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Just how much ink needs to be spilled about how California and Bay Area are doomed. I have probably read a hundred article over the last 15 years predicting the

by dmode 8y ago

Just how much ink needs to be spilled about how California and Bay Area are doomed. I have probably read a hundred article over the last 15 years predicting the demise of both, but in reality the exact opposite happens as California and Bay Area economy continue to crush the rest. The gap between SF and rest of the country when it comes to venture investment has actually grown as the cost of living has gone up. For example, in 2018, $45bn was invested in Bay Area startups whole only $1.5bn was invested in Austin and even less in Denver, Utah etc. It is not even close. Weirdly, the other fast growing tech regions are similar to California - expensive, dense, and left leaning (NYC, Boston, Seattle). Maybe this time the prediction will be true, but I am willing to take a large bet against it. And this is because several things, but the primary reason is that California continues to overindex it's policies towards people, while other competing states overindex on business friendliness. But in the knowledge economy, a thirivng talent market is far more relevant to a business than some tax breaks. If you can't execute and be profitable, what's the point of a tax break. California optimizes for people through various mechanisms - non competes, inclusivity, diversity, environment, labor protection, safety net etc. If a place is great for people, it is great for business.

aylmao 8y ago
> I have probably read a hundred article over the last 15 years predicting the demise of both, but in reality the exact opposite happens as California and Bay Area economy continue to crush the rest. Maybe I just wasn't paying attention before, but I've read a lot about it lately, especially in the context of New York being the next Silicon Valley. I feel like this was especially true when Amazon was considering it as a location for HQ2, but even now that it's not I keep seeing NYT articles about NYC being #2 in tech (ignoring Seattle, for example) and how it's definitely gonna surpass SV at some point because it's "a so much better place to live", has "so many more creative professionals", etc. This article doesn't say it outright, but it kinda alludes to it making NYC the primary example it compares The Bay against.
- freddie_mercury 8y ago
  Here's one that is 8 years old: https://www.city-journal.org/html/cali-business-get-out-13419.html https://www.city-journal.org/html/cali-business-get-out-1341... Here's one that is 11 years old: http://articles.latimes.com/2008/dec/18/business/fi-leaving-california18 http://articles.latimes.com/2008/dec/18/business/fi-leaving-... Here's one that is 14 years old: https://www.ppic.org/press-release/are-businesses-fleeing-california-myth-busting-study-says-no/ https://www.ppic.org/press-release/are-businesses-fleeing-ca... Here's one from 24 years ago: https://www.nytimes.com/1995/03/29/us/a-changing-california-emerges-from-recession.html https://www.nytimes.com/1995/03/29/us/a-changing-california-...
  - dmode 8y ago
    Thanks for the article links that underscores my point. Somehow businesses are always fleeing California and we have the worst business climate, while at the same time becoming the fifth largest economy of the world, home to 3 of the 5 most valuable companies in the world, and home to the next set of valuable startups.
temp1928384 8y ago
CA and Bay Area will be fine, economically speaking, but at least from my perspective we've already reached a tipping point where it's become so expensive for your average family that it's created this strange, dystopian atmosphere (in SF) where you have obscene wealth next to in-your-face poverty, there are basically no kids because no one can afford to raise families here, streets downtown are lined with human feces and used needles, $1m gets you a small 1-bedroom fixer upper in a bad area, diversity (in profession/race/ages) is extremely limited, and people are generally stretched/anxious due to cost of living.
- knn 8y ago
  Obscene wealth next to in your face poverty is nothing new, nor particularly special about SF. I don't deny it's a big problem, but this is pretty much what every major city wrestles with. Nor is this unique to our time period. For example, it's well documented that in Paris through as early as the 1700's through now, that there was an enormous amount of capital concentration right beside extreme poverty and >40% of the population owning net nothing. 'Dystopian' is also a very dramatic language.. Where do you live in SF? If you live in downtown or soma and only spend time there, I can see what you mean. However if you go out to richmond or sunset for example, there are a lot more families and children there.
  - temp1928384 8y ago
    It's different in SF. The homeless are much more "in your face" than in any other city I've been to by a long shot e.g. in NYC the homeless mostly keep to themselves and aren't very aggressive in my experience. In SF they are very aggressive, many with mental issues, talking to themselves or yelling at others, and appear to be on drugs. I've never visited a city where they are so many homeless who are simply passed out in the middle of the sidewalk on the hard ground with people in suits stepping over them downtown. It's also more "visible" because services that cater to homeless are all located downtown. I live in Castro, but obviously like many spend a lot of time downtown for work. Sure, there are families in the outer neighborhoods, but it's different in the sense that those are mostly families that have lived in SF for generations. Good luck trying to raise a family as a newcomer on the reported median household income for SF of ~$78k.
phamilton 8y ago
> California optimizes for people through various mechanisms Except for high personal income tax, school funding, cost of living (food costs, utility costs, etc are all heavily affected by public policy), regressive consumption taxes (like the fuel tax), high sales tax, poor public transportation, and so on. It certainly doesn't feel like California is trying to optimize for people.
- rcpt 8y ago
  It's optimizing for long time Californian land owners, cf. Props 13, 8, 58, 60, 90, 193, 218, 39, 26. Direct democracy has the Native Sons of the Golden West building thier economic wall around the state ten feet higher every election. I don't see any way out without federal intervention.
negativez 8y ago
It's worth noting that $45bn of funding in the Bay Area probably only goes as far as $15bn would in Austin. Companies are indirectly paying their employees' housing costs after all. I'd like to see numbers by per-company and per-employee funding, adjusted for purchasing power.
TrackerFF 8y ago
It must be mentioned that SF housing prices - i.e price for median homes - are now nearing levels where regular people may never be able to pay off their mortgage. And these homes are increasing 15% in price, every year. That is, IMO, very dramatic.

