California, a Failed State

As a rule, when considering all things California, I have relied on Joel Kotkin. He is an academic, a scholar, and not a political partisan. His reflections on the California recall election appeared in the City Journal, which is not, I am sure you know, a leftist publication.

So, Governor Gavin Newsom won the recall election last week. What does it all mean, for California and for America.

First, Kotkin points out that California has lost most of its middle class. Thus, the state is divided between the rich and the rest. The companies that employed middle class workers are leaving the state. The only middle class that remains contains unionized state workers. It sounds familiar to New Yorkers:

The sinking of the state’s once-buoyant middle class undermines the base for a two-party politics in California. The kinds of taxpayers who called the state home during the 1980s and 1990s are leaving, and few families are moving in. Many of the leading companies that employed middle-class workers—McKesson, Hewlett Packard, the oil and aerospace industries—are fleeing at a quickening pace.

It is worth noting, Kotkin adds, that the Newsom campaign largely outspent his opponents’ campaigns. And, let us not forget that the California poor, those who are not living on the streets, have benefited from government provided covid relief funds:

California today works primarily for two key Newsom constituencies: unionized public employees and pop culture, tech, and financial leaders. Money from these groups gave Newsom a massive advantage in advertising and organizing. Newsom’s coffers exceeded those of the nearly bankrupt recall campaign and all the prospective candidates combined by almost three to one. The combination of tech IPOs and federal money has also financed massive relief funds for a third Newsom constituency—California’s highest percentage-in-the-nation poor population—allowing the governor to act like a modern-day Boss Tweed.

Blue collar workers in California are vanishing, with the exception of those who work for the state. Still, California is leading the nation in unemployment. 

In this environment, California’s blue-collar workers face a grim future unless they’re employed by the state. Progressive success drives out the very businesses—manufacturing, suburban homebuilding, the once-robust oil-and-gas sector—that historically employed middle-income workers. Indeed, the lack of stable jobs and a dependence on low-paid service workers contribute to the state’s highest-in-the-nation unemployment rate. One out of every three households, notes the United Way, find achieving even basic security “elusive.”

As for Newsom, most Californians did not see him as an effective governor. The state’s problems are legion, and Newsom had no real way to solve them. One might even say that progressive policies caused them. Unfortunately, the Republican Party, outspent and outmanned, could not turn Democratic failures into votes:

Polls show that many Californians don’t see Newsom as effective at battling such problems as deepening income inequality, homelessness, rising crime, fires, and the pandemic. Some longtime progressives broke with the governor. But the state Republican Party could not capitalize—a sign that it remains largely marginal, particularly in the highly populated coastal areas, where dislike of Donald Trump has tarnished its brand.

California is certainly a failed state. Kotkin explains:

Even before Covid, 53 percent of Californians were considering leaving; almost two-thirds thought the state’s best days were behind it. The New York Times may see California as a multicultural exemplar, but a 2019 University of California, Berkeley poll showed that 58 percent of African-Americans, 44 percent of Asian-Americans, and 43 percent of Latinos were considering leaving the state. A recent poll from Sacramento’s Chamber of Commerce showed that roughly one-fourth of the workforce was contemplating a move out within three years.

If Republicans want to exercise any influence, to say nothing of power, they need to promote a new agenda. That means, they need to have constructive plans to solve California’s extensive problems:

If they want to become relevant in the state again, though, Republicans need a constructive agenda. The next opportunity could take place under more difficult circumstances for progressives. The expensive and unreliable electrical grid will continue to cause problems. The state is in such trouble that it has been forced to propose building five “temporary” gas plants to keep the lights on. Meantime, green-driven reluctance to stop water releases to the ocean risks taking jobs from workers in the now politically marginalized interior. Some 6,600 Central Valley farmers have already been told not to expect deliveries this year. Pension debt will mount; schools will surely not improