, Austin’s diverse entrepreneurs will usher in a new era of growth for the city, state and country. I couldn’t be more excited to be investing in health care AI companies and fin-tech companies that have a consumer media backbone. The best founding teams are multifaceted and versatile, and Austin has every type of entrepreneur that a great company needs. This kind of interdisciplinary entrepreneurship will help Austin companies flourish.Austin has attracted and will continue to attract young, brilliant talent because of its comparative affordability, outdoor culture and professional development opportunities. This vast pool of expertise is contributing to a remarkably robust climate of innovation. With Tesla, Facebook, Apple, Google, Oracle and other leading companies moving to or expanding in Austin, the entrepreneurial ecosystem will be bolstered when talent from these companies breaks away to start new ventures. Some of my best investments have been in entrepreneurs who gained valuable experience at an outstanding established company before starting their own. Five years from now, Austin will benefit from many tech company alums eager to leverage their expertise to tackle some of the world’s most pressing problems.
While it may be an overstatement to say California is hemorrhaging people, some of the state’s major companies and wealthiest residents are leaving for states like Texas, Arizona and Florida. In 2020, Oracle, Palantir and Hewlett-Packard Enterprise were among the companies that announced they’re relocating their headquarters out of the Golden State. Wealthy individuals from the tech industry moving recently include Larry Ellison, Drew Houston, Joe Lonsdale and Elon Musk, currently the world’s richest man.
California’s population and job growth have both slowed to a trickle, with many citing concerns about high taxes, cost of living and heavy regulations. With the rise of remote work in 2020, over 135,000 more people left California than moved in — the third largest net migration loss ever recorded for the state. Although some big names have committed to stay, one recent survey found that two of every three Bay Area workers would leave the area permanently if they could continue to work from home indefinitely.
It’s not just businesses that are moving out of California. Retirees are leaving in growing numbers.
For whatever reason they move, the retiree exodus is taking knowledge, wealth, patrons of the arts and potential philanthropy out of communities in the Golden State to the benefit of other places.
The trend dovetails with larger concerns about California’s affordability, business climate and economic disparities.
“It’s not just retirees moving. It’s companies. It’s rich people and poor people,” said Sanjay Varshney, professor of finance at California State University Sacramento and founder of Goldenstone Wealth Management LLC in El Dorado Hills.
Poorer people are leaving the state because “they can’t make ends meet” with the high cost of living and housing, he said. “And extremely wealthy people are moving because they are fed up.”
Varshney said a migration of wealthy people are leaving the Bay Area in particular, and “you are seeing that with people like Elon Musk and corporations like Oracle, Tesla and Hewlett Packard Enterprise.”
Retirees can easily leave California, as they are no longer tied to jobs in the state. “Retirees are a very mobile part of the population,” Varshney said
The trend appears to be growing. The California Public Employees’ Retirement System tracks where it sends benefits, and more of its members no longer call California home. Some 85% of CalPERS retirees lived in the state 2013. That dropped to 84% in 2018 and to 82.3% in 2020, according to the pension system.
The Greater Sacramento Economic Council’s mission is to attract companies to relocate to the Sacramento area. By the time companies decide to move out of the Bay Area, they are often soured on California taxes and regulations, and they tend to move out of the state completely, said Barry Broome, Greater Sacramento’s CEO.
The same can be said for individuals, he said.
“A lot of this is tax,” Broome said. California has higher business taxes and higher individual tax rates than most other states.
To live in California at this time is to experience every day the cryptic phrase that George W. Bush once used to describe the invasion of Iraq: “Catastrophic success.” The economy here is booming, but no one feels especially good about it. When the cost of living is taken into account, billionaire-brimming California ranks as the most poverty-stricken state, with a fifth of the population struggling to get by. Since 2010, migration out of California has surged.
The basic problem is the steady collapse of livability. Across my home state, traffic and transportation is a developing-world nightmare. Child care and education seem impossible for all but the wealthiest. The problems of affordable housing and homelessness have surpassed all superlatives — what was a crisis is now an emergency that feels like a dystopian showcase of American inequality.
