University of California, Crown Jewel of Education, Struggles With Cuts - NYTimes.com

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By TAMAR LEWIN

BERKELEY, Calif. — As the University of California struggles to absorb its sharpest drop in state financing since the Great Depression, every professor, administrator and clerical worker has been put on furlough amounting to an average pay cut of 8 percent.

In chemistry laboratories that have produced Nobel Prize-winning research, wastebaskets are stuffed to the brim on the new reduced cleaning schedule. Many students are frozen out of required classes as course sections are trimmed.

And on Thursday, to top it all off, the Board of Regents voted to increase undergraduate fees — the equivalent of tuition — by 32 percent next fall, to more than $10,000. The university will cost about three times as much as it did a decade ago, and what was once an educational bargain will be one of the nation’s higher-priced public universities.

Among students and faculty alike, there is a pervasive sense that the increases and the deep budget cuts are pushing the university into decline.

The budget cuts in California, topping $30 billion over the last two years, have touched all aspects of state government, including health care, welfare, corrections and recreation. They have led to a retrenchment in state services not seen in modern times, and for many institutions, including the state university system, have created a watershed moment.

The state’s higher education budget has been slashed by $2.8 billion this year, including $813 million from the university system — about the equivalent of New Mexico’s entire higher education budget.

“Dismantling this institution, which is a huge economic driver for the state, is a stupendously stupid thing to do, but that’s the path the Legislature has embarked on,” said Richard A. Mathies, dean of the College of Chemistry here at Berkeley, long the system’s premier campus. “When you pull resources from an institution like this, faculty leave, the best grad students don’t come, and the discoveries go down.”

As the litany of cuts continues, there is a growing worry that senior faculty members may begin to defect. In fact, some colleges around the nation have begun identifying funds to use to recruit U.C. professors.

Since California adopted a master plan for higher education in 1960, the state has been, in the words of the historian Kevin Starr, “utopia for higher education.” Eight of the 10 University of California campuses — all but Merced and San Francisco — are in the top 100 in this year’s U.S. News & World Report’s rankings. But maintaining that edge, without resources, is difficult.

In 2004, international rankings by the London-based Times Higher Education named Berkeley the No. 2 research university in the world, behind only Harvard. This year, Berkeley plummeted to No. 39, mostly because of its high faculty-to-student ratio. The other international rankings, by Shanghai Jiao Tong University, rated Berkeley No. 3 this month.

Patrick M. Callan, president of the National Center for Public Policy and Higher Education, a nonpartisan group that promotes access to higher education, said that while public universities in many states were facing financial problems, California was in a class by itself.

“In most states, it’s the economy, and you can say that in a couple of years, it will bounce back,” Mr. Callan said. “But in California, it’s really part of a significant retrenchment of the whole public sector. If the perception is that it’s going to be chronic, and people give up on California, the pre-eminence of Berkeley and U.C.L.A. would be in danger.”

No wonder, then, that people like Bruce Fuller, a Berkeley professor of education and public policy, are asking themselves whether it is time to move on.

As co-director of the Institute for Human Development, an interdisciplinary research group that suffered big cuts, Mr. Fuller worries that the unit is losing its intellectual excitement and its ability to support his grant proposals. Then, too, he lost his two best graduate students last year to Stanford.

“To stay on top, you need to be bringing in new people,” Mr. Fuller said. “And I’m not sure how many of my most stimulating colleagues will still be here in three years.”

So although he was not swayed last year when the University of North Carolina came calling, Mr. Fuller said, he may be more receptive this year.

Formerly taboo ideas, like allowing U.C.L.A. and Berkeley to charge substantially more than other campuses, or even eliminating the research mission at some of the newer campuses, are being put forward. Many here seem to be in a state of shock that things have been allowed to get so bad at one of the nation’s leading public research universities, one with a long tradition of excellence. Berkeley faculty, past and present, have won 21 Nobel prizes. And last month, two of the 24 MacArthur fellowship grants went to a Berkeley computer scientist and a molecular biologist.

Students, professors and union workers alike say the state’s 20 percent cutback in financing imperils the system’s ability to provide a top-quality education to all qualified California students, particularly those from low-income families, who make up almost a third of the university’s student body.

Mark Yudof, the university system president, has created a commission that will make recommendations next spring on the future size and shape of the system. Just about everything seems to be on the table. There is even talk of creating an online “11th U.C. campus,” to bring in new revenue by offering courses — and degrees — to qualified students in other states and countries.

As support from the state dwindles, it is inevitable that the university will begin to look more like a private institution. The proportion of out-of-state students will rise next year: at Berkeley, almost a quarter of the freshmen admitted for next year will be international or out-of-state students.

And, as at private universities, student fees are rising rapidly, balanced, in large part, by bigger aid packages for low- and middle-income students. Across the 10 campuses, instructional budgets are being reduced by $139 million, with 1,900 employees laid off, 3,800 positions eliminated and hiring deferred for nearly 1,600 positions, most of them faculty.

Mr. Yudof rejects suggestions to retrench, like adopting a two-tiered system in which the Santa Cruz, Riverside and Merced campuses would be teaching institutions and no longer focus on research.

“My mission is to defend, protect, enhance and grow the University of California,” Mr. Yudof said. He added that he hoped the current measures would be enough to get the system back on track.

But that may not be the case. Just to fend off further cuts, he said, the state will need to add nearly $900 million to the university’s budget next year.

Whatever that budget looks like, Mr. Yudof said, there will be no more furloughs. “It’s too demoralizing,” he said.

This year, the University of Texas lured three senior faculty members from the University of California, among them William F. Hanks, and his wife, Jennifer Johnson-Hanks, both anthropologists.

“Last spring, when we made the decision, there were issues, but the budget hadn’t quite slammed down to the extent it has since then,” Mr. Hanks said. “It looks a lot bleaker now.

“But in our case, it wasn’t so much wanting to leave Berkeley as wanting to come to U.T. Surprisingly, there’s more intellectual excitement and dynamism here. The department is growing and expanding, and we’re part of a cohort of new people, which is a fabulous feeling, fraught with potential.”

Meanwhile, back in his old department at Berkeley, things are tight — and no replacements can be hired. “Our biological anthropology course, which is required for psych majors, used to be offered every semester,” said Meg Conkey, an archeology professor, “and now it’s just spring semester, and probably there will be students who don’t get in.

“We just don’t have as many people to draw from, and we’re likely to have three retirements coming up,” she said. For undergraduates, the budget cuts are creating new strains about graduating in four years. Classes will be larger and teaching assistants fewer, and already, dozens of students have been unable to register for sections of introductory chemistry courses.

“Last semester, I couldn’t get into a lab section for Chem 3A,” said Nawal Siddiqui, a bioengineering major who hopes to go to medical school. “So now I’m taking Chem 3B lectures, with the labs for Chem 3A. It’s kind of hard.”

The chancellor of Berkeley, Robert J. Birgeneau, expresses optimism that more money can be saved without cutting into the educational muscle of the university. “If the budget doesn’t get worse,” he said, “we can recover in two years.”

Dr. Birgeneau tells of a recent meeting with a student leader, who said students were most unhappy about the decision to end Berkeley’s tradition of keeping the library open 24 hours during finals, and an hour later, a parent meeting where he mentioned that complaint — and immediately got a $30,000 pledge to pay for round-the-clock library access during finals.

“If they keep cutting, it’ll take us longer to recover,” Dr. Birgeneau said. “But Berkeley can always recover.”

California: Golden State Is Thriving, Despite Its Woes - TIME

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by Michael Grunwald

California, you may have heard, is an apocalyptic mess of raging wildfires, soaring unemployment, mass foreclosures and political paralysis. It's dysfunctional. It's ungovernable. Its bond rating is barely above junk. It's so broke, it had to hand out IOUs while its leaders debated how many prisoners to release and parks to close. Nevada aired ads mocking California's business climate to lure its entrepreneurs. The media portray California as a noir fantasyland of overcrowded schools, perpetual droughts, celebrity breakdowns, illegal immigration, hellish congestion and general malaise, captured in headlines like "Meltdown on the Ocean" and "California's Wipeout Economy" and "Will California Become America's First Failed State?" (

Actually, it won't.

Ignore the California whinery. It's still a dream state. In fact, the pioneering megastate that gave us microchips, freeways, blue jeans, tax revolts, extreme sports, energy efficiency, health clubs, Google searches, Craigslist, iPhones and the Hollywood vision of success is still the cutting edge of the American future — economically, environmentally, demographically, culturally and maybe politically. It's the greenest and most diverse state, the most globalized in general and most Asia-oriented in particular at a time when the world is heading in all those directions. It's also an unparalleled engine of innovation, the mecca of high tech, biotech and now clean tech. In 2008, California's wipeout economy attracted more venture capital than the rest of the nation combined. Somehow its supposedly hostile business climate has nurtured Google, Apple, Hewlett-Packard, Facebook, Twitter, Disney, Cisco, Intel, eBay, YouTube, MySpace, the Gap and countless other companies that drive the way we live. (See pictures of California First Lady Maria Shriver.)

