A newspaper columnist who has been covering California politics for more than 25 years painted a bleak picture of the state's economic future for Solano County business and political leaders on Wednesday.
Dan Walters offered one "silver lining" to his gloomy forecast: "The first step toward curing yourself of a disease is admitting you have it," he said. "The longer this recession goes on, the more evident it becomes that things aren't right. ... The denial quotient seems to be diminishing."
Speaking at the Solano Economic Development Corp.'s breakfast meeting at Fairfield's Hilton Garden Inn, the Sacramento Bee's syndicated political columnist assessed the state's economic and political conditions, putting them into historical context.
While the recession may have officially ended months ago, California remains mired in it, said Walters, noting that the state's 12 percent unemployment rate doesn't count those who have given up hunting for jobs or who have left the labor force altogether or the underemployed. Add in those numbers and "the impact is truly 18 or 20 percent" unemployment, he said.
The state that has already lost more than 1 million jobs needs to add 15,000 a month just to keep up with its growth rate, Walters said. While there are areas where jobs are on the uptick, such as Silicon Valley, most of the state remains in what Walters called "the worst recession since the Great Depression."
Walters, a journalist for more than four decades and who started writing a column focused on California and its politics in 1975 -- the first time Jerry Brown was governor -- reminded the audience that the state's economy has long been a series of booms and busts.
President Ronald Reagan's military buildup of the 1980s poured money into California's military installations and weapons and space industries. It dried up when the Cold War ended, resulting in the bust of the early 1990s.
In the late 1990s, venture capitalists invested heavily in high-tech industries, resulting in the dot.com bubble that burst when those investors began looking for actual profits. Then global bankers streamed money into the state's housing market. The state is still reeling from its collapse.
While there has been plenty of speculation as to what the next bubble might be, no one knows if there will even be a next one, Walters said. Which raises a number of questions: "What if we actually have to ... compete in the global economy without the advantage of a rapid capital infusion? What if we have to go out and hustle and invest?"
California doesn't stack up well in the competitive world, Walters said. Yes, it has good weather, impressive scenery and an entrepreneurial spirit that can be capitalized on, but it also has plenty of drawbacks, including:
* The fifth-highest tax burden, when measured as a percentage of personal income. "We're at 11 to 11 1/2 percent," he said. "The national average is 9 percent."
* An "uncertain" water supply -- not because California doesn't have water but because "we have political inability to come to grips with capturing, storing, conveying and pricing that water."
* The worst traffic congestion of any state.
* Among the worst road conditions, "second only to New Jersey, where Tony Soprano buried bodies in the road," he said, drawing a laugh.
* Public education, which "is down there with Mississippi."
* The "most dense regulatory structure in the country."
Sacramento politicians should be asking, "What do we need to do to make ourselves competitive?" But they aren't, Walters said. "They don't want to dig into the real problems and look at where we stand in a global economy."
If they did, he said, legislators would redirect their attention "toward the real stuff -- education, transportation, water -- instead of whether hotels such as this one should have to use fitted sheets, or whether San Francisco should be allowed to dump its trash in Solano County."
Dan Walters offered one "silver lining" to his gloomy forecast: "The first step toward curing yourself of a disease is admitting you have it," he said. "The longer this recession goes on, the more evident it becomes that things aren't right. ... The denial quotient seems to be diminishing."
Speaking at the Solano Economic Development Corp.'s breakfast meeting at Fairfield's Hilton Garden Inn, the Sacramento Bee's syndicated political columnist assessed the state's economic and political conditions, putting them into historical context.
While the recession may have officially ended months ago, California remains mired in it, said Walters, noting that the state's 12 percent unemployment rate doesn't count those who have given up hunting for jobs or who have left the labor force altogether or the underemployed. Add in those numbers and "the impact is truly 18 or 20 percent" unemployment, he said.
The state that has already lost more than 1 million jobs needs to add 15,000 a month just to keep up with its growth rate, Walters said. While there are areas where jobs are on the uptick, such as Silicon Valley, most of the state remains in what Walters called "the worst recession since the Great Depression."
Walters, a journalist for more than four decades and who started writing a column focused on California and its politics in 1975 -- the first time Jerry Brown was governor -- reminded the audience that the state's economy has long been a series of booms and busts.
President Ronald Reagan's military buildup of the 1980s poured money into California's military installations and weapons and space industries. It dried up when the Cold War ended, resulting in the bust of the early 1990s.
In the late 1990s, venture capitalists invested heavily in high-tech industries, resulting in the dot.com bubble that burst when those investors began looking for actual profits. Then global bankers streamed money into the state's housing market. The state is still reeling from its collapse.
While there has been plenty of speculation as to what the next bubble might be, no one knows if there will even be a next one, Walters said. Which raises a number of questions: "What if we actually have to ... compete in the global economy without the advantage of a rapid capital infusion? What if we have to go out and hustle and invest?"
California doesn't stack up well in the competitive world, Walters said. Yes, it has good weather, impressive scenery and an entrepreneurial spirit that can be capitalized on, but it also has plenty of drawbacks, including:
* The fifth-highest tax burden, when measured as a percentage of personal income. "We're at 11 to 11 1/2 percent," he said. "The national average is 9 percent."
* An "uncertain" water supply -- not because California doesn't have water but because "we have political inability to come to grips with capturing, storing, conveying and pricing that water."
* The worst traffic congestion of any state.
* Among the worst road conditions, "second only to New Jersey, where Tony Soprano buried bodies in the road," he said, drawing a laugh.
* Public education, which "is down there with Mississippi."
* The "most dense regulatory structure in the country."
Sacramento politicians should be asking, "What do we need to do to make ourselves competitive?" But they aren't, Walters said. "They don't want to dig into the real problems and look at where we stand in a global economy."
If they did, he said, legislators would redirect their attention "toward the real stuff -- education, transportation, water -- instead of whether hotels such as this one should have to use fitted sheets, or whether San Francisco should be allowed to dump its trash in Solano County."