And yet, it’s not really American inequality. It’s the kind of inequality produced by failed leftist policies. Picture today’s San Francisco:
Yet the streets there are a plague of garbage and needles and feces, and every morning brings fresh horror stories from a “Black Mirror” hellscape: Homeless veterans are surviving on an economy of trash from billionaires’ mansions. Wealthy homeowners are crowdfunding a legal effort arguing that a proposed homeless shelter is an environmental hazard. A public-school teacher suffering from cancer is forced to pay for her own substitute.
Manjoo emphasizes that San Francisco is run entirely by Democrats. It has become difficult to blame it on Republicans when there are no Republicans.
The good news is that two trash-strewn downtown Los Angeles streets I wrote about last week were cleaned up by city work crews and have been kept that way, as of this writing.
The bad news is that I didn’t have to travel far to find more streets just as badly fouled by filthy mounds of junk and stinking, rotting food.
Then there was the news that the LAPD station on skid row was cited by the state for a rodent infestation and other unsanitary conditions, and that one employee there was infected with the strain of bacteria that causes typhoid fever.
What century is this?
Is it the 21st century in the largest city of a state that ranks among the world’s most robust economies, or did someone turn back the calendar a few hundred years?
We’ve got thousands of people huddled on the streets, many of them withering away with physical and mental disease. Sidewalks have disappeared, hidden by tents and the kinds of makeshift shanties you see in Third World places. Typhoid and typhus are in the news and an army of rodents is on the move.
On Thursday I saw a county health inspector on rat patrol between 7th and 8th streets on skid row. He was carrying a clipboard and said he had found droppings and other evidence of rodents, and I asked where:
“Everywhere,” he said.
Well, it’s nice to know somebody is doing something, but you don’t need a clipboard. I’ve seen so many rats the last two weeks in downtown Los Angeles, I have to suspect they’re plotting a takeover of City Hall, which vermin infiltrated last year.
The city of Los Angeles has become a giant trash receptacle. It used to be that illegal dumpers were a little more discreet, tossing their refuse in fields and gullies and remote outposts.
Now city streets are treated like dumpsters, or even toilets — on Thursday, the 1600 block of Santee Street was cordoned off after someone dumped a fat load of poop in the street. I’m not sure when any of this became the norm, but it must have something to do with the knowledge that you can get away with it. Every time sanitation crews knock down one mess, another dumpsite springs up nearby.
California is the great role model for America, particularly if you read the Eastern press. Yet few boosters have yet to confront the fact that the state is continuing to hemorrhage people at a higher rate, with particular losses among the family-formation age demographic critical to California’s future.
Since the recovery began in 2010, California’s net domestic out-migration, according to the American community survey, has almost tripled to 140,000 annually. Over that time, the state has lost half a million net migrants with the bulk of that coming from the Los Angeles-Orange County area.
In contrast, during the first years of the decade the Bay Area, particularly San Francisco, enjoyed a renaissance of in-migration, something not seen since before 2000. But that is changing. A recent Redfin report suggests that the Bay Area, the focal point of California’s boom, now leads the country in outbound home searches, which could suggest a further worsening of the trend.
One of the perennial debates about migration, particularly in California, is the nature of the outmigration. The state’s boosters, and the administration itself, like to talk as if California is simply giving itself an enema — expelling its waste — while making itself an irresistible beacon to the “best and brightest.”
The reality, however, is more complicated than that. An analysis of IRS data from 2015-16, the latest available, shows that while roughly half those leaving the state made under $50,000 annually, half made above that. Roughly one in four made over $100,000 and another quarter earned a middle-class paycheck between $50,000 and $100,000. We also lose among the wealthiest segment, the people best able to withstand California’s costs, but by much smaller percentages.
The key issue for California, however, lies with the exodus of people around child-bearing years. The largest group leaving the state — some 28 percent — is 35 to 44, the prime ages for families. Another third come from those 26 to 34 and 45 to 54, also often the age of parents.
(Hat tip: TPPF.)
Every day, Texans are reminded why letting liberal democrats take over this state would be a terrible idea.
In a new report released by S&P Global Ratings, Texas has been ranked among the most recession-proof states in the country, according to a variety of factors.
Texas’ fiscal strength stems from conservative state legislators’ insistence against implementing a personal income tax or increasing other taxes. Also important has been the push by Gov. Abbott and Lt. Gov. Dan Patrick to slow the rate of spending growth and refusal to dip into the state’s “rainy day fund” for non-emergency spending.