"Whenever we have a problem, everyone makes a big drama — 'Oh, my God, it's the end. California is over,'" Governor Arnold Schwarzenegger told me. "It's all bogus." Schwarzenegger likes spin and drama too — he's issued warnings about a "financial Armageddon" — and he literally blew smoke in my eyes while we spoke. But his belief in the anything-is-possible dream of California is more than spin; he is, after all, its ultimate embodiment. (See how marijuana is taxed in California.)

California, to borrow a phrase, will be back. It's been stuck in an awful recession — not quite as awful as Nevada's — but it's getting unstuck. It's made nasty cuts to close ugly deficits, but it hasn't had to release prisoners or close parks, and its IOUs are being paid. Its businesses aren't fleeing to Nevada or anywhere else; Jed Kolko, an economist at the Public Policy Institute of California, has shown that fewer than one-tenth of 1% of its jobs leave the state each year. Even California's real problems tend to get magnified by its size. If it were a country, it would be in the G-8. So, yes, California has the most foreclosures and layoffs. With 38 million residents and a $1.8 trillion economy, it also has by far the most homes and jobs.

It can be perilous to generalize about a place this gigantic, an overwhelmingly metropolitan state that leads the nation in agricultural production, a majority-minority state with a white-majority electorate. There are real differences between (crunchy, techy) Northern and (hipster, surfer) Southern California, and especially (richer, denser, bluer) coastal and (poorer, sparser, redder) inland California. But one generalization has held true from the Gold Rush to the human-potential movement to the dotcom boom: California stands for change, for disruption of the status quo. "California is not another American state," concluded Carey McWilliams in his 1949 history California: The Great Exception. "It is a revolution within the states."

Today, it's still the home of the new new thing. It is electric-vehicle start-ups like Tesla, Fisker and Better Place taking on the Big Three, or the local-organic foodies behind California cuisine going after Big Ag. It's Kaiser Permanente, the HMO whose model of salaried doctors in group practice may be the future of health care, or the University of California at Irvine's law school, which opened this semester with free tuition and was instantly more selective than Harvard or Yale. It's SpaceX, the private rocket-launching company, or Kogi, the Korean taco truck that announces its location over Twitter to flash mobs of Angelenos. "The beauty of California is the idea that you can reinvent yourself and do something totally creative," says Kogi's Roy Choi, a former chef at the Beverly Hilton. "It's still the Wild West that way."

California is a state of early adopters — not only in fashion, technology and design but in politics too. Its voters approved huge bonds for stem-cell research, high-speed rail and repairs to aging infrastructure while Washington was dragging its feet; its politicians adopted first-in-the-nation greenhouse-gas regulations, green building codes and efficiency standards for automobiles and appliances that have rearranged the national energy debate. Yes, it was also an early adopter of subprime mortgages — Countrywide, Golden West and IndyMac were all California-based — but life on the frontier has always been risky. "This is the most dynamic place for change on earth," genomic pioneer J. Craig Venter said on a recent tour of his San Diego labs, where researchers are studying ways to convert algae into oil, coal into natural gas and human wastewater into electricity. "That's why we're here." Dressed in shorts, flip-flops and a crazy-loud floral shirt on a typically perfect day, Venter noted that California's quality of life isn't bad either: "It is pretty nice not to have to wear pants."

California has long inspired its own premature obituaries. The 1855 book The Land of Gold dismissed it as "lawless, penniless and powerless." TIME published a woe-is-California issue called "The Endangered Dream" in 1991 after the aerospace industry collapsed. But even with 12% unemployment, California still has an enviably young and productive workforce. And it's still a magnet for dice-rolling dreamers who want to start anew, make money and change the world, with or without pants. "I see my own pattern repeated again and again — people who want to invent the future and aren't afraid to fail," says billionaire Silicon Valley financier Vinod Khosla, an Indian immigrant who helped found Sun Microsystems and recently unveiled a $1.1 billion venture fund for investments in clean technology.

Which just happens to be the next California gold rush.

The New Gold Rush
Tom Dinwoodie is standing on a roof, staring at the future. The roof covers Richmond's grand "daylight factory" overlooking San Francisco Bay, where Ford built Model A's before World War II and then the iconic Rosie the Riveter built jeeps and tanks during the war. Now SunPower Corp. uses it to assemble the world's most efficient solar panels, including a sleek array on its roof. That's where Dinwoodie, SunPower's chief technology officer, likes to go to look across the bay at a collection of hulking tanks in which Chevron stores fossil fuels. If we don't stop global warming, he says, that water will rise. But if solar and other renewables keep growing as fast as they are in California, "we'll turn those tanks into hot tubs."

If you think solar is an eco-fantasy, you probably don't live in California, where rooftop installations have doubled for two years in a row, to 50,000, heading to the state goal of 1 million by 2017. The San Francisco utility Pacific Gas & Electric, which recently bolted the U.S. Chamber of Commerce over climate policy, has 40% of the nation's solar roofs in its territory. SunPower now has more than 5,000 employees. It's building massive power plants for utilities, as well as roof panels for big-box stores, complete subdivisions and individual homes. Prices are plummeting, and competition is fierce, most of it from California firms like BrightSource, Solar City, eSolar, Nanosolar and Solyndra. "The scramble is on, and California is leaps and bounds ahead of the rest of the country," says Dinwoodie. "That's true of all energy issues." (Read a 2003 profile of Arnold Schwarzenegger.)

When it comes to energy, California is not just ahead of the game; it's playing a different game. Its carbon emissions per capita are less than half the U.S. average. And from 2006 to '08, it attracted $3 of every $5 invested in U.S. clean tech — five times as much as the No. 2 state. It's by far the national leader in green jobs, green patents, supply from renewables and savings from efficiency. It's also leading the way toward electric cars, zero-emission homes, advanced biofuels and a smarter grid: its electric utilities plan to install smart meters in every California home. It's even launched a belated battle against car-dependent sprawl, with unprecedented rules forcing communities to consider carbon emissions in their land-use plans.

California has been preparing for its clean-energy future for a long time. Starting in the energy crisis of the 1970s, California revamped its electricity markets so that utilities could make more money by helping their customers use less power. It also began enacting groundbreaking efficiency standards for buildings, appliances, pool heaters and almost anything else that needs juice. It just proposed the first standards for flat-screen TVs. As a result, per capita energy use has remained stable in California while soaring 50% nationwide, saving Californians an estimated $56 billion and avoiding the need for 24 new gas-fired power plants. On the supply side, the state has required utilities to provide one-fifth of their power from renewables by 2010, which will jump to one-third by 2020. And California's soup-to-nuts effort to slash emissions — including a cap-and-trade regimen in 2012 — is the blueprint for federal climate legislation. (Download a PDF on California's industries, labs and technologies.)

This public-sector foresight has created alluring opportunities for the most tech-savvy private sector on earth. The venture capitalists behind the high-tech and biotech booms see clean tech as the next big score. The necessary engineers, scientists, accountants, lawyers, marketers and other knowledge workers are already there. "We've already turned industries on their heads, so we assume we can do it again," says Steve Dolezalek, VantagePoint Venture Partners' managing director, who oversaw the firm's software and life-sciences investments before heading its clean-tech group.

The lines between sectors are blurring fast. As its name suggests, eSolar is essentially a software play; its added value is advanced code that positions vast arrays of mirrors to the millimeter to maximize their exposure to sunlight. The company was spawned by IdeaLab, a Pasadena incubator that developed NetZero, Picasa, pay-per-click ads and online car-selling. "We only do ideas that challenge the status quo, and California is the only place we'd do it," says CEO Bill Gross. (See pictures of San Francisco.)

Chip-industry veterans are also drifting into solar, as well as LED lighting and green materials, while Cisco, which made the guts of the Internet, is pivoting to make the guts of the digitized grid. San Diego's cluster of more than 500 biotech companies is now the world capital of algae-to-fuel experiments, including a new $600 million joint venture between ExxonMobil and Venter's Synthetic Genomics. Khosla's investments include Calera, a carbon-capturing-cement start-up founded by a Stanford expert in medical cement; Amyris, which has Berkeley malaria researchers working to turn sugar into diesel; and Soladigm, which exploits semiconductor-industry expertise to make energy-efficient windows.

California scores poorly in most "business friendly" ratings, which tend to focus on tax rates and wage levels rather than on, say, worker productivity or creativity. And the state has more than its share of no-no-no types protesting nanotechnology, synthetic biology and even some SunPower solar-energy projects, which could possibly imperil kangaroo rats and fairy shrimp. But the state's business culture fetishizes long-shot ventures and game-changing ideas. Failure is appreciated, not stigmatized, and an entrepreneur without a few busted start-ups on his résumé is almost suspect. (See TIME's City Guide: Los Angeles.)

Guido Jouret, who oversees Cisco's emerging technologies, explained this creative destruction when we talked over TelePresence, an ultra-high-definition substitute for the hassle, expense and carbon footprint of business travel. We were 3,000 miles (4,800 km) apart, but I kept forgetting we weren't at the same conference table. One of Steven Spielberg's cinematographers helped Cisco get the illusion of intimacy just right. "California has a very welcoming attitude, but it's a Darwinian society," Jouret said. "Companies come and grow and die, and no one sheds a tear. And there's a real sense that it isn't worth doing if it won't change the world."

