How California Got Rich

The always thought-provoking David Brooks turns his attention to The Golden State in his latest New York Times column. Citing Kevin Starr, the accomplished historian of all things California, he gives this overview:

Between 1911 and the ’60s, California had a series of governors — like Hiram Johnson, Earl Warren, Goodwin Knight and Pat Brown — who were pro-market and pro-business, but also progressive reformers.
They rode a great wave of prosperity, and people flocked to the Golden State, but they used the fruits of that prosperity in a disciplined way to lay the groundwork for even more growth. They built an outstanding school and university system. They started a series of gigantic public works projects that today are seen as engineering miracles. These included monumental water projects, harbors and ports, the sprawling highway system and even mental health facilities.

In reflecting on any era, it is common to credit the person at the top of the political hierarchy. Just as presidents are lauded for presiding over times of national prosperity, governors are the ones mentioned in discussions of notable successes within individual states. A closer look at California in the era Mr. Brooks mentions affords a particularly good opportunity to see the shortcomings of that approach. Best to focus on the Hoover Dam, arguably the most important and far-sighted public works effort of the era, and the Colorado River Project. Absent these engineering triumphs Greater Los Angeles as we now know it wouldn’t exist.

On the whole, federal and municipal efforts were far more important than anything done at the state level. In 1918, Secretary of the Interior Franklin Lane commissioned a report on an irrigation canal that would tap into the Colorado River. The Bureau of Reclamation did the early geological surveys. A Californian, Herbert Hoover — then Secretary of Commerce for Warren Harding — was instrumental in negotiating an agreement among western states about how water and electricity would be shared if what was then called The Boulder Dam was built. Hiram Johnson helped, but as a United States Senator, having already finished his term as governor. What about Los Angeles’ bid to benefit? Its chief water engineer, William Mulholland, obtained a local bond issue to fund a study into how his city could get water and electricity from the project. The most persuasive public advocate for building the dam was Arthur Powell Davis, who wrote what Starr calls “the establishment rationale” in a February 1929 piece in The Atlantic Monthly.

California also benefited from the rise of Herbert Hoover to the presidency, and the fact that his Secretary of the Interior, Ray Lyman Wilbur, hailed from the Golden State. “Had Wilbur come from Wyoming, Utah, Nevada, Arizona, or Colorado, he might have been influenced toward a different decision,” Starr writes. “As it was, he allocated 36 percent of the water and power to the Metropolitan Water District of Southern California. To the City of Los Angeles, which operated its own Department of Water and Power, he allocated 13 percent of the hydro-electrical power. He allocated another 15 percent of the hydro-electricity to the Southern California Edison Company and a handful of other Southern California cities.”

Or to put a sharper point on it:

Thus a President and a Secretary of the Interior from California set in motion a project which a California senator and a California congressman had pushed through Congress, to be supervised in its construction by a government agency headed by a former California professor, with financing from revenues paid by Southern California water and power organizations, with construction being performed by a consortium dominated by California-based companies, with the eventual recipients of the water and power made available by the dam, once completed, being millions of Southern Californians.

The federally financed dam was built on the Arizona-Nevada border.

The 1930s were an extraordinary era in California public works. Herbert Hoover was instrumental in getting the San Francisco—Oakland Bay Bridge built too. Also federally financed, it was the largest bridge and the most expensive public works project ever built. The Golden Gate bridge, as beautiful as any on earth, was conceived and designed locally, and funded by bond issues in the counties it would serve. (The Italian immigrant who founded the San Francisco based Bank of America deserves credit for buying the entire bond issue despite the timing — the early years of the Great Depression). California’s first freeway, The Arroyo Seco, connected Los Angeles and Pasadena thanks to efforts in the two communities, and help from the WPA. And various New Deal agencies would poor untold millions into the state as much of the Dust Bowl’s poor migrated here.

As World War II arrived, California became strategically vital — the landing point for a theoretical Japanese invasion that prompted all sorts of defense spending, the center of America’s aircraft industry, home to various military bases, and the point of departure for the Pacific rim. During World War II, the aircraft industry became the biggest in the United States, producing more than 300,000 military aircraft. The Golden State got almost half of this business.

In the period from 1911 to 1965, any halfway competent series of governors would’ve presided over a prosperous California. In the passage I excerpted, Mr. Brooks isn’t wrong — California’s governors did ride a wave of prosperity, and they did spend its fruits a reasonably responsible way, along with the various legislatures. (Their faith in direct democracy also laid the groundwork for certain pathologies identified later in the column.) But their example isn’t one that can guide us toward prosperity today. The successes of the past are best explained by forces outside the statehouse. And even today’s lackluster state leaders would manage to preside over a return to prosperity if the federal government again sent us amounts like what flowed here from the beginning of the Depression through the end of the Cold War defense buildup.

Today California has a spending problem, a public employee problem, a business regulation problem, and a constitutional problem. The state’s prosperity and its pathologies alike flow from the Progressive Era. It’s the latter that we’ve got to address now.