California’s Left-Wing Oligarchy Profits from “Scarcity”

By | 2018-01-29T15:39:41+00:00 January 29th, 2018|
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There is no good reason for home prices and rent to be so much more expensive in California than they are in the rest of the country. The supposed shortages of land, energy, and water, as well as the poor condition of our roads and freeways, are all problems that might have been avoided by good government.

California’s punitively high cost of living is the result of conscious choices made by California’s state legislature, and the primary force behind these choices is not desire to protect the environment, it is greed. The people who profit by artificial, contrived scarcity, don’t want anything to change. They are the utility companies, the trial lawyers, the Silicon Valley “green” entrepreneurs, and billionaires who already own the artificially limited supplies of land and housing.

California receives between 150 and 300 million acre feet of precipitation per year. This, plus desalination and sewage reuse, along with reasonable conservation measures, guarantee ample supplies of water. There is no water shortage, only a shortage of creative policies to increase water supply.

California has 163,000 square miles of land, and less than one-fourth of that land is prime agricultural land. In fact, the absolute prime farmland is less than one-tenth of that amount. It is an absurd falsehood to state that new suburbs, even if they’re built to house another 10 million residents, are going to use up all of California’s open land. There is no shortage of land.

California sits on the Monterey shale formation, a massive onshore deposit of oil and gas that could yield tens of billions of barrels of oil. If California permitted safe extraction of in-state natural gas and built natural gas power plants to generate more electricity, their electricity would be cheap and affordable instead of the highest priced in America. There is no shortage of energy.

Public sector unions, the senior partners in California’s leftist coalition, love the doctrine of scarcity. When no tax revenue goes into infrastructure spending, there’s more money available to keep their pension systems solvent. Endlessly appreciating asset values thanks to artificial scarcity also helps the pension funds which invest in these assets. And when home prices are stratospheric, property tax revenue also helps pay their bloated compensation. Ironically, if these public servants made less, it would help free public investment in infrastructure to lower the cost-of-living so they wouldn’t have to make so much to live and work there.

California’s left-wing oligarchy distracts voters with unfounded panic over environmental concerns, as if Californians, of all people, cannot figure out how to safely build up water infrastructure, energy extraction, and new home construction. Public funds, and, more significantly, unleashed private funds and private investment via regulatory reform, could easily facilitate abundant supplies of water, energy, and housing.

The trump card used to stifle dissent, however, is the threat of “climate change,” wherein virtually any development, anywhere, is alleged to contribute to “greenhouse gas emissions.” California’s left-wing oligarchy has convinced the average Californian that anyone who even questions these theories is either morally bankrupt or mentally unhinged. All development projects must tip-toe around the beast of climate change, which in practical terms means only permitting ultra-high density housing and rationing of energy and water.

If that trump card isn’t sufficient, and it usually is, the other trump card wielded by California’s left-wing oligarchs is to completely change the subject, and convince millions of voters that the only thing really worth thinking about are issues of race and gender discrimination—concerns that have far less basis in fact than the reality of California being totally unaffordable. And they are laughing all the way to the bank.

About the Author:

Ed Ring
Edward Ring co-founded the California Policy Center in 2010 and served as its president through 2016.