JOEL KOTKIN: Fully Oligarchic Luxury Californication.

This grossly unequal economy over the long run may undermine oligarchic socialism and could redound against the very oligarchs supporting it. At the heart of the challenge lies the old question: who pays? Right now, it’s likely to be the middle and working classes, through income, real estate, and sales taxes, rather than the wealthiest oligarchs themselves. Indeed as Pro Publica’s likely unethical and perhaps illegal revelations of personal tax information show, the likes of Elon Musk and Mark Zuckerberg have been brilliant at evading taxes.

The loss of factory, energy, and food related jobs does not much impact Palo Alto, Marin, or Malibu but could spark a rebellion in the less favored parts of the state. This conflict could become fraught once market cycles change and interest rates, as seems inevitable, rise again. The one percent—who pay roughly half of the state’s income taxes—won’t always have such great years, and with the middle and working class in decline, it’s hard to see where the money will come from to support the burgeoning welfare state.

Worse yet, the prospect of wealth taxes, with plans to force people to pay even if they leave the state, and calls to raise the state’s income tax, already the nation’s highest, could add to the hegira of high-profile billionaires like Elon Musk and Larry Ellison out of state. At the same time, tech employment has been shifting to other states, with firms like Apple doing their major expansions either abroad or in lower cost areas like Austin or Raleigh-Durham. Many leading tech firms now expect a large proportion of their workforce to work remotely after the pandemic, with workers now increasingly seeking out cheaper, more scenic, and less congested climes. It is also likely that some of the most powerful firms, even Google, could become sclerotic as they take on the bureaucratic sloth associated with monopolies.

Earlier: Visualizing all the Vacant Office Space in San Francisco.