Magnificent in the distance, San Francisco is now shockingly ugly up close. In the decade I have lived here, the city has achieved the seemingly impossible: It has combined the expensive and the bland and the appalling into a new form of decadence. To the untrained eye, it looks magical: a city of the future, a city of gasps. Then, slowly, it reveals itself to be a city of lies, one that dismisses the idea of city living.
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Running a venture-capital fund that invests as early as possible in startups, I now see fewer and fewer companies choosing to come launch here. When we opened our doors in 2015, maybe 80 percent of our investments were in Bay Area companies. Last year [2018], half of them were, and we expect to see that number decrease even more in the years ahead. Andreessen-Horowitz, the famed Silicon Valley VC firm, has announced that it’s becoming more or less a hedge fund, presumably to focus on later-stage opportunities. Peter Thiel, who had lived here since the mid 90s, has now decamped to Los Angeles, and says there is a less than 50 percent chance the next great tech company will arise in an increasingly expensive, conformist Silicon Valley.
“Silicon Valley is now more fashion than opportunity,” Thiel told the Swiss newspaper Neue Zürcher Zeitung. “The heads are the same.”
Lack of independent thought aside, the Economist has identified the source of the problem: You can’t build a successful startup from a garage if a garage costs a million bucks. The flow of new creations is being choked off first and foremost because there are fewer cheap places for new things to start.
The median rent for a one-bedroom apartment in San Francisco recently hit $3690 per month, 30 percent greater than in New York City. Over the last decade, the Bay Area has added 722,000 jobs but built only 106,000 new homes. Proposition M, passed in the 1980s to avoid “Manhattanization,” limits the supply of office space. The city’s average Class A asking rent has risen 124 percent since 2010 to over $80 per square foot.
The legendary urbanist Jane Jacobs once remarked that new ideas come from old buildings, the types of places you can alter without permission because no one cares about them. This is one reason why so many garage startups and garage bands and artists spilling paint in discarded warehouse lofts have left their mark on the world. The true creative class can’t afford to rent expensive new studios.
But in San Francisco, the true creative class can’t afford to rent any space anymore.
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Up and down the city’s disorienting hills, you notice homeless men and women — junkies, winos, the dispossessed — passed out in the vestibules of empty storefronts on otherwise busy streets. Encampments of tents sprout in every shadowy corner: under highway overpasses, down alleys. Streets are peppered with used syringes. Strolling the sidewalks, you smell the faint malodorous traces of human excrement and soiled clothing. Crowded thoroughfares such as Market Street, even in the light of midday, stage a carnival of indecipherable outbursts and drug-induced thrashings about which the police seem to do nothing.
The confused mumble, the incoherent finger-pointing tirade, the twitch, the cold daemonic stare, the drunken stumble and drool — these are the rhythms of a city on the edge of a schizophrenic explosion.
1) Assume that a state with among the highest income, sales and gas taxes has commensurately among the nation’s worst roads. Therefore, do not become depressed by blood alleys, potholes, bullet-holed and graffiti stained road signs, or roads unchanged from a half-century ago when the population was less than half of what it is today. You are an adventurer on the frontier, not a complacent commuter or traveler. Approach the next few hours as a challenge rather than a nightmare. Envision a California road trip like Odysseus did his on voyage on the Aegean.
2) It is wiser not to use the restrooms on any California cross-country drive. Excrement can be many places other than in the toilet. Also, fill up before starting. Don’t count on finding gas stations that are not overcrowded or have all their pumps working—even the ones with national affiliations that look as inviting from the off-ramp as Circe’s smile.
My favorite is one where all the tiny glass windows at the pumps where the electronic instructions guide you are either broken or scratched out. My second favorite one was where the pump had no hose and no sign saying it had no hose. In California, you often fill up by holding the pump handle down nonstop, given the automatic levers are broken or missing. A state law requires emergency free air and water services for all gas station customers; perhaps because it’s mandatory, the air and water dispensers usually do not work.
3) Assume “Mad Max” conditions at any time. Contraptions can pose as vehicles in the most regulated vehicle state in the nation (there is a reason why the California DMV is dysfunctional). Cars can still tow each other, 1950s-style, with sagging rope. Expect a piece of lumber or a mattress to go Frisbee on every other trip. Anticipate that a quarter of the drivers have bad brakes, worse tires, and ignore or cannot read signs and posted warnings. The person who passes you at 90 miles per hour likely does not have a license, or registration, or insurance—or, perhaps, any of the three.