California's high-tech community has concluded en masse that the next Google guys are going to be the visionaries who figure out how to harness the sun, build a battery to store the wind or engineer the renewable fuel that won't compete with the food supply. (It could be the actual Google guys, who have launched an aggressive clean-energy initiative.) "Inventing a better gadget isn't enough anymore. We're trying to reshape the way people live," says SolarCity CEO Lyndon Rive, a South African who went to California for the world underwater-hockey championships, got caught up in the Internet boom and never left. He built and sold an IT-support company; now he's reshaping its software to monitor solar panels.

The State of Progress
So why all the end-is-nighism? Schwarzenegger thinks California gets slagged nationwide for the same reason the U.S. gets slagged worldwide: it's natural to resent the big kahuna. (He should know; his approval rating has dipped below 30%.) In a poolside interview after hosting a global climate summit in Century City, he suggested that outsiders envy California's immense resources — beaches, mountains and redwoods; Hollywood, Napa and Disneyland; the best in stem-cell research, fruits and vegetables, entertainment and fashion. (He was sporting a suit with a zebra-print lining.) "We're all about the cutting edge," he said. "I mean, come on. California is wild!" He's right about the schadenfreude, and it was fun to hear him say the word. It is easy to gloat when the cool jock with the hot girlfriend wrecks his sweet car, especially if he seems kind of smug. I was reminded of this during Rob Lowe's talk at the summit, when he declared that everyone has an obligation to join the fight against global warming, then continued, "For my part, I'll be doing The Ellen DeGeneres Show."

Then again, California has legitimate problems that inspire legitimate criticism: gangs, sprawl, disturbing dropout rates, water shortages that don't seem to stop farmers from irrigating rice and cotton in the desert, the crazymaking traffic that Hollywood immortalized in Falling Down. It's still sitting on a fault line. Its expensive housing, even after the real estate crash, poses a real obstacle to the dream of upward mobility. So do its public schools and other public services, which have been deteriorating for years — in part because older white voters have been reluctant to subsidize younger minorities.

This gets to the one area where California really is dysfunctional: its budget. Californians generally enjoy government spending more than they enjoy paying for it, which is a national problem, but they've also straitjacketed their politicians with scads of lobbyist-produced ballot initiatives locking in huge outlays for various goodies, as well as the notorious Proposition 13, which has severely restricted local property taxes since 1978. California is also one of only three states that need a two-thirds supermajority to pass a budget or raise taxes, a virtual impossibility in its ultra-partisan legislature. So it relies on a boom-and-bust tax base that even many liberals admit is overreliant on the rich. The state's economy actually grew last year, but its revenues crashed because its top earners had lower incomes and capital gains. That meant sharp cutbacks, especially in education, which in California is unusually dependent on state cash. "We have an incredibly dynamic economy, but we'll still end up in federal receivership if our government can't pay its bills," says historian Kevin Starr, a prolific chronicler of the state.

Fortunately, help may be on the way. Nonpartisan groups like Repair California and California Forward have built momentum for sweeping reforms that could stop the unsustainable chaos — including an end to the two-thirds rule, limits on ballot initiatives and a new system of taxation. Schwarzenegger is pushing for a gargantuan water-sharing agreement that could help prevent the state from running dry. And his potential successors are also formidable go-getters with forward-thinking credentials — including former governor and current attorney general Jerry Brown, golden-boy San Francisco mayor Gavin Newsom and former eBay CEO Meg Whitman. Brown, the early front runner, was widely mocked as Governor Moonbeam back in the 1970s, but some of his ideas — including energy efficiency, as well as the emergency-communications satellite that inspired his nickname — no longer seem so flaky. (Download a PDF on California's industries, labs and technologies.)

But the krazy-Kalifornia criticism is likely to continue regardless of the facts on the ground — not just because of envy, but because of ideology as well. The collapse of the Golden State provides an irresistible parable for hippie-lefty vegan politics, the failure of a quasi-Scandinavian progressive experiment symbolized by MoveOn.org, Daily Kos and the Sierra Club; yoga, crystals and medical marijuana; "Hollywood values" and "San Francisco values." California has a tradition of activist government, and public support for the University of California, federal energy labs and the military-aerospace-industrial complex played a huge role in creating Silicon Valley, San Diego's biotech cluster and the state's other private-sector centers of innovation. So it's been a juicy target for right-wingers who consider Schwarzenegger a squishy sellout. If a low-carbon, Big Government, change-obsessed state with high taxes on the wealthy, draconian environmental regulations, a porous border and the nation's most vibrant labor movement were imploding, what would that say about the age of Obama?

Then again, the home state of Richard Nixon and Ronald Reagan has been a conservative trendsetter as well, leading the backlash against taxes, affirmative action and illegal aliens and enacting the first three-strikes law against career criminals. Its economy is much closer than the nation's to a true model of free-enterprise capitalism, in which government sets rules and enforces a level playing field but declines to pick winners. And what could be more Californian than the conservative megapastor Rick Warren urging his multimedia flock to make a fresh start with a forgiving God? "A clean slate is possible!" he wrote in his best seller God's Power to Change Your Life. "It's a lot like my son's Etch A Sketch."

In any case, California is not imploding, which ought to be heartening to Americans regardless of ideology or geography. Because America is essentially the land of the Etch A Sketch, and California is America but more so, beckoning dreamers who want to cook Korean tacos or convert fuel tanks into hot tubs. It's progressive more in the literal than in the political sense of the word. And it's where America is going: a greener, more advanced and more global economy; a browner and more metropolitan population; and, yes, some staggering debts and other governance problems that need to be resolved. It's expensive and crowded — because people still want to be there! — and it's recovering from an economic earthquake. But it continues to have a powerful claim on the future. "In the depths of the breakdown, you can see the next narrative," says Mark Muro of the Brookings Institution's metropolitan-policy program. "It's California. The next economy is already in place there, and it's amazing."

Greetings From California: Letter From a State in Crisis

There is science, logic, reason; there is thought verified by experience. And then there is California.--Edward Abbey

Duroville, California

Poking around this jumble of ramshackle trailers lined up along a dozen dusty, unpaved roads on the outskirts of the Torres-Martinez Indian reservation, surrounded by the barren and baking Southern California desert on three sides and a fetid, smoking rubbish dump on the fourth, you'd think naming this place Duroville was nothing short of a cynical, deliberate joke. Duro, in Spanish, means "hard" or "tough." Duroville. You know, Hard Times Town.

Instead, it's just a cutting coincidence. A decade ago, sensing opportunity amid a severe housing shortage for Mexican-born farmworkers who toil in the nearby fields, local resident Harvey Duro opened up this land for any campesino willing to park his trailer for about $500 a month. So what if there was no running water, no plumbing, no health regulation of any sort and if, in general, Duroville was really no better than the Dust Bowl-era labor camps described in The Grapes of Wrath?

Yet the 3,000 or so mostly Purépecha Indians (from the Mexican state of Michoacán) who populate this outpost between posh Palm Springs and the near-dead Salton Sea have fought relentlessly--and successfully, thanks to a recent court order--for the right to keep building this hardscrabble hamlet and are adamantly grateful for the modest haven it offers them and their families. Especially on a summer day like this, when the mercury tops 112. "Thank God for Duroville," said 45-year-old farmworker Elias. "Without this, where would we have to live?"

Elias knows of what he speaks. Just a few miles up the road, in the preposterously named flyspeck town of Mecca, several dozen of his co-workers simply sleep in their cars in the parking lot of El Toro Market. Riverside County officials, resigned to this degradation, are caring enough, or at least are realistic enough, not to evict them and instead provide toilets and weekly portable showers. "Things here are worse, worse, worse than ever," said Emanuel Benitez, a community outreach worker at the local office of California Rural Legal Assistance. "These people make about $13,000 a year. They have no money for rent. And anyway, there are no places here to rent."

All this, a mere two hours southeast of 90210.

As recently as a few years ago, it would have been an easy reporter's trick to juxtapose the Fourth World conditions of Mecca and Duroville with the lush golf courses, seven-figure mansions and glittering casinos thirty minutes away in the Palm Springs valley in order to prove that two very different Californias coexist, blithely ignorant of each other.

Nowadays, that seems too facile. Certainly, the socioeconomic distance between the two extremes remains vast, if not immeasurable. But now we are talking about degrees of pain and comfort rather than separate social universes. The city of Cabazon, for example, home to one of those mega-rich casinos, recently clocked in with a 30 percent unemployment rate. The wealthiest enclaves of California have hardly been driven into misery, but no social stratum is exempt from the crash of The Dream. A morning's ride west of Palm Springs, on the shimmering Orange County coast, the $500-a-night St. Regis-Monarch Beach resort, where AIG sponsored a free-spending bash last fall, just days after getting a federal bailout, has been seized by Citigroup. Like a record number of properties in California, the St. Regis has an "underwater" mortgage, owing $300 million on a hotel now worth maybe a third of the debt. Up the same coast, the ritzy San Francisco Four Seasons resort just defaulted on a $90 million loan. The rich, it turns out, aren't that different from us anymore. Even they are traveling less and cutting back on hot stone massages.

