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California Dreaming, Chapter 2

It’s been a picture postcard perfect day out here on the central coast of California, with a large pod of humpback whales frolicking out in the ocean right in front of me (video coming shortly), so I’ve neglected the keyboard most of the day.  California enjoys what economists call “exploitable asymmetries,” which means California’s climate and topography enable liberals to get away with more idiotic stuff than interior states, because people are willing—up to a point—to pay more and tolerate more bad government to live here.  The trouble is, California has long ago left the zone of equilibrium, and is now struggling to see if it can claw its way back.  So far it’s not going very well.

One of the great glories of California in the mid-20th century was the fact that growth liberals, like Jerry Brown’s dad, Gov. Pat Brown, built stuff.  Lots of stuff.  Especially highways, water projects, and public universities.  Stuff middle class people could use, unlike Jerry’s stupid high speed rail project and expensive boutique energy projects.  Anyone with a little gumption and halfway decent grades could attend a relatively decent public state college almost for free.  Not any more: under the rule of liberalism, tuition at our formerly low cost university system has soared, and now you can’t even get in.  Several state universities have stopped admitting in-state residents to graduate programs in favor of out-of-state and international students for the most craven of reasons—they pay even higher tuition rates, and the university system wants to fill is classrooms with out of state students to balance their bloated budgets.  Another epic failure of liberalism—a system meant to favor in-state California citizens now discriminates against them.

Meanwhile, how far underwater is the state’s pension liability?  CalPERS says it is “only” around $162 billion.  That might be manageable with a return to economic growth and some trims in future benefits, etc.  But what’s the real figure?  How about $884 billion?  That’s the possibility raised in this piece by Autumn Carter of California Common Sense and flagged by our friends at Hoover.  The difference is actually quite simple to explain.  What discount rate (or annual rate of return on assets) should we expect in the real world?  CalPERS assumed 7.5 percent for a long time, and has averaged an annual return of 5.5 percent for the last decade, and did only 1 percent last year.  A more realistic rate, in today’s market, of 3.8 percent, yields the $884 billion unfunded liability figure.  Here’s the chart:

Meanwhile, the Esalen Institute, discussed here back in June, is in the news again.  Last time it was USA Today.  Now the New York Times has noticed that New Age is looking Old School:

But others, including people formerly and currently associated with Esalen, say it is losing its relevance in a culture where New Age has become a cliché. The retreat’s half-century anniversary has coincided with continuing protests over the layoff of longtime employees as part of a management restructuring. Staff members and others have gathered in circles of silence here; on the Internet, including on a site called Esaleaks, other protesters have assailed Esalen’s management as corporate types bent on transforming the retreat into a boutique resort.

Losing its relevance?  Did it ever really have any relevance?  Esalen has been about as relevant as Al Gore’s CurrentTV.  And there are times when I think I’m reading an Evelyn Waugh novel:

David Price, the son of Dick Price, a co-founder of Esalen who was killed by a falling boulder while meditating here in 1985, said the worry that this place would become just another luxury resort was a perennial one.

Oh-kay.

The exit passage is just as good:

“I’m very interested in the Mayan prophecies,” Ms. Werning said.

It had become dark by the time the Mayan shaman began wrapping up his talk on the return of Kukulkan. Innumerable stars lit up the sky above Esalen, and the Milky Way shone so clearly that it seemed within everyone’s grasp.

“Please close your eyes,” the shaman said, instructing his listeners to invoke Kukulkan. “Breathe in, breathe out.”

“Ku-kul-kan,” he said, pronouncing each syllable separately and banging slowly on a drum as his listeners repeated after him. “Ku-kul-kan.”

Soon, the chanting and drumming grew faster and louder, building into a frenzy with cries of “Kukulkan!”

“Breathe in,” the shaman said, “breathe out.”

Do I have to promise not to burst out laughing when I breathe out?

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