In April 2016, California Gov. Jerry Brown signed the state’s $15-an-hour minimum wage law into effect.
As a consequence, the minimum wage went from $10 an hour to $10.50 an hour for businesses with 26 or more employees on January 1, 2017. On January 1 of this year, the minimum wage was hiked again to $11.00 an hour for larger employers and $10.50 for businesses with 25 or fewer employees.
Federal jobs data for 2018 suggests that California’s rural manufacturing base might be getting hammered by the higher mandated minimum wage.
Unless a future governor waives the scheduled increases due to economic weakness, the government mandated hourly wage hikes will keep coming—$1 per hour every year—until they reach $15 an hour four years from now for large employers with smaller employers hitting $15 in 2023. After that, future increases are pegged to national consumer price index for urban wage earners and clerical workers.
Many factors affect regional job creation and wage growth. Availability of suitable labor, energy and land costs, infrastructure, including access to clean water and well-maintained roads, as well as state and local taxes, the regulatory burden and the lawsuit environment. Measured against these factors, California has significant challenges.
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California’s 2017 retail electric prices were 89 percent higher than in its peer competitor, Texas. California’s gasoline prices remain the highest in the contiguous 48 states, at $3.619 per gallon of unleaded, some 26 percent higher than the national average of $2.865.
California’s once-vaunted water storage and conveyance system has been essentially frozen in time for decades, as the state’s politicians spend billions on environmental programs and studies and precious little on expending and securing California’s water supply.
California’s highway system, once the envy of the world, has similarly been put at the bottom of the priority list, regularly being ranked at the tail end of national surveys. Further, the state’s union labor agreements and environmental approval maze contribute to the state’s road maintenance costs being almost 40 percent higher than the national average.
As for state and local taxes, Forbes ranked California as 45th-worst in 2016.
The U.S. Chamber of Commerce meanwhile rated California as having the 47th-worst lawsuit climate in the nation last year.
The regulatory burden on small business was studied in a report authorized by the California legislature 10 years ago which found that small businesses faced a complex puzzle of state and local rules that cost about $134,000 per year in compliance costs.
Voters approved retroactive pension increases 10 times between 1996 and 2008, thus leaving the San Francisco Retirement System underfunded and a drain on the operating budget.
The city and county of San Francisco owes the retirement system a massive $5.8 billion – more than half the city’s entire general-fund budget.
(Hat Tip: Pension Tsunami.)
The heroin needles, the pile of excrement between parked cars, the yellow soup oozing out of a large plastic bag by the curb and the stained, faux Persian carpet dumped on the corner.
It is a scene of detritus that might bring to mind any variety of developing-world squalor. But this is San Francisco, the capital of the nation’s technology industry, where a single span of Hyde Street hosts an open-air narcotics market by day and at night is occupied by the unsheltered and drug-addled slumped on the sidewalk.
There are many other streets like it, but by one measure it is the dirtiest block in the city.
Just a 15-minute walk away are the offices of Twitter and Uber, two companies that along with other nameplate technology giants have helped push the median price of a home in San Francisco well beyond a million dollars.
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According to city statisticians, the 300 block of Hyde Street, a span about the length of a football field in the heart of the Tenderloin neighborhood, received 2,227 complaints about street and sidewalk cleanliness over the past decade, more than any other. It is an imperfect measurement — some blocks might be dirtier but have fewer calls — but residents on the 300 block say that they are not surprised by their ranking. The San Francisco bureau photographer, Jim Wilson, and I set out to measure the depth of deprivation on a single block. We returned a number of times, including a 12-hour visit, from 2 p.m. to 2 a.m. on a recent weekday. Walking around the neighborhood we saw the desperation of the mentally ill, the drug dependent and homeless, and heard from embittered residents who say it will take much more than a broom to clean up the city, long considered one of the United States’ beacons of urban beauty.
“If everyone in the middle class is leaving, that’s actually a good thing. We need these spots opened up for the new wave of immigrants to come up. It’s what we do. We export our middle class to the United States. You guys should be thanking us for that,” Singam said to a stunned Carlson.