Let's make it easy to understand. California might be suffering its worst drought in decades, but the entire Golden State is underwater. Goodbye to those timeworn, bubble-gum-colored fantasies of the Endless Summer, California Girls and gleaming, pool-pocked suburbs. Hello to a new set of descriptors: "Bankrupt." "Ungovernable." "California Nightmare." "Failed State."

You know something is radically wrong when the mere act of the governor and the legislature agreeing on a budget to close a $26 billion deficit after months of haggling is hailed in bold headlines. Or maybe you get the message when you're a state contractor and you get an IOU instead of a paycheck and then find out the banks will no longer honor your scrip. Or you see that state unemployment rates are nudging 12 percent; that in LA County the poverty rate hovers near 20 percent; that some of the thousands of teachers who received pink slips are on hunger strike, while California schools are ranked forty-seventh in the nation; that the state college system has suspended admissions for spring 2010, raised fees 20 percent and forced its faculty to take unpaid leave two days a month; that thousands of state workers are being laid off and those who remain must take three furlough days a month for the rest of the year; that protesters in wheelchairs are blocking the halls of the Capitol; that a number of state parks are being closed; that California's bond rating is just above junk level; that Southern California had its highest peak in personal bankruptcies last year and that so far this year they're up 75 percent over that; and that one in four capsized mortgages in the United States is in California.

Recently, two Democratic representatives from the Central Valley appeared before a Congressional committee and, comparing their region's economic devastation to Katrina, asked to be declared a federal disaster area eligible for emergency relief. According to a Brookings Institution report, among twenty of the economically weakest metro areas in the country, four are in the Central Valley. One of them is the capital, Sacramento. In another, the Merced-Stockton area, the 70 percent drop in housing prices is so steep that homes there don't even qualify for federal recovery assistance. That's on top of the estimated 5 million impoverished Californians who have no cash assistance whatsoever.

Those east of the state line tempted by the allure of schadenfreude ought to think twice. California has the eighth-largest economy in the world and produces 12 percent of the national GDP. There can be no solid national economic recovery without a resurrection of California--something not very likely in the short term.

"It's a perfect storm," said veteran political consultant Allan Hoffenblum, co-editor of the nonpartisan California Target Book, which tracks all of the state's political districts. With the high tide of the Great Recession battering the Left Coast, state government, instead of shoring up what it could, melted into what Hoffenblum calls "total dysfunction."

"During this crisis, no individual or institution has been able to assert any real leadership and bring people together for a common cause," he added. "This has created a power vacuum, allowing everyone to have a veto over everyone else. A weak Assembly speaker. A weak Senate leader. A weak governor. Arnold has flip-flopped so many times that there's nobody in Sacramento who trusts his word."

Nor is this by any stretch a strictly partisan issue. California is solidly blue. And although its Democrat-dominated legislature has a miserable 14 percent overall favorability rating, that rating rises to only 19 percent among Democratic voters. Californians are as liberal as anybody "at the federal level," said Mark DiCamillo, director of the respected Field Poll. "They're more supportive of national healthcare than the national average. But it's also true that Californians remain somewhat tightfisted when it comes to increasing state taxes."

California's political and economic crisis didn't begin with the current economic slump but has been brewing for decades. "You could go back to 1933, with the requirement approved by voters that you need a two-thirds majority to approve the budget," said Sherry Bebitch Jeffe, a USC-based political scientist. "Obviously there's Prop 13, which made things worse; there's the ballot-box budgeting--earmarking money for specific programs--that everyone from Arnold Schwarzenegger to Rob Reiner has used. And the runaway gerrymandering. It all makes flexibility impossible, and it empowers the special interests."

"No question the system is broken," said liberal Los Angeles Mayor Antonio Villaraigosa, who recently decided not to run for governor next year and whose city is grappling with a $530 million deficit. "It's a state on the brink, families falling through the cracks with IOUs as a safety net. It's mind-boggling to me how little controversy there is over the IOUs."

Maybe it's because Californians are so used to failure from Sacramento. For almost every one of the past twenty years, the state government failed to reach a budget agreement by the July 1 fiscal deadline. Indeed, in 1992 Governor Pete Wilson had to resort briefly to issuing IOUs. But this season's deadlock, finally (or more probably, temporarily) resolved after a near twenty-four-hour session of the legislature on July 24, took on high drama. "I don't know if it's fair to say, but it was like Arnold thought he was starring in his own Gunfight at the O.K. Corral movie and didn't give a damn that the movie house was burning down around him," said one LA City Council staffer.

In February the Democratic majority proposed to-the-bone budget cuts, but their offset measures to increase taxes on oil extraction, vehicle registration and tobacco enraged Republicans and evoked veto threats from the governor. Because California is one of only three states that require a two-thirds majority to approve a budget or even a tax increase, the small GOP minority had just enough votes to block passage. And entrenched gerrymandering makes their seats invulnerable, allowing them to take the most extreme positions. "For me it has been heartbreaking," said Democratic Assemblyman Kevin de Léon, one of ten conferees on the budget. "Back in February we came up with a good budget but with those two minor taxes--on oil and tobacco. That money would have gone right into education. But because of the two-thirds rule, and even though a majority wants it, we get handcuffed by a small group."

Aggravating matters, Governor Schwarzenegger took an intractable "no new taxes" position and then went a step further, saying the crisis was an opportunity to make "structural reforms." Translation: the governor demanded radical shrinkage of the public sector, including virtual abolition of CalWorks, the state welfare program, and a rollback of state employee pensions. He even threatened the "nuclear option": suspension of Prop 98, which requires that 40 percent of state revenues be channeled into schools. Four years ago, when Schwarzenegger attempted to impose a similar far-reaching conservative agenda through a set of referendums, he was mightily slapped down by voters and forced to apologize. Now, it seemed, he was trying to hold the state hostage to these draconian changes as the price of a budget deal. "He just got it in his head that his time is up and his legacy must be long-term reform," said Bebitch Jeffe. "So he's using the short-term budget as leverage. Either he doesn't understand, or he's taking a mammoth risk."

"Some of the cuts proposed by the governor are unimaginable," said Barbara O'Connor, political analyst at Cal State, Sacramento, a few days before the budget deal was reached. "In the end," she predicted, "it will be declared a win-win. No one will love it. Everyone will accept it."

Maybe. Because in the end, while Schwarzenegger was proposing Armageddon, the Democrats settled for mere catastrophe. When the budget details were unveiled, it was like viewing the emaciated corpse of a once great state. There are no new taxes. But hammer blows hit the poor, the elderly, the infirm and students and will keep them staggering for years. The deal called for almost $8 billion to be taken from education; more than $1 billion from state worker pay; an equal amount from Medi-Cal, the state's Medicaid program; $375 million from CalWorks; $226 million from home healthcare, in which patients and caregivers will now have to be fingerprinted; $124 million from Healthy Families health insurance, which means thousands of children will be wait-listed for coverage; and more than $4 billion confiscated from local governments, which will create a ripple effect of collateral damage. The proposed taxes on oil extraction, tobacco sales and vehicle registration were penciled out; the budget was balanced only through a set of accounting gimmicks, which merely kicked the crisis down the road a few months. The only winners in this deal were felons, who won a $1.2 billion cut in prison funding, which would reduce the prison population by some 27,000.

"It was like a suspense movie," said a jubilant governor, who later showed up in a web video happily brandishing a carving knife. "But we have accomplished a lot." Said Democratic Senate leader Darrell Steinberg, "We have cut in many areas that matter to real people, but I think we have done so responsibly. This is a sober time."

Other reactions were less sanguine. The second-largest public employees union, the Service Employees International, whose members have taken a 15 percent pay cut, has mailed out strike authorization forms and is threatening a statewide shutdown to forestall more cuts. SEIU Local 1000 president Yvonne Walker sent a letter to Schwarzenegger saying, "Governor, we've sacrificed. And now we've reached our limit."

The threat of an immediate lawsuit by more than 180 city and county governments forced the legislature to reduce the $4 billion confiscation of local revenues to a $2 billion "loan" in its final version. LA Mayor Villaraigosa, who called the budget "highway robbery" on his official blog, says the suit might still go forward. Pressure from environmentalists successfully excised an agreement to resume offshore oil drilling. And GOP objections kept the 27,000 inmates locked up pending a separate vote later this year. But in the end, the budget deal killed off any lingering notion of California as a land of plenty.

"When Democrats agree to a budget that is counter to why they are Democrats, it's time to hit the reset button," said Rick Jacobs, head of the 700,000-member California-based Courage Campaign. The liberal advocacy group has launched an ad protesting the budget, saying the state has been "closed."

But it's difficult to see how pressure from unions or progressive activists is going to be able to reverse or modify this budget in the short term--especially when it was approved by a liberal Democratic leadership. More likely, it will be revised--for the worse--if some of the projected revenues fall short. This is quite possible, given that economic analysts are predicting a second shattering wave of California home foreclosures, this time centered more on middle-class and high-end properties, while forecasters see unemployment rising through next year. Everyone knows the odds are that just a few months from now, the state will be right back in a sea of red ink, forcing even deeper cuts.

