Wednesday, February 12, 2014

California, My California

1969 Ford Falcon
I moved to California, with my bride, in 1971. We crossed the Great Plains and the Rocky Mountains in a 1969 Ford Falcon (Metallic Green) towing a trailer full of marriage gifts and hope. We bought a new tire in Flagstaff, Arizona because someone at a gas station cut the sidewall. We saw Las Vegas when there were just a few "BIG" casinos on the strip and, when we crossed into California on I-15 in the Mojave Desert, there were 19,971,069 citizens in the Golden State. Most arrived the way we did, now they arrive by plane from places we have never heard of.

Now there are now 38,041,430 Californians, twice as many as in 1971. The game of demographics is fun and leaves one scratching their collective head. The region that surrounds San Francisco has grown exponentially. San Jose is now the second largest city in the state, towns that were counted in thousands are now tens of thousands, even hundreds, yet San Francisco has about 825,111 people (2% of the population), in 1971 it had 720,000 (3.6%). It's now become an adult Disneyland. Church's are closing, schools are closing, the streets are a mess, and home and apartment prices are higher than anywhere except maybe London.

In the other parts of the country Michigan's population in 1970 was 8,881,826; in 2010 it was 9,883,701, a growth of 1 million. Illinois in 1970, the state I left, was 11,110,285 and by 2010 had added 1.7 million. Both with about 10% growth. Overall the United States population in 1970 was 203,392,031, in 2010 in had grown by 33% to 308,745,538.

Why California? The post World War II growth of the state is unprecedented in America and most probably the world as well. The reason, most undoubtedly, is it's weather. For my readers in most of the rest of the US just look out your window – here, today in Northern California it will be 65 degrees and sunny and even thought there is a drought, this too will pass. Texas had one, the southeast had one, and parts of the Midwest had one. Inconvenient yes, Dust Bowl, Grapes of Wrath result – no. Weather is huge! It's attitude, it's convenience, and it's cost savings. We whine when it rains (or used to), and heaven forbid it gets below 30. Yes we are a state wimps and crybabies – with cancer prone tans.

This California Attitude lead to excesses by the state and local governments with pensions and salaries, but that is being corrected. It also led to a creative blast that changed the world – Silicon Valley. My wife calls it Silicone Valley – she may be more correct. I remember clearing prune orchards in the valleys west of San Jose for housing neighborhoods twenty years before Apple's headquarters dropped in across the street (and taking one of the last orchards). Millions of everything has been built in the region, manufacturing, research, retail, and office square footage. Southern California has grown to the east of LA so far that Palm Springs seems like a suburb of Riverside. The same with Sacramento and the south Central Valley – its growth has been in spurts (some disastrous), but growth nonetheless.

But critical issues remain as the state grows to 50 million people (and 15% of the country's population). Water is without a doubt the most critical both for agriculture as well as domestic use. Great strides in reuse (grey water) are helping especially in newer communities. So has the ongoing management in agriculture's usage with improved irrigation distribution and storage. But obviously more need's to be done – a lot more. Costs will be high but grey water systems need to be put into the older urban areas of LA, San Jose, and San Francisco. And more reservoirs and damns need to be built – especially in the far north of the state. Then again if Canada was smart they would plan, in addition to oil being pipelined to New Orleans for processing, piping crystal clear and clean drinking water from British Columbia, Canada at $100 a barrel (that's about $3.00 a gallon, in volume on par with oil). And how could you fight this kind of pipeline, won’t explode or pollute – just water the flowers if it cracked?

The current big battle of egos and dollars is the High Speed Rail – I've written extensively about this. One note to think about – in the WSJ today there was a short article that the airline industry may start flying their bigger jets with 300 plus seats between high volume short-haul airports because of the paucity of landing slots. One plane - almost twice as many people. This is how markets deal with demand not by assuming a 100 billion dollar debacle will fix a transportation problem. In future California, time will be an even more valuable commodity.

Another addendum before closing: One of my favorite writers on all things economic is John Mauldin GO HERE, his newsletter is free and his advice and insight priceless. In today's missive he calls out an article by Morgan Housel at Motley Fool titled "50 Reasons We're Living Through the Greatest Period in World History."    Here's a taste for you cynics:

4. In 1949, Popular Mechanics magazine made the bold prediction that someday a computer could weigh less than 1 ton. I wrote this sentence on an iPad that weighs 0.73 pounds.
5. The average American now retires at age 62. One hundred years ago, the average American died at age 51. Enjoy your golden years — your ancestors didn't get any of them.
6. In his 1770s book The Wealth of Nations, Adam Smith wrote: "It is not uncommon in the highlands of Scotland for a mother who has borne 20 children not to have 2 alive." Infant mortality in America has dropped from 58 per 1,000 births in 1933 to less than six per 1,000 births in 2010, according to the World Health Organization. There are about 11,000 births in America each day, so this improvement means more than 200,000 infants now survive each year who wouldn't have 80 years ago. That's like adding a city the size of Boise, Idaho, every year. 
7. America averaged 20,919 murders per year in the 1990s, and 16,211 per year in the 2000s, according to the FBI. If the murder rate had not fallen, 47,000 more Americans would have been killed in the last decade than actually were. That's more than the population of Biloxi, Miss.

Get the rest HERE.

Stay Tuned . . . . . . . . .

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