Of course, he also says that “Soon enough Texas will be a blue state,” so there’s an unusually high degree of “talking out your ass” going on here… (Hat tip: Ed Driscoll at Instapundit.)
The SpaceX South Texas launch site, which first broke ground in September 2014, is a rocket production facility, test site, and spaceport located at Boca Chica approximately 20 miles east of Brownsville, Texas, on the Gulf Coast. The South Texas Launch Site is SpaceX’s fourth active suborbital launch facility, and first private facility.
By March of last year, SpaceX had over 500 employees working at the Boca Chica site, Ars Technica reported. Four shifts work 24/7 — in 12-hour shifts with four days on and three days off followed by three days on and four off — enabling the continuous manufacturing of his Starship flight rocket with workers and equipment specialized to each task of serial Starship production.
According to a 2014 Brownsville Economic Development Council report, the facility was projected to generate $85 million worth of economic activity in Brownsville and eventually generate roughly $51 million in annual salaries from new jobs created by 2024.
Part of this money is coming directly from Musk. Musk tweeted that he is donating $20 million to schools in Cameron County and $10 million to the city of Brownsville for revitalization efforts, both of which are near SpaceX.
“Please consider moving to Starbase or greater Brownsville/South Padre area in Texas & encourage friends to do so! SpaceX’s hiring needs for engineers, technicians, builders & essential support personnel of all kinds are growing rapidly,” Musk tweeted on Tuesday. “Starbase will grow by several thousand people over the next year or two.”
Amid raging wildfires, rolling blackouts and a worsening coronavirus outbreak, it has not been a great year for California. Unfortunately, the state is also reeling from a manmade disaster: an exodus of thriving companies to other states. In just the past few months, Hewlett Packard Enterprise said it was leaving for Houston. Oracle said it would decamp for Austin. Palantir, Charles Schwab and McKesson are all bound for greener pastures. No less an information-age avatar than Elon Musk has had enough. He thinks regulators have grown “complacent” and “entitled” about the state’s world-class tech companies. No doubt, he has a point. Silicon Valley’s high-tech cluster has been the envy of the world for decades, but there’s nothing inevitable about its success. As many cities have found in recent years, building such agglomerations is exceedingly hard, as much art as science. Low taxes, modest regulation, sound infrastructure and good education systems all help, but aren’t always sufficient. Once squandered, moreover, such dynamism can’t easily be revived. With competition rising across the U.S., the area’s policy makers need to recognize the dangers ahead.
In recent years, San Francisco has seemed to be begging for companies to leave. In addition to familiar failures of governance — widespread homelessness, inadequate transit, soaring property crime — it has also imposed more idiosyncratic hindrances. Far from welcoming experimentation, it has sought to undermine or stamp out home-rental services, food-delivery apps, ride-hailing firms, electric-scooter companies, facial-recognition technology, delivery robots and more, even as the pioneers in each of those fields attempted to set up shop in the city. It tried to ban corporate cafeterias — a major tech-industry perk — on the not-so-sound theory that this would protect local restaurants. It created an “Office of Emerging Technology” that will only grant permission to test new products if they’re deemed, in a city bureaucrat’s view, to provide a “net common good.” Whatever the merits of such meddling, it’s hardly a formula for unbounded inventiveness.
These two traits — poor governance and animosity toward business — have collided calamitously with respect to the city’s housing market. Even as officials offered tax breaks for tech companies to headquarter themselves downtown, they mostly refused to lift residential height limits, modify zoning rules or allow significant new construction to accommodate the influx of new workers. They then expressed shock that rents and home prices were soaring — and blamed the tech companies. California’s legislature has only made matters worse. A bill it enacted in 2019, ostensibly intended to protect gig workers, threatened to undo the business models of some of the state’s biggest tech companies until voters granted them a reprieve in a November referendum. A new privacy law has imposed immense compliance burdens — amounting to as much as 1.8% of state output in 2018 — while conferring almost no consumer benefits. An 8.8% state corporate tax rate and 13.3% top income-tax rate (the nation’s highest) haven’t helped.
The third and most ignored reason California doesn’t use much electricity is that their tax and regulatory policies and high costs of doing business have steadily driven out industries that use a lot of energy to manufacture things such as steel and cement.
