Rod Dreher links to this dyspeptic piece by Joel Kotkin about the economic and political failure of California and calls out identity politics as a driver of this failure:

I thought Thomas Frank told us that only conservatives in states like Kansas voted on social issues, often against their own economic interests. So liberal Californians do it too. Imagine that.

As a long-standing hater of identity politics on both the right and left, I nod my head vigorously. But I bear a message of (partial) hope.

California may be in the process of transition from being a competitive two-party state to a one-and-a-half party state. In general, I think being a competitive two-party state is better – both a sign and a driver of political health. But, living as I do in a one-and-a-half party state, I can say that you can make things work.

What happens, basically, is that the legislature becomes the brokerage house for the various interest groups that dominate the overwhelming majority party. This creates an opening for the opposition party to seize control of the executive, on the banner of protecting the general interest from the depredations of the special interests. The problem is that the opposition party, because it cannot wield real power in the legislature, can’t build an infrastructure for a real party statewide. So it becomes the vehicle for a series of more or less high-profile individuals who can carry a statewide campaign. The pressure from this outside force, in turn, forces the majority party to, occasionally, offer up a candidate from its own reform wing in order to be competitive on a statewide level with a reform-minded opposition.

This dynamic is basically why Democrats tend to lose the mayoralty of New York (in spite of the fact that there are, to a first approximation, no Republicans in New York City), why Deval Patrick is the first Democratic governor of Massachusetts since Michael Dukakis, etc. Identity politics on a small-scale matters enormously in such a politics, but on a grand culture-war scale it almost fades away. The Schwarzenegger Administration in California may have been a harbinger of a similar future for that state.

The good news is that while the one-and-a-half party state isn’t a great political setup, it can work well enough. The bad news is that the states I’m comparing California to are mature, slow-growing states; implicitly, I’m accepting that California has matured, and is no longer the overwhelming locus of natural growth in the United States. (The United States itself may well be maturing similarly.) Or maybe that’s not bad news; don’t call it “maturity” – call it “the best years of your life.”

The worse news is that California has a uniquely screwy referendum system that may make it difficult for a one-and-a-half party state to function – because the strength of the executive should come from its ability to speak for “the whole people” and negotiate with the legislature from that position of strength, but if the people speak for themselves regularly via referendum then this ability is constantly undercut.

Apropos of the original Kotkin article: he praises a series of regions – the Gulf coast, the High Plains, the Southeast – for being more competitive by being low-cost (cheap land and cheap labor). It’s worth pointing out that California can only compete on land prices by increasing density, something Kotkin deplores elsewhere in his article), and you can only compete on labor costs by driving down wages, which doesn’t sound like a great development strategy to me. Looking at, on the one hand, regulatory encumbrances on development and, on the other, how to make essential public services more efficient, would seem to be much more promising avenues to explore. Exactly the kinds of things that have been the focuses of “reform” candidates in places like New York and Massachusetts.

Looking at a list of unemployment rates by state, my first impression is that two variables – proximity to Canada and percentage of the state economy involved in the oil and natural gas industries – explain much of the variance in unemployment. North Dakota, on the Canadian border and in the midst of a shale boom, has the lowest unemployment rate in the nation (3.0%); the highest rate (12.0%) is suffered by Nevada. With 11.0% unemployment, there’s clearly something the matter with California that isn’t wrong with neighbors Oregon or Arizona (each at 8.6% – each state is much smaller, of course, but Oregon and Arizona have many things in common with northern and southern California respectively). But I also wonder “what’s the matter with Idaho and Rhode Island?” whose unemployment rates also seem out of line with comparable neighbors. (Idaho = 7.9%, versus 5.8% for Utah, 5.3% for Wyoming, 6.2% for Montana; Rhode Island = 11.0%, versus 6.5% for Massachusetts, 7.7% for Connecticut, 7.2% for Maine.)