The state does need structural reform, if not exactly the way Schwarzenegger envisions it. What seemed like a fringe idea a year ago, when it was first floated in an op-ed piece, is gaining momentum: a constitutional convention of ordinary citizens that would rework the state structure. Its motor force is an unlikely suspect--a Northern California business group known as the Bay Area Council, whose scores of members span from the University of California, Davis, several media companies and banks to Hewlett-Packard, Google and Yahoo. The council is just one of a quickly multiplying array of bipartisan establishment groups pushing for a constitutional convention or similarly urgent structural reforms, including Forward California, which is led by former Democratic Assembly Speaker Bob Hertzberg and whose board includes AFL-CIO officials. "This movement is getting very real with every passing day," said Council CEO Jim Wunderman, who wrote the op-ed last summer. "New leaders and groups are coming to us, asking how to get involved. There is real momentum here."

And that's not just self-promoting hype. On the weekend before the budget deal, several hundred Californians joined Wunderman at a USC conference hall to endorse and start planning for a convention, which could be mandated through the initiative process. Rick Jacobs of the Courage Campaign was on the dais balancing out any notion that this was strictly an initiative of the business community. So were LA Mayor Villaraigosa, who says he "absolutely endorses" the call for a convention; the LA city controller; the progressive president of the LA City Council; reps from the Mexican American Political Association; Common Cause; and several other activist groups. It was a clear manifestation of at least the germ of a nonpartisan, broad-based reform coalition. "We want this to be dispassionate and deliberate," said Wunderman. "Not done overnight. That's why we think a constitutional convention is the best way to go."

No one involved in the movement wants to take an overtly partisan position. But there's general agreement on what needs fixing: the two-thirds budgeting rule has got to go; the once progressive initiative process, which has been "hijacked by special interests," as Wunderman put it, has to be reformed; gerrymandering must end; term limits, which have crippled the legislature, must be stretched; open primaries must be considered; and, most important, something has to be done about that third rail of California politics, Prop 13 and the taxation system.

The 1978 measure reduced property tax to a painless 1 percent a year, but it skewed the rest of state revenue. With property taxes so low, 55 percent of revenue comes from personal income tax; 45 percent of that comes from the top bracket (most states like to keep personal income tax to one-third of revenue). The state is far too dependent on income tax: when times are good, there's plenty of money; when they're sour, California goes bust. In just the first five months of this year, revenues from this tax plummeted 34 percent.

In addition, more than 30 percent of Californians pay little or nothing in personal income tax. And the bottom 85 percent of taxpayers contribute only 16 percent of income tax. This is an uncomfortable reality; progressives who say "tax the rich" don't always realize that in California, wealthy individuals (if not corporations) are the tax base. Conservatives, meanwhile, won't admit that intransigent defense of Prop 13 has turned California into a second-rate state. Even sectors of the business community are worried about the future.

While Prop 13 attracts new critics daily, few are confident it can be repealed. When Schwarzenegger ran for governor in 2003, he showcased Warren Buffet as his economic adviser. "Buffet said we had to get rid of Prop 13 and poof! we never saw him again," laughed political analyst O'Connor. More realistic than repeal is a "split roll," which would raise business property tax and close gaping loopholes that allow large corporations to pay less property tax than Ma and Pa. "Prop 13 has been a sacred cow, but it's time to look at it again," said Villaraigosa. "When people voted for it, they never expected the real beneficiaries were going to be big corporations." The San Francisco Assessor, Phil Ting, and the nonprofit California for Tax Reform are now preparing a ballot initiative, perhaps in 2012, to amend Prop 13 to tax commercial property, which some analysts believe could produce more than $7 billion in additional annual revenue.

What Californians really don't want is a permanent parlor game. In a show of defiance in May, they overwhelmingly voted down a package of initiatives backed by the governor and legislature that would at least have forestalled the current crisis. Everyone has his own interpretation. "Forget about eliminating term limits and the two-thirds requirement," darkly predicted analyst Hoffenblum. "The voters will never go for it. They are too distrustful of the politicians." DiCamillo of the Field Poll is also pessimistic about the possibility of structural tax reform. "Only sin taxes are palatable," he said. "Our polling shows no inclination toward shared sacrifice, because the voters themselves are already hurting too much. They're so worried about their own pocketbooks that there isn't much sentiment toward looking at this in a more mutual way."

California has always been as much a state of mind as a physical reality. The state's natural resources, along with its inhabitants' capacity to exploit them, made The Dream more likely than not. But now it's time to stop dreaming, says D.J. Waldie, who has the unique experience of living through this crisis as both an official of an LA suburb and a prizewinning author who plumbs the Golden State zeitgeist. "The middle class and the near middle class have been missing in action in paying for the sort of life they think California owes them," he said. "Instead, they believe that someone else should pay for the California Dream. Smokers. Drinkers. Gamblers. Millionaires. But not me.

"We have sold ourselves a vision of California, but we are not psychologically or emotionally prepared to make the hard choices. We prefer to point our finger at 'waste, fraud, immigrants.' Those are all straw men. It conveniently avoids the question of what we want and what we want to give up."

About Marc Cooper

Marc Cooper is a Nation contributing editor and a contibutor to The Notion. He is a visiting professor of journalism and associate director of the Institute for Justice and Journalism at the USC Annenberg School for Communication.

His books include Pinochet and Me: A Chilean Anti-Memoir and Roll Over Che Guevara: Travels of a Radical Reporter. His work has been recognized by the Society of Professional Journalists, PEN America and the California Associated Press TV and Radio Association.

Tales of Tent City

by Ben Ehrenreich

"This is the bigger picture," said John Kraintz, with a sweep of his arm, indicating the roughly two dozen remaining tents pitched around him on a muddy, pockmarked field between the city dump and the slow green waters of the American River. Kraintz is a thin man of 57, a former electrician who had lived in Sacramento's parks and riverside lots for seven years. His home had been right here--in Tent City.

Kraintz had relocated to Tent City's outer boroughs. Its downtown, which briefly attracted camera crews from all over the world--a Third World shantytown in the capital of the richest state in the richest country!--was a couple of hundred yards away. Depending on whom you ask, somewhere between 150 and 300 people lived in Tent City between November and April. But by the third week in April, when I visited, most had already packed up. Some had migrated to this spot to avoid police attention. But the cops came, handing out notices announcing, "It is unlawful to camp in the City of Sacramento" and giving people two days to leave. ("This is not camping--we're living!" yelled one of Kraintz's neighbors.) By the end of the week, everyone had left. Tent City, for that moment at least, had disappeared.

Few people there, though, doubted that it would be back. Tent City is less a single location than a nomadic but constant phenomenon, a shifting blue-tarped shadow to the glass and steel American metropolis. In good times and bad, Tent City comes and goes, forms and scatters and takes shape again. Despite its momentary dispersal in Sacramento, it is still out there--in Seattle, Portland, Reno, Providence, Fresno, even in the sprawling exurbs of southern California in the small city of Ontario. Tent City existed at the height of the real estate boom too, hidden in plain view, an omen for anyone willing to look.

While recent media accounts portrayed Tent City's incarnations as creatures of the recession--reborn Hoovervilles for the laid off and the foreclosed--shantytowns have been a periodic but permanent feature of American urban life for at least the past two decades. They are what connects us to São Paulo, Lagos and Mumbai, physical manifestations of our growing inequality and societal neglect. Seattle saw its first Tent City in 1990. The area now boasts three, one dating back to 2000, another to 2004. Portland's Tent City ("Dignity Village") has been around since 2001. No one living there, says resident Gaye Reyes, is recently homeless. In California's San Joaquin Valley, the City of Fresno last fall began distributing a $2.3 million settlement to homeless people whose property was destroyed when the city repeatedly razed its Tent City between 2004 and 2006, at the apex of the economic boom.

As early as 1989, dozens of homeless were pitching tents on the precise site of this year's Tent City in Sacramento. They called their community, without irony, "Camp Hope." Since then, other tent cities have sprung up there for a few weeks or months. It's hardly an idyllic spot--no sanitary facilities, few trees, no shelter from the wind or rain--but it's out of sight and a short walk to Loaves and Fishes, a nonprofit that provides free meals and other services.

This latest Tent City was notable mainly for its density, a product of increased enforcement of anti-camping ordinances in the city's parkland, where Sacramento's homeless were once able to spread out unmolested. In November police broke up a camp of more than 100 people on the sidewalk outside the Union Gospel Mission. Police officers instructed them, Tent City residents said, to resettle here. The Sacramento Bee first reported on the newest Tent City in December. Oprah Winfrey sent a correspondent in February. After that, said Tent City resident Danny Valadez, "It went like a cyclone," buzzing with journalists and new arrivals. Most reporters focused exclusively on the few Tent City residents whose predicaments could be linked directly to the economic collapse. "They were all looking for Henry Fonda [in The Grapes of Wrath]," laughs Paul Boden, director of the Western Regional Advocacy Project.

