Welcome to the Collapse--California Style

All the leaves are brown and the sky is gray.

I've been for a walk on a winter's day.

I'd be safe and warm if I was in L.A.;

California dreamin' on such a winter's day.

               --The Mamas and the Pappas

Joel Kotkin writes at the Orange Country Register:

The most important news to hit Southern California last week did not involve the heinous Donald Sterling, but Toyota’s decision to pull its U.S. headquarters out of the Los Angeles region in favor of greater Dallas. This is part of an ongoing process of disinvestment in the L.A. region, particularly among industrially related companies, that could presage a further weakening of the state’s middle class economy. 

The Toyota decision also reflects the continued erosion of California’s historic economic diversity, which provided both stability and a wide variety of jobs to the state’s workers. We have seen this in the collapse of our once-burgeoning fossil-fuel energy industry, capped this year by the announced departure from Los Angeles of the headquarters of Occidental Petroleum. Blessed with huge fossil fuel reserves, California once stood as one of the global centers of the energy industry. Now, with the exception of Chevron, which is shifting more operations out of state, all the major oil companies are gone, converting California from a state of energy producers to energy consumers, and, in the process, sending billions of dollars to Texas, Canada and elsewhere for natural gas and oil that could have been produced here.

... Since 2010, California has managed to miss out on a considerable industrial boom that has boosted economies from the Rust Belt states to the Great Plains and the Southeast. Los Angeles and Orange counties, the epicenter of the state’s industrial economy, have actually lost jobs. Since 2000, one-third of the state’s industrial employment base, 600,000 jobs, has disappeared, a rate of loss 13 percent worse than the rest of the country.

Kotkin relates the various factors that drew industry to California in the first instance, but that these factors have either reversed or are no longer important. According to Kotkin, the biggest reason, however, for moving the corporate and engineering out of California is the deindustrialization of the state. Basically, with manufacturing having left to locations in Texas and the Mid-West, the engineering and technical jobs, management, and corporate jobs to support the manufacturing are tagging along. To add insult to injury, at least in the case of Toyota, Texas did not even have to lobby Toyota to move its North American headquarters.

Kotkin concludes: "[O]ur region is devolving toward marginality, largely as a tourist and celebrity haven." Rich liberals at the top, and the welfare dependent masses at the bottom. The liberal dream writ large.