by dmode 8y ago

aylmao 8y ago

> I have probably read a hundred article over the last 15 years predicting the demise of both, but in reality the exact opposite happens as California and Bay Area economy continue to crush the rest. Maybe I just wasn't paying attention before, but I've read a lot about it lately, especially in the context of New York being the next Silicon Valley. I feel like this was especially true when Amazon was considering it as a location for HQ2, but even now that it's not I keep seeing NYT articles about NYC being #2 in tech (ignoring Seattle, for example) and how it's definitely gonna surpass SV at some point because it's "a so much better place to live", has "so many more creative professionals", etc. This article doesn't say it outright, but it kinda alludes to it making NYC the primary example it compares The Bay against.

freddie_mercury 8y ago
Here's one that is 8 years old: https://www.city-journal.org/html/cali-business-get-out-13419.html https://www.city-journal.org/html/cali-business-get-out-1341... Here's one that is 11 years old: http://articles.latimes.com/2008/dec/18/business/fi-leaving-california18 http://articles.latimes.com/2008/dec/18/business/fi-leaving-... Here's one that is 14 years old: https://www.ppic.org/press-release/are-businesses-fleeing-california-myth-busting-study-says-no/ https://www.ppic.org/press-release/are-businesses-fleeing-ca... Here's one from 24 years ago: https://www.nytimes.com/1995/03/29/us/a-changing-california-emerges-from-recession.html https://www.nytimes.com/1995/03/29/us/a-changing-california-...
- dmode 8y ago
  Thanks for the article links that underscores my point. Somehow businesses are always fleeing California and we have the worst business climate, while at the same time becoming the fifth largest economy of the world, home to 3 of the 5 most valuable companies in the world, and home to the next set of valuable startups.

temp1928384 8y ago

CA and Bay Area will be fine, economically speaking, but at least from my perspective we've already reached a tipping point where it's become so expensive for your average family that it's created this strange, dystopian atmosphere (in SF) where you have obscene wealth next to in-your-face poverty, there are basically no kids because no one can afford to raise families here, streets downtown are lined with human feces and used needles, $1m gets you a small 1-bedroom fixer upper in a bad area, diversity (in profession/race/ages) is extremely limited, and people are generally stretched/anxious due to cost of living.

knn 8y ago
Obscene wealth next to in your face poverty is nothing new, nor particularly special about SF. I don't deny it's a big problem, but this is pretty much what every major city wrestles with. Nor is this unique to our time period. For example, it's well documented that in Paris through as early as the 1700's through now, that there was an enormous amount of capital concentration right beside extreme poverty and >40% of the population owning net nothing. 'Dystopian' is also a very dramatic language.. Where do you live in SF? If you live in downtown or soma and only spend time there, I can see what you mean. However if you go out to richmond or sunset for example, there are a lot more families and children there.
- temp1928384 8y ago
  It's different in SF. The homeless are much more "in your face" than in any other city I've been to by a long shot e.g. in NYC the homeless mostly keep to themselves and aren't very aggressive in my experience. In SF they are very aggressive, many with mental issues, talking to themselves or yelling at others, and appear to be on drugs. I've never visited a city where they are so many homeless who are simply passed out in the middle of the sidewalk on the hard ground with people in suits stepping over them downtown. It's also more "visible" because services that cater to homeless are all located downtown. I live in Castro, but obviously like many spend a lot of time downtown for work. Sure, there are families in the outer neighborhoods, but it's different in the sense that those are mostly families that have lived in SF for generations. Good luck trying to raise a family as a newcomer on the reported median household income for SF of ~$78k.

phamilton 8y ago

> California optimizes for people through various mechanisms Except for high personal income tax, school funding, cost of living (food costs, utility costs, etc are all heavily affected by public policy), regressive consumption taxes (like the fuel tax), high sales tax, poor public transportation, and so on. It certainly doesn't feel like California is trying to optimize for people.

rcpt 8y ago
It's optimizing for long time Californian land owners, cf. Props 13, 8, 58, 60, 90, 193, 218, 39, 26. Direct democracy has the Native Sons of the Golden West building thier economic wall around the state ten feet higher every election. I don't see any way out without federal intervention.

negativez 8y ago

It's worth noting that $45bn of funding in the Bay Area probably only goes as far as $15bn would in Austin. Companies are indirectly paying their employees' housing costs after all. I'd like to see numbers by per-company and per-employee funding, adjusted for purchasing power.

TrackerFF 8y ago

It must be mentioned that SF housing prices - i.e price for median homes - are now nearing levels where regular people may never be able to pay off their mortgage. And these homes are increasing 15% in price, every year. That is, IMO, very dramatic.