Rails 3 production environment by default is configured to use application servers (apache, nginx, …) to serve static assets. If you want to run production environment locally with the assets, you need to precompile the assets with rake assets:precompile and start the server in production environment locally with rails server -e production using standard development server like mongrel/webrick or similar. And you will need to change the following line in config/environments/production.rb so that static assets are served by the ruby server:

config.serve_static_assets = false

to:

config.serve_static_assets = true