The rise of Tent City, though, says John Foley, director of the nonprofit Sacramento Self-Help Housing, had "almost nothing to do with the recession." But the recession has made poverty visible again, and Tent City tells the grueling backstory to the current recession--nearly thirty years of cuts in social services to the poor and mentally ill, the decimation of the industrial economy and the cruel underside of the housing boom. Kraintz, despite his soil-caked clothes and matted hair, summarized that narrative with more precision than most white-shirted economists can manage: "We've seen falling wages and rising rents. The two finally collided."

The economic collapse has without question pushed people out of their homes. The National Alliance to End Homelessness warns that 1.5 million Americans could be thrown into homelessness over the next two years. In Sacramento, homelessness has jumped 14 percent since 2007, even though the population categorized as "chronically homeless"--the disabled and mentally ill--has fallen by 35 percent. Sacramento was hit particularly hard by the mortgage crisis--the city had the third-highest foreclosure rate in the country in 2007--and folks who have recently seen their incomes disappear are finding themselves with nowhere to turn.

California's ongoing budget crisis hasn't helped. Last year Governor Arnold Schwarzenegger slashed the state's already meager funding for emergency shelters. The year before, he vetoed a $55 million program that would have provided housing for 5,000 people with mental illness. His most recent budget proposal slashes nearly all the services that aid the growing ranks of the poor--cutting eligibility for Social Security and disability and eliminating what's left of the state's welfare system, as well as its entire health insurance program for children. The governor plans to borrow $2 billion from cities and counties, which will mean severely reduced funds on the local level. All of this likely will throw more people onto the streets.

But Tent City, says Joan Burke, advocacy director of Loaves and Fishes, "is the least desirable place to be homeless," and the last place the newly homeless are likely to end up. They stay with friends and relatives until those relationships fray, then in motels, cars and finally shelters. Thus, only a very few of Tent City's inhabitants could pin their plight on the recession.

Karen Hersh, 53, her skin red and peeling from poison oak, attributed the failure of her trucking company to rising fuel prices. She lived in her truck when she lost her home and stayed with friends when she lost her truck. Eventually, Hersh ended up in a shelter--"I didn't like it one bit. They steal from you. They gang up on you"--and finally in Tent City.

Fred and Linda, a Latino couple in their early 50s who preferred to keep their surnames to themselves, have been homeless for a year and a half. Fred worked as a mason until he burned his arm in an accident. He took time off to recover, but "when I went back to work, there wasn't a job for me." Construction had ground to a halt. Linda, a sometime warehouse worker, was out of work too. After they lost their apartment, no landlords would consider them. "If you're not employed," said Linda, "it's no go." They had come to Tent City in the hope that the media attention would mean a better chance of finding housing. So far, it hadn't. But Fred's unemployment payments hadn't run out yet, and the pair had rigged makeshift trailers to their bicycles to tow their belongings. If the police push them out, said Fred, "it ain't no big deal. We have three places we're thinking about."

Most of Tent City's residents, though, have been homeless for years. The original causes of their homelessness--an illness or injury, addiction, some life-shattering tragedy--blurred out in the distant past. "But on a structural, societal level," says Burke, the causes of homelessness are far from hazy: "It's the lack of housing that people can afford."

"I used to be a Republican. I voted for Ronald Reagan," a man who identified himself only as Tom M. told me, laughing. But it was Reagan who in his first year as president halved the budget for public housing. Over the course of his first term, more than half a million people were thrown off the disability rolls. "Until then," says Tim Brown, director of Sacramento County's Ending Chronic Homelessness Initiative, "basically there was no homelessness." Since then, neither the disability nor the housing budget has come close to recovering. Clinton-era welfare reforms cut all but the last remaining threads of the Great Society safety net.

Meanwhile, the real estate boom led to a drastic reduction in affordable housing. Through the 1980s and even into the '90s, says Sacramento Self-Help Housing's Foley, the city had no shortage of housing options for the poor: rooming houses, single-room-occupancy hotels, motel-like labor camps for cannery workers. "Almost all of that's gone," he says, victims of the insatiable housing market. Gone also are the vast majority of the unionized cannery and food processing jobs that for decades made it possible for workers here to become homeowners. Tent City sprawled just across the railroad tracks from one of the few major food processing facilities left in the city: the nonunion Blue Diamond almond plant.

Since 1996, the federal government has budgeted precisely zero dollars for new public housing. The waiting lists in Sacramento for Section 8 and public housing are five digits deep. Between 2001 and '09, however, the monthly income required to rent an "affordable" studio apartment here jumped from $1,025 to $1,433, "and wages have not gone up proportionally," Foley says. Working full time at minimum wage in California gets you just $1,280 a month. "It takes two people to rent an apartment," said Tent City resident Jessica McFarlin, "one to pay the bills and one to pay the rent, if you want to have food."

In Sacramento, some subsidized housing options remain for those with disabilities. "If you're disabled," says Brown, "your chances [of finding housing] aren't too bad in the next year." But as to the swelling ranks who are not disabled but simply can't find work--or who have jobs but still can't make their rent--Brown says, "they're shit out of luck."

For Tom M., the math was simple. He fell out of the corporate world several years ago and lived in his van until January, when he could no longer afford to keep it registered. He is 56, with high blood pressure, a heart condition and, he said, "the mental thing"--he's convinced he's being stalked. "It gets pretty intense sometimes," he said. But he has been unable to qualify for disability, which left him with what little money he could earn recycling cans and a monthly county General Relief check for just over $200.

The day before I met him, Tom M. had left Tent City to apply for subsidized housing. His experience, he said, was typical: "I was in line for hours and never got to see them. There's so many people," he shrugged, "and only so much resources."

In the end, Sacramento dealt with its Tent City with more compassion than can usually be expected. "If they had a great big rug they could sweep us under somewhere, they would," predicted Karen Hersh, and she was right. The broom, fortunately, came in the form of temporary fixes, not arrests. The city scrambled to raise money for forty additional units of subsidized housing (few of which were ready before Tent City was cleared) and fifty additional shelter beds, which quickly filled. Local advocates for the homeless had vowed civil disobedience if any arrests were made, so to avoid an embarrassing confrontation, the city came up with motel vouchers for the last few dozen holdouts. "The bulk of the people," though, said Loaves and Fishes' Joan Burke, "just dispersed to more hidden camps." By April 20, everyone was gone.

No one pretended the problem had been solved. Renting hotel rooms for the homeless, said Steve Maviglio, a spokesman for Mayor Kevin Johnson, "is obviously not sustainable in the long term," particularly with homelessness on the rise. For now, the newly homeless, whose predicaments are directly related to the recession, are not yet desperate enough to camp in blighted fields. They look less like John Kraintz and Tom M. and more like 38-year-old Kysia Bell, a clear-eyed home healthcare worker and mother of two who lost the home she was renting when her landlord fell into foreclosure.

"I didn't know that the owner wasn't paying the mortgage," she said. "We got a note on the door that we had to vacate within two weeks." At the same time, her hours were cut, making it impossible to come up with the deposit for a new apartment. She and her daughters stayed with relatives as long as they could, then with friends and finally in her car until they found beds at St. John's, Sacramento's largest shelter for women and children. Bell was lucky: in 2007, St. John's was forced to turn away about twenty people a day. So far this year, that number is up to 300.

Nearly 400 miles south, in Ontario, California, Tent City hides behind a bureaucratic mask. City officials call it the Temporary Homeless Services Area, or THSA, but until March 2008, it was just Tent City. About nine months earlier, local police began directing everyone they found sleeping in parks and alleys to an empty field near the city's airport. Word got around that you could camp there unharassed, and the new encampment quickly grew.

As in Sacramento, the Ontario Tent City's inhabitants were victims not of the immediate recession but of older, less dramatic economic shifts. Take the white-bearded man who identified himself only as Cowboy. He was a long-distance truck driver until a stroke slurred his speech and paralyzed his right arm. The $900 in veterans' benefits and SSI he receives each month might pay for a small apartment but would leave nothing for food, so Cowboy lived with his mother until she died, then with cousins, then on the streets and finally, at age 57, in Tent City.

In March, after herding the local homeless population to Tent City, police and code enforcement officers descended on the encampment and required its inhabitants to prove they were residents of Ontario. Those who could not--all but 127--were evicted. The city bulldozed and graded the field, erected orderly rows of matching green tents, issued ID cards to those who remained, fenced the encampment and posted a list of rules: no re-entry after 10 pm, no alcohol, no pets, no minors, no visitors. Now private security guards patrol the THSA's perimeters, ejecting anyone who doesn't have permission to be there, including reporters.

None of the Tent City residents I interviewed from just outside the fence complained much. They were fed three meals a day and were otherwise left alone. The rules were infantilizing, but the people largely shrugged them off. Still, more than a third of those permitted to stay in the THSA have left for good. No new arrivals have been admitted. Isaac Jackson, coordinator of the county's Office of Homeless Services, credited Ontario with doing "a great job" of reducing Tent City's population. Neither city nor county officials, though, knew if any of those who have left Tent City have found a better source of shelter than a tent.