There’s irony in this, of course, and it’s this: California’s environmentally-minded leaders like to tout the virtue of their post-industrial policies, but in deindustrializing wide swaths of their economy, they have merely outsourced the energy use—and pollution—to other places and then, to add insult to injury, pay to have it shipped to California in carbon-emitting ships, planes, trains, and trucks.
In terms of electric production, California is the nation’s biggest importer of electricity. In the past, this meant a lot of coal-fired power from places such as Arizona and Utah.
But a law passed in 2006 alongside the state’s more famous AB 32, the Global Warming Solutions Act, effectively banned the renewal of power contracts from traditional out-of-state coal-powered generators.
As a result, “electron laundering” has arisen to fill the gap. This occurs when Californians, in the quest for green electrons to power their grid, pay British Columbians for hydropower, which the Canadians are happy sell, as they backfill their own power needs with coal power from Washington State and Alberta. It works out for everyone: California gets higher-priced power that they can claim is green, while the Canadians get American greenbacks to fund their national health care system.
To cover their tracks and keep the green mirage intact, California authorities invented a new category of imported power called “Unspecified Sources of Power” that magically provided 9.25% of California’s electric needs last year. Prior to becoming politically incorrect, these power imports were simply labeled “coal.”
In the meantime, Californians paid an average of 18.41 cents per kilowatt hour for their electricity in July 2018, 67% higher than the national average and more than double the cost of electricity in Texas. In August, California’s rates jumped to 19.08 per kWh, 110% higher than Texas’ rates. In fact, Californians’ July and August electric rates were the highest in the contiguous 48 states.
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In contrast, Texas pursued a market-based electric policy through deregulation. While liberal consumer advocates were quick to claim failure in the first couple of years after the 2002 electric competition law passed as higher prices signaled more producers to enter the market, in the years since, Texans have seen their retail inflation-adjusted electricity prices decline by 32 percent from 2008 to 2017.
California has hooked up a grid battery system that is almost ten times bigger than the previous world record holder, but when it comes to making renewables reliable it is so small it might as well not exist.
The new battery array is rated at a storage capacity of 1,200 megawatt hours (MWh); easily eclipsing the record holding 129 MWh Australian system built by Tesla a few years ago. However, California peaks at a whopping 42,000 MW. If that happened on a hot, low wind night this supposedly big battery would keep the lights on for just 1.7 minutes (that’s 103 seconds). This is truly a trivial amount of storage.
Mind you this system is being built to serve just Pacific Gas & Electric. But they by coincidence peak at about half of California, or 21,000 MWh, so they get a magnificent 206 seconds of peak juice. Barely time to find the flashlight, right?
There is no word on what this trivial giant cost, since PG&E does not own it. That honor goes to an outfit called Vistra that does a lot of different things with electricity and gas. But these complex battery systems are not cheap.
This one reportedly utilizes more than 4,500 stacked battery racks, each of which contains 22 individual battery modules. That is 99,000 separate modules that have to be made to work well together. Imagine hooking up 99,000 electric cars and you begin to get the picture.
The US Energy Information Administration reports that grid scale battery systems have averaged around $1.5 million a MWh over100% renewable deception the last few years. At that price this trivial piece of storage cost just under TWO BILLION DOLLARS. At 103 seconds of peak storage that is about $18,000,000 a second. Money for nothing.
Mind you the PG&E engineers are not that stupid. They know perfectly well that this billion dollar battery is not there to provide backup power when wind and solar do not produce. In fact the truth is just the opposite. The battery’s job is to prevent wind and solar power from crashing the grid when they do produce.
It is called grid stabilization. Wind and solar are so erratic that it is very hard to maintain the constant 60 cycle AC frequency that all our wonderful electronic devices require. If the frequency gets more than just a tiny bit off the grid blacks out. Preventing these crashes requires active stabilization.
Grid instability due to erratic wind and solar used to not be a problem, because the huge spinning metal rotors in the coal, gas and nuclear power plant generators simply absorbed the fluctuations. But most of those plants have been shut down, so we need billion dollar batteries to do what those plants did for free. Nor is this monster battery the only one being built in California to try to make wind and solar power work. Many more are in the pipeline and not just in California. Many states are struggling with instability as baseline generators are switched off.
