Welcome to the Hotel California

Such a lovely place…

– The Eagles, 'Hotel California'

The bad rap on California, whether up north in San Francisco's gorgeous, foggy-cool Bay Area or in the hotter, almost separate nation where I live, around "El Lay", south of Tehachapi mountains and San Joaquin valley, is that we're too laidback, easygoing, softminded and soft-edged – a bit loopy, a lot less intense and "interesting" than New Yorkers and other east coasters, and probably somewhat shallow. As Woody Allen's Alvy Singer famously remarks to Annie Hall, when she says how clean it is: "That's because they don't throw their garbage away, they turn it into television shows." Great joke from a Manhattan bigot.

California's own politicians routinely call us 40 million people – one tenth of the US population – "ungovernable" and "dysfunctional" because of our $19bn deficit and chronic legislative gridlock in the state capital, Sacramento. Not to mention the "golden state's" all-season sport of demonising immigrants who cross and recross the Rio Grande – often finding not jobs, but death from heatstroke in the Sonoran desert.

But amid the hoopla surrounding the upcoming 2 November midterm elections, for governor and senator, what's forgotten is how terrific and just plain liveable California is – despite freeway congestion, mudslides, wildfires, earthquakes and our present, vain, empty-suit governor, Arnold Schwarzenegger.

For me, as a born midwesterner and then a settled Londoner, this amazing 800-mile-long sliver of a state was a god-given second chance at breathing a little "easier-in-myself" (even in LA's smog), and doing the work I most love in a fabulous climate, where, literally, I can pick an orange or lime from a tree in my small back garden. You need do no more than spit on the ground in most parts of amazingly fertile California, for something strange and wonderful – including its political phenomena – to grow almost immediately.

Even today, in the midst of a man-made cyclone of home foreclosures and expired jobless benefits, there's still a liberating, innovative feel here, an expansive "something new is about to happen" atmosphere – whether it's the latest in "California casual style" that goes global, or speedier semiconductors or 4-D movies (I'm sure they will come).

We often forget, but California is full of a modern version of Steinbeck's Tom Joads, not all of them down-and-outs, who, like me, came here seeking exactly what the early Spanish adventurers were looking for – a mythical paradise – and found it. Yes, there's a whole literature of disillusionment with California (including a book of mine), and a mendacious library of tourist "boosterism" as well. But for all its faults (including active seismic fractures), over the long haul, we are what the rest of America could be if it had our tradition of pragmatic utopianism, our climate and the stunning beauty of the land.

Remember, this is where a rose-red socialist, the author Upton Sinclair, ran on a pie-in-the-sky platform of EPIC (End Poverty in California), and came within a whisper of being elected governor. Alas, he was stabbed in the back by my hero, President Roosevelt, and propagandised out of the race by Fox News-style "newsreels" faked by Metro-Goldwyn-Mayer that, not for the first and certainly not for the last time, rang the racist bell. Except, in Sinclair's case, the border-crossing aliens were white "Okies".

You can bet on it: whenever a progressive candidate appears on a California ballot, Monster Money will go all-out to kill anything smacking of fairness and decency to working people.

This anti-incumbent year, her name is billionaire-empress Meg Whitman, former eBay CEO, who so far has poured $145m of her Forbes-estimated $1.3bn fortune into a smart, ad-saturated campaign to become our next governor after termed-out "Ahnold". Whitman – married name: Mrs Harsh (no comment) – thus smashes the record for the most money ever donated by a candidate in any American election, outstripping Mike Bloomberg's paltry $108m to buy the New York mayor's chair.

By contrast, her notoriously skinflint opponent, 70-year-old Catholic, pro-choice Jerry Brown, our present attorney general, and a former, liberal, two-term governor (and son of a governor), has been paralytically slow off the mark, with a skeletal staff, hardly any ground operation and unremarkable TV ads. Yet, Whitman is a wide-open target: she promises to bring jobs to California and, at the same time, vows to cut 40,000 state jobs! But like most running-scared Democratic candidates across the country, Brown so far refuses to come out swinging as his authentic, angry populist self. Rather than focusing on what he'd do to right the damaged economy, he's running instead on his name (unknown to younger voters) and experience.

Democratic party death wish aside, Jerry Brown hasn't exploited his natural demographic advantages. Normally, California leans 45% Democratic, except in the "bread basket" valleys and eastern sierras, against 31% Republican. Forty per cent of Californians are Democratic-friendly Latinos – shrewdly wooed for over a year by Whitman, who, without a blush, about-faces to white Republican voters and guarantees she'll be "hard as nails" on employers who hire "illegals".

Ah, sweet justice. Happily, a bit of last-minute melodrama involving revelations about Meg Whitman's nine-year employment of an illegal Latina maid, Nicky Diaz – "she was part of our family" until she became a political liability and was brutally sacked: "You have never seen me and I have never seen you," Ms Diaz swears Whitman told her – may jazz up the contest in Brown's favour.

Although it's always a mistake to count on the other side beating itself up with gaffes (the Obama White House's dismal electoral strategy), the "illegal maid scandal" may actually help determine the outcome in this battle for California's soul. At the moment, prevaricating Whitman seems flummoxed by her TV-tearful, lowly former maid, who is being championed by California's most publicity-mad feminist lawyer, Gloria Allred.

If only Whitman had told the truth at the start – which is that California utterly depends on the sweated labour of millions of Nicky Diazes from south of the border.

Also running at the top of the ballot, against our present, old-fashioned liberal senator, Barbara Boxer, is anti-choice Carla Fiorina, yet another ex-CEO, who almost drove Hewlett-Packard into the ground despite slashing the payroll by many thousands of employees and outsourcing their jobs to Asia. Unlike the smarter Whitman, Fiorina, a more natural reactionary who is dropping behind in the polls, has eagerly embraced "Republicans with crazy hats": the Tea Party angries.

It says much for my adopted state that this Palinesque movement is so much weaker in the allegedly "crazy" state of California. As I said, utopian but pragmatic.