It seems unlikely. The federal stimulus package will give California $189 million in homelessness prevention funding and another $100 million in community service block grants that local governments can use for homeless services. The Homeless Emergency Assistance and Rapid Transition to Housing Act, passed in May, authorizes another $2.2 billion nationwide. But as the feds give with one hand, the state takes away with the other, and no one at any level of government is attempting to tackle the systemic roots of homelessness, or to reconsider housing as something more vital to human dignity than market forces allow. For now, Cowboy and his neighbors are unaware of any resources available for more permanent lodging than a tent in a fenced-off field.

In April I asked Brenda Hill, who had been there from the start, if she knew where she'd go if Sacramento closed Tent City. She shook her head sadly. "Nope," she said. "Nowhere."

About Ben Ehrenreich

Ben Ehrenreich, a journalist and novelist based in Los Angeles, is the author of The Suitors.

California Apologizes to Chinese Americans

By Ling Woo Liu

What's in an apology? Some expressions of remorse are commonplace — we hear them on the playground when kids smack each other on the head, or they land in your inbox after a friend forgets your birthday. It's the grand-scale apologies, it seems, that are harder to come by.

On July 17, the California legislature quietly approved a landmark bill to apologize to the state's Chinese-American community for racist laws enacted as far back as the mid–19th century Gold Rush, which attracted about 25,000 Chinese from 1849 to 1852. The laws, some of which were not repealed until the 1940s, barred Chinese from owning land or property, marrying whites, working in the public sector and testifying against whites in court. The new bill also recognizes the contributions Chinese immigrants have made to the state, particularly their work on the Transcontinental Railroad. (Check out a story about the Asian-American experience in late–20th century California.)

The apology is the latest in a wave of official acts of remorse around the globe. In 2006, Canadian Prime Minister Stephen Harper made a similar apology, expressing regret to Chinese Canadians for unequal taxes imposed on them in the late 19th century. Last February, Australian Prime Minister Kevin Rudd apologized to his country's Aborigines for racist laws of the past, including the forced separation of children from their parents. Five months later, the U.S. Congress formally apologized to black Americans for slavery and the later Jim Crow laws, which were not repealed until the 1960s. And most notably, in 1988 the U.S. government decided to pay $20,000 to each of the surviving 120,000 Japanese Americans imprisoned in camps during World War II. Says Donald Tamaki, a San Francisco–based attorney who helped overturn wrongful WWII-era convictions of Japanese Americans: "Part of what a humane society does is recognize past injustices and address them."

The California resolution moved quickly through the state legislature since it was first introduced in February. "It's symbolic to recognize that the state made mistakes," says assembly member Paul Fong, who co-sponsored the legislation with assembly member Kevin de Leon. "These laws reverberate to this date because racism still exists." (Read about a new Asian-American stereotype in TIME'S 1987 cover story.)

Most of the direct victims of the laws in question have already passed away. Fong's grandfather was held for two months at Angel Island, an immigration station near San Francisco that targeted and detained several hundred thousand Chinese immigrants from 1910 to 1940. Dale Ching, 88, arrived at Angel Island from China's Guangdong province in 1937 at age 16. Though his father was an American citizen, immigration authorities detained Ching for 3½ months. "My intent was to try to have a better life, better than in China," says Ching. "But at that time, they didn't want you to get ahead."

How times have changed. In the throes of huge budget cuts, California is wooing cash-flush mainland Chinese tourists to its sun-kissed coastline and world-famous theme parks. So far this year, the state's Travel and Tourism Commission has opened offices in three Chinese cities. In 2005, Governor Arnold Schwarzenegger toured China on a six-day trade mission to peddle his state's produce, technology and raw materials. China is now California's fourth largest export market, after Mexico, Canada and Japan. In 2008 California exported $10.9 billion worth of goods to China, up 40% since 2005.

With the California bill in the bag, Fong now plans to take the issue to Congress, where he will request an apology for the Chinese Exclusion Act, the only federal law ever enacted to deny immigration based exclusively on race or nationality. Passed in 1882, the law was not fully repealed until 1943, after China and the U.S. became allies in WWII. Given President Obama's decision to appoint Gary Locke as Commerce Secretary and Steven Chu as Energy Secretary, Fong says he's confident of the bill's passage. "As a person of color, President Obama would understand these issues," he says.

Fong does not plan to press for financial compensation for the surviving victims of the state and federal laws in question, despite the Japanese-American precedent. More important than individual compensation, he says, is to help educate younger generations about the mistakes of the past. That said, Fong may ask for funding to help preserve the Angel Island immigration station, dilapidated after decades of neglect. To complicate matters, the station is located within a state park that, along with several others, may be shut down to help balance California's budget shortfall.

Not long after his father helped negotiate his release, Dale Ching joined the U.S. Army and fought Japanese forces during WWII. He went on to become an electronics technician, but after retiring, he began volunteering as a docent at Angel Island in hopes of drawing more attention to that moment in history. "We've been fighting, but nobody would listen," he says. "Finally someone has said sorry."

The War Against the 'War on Drugs'

By Sasha Abramsky

As California goes, so goes the nation.

If that old adage still holds true, then the nation may soon see a gradual backpedaling from the criminal justice policies that have led to wholesale incarceration in recent decades. For the most populous state in the union is on the verge of insolvency--partly because it didn't set aside a rainy-day fund during the boom years; partly because its voters recently rejected a series of initiatives that would have allowed a combination of tax increases, spending cuts and borrowing to help stabilize the state's finances during the downturn; partly because it has spent the past quarter-century funneling tens of billions of dollars into an out-of-control correctional system. Now, as California's politicians contemplate emergency cuts to deal with a $24 billion hole in the state budget, old certainties are crumbling.

The state with the toughest three-strikes law in the land and a prison population of more than 150,000 is facing the real possibility of having to release tens of thousands of inmates early in order to pare its $10 billion annual correctional budget. At the same time, an increasing number of the state's political figures are challenging the basic tenets of the "war on drugs," the culprit most responsible for the spike in prison populations over the past thirty years; they argue that the country's harsh drug policies are not financially viable and no longer command majority support among the voting public.

Similar stories are unfolding around the country; in Washington, federal officials are talking about drug-policy reform and, more generally, sentencing reform in a way that has not been heard in the halls of power for more than a generation.

For old-time politicians, who have spent the past three-plus decades navigating the country's roiling tough-on-crime waters, the changes are almost unfathomable. Onetime California governor and current gubernatorial hopeful Jerry Brown, for example, has spent decades trying to erase the public's memory of his liberal tenure in the 1970s, when California's prison population shrank to well below 30,000. As a part of that remodeling, he has assiduously courted the California Correctional Peace Officers' Association, the trade union representing the state's prison guards. Now, with his war chest flush with CCPOA funds, Brown won't do anything to challenge tough-on-crime orthodoxies.

Yet many newer political faces view the current moment as something of an opportunity. For Betty Yee, chair of California's Board of Equalization--the office responsible for collecting sales tax in the Golden State--the changes, especially around drug-law enforcement, can't come soon enough.

Sitting at her conference table high up in one of downtown Sacramento's few sky-rises, Yee has marijuana on her mind. Specifically, she has become an outspoken advocate for legalizing pot for residents older than 21. Her friend Assemblyman Tom Ammiano, a former San Francisco city councilman, is pushing just such a bill in the State Legislature. Yee wants to levy fees on business owners applying for marijuana licenses, impose an excise tax on sellers and charge buyers a sales tax. Do it properly, and the state could reap about $1.3 billion a year, she has estimated. "Marijuana is so easily available. Why not regulate it like alcohol and tobacco?" she says, and gain additional tax revenue into the bargain?

Not so many years back, any public figure who dared to advocate such reforms would have been shunned by much of the establishment. It's a measure of how much things have changed that Yee and Ammiano's proposal is being taken seriously across the board. In fact, shortly after I met with Yee, Governor Arnold Schwarzenegger--whose office declined my request for an interview for this article--announced that the state should at least consider the merits of pot legalization. He wasn't advocating it, he was careful to stress, but he did think the time was ripe to debate the issue.

"The budget is so bad now, the populism of the issue is beginning to work here in the Legislature," Ammiano says as he paces back and forth in his office, toward the bookshelves with the four martini glasses and Golden Gate Bridge bookends and then away again. On the wall near the receptionist's desk hangs a huge poster from the movie Milk. "Everyone thinks it's Cheech and Chong," he says with a laugh, describing the marijuana legalization bill. "But there's a lot of policy wonks" supporting it. "There's very conservative support from the oddest sources and locations." The GOP chair in the state, as well as Tom Campbell, a Republican gubernatorial hopeful, have indicated their support for his bill, Ammiano declares. "When it starts to cost more money than it's worth even in the eyes of the pooh-bahs, then you can accomplish something."

Over the past three decades, California has tripled the number of prisons it operates, has more than quintupled its prison population and has gone from spending $5 on higher education for every dollar it spent on corrections to a virtual dead-heat in spending. That puts it in the same boat as Michigan, Vermont, Oregon, Connecticut and Delaware--all of which, according to estimates by the Pew Charitable Trust, spend as much or more on prisons than on colleges. California is also under federal court order to implement costly improvements in the delivery of medical and mental healthcare services in prisons and to release close to a third of the prison population--about 55,000 inmates--to improve conditions for those remaining behind bars.