There is even an insane irony here, one that is perfect for Crazy California. This billion dollar battery occupies the old generator room of a shut down gas fired power plant. Those generators used to make the grid stable. Now we are struggling to do it.
The drugstore, which serves many older people who live in the Opera Plaza area, is the seventh Walgreens to close in the city since 2019.
“All of us knew it was coming. Whenever we go in there, they always have problems with shoplifters, ” said longtime customer Sebastian Luke, who lives a block away and is a frequent customer who has been posting photos of the thefts for months. The other day, Luke photographed a man casually clearing a couple of shelves and placing the goods into a backpack…
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he Walgreens clerks can’t do anything about the theft because the company has a policy preventing them from interfering in shoplifting. Allegedly this is for their safety but I suspect it’s really because if they didn’t have this policy and anyone got hurt, they would be sued.
And trying to stop this wave of thieves would be like throwing a pebble in a stream. It wouldn’t make any real difference anyway. A theft of less than $950 is a misdemeanor in California and even if the shoplifters get arrested they would likely be back on the streets almost immediately.
The myth that America suffers a scarcity of teachers is promulgated by the teachers’ unions and their supporters in the education establishment. On the California Teachers Association website, we read that “California will need an additional 100,000 teachers over the next decade.” But this statistic simply means that CTA expects about a 2.8 percent yearly attrition rate, and will need to hire 10,000 teachers per annum over a ten-year period to maintain current staffing levels—more of an actuarial projection than an alarming call for action. (The union adds that California must hire even more teachers to “reduce class size so teachers can devote more time to each student.” The claim that small class size benefits all students—another union promulgated myth—means more teachers, which translates to more dues money for the union.) In reality, California is following the national trend in overstaffing. According to the Legislative Analyst’s Office, California had 332,640 teachers in 2010. By 2015, there were 352,000. But the student population has been virtually flat, moving from 6.22 million in 2010 to 6.23 million in 2016.
True, legitimate general shortages exist in some school districts, while other districts may lack teachers in certain areas of expertise, like science and technology. Workers in these fields can earn higher salaries in the private sector; one solution would be to pay experts in these subjects more than other teachers as a way to lure them into teaching. Unfortunately, that’s not possible: throughout much of the country, and certainly in California, salaries are rigorously defined by a teacher union-orchestrated step-and-column pay regimen, which allows no room for flexibility in teacher salaries.
What’s necessary is to break up the unaccountable Big Government-Big Union education duopoly. More school choice, from privatization to charter schools, could go a long way toward solving the teacher glut. The government-education complex will always try to squeeze more money from the taxpayers, irrespective of student enrollment. Its greed has nothing to do with teacher shortages, small class sizes, educational equity, or any other rationale it can come up with: paramount to the interest of the educational bureaucracy is more jobs for administrators, and more dues money for the unions, which they use to buy and hold sway over school boards and legislators. While there is a surfeit of teachers and administrative staff, clarity and transparency regarding the reality of union control of the schools are scarce indeed.
From Santa Rosa to San Jose, more and more residents are making the bittersweet decision to leave the Bay Area, abandoning its near-perfect weather, booming economy and thriving arts, culture and food scenes in favor of less-glamorous destinations like Austin, Boise and Knoxville.
Some are fleeing the Bay Area’s sky-high housing and rent prices, both among the most expensive in the nation. Others are cashing out, selling their homes to get more for their money in a less expensive city. Nearly all of them are fed up with miserable, hours-long commutes on snarled freeways.
More people are leaving the Bay Area than are moving in, according to a 2018 report by the Silicon Valley Leadership Group and Silicon Valley Community Foundation. An average of 42 people left San Francisco, San Mateo and Santa Clara counties each month in 2016, the most recent year for which data was available. That’s a sharp uptick from the year before, when the region gained an average of 1,962 residents per month.
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The couple will miss the church and community they’re leaving behind. But Pullen and Preuss, who describe themselves as politically moderate, won’t miss the Bay Area’s “super progressive politics.”
(Hat tip: Ed Driscoll at Instapundit.)
Kieran Blubaugh dreamed of living in California when he was growing up in Indiana. He played the Tony Hawk Pro Skater video game and envisioned himself skateboarding down San Francisco’s crazy hills.
