Saturday, July 31, 2021

Bemoaning the loss of the Mythic California Dream: How can so many not know what Steinbeck knew?

    The California Dream is the psychological motivation to gain fast wealth or fame in a new land. As a result of the California Gold Rush after 1849, California's name became indelibly connected with the Gold Rush, and fast success in a new world became known as the "California Dream". California was perceived as a place of new beginnings, where great wealth could reward hard work and good luck. ...Overnight, California gained the international reputation as the "golden state"—with gold and lawlessness the main themes. - from Wikipedia

A curious narrative is being reported and repeated in news stories such as The California Dream Is Dying offered in The Atlantic. No, the "California Dream" is not dying. It is a 170-year-old myth sold to gullible people. As further explained in that Wikipedia entry:

    Generations of immigrants have been attracted by the California Dream. California farmers, oil drillers, movie makers, aerospace corporations and "dot-com" entrepreneurs have each had their boom times in the decades after the Gold Rush.
    Part of the "California Dream" was "that every family could have its own private home."
    As historian Kevin Starr has pointed out, for many if not most migrants to the golden state, "the dream outran the reality." The Okies of the 1930s "found their California dream transformed into a nightmare,' notes Walter Stein. As a result, "the California Dream is a love affair with an idea, a marriage to a myth."

If you read John Steinbeck's The Grapes of Wrath you get a good picture of the disappointment experienced by The Okies of the 1930's. But his other writings make clear that the current climate "change" called a drought is a good example of the myth as explained in 2017 here in Foolish planning and the inevitable wildfires: What could have been learned from John Steinbeck about California's true climate. That post expanded on a 2014 post To A God Unknown: Steinbeck, Stine, and Medieval California. Both those were based on what Steinbeck wrote in his 1933 novel To A God Unknown. But the following from East of Eden offers a direct view of California's climate:

Now the problem is exacerbated with something we have labeled "Climate Change" which for California means even drier made more disastrous fires because too many people live in California.

And a significant part of California's wealth is large agriculture dependent entirely on a water supply propped up by federal and state facilities, all of which is collapsing around us as the reservoirs go dry.

The drought is just one piece of the myth gone wrong. There is the the 20th Century housing myth.

Yes, we did have a huge housing boom after WWII. But it wasn't something that just happened. Compounding the California Dream myth, the federal government established funding mechanisms for building thousands of new homes to be purchased by people who would not have otherwise been able to afford them at the time. This was done through loan guarantees from the Federal Housing Administration and the Veterans Administration. From Wikipedia:

    During the Great Depression many banks failed, causing a drastic decrease in home loans and ownership. At that time, most home mortgages were short-term (three to five years), with no amortization, and balloon instruments at loan-to-value (LTV) ratios below sixty percent.[4] This prevented many working and middle-class families from being able to afford home ownership. The banking crisis of the 1930s forced all lenders to retrieve due mortgages; refinancing was not available, and many borrowers, now unemployed, were unable to make mortgage payments. Consequently, many homes were foreclosed, causing the housing market to plummet. Banks collected the loan collateral (foreclosed homes) but the low property values resulted in a relative lack of assets.
    In 1934 the federal banking system was restructured. The National Housing Act of 1934 created the Federal Housing Administration. Its intention was to regulate the rate of interest and the terms of mortgages that it insured; however, the new practices were restricted only to white Americans. These new lending practices increased the number of white Americans who could afford a down payment on a house and monthly debt service payments on a mortgage, thereby also increasing the size of the market for single-family homes.
    Since 1934, the FHA and HUD have insured almost 50 million home mortgages. Currently, the FHA has approximately 8.5 million insured single family mortgage, more than 11,000 insured multifamily mortgages, and over 3,900 mortgages for hospitals and residential care facilities in its portfolio.

This is what many think is the California Dream - housing funded by a federal program. Much like the Gold Rush, it was a myth-expanding reality though the federal government action did make far more new Californians "richer" than the Gold Rush did. And then those Californians adopted Proposition 13 putting a fence around their federally created wealth.

If you reread the first quote in this post you will note that "gold and lawlessness" were the main themes of the California Dream. Gold has been replaced, apparently by bitcoin, but lawlessness (defined as "being without law; uncontrolled by a law; unbridled; unruly; unrestrained") continues in the technology boom.

Probably more of the critical narrative appearing in print today is that folks migrating into California are not finding the economic promise of the Mythic California Dream. Housing? If you do a little research you will learn that in the 20th Century a multitude of cities were incorporated in California within which thousands of those federally funded homes were built. That incorporation of new cities stopped in 2000. The reason is simple - new cities must be allocated natural resources that are not available because there aren't enough to support even the existing economic structure.

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