Schwarzenegger adamantly opposed that ruling by a three-judge panel. Now, though, in the face of fiscal calamity, he is proposing cutting the prison population by tens of thousands. Of course, he is doing that not out of concern for inmates' well-being, or out of a sense that many sentences are disproportionate to the crime, but simply because the state can no longer pay its bills. Schwarzenegger believes he can save several hundred million dollars by releasing some categories of inmates, in particular nonviolent offenders who are in the country illegally and stand to be deported upon early release.

To save money, he's also talking about firing hard-working guards (a far better, but costlier, option would be to scale back the prison system and to retrain surplus guards to work in other venues), and he's asking for close to $1 billion in cuts to vital prison drug-treatment, education and job-training services. At the same time, since this is all about shaving dollars off budgets rather than intelligent criminal justice system reform, there's no talk of investing in crucial re-entry infrastructure.

In short, it looks like California will go about a necessary scaling back of the correctional system exactly the wrong way. But however grudgingly state officials are approaching the issue, at least they recognize that the magnitude of prison spending is a problem. Down the road, when Californians start thinking beyond the crisis moment, that new understanding will shape policy responses for years to come. It will both feed off and help create a new national sentiment that being "tough on crime" isn't necessarily being smart on crime.

Tough-on-crime rhetoric, and the policies and institutions that grow from it, emerged from Nixon's Silent Majority tactics, from his recasting of politics as a series of debates around "values" rather than bread-and-butter issues. And in the same way the 2008 presidential election ended that peculiar chapter in American history, so too did it end the monotone cry that we could incarcerate our way out of deep-rooted social and economic problems. Despite a few halfhearted GOP attempts to accuse Democrats of being weak on drugs and public safety--Obama had, after all, written about his drug use during his teenage and early adult years, which, according to the old calculus, should have made him an easy target for scaremongers--neither presidential candidate played the tough-on-crime card. It was a nonissue for most voters and thus for the candidates. In fact, recent Zogby polling commissioned by the National Council on Crime and Delinquency suggests that close to eight in ten Americans favor alternatives to incarceration for low-level nonviolent offenders. Another Zogby poll, from last fall, found that just more than three-quarters of Americans felt the "war on drugs" was a failure. The sea change in public opinion holds in California too. In late March the Los Angeles Times ran a column asking readers their opinion on marijuana legalization. So far 4,927 people have replied, and 94 percent of them favor legalization. A Field Poll in April found that 56 percent of Californians favor legalizing and taxing pot.

The new atmosphere is most apparent vis-à-vis the Obama administration's move away from "war on drugs" rhetoric and toward a harm-reduction strategy. Gil Kerlikowske, the new head of the Office of National Drug Control Policy, has made it clear that he prefers treatment over punishment for drug users, a preference he brings from his time as a reform-oriented police chief in Seattle. Putting money where its mouth is, the new team has increased funding for the Bush-era Second Chance Act, intended to connect released inmates with community services such as housing, family counseling and addiction treatment. Support is also growing for the creation of more drug and mental health courts across the country. Finally, there are the promises being made by drug policy leaders in Washington that state medical marijuana laws will be respected rather than trampled, as they have been for more than a decade.

A related issue involves the infamous discrepancy in sentences for crack- versus powder-cocaine crimes. Vice President Biden was one of the architects of these laws--which is why his repudiation of them in recent years has been so significant. The day after Obama's inauguration, the president's website mentioned the importance of eliminating these discrepancies--as well as of promoting needle-exchange programs and expanding the nation's embryonic network of drug courts. The House recently held hearings on the sentencing discrepancy issue.

For Margaret Dooley-Sammuli, deputy state director of the Drug Policy Alliance in Southern California, sacrosanct legislative underpinnings of the "war on drugs" are starting to look like the Berlin Wall, "up one day and down the next"--seemingly impregnable; in reality, utterly fragile. Over the past few years, an increasing number of localities have dabbled in ways to simply walk away from the "war on drugs." Initiatives in several states and cities, including Denver; Missoula, Montana; Albany County, Oregon; and Seattle have mandated that law enforcement agencies deprioritize marijuana arrests. Several cities have begun needle-exchange programs. And states like California have passed citizens' initiatives mandating that first-time drug offenders be channeled into treatment programs in lieu of prisons.

Then there's Virginia Senator Jim Webb's legislation creating a blue-ribbon commission on criminal justice reform, with a mandate to put all questions on the table during its eighteen-month tenure--from drug law reform to the restoration of judicial discretion in sentencing, from parole reforms to different approaches to gangs, border patrol, prison architecture and the like. Webb has been pushing for systemic criminal justice reform for years; in 2009, he believes, it will acquire legs. During a telephone interview for this article, Webb said that President Obama "has personally called me on this, and he's very supportive of the idea of moving forward." Across the aisle many Republican senators, including senior figures like Lindsey Graham, have also expressed support for the idea.

The bipartisan backing for Webb's commission is partly a response to the escalating drug-and-gang crisis south of the border. There's a growing recognition in US policy and law enforcement circles that government dysfunction, phenomenal levels of street violence and the rising power of drug cartels are threatening to move from being a Latin American problem to one that destroys the integrity of the Mexican state and risks spilling over more heavily into the American Southwest. Nobody, no matter their political stripe, wants the Tijuana-ization or Juárez-ization of Phoenix or Los Angeles, of San Diego or El Paso.

"It really is a serious problem in this country," Webb argues. "The transnational gangs or syndicates are bringing a tremendous amount of drugs into this country."

To get a handle on that problem involves thinking of ways to neutralize these gangs, which inevitably leads to a discussion of partial drug decriminalization or legalization. Why? Because once the drug market is no longer confined to the shadows--once it is regulated and taxed, as alcohol was after Prohibition ended in 1933--the violence that accompanies struggles for control of that illicit market will disappear. After years of denying this truth and assuming that the country could incarcerate its way out of the drug-abuse epidemic, a number of American politicians, Webb included, are touting that seemingly paradoxical fact. Want to get really tough on crime? Well, do the smart thing: start working out ways to neutralize the drug cartels, start talking about at least limited forms of decriminalization or legalization.

It is, Webb argues, "a fair issue for this commission. Every piece of it should be fair game."

For an administration like Obama's that prides itself on thinking outside the box, systemic drug policy reform is an intriguing prospect. An increasing number of law enforcement people and judges have also decided that this is an idea worth running with.

"I've never seen so much interest," says retired Orange County superior court judge James Gray, who has been advocating marijuana legalization since the early 1990s. "My phone is ringing much more than it ever has before."

"We need to ask, Is there a more sensible approach?" argues Norm Stamper, who, like Kerlikowske, is a former chief of police of Seattle who believes the criminal justice system is broken. "And the answer is prevention and education and treatment."

After decades of being on the defensive, progressive criminal justice reformers suddenly have a receptive audience. New York, which has closed some of its prisons in the past decade, has spent the last few years unraveling the tangled web created by the 1970s-era Rockefeller drug laws. Michigan, Louisiana and several other states have also scaled back their harshest mandatory drug sentences. The State of Washington is looking at how to redefine low-end drug and property crimes as misdemeanors rather than felonies. And in Michigan, which allows a $100 theft to trigger a four-year prison sentence, legislators are pushing to make the threshold $1,000 instead, so as to reduce the number of low-end offenders pushed into long-term incarceration and hobbled for life by felony convictions.

Meanwhile, correctional system administrators in Georgia, Illinois and Arkansas have started the long, hard task of reforming their systems from within even without a new consensus emerging on the issue.

Howard Wooldridge, a retired police detective from Bath, Michigan, who advocates in DC for criminal justice system reform, says the moment is ripe for change. "I've been doing this for twelve years, and this is by far the most perfect storm."

America isn't about to abandon all of its "tough on crime" tenets. Nor should it in all instances. The three-strikes law will likely remain in place for violent offenders, as will the growing body of laws limiting where sex offenders may live. Violent crimes will probably continue to trigger longer sentences than they did before the get-tough movement. And while some inmates will qualify for early release, many sentenced to long terms at the height of the tough-on-crime years will stay in prison. But out of economic necessity and because of shifting mores, the country will likely get more selective, and smarter, about how it uses incarceration and whom it targets for long spells behind bars.

This will be especially true for drug policy--the multi-tentacled beast that's sucking most people into jails and prisons. There, profound changes are likely to develop over the next few years. And when it comes to the mentally ill, momentum continues to build around mental health courts designed to get people medical and counseling help rather than simply to shunt them off to prison. States like Pennsylvania are starting to develop parallel institutions to deal with mentally ill people who run afoul of the law. Many other states will likely follow suit in the near future. Forty years after deinstitutionalization, a new consensus is emerging that prisons became an accidental, de facto alternative to mental hospitals, and that very little good has come from that development.

"I believe that we have a compelling national interest," explains Senator Webb, referring to systemic criminal justice reform. "That's a term that is carefully chosen. This is a national commission, but it should not be limited to looking at the federal prison system. You have to look at the whole picture and then boil it down into resolvable issues."


About Sasha Abramsky
Sasha Abramsky, a freelance journalist and senior fellow at Demos, is the author, most recently, of Breadline USA: The Hidden Scandal of American Hunger and How to Fix It (PoliPoint).