After paying off his student loans four years ago, he landed a job with a tech company and moved to San Francisco. At first, life was heavenly. He had a seven-minute commute on his motorcycle. He could pay $30 to see Incubus, one of his favorite bands, a short walk from his apartment.
Soon, however, his California dream soured. Thieves broke into his locked garage and did $8,000 worth of damage to his motorcycle, doubling his insurance rates. His dog nearly died after eating human feces on the sidewalk. Seeing people either getting arrested or being treated for an overdose outside a nearby building was a regular occurrence.
“And I live in a nice part of town,” said Blubaugh, 33.
Not anymore. On Saturday, Blubaugh moved out of the $4,000-a-month two-bedroom apartment he shared on Russian Hill and moved to Dallas, where he will pay $1,300 a month for a place the same size.
It’s not that he set out to ditch San Francisco for Dallas. “But it was the financially responsible thing to do,” he said.
Also: “We need more police. There’s a general lawlessness that’s just scary.”
California’s bullet train has become a nearly forgotten source of trouble, eclipsed in the public eye by Covid-19, a gubernatorial recall, and out-migration from the Golden State. But it’s still out there, sucking up time and money, and as empty as it ever was.
The California High Speed Rail, its formal name, was a hobby-ego project for former governor Jerry Brown that was supposed to move passengers between Los Angeles and San Francisco at 220 mph by 2020. Instead, the project is moving at the speed of the museum piece it sometimes appears destined to be. Not a single train has run, with train testing still six to seven years away, amid seemingly never-ending delays.
The news regarding the project is, as usual, dismal. As the Los Angeles Times reported in January, Ghassan Ariqat, vice president of operations at bullet-train contractor Tutor Perini, sent a “scorching” letter to California officials criticizing persistent construction delays, “contradicting state claims that the line’s construction pace is on target,” and warning that the project could miss “a key 2022 federal deadline.” “It is beyond comprehension that as of this day, more than two thousand and six hundred calendar days after [official approval to start construction], the authority has not obtained all of the right of way,” Ariqat wrote. Because of the sluggish construction pace, he added, his company “will have to lay off a significant number of its field workers in the very near future” after already letting 73 walk.
Ariqat has good reason to be agitated. If there’s been a more poorly run public works project in California history, nobody can remember it. Two years ago, a senior fellow at the Eno Center for Transportation, a nonpartisan think tank, called California’s high-speed rail an outright “failure” that has “suffered from at least seven identifiable ‘worst practices,’” causing it “to be indefinitely delayed.”
The Round Rock Chamber announced Friday that Ametrine, Inc. has selected Round Rock as the company’s new U.S. headquarters in a move that will create some 140 good-paying jobs.
Founded in 2011, Ametrine is a manufacturer of unique, advanced multispectral camouflage systems with its current headquarters in Rockville, Maryland. Ametrine produces patented nano-technology materials and is consistently awarded research and development projects through the U.S. Department of Defense.
“We started the search for our new U.S. headquarters almost a year ago,” Ametrine CEO Brandon Cates said in a prepared statement. “We compared thirteen cities in five states using twelve evaluation criteria and came to the conclusion that Round Rock would be the best fit for the future of our business. Round Rock has been very forward-thinking when it comes to supporting the defense industry, and we anticipate future collaboration with the city, the chamber, and the other innovative companies that Round Rock attracts.”
(Hat tip: Rep. John Carter on Twitter.)
People are voting with their feet… https://t.co/mlFmtxKkkL #TXSen #CruzCrew #CNNDebateNight pic.twitter.com/pw2UcfwBvE
— Ted Cruz (@tedcruz) November 29, 2017
Back in the Grapes of Wrath days, people fleeing the Dust Bowl for California were derisively called "Okies." I think we should derisively mock people arriving from California as "Fornies"
— David Burge (@iowahawkblog) January 4, 2021
When you leave California remember that you are a refugee, not a missionary. We don’t need your blue politics here.
Sincerely
Texas#txlege pic.twitter.com/EgI3jSdwY9— Տᗩᑎᗪᖇᗩ ن (@SandraSentinel) January 9, 2021
Planet Sh*t Hole #2 pic.twitter.com/3AScFmh6BJ
— Steve Inman (@SteveInmanUIC) January 31, 2021
Hopefully the next update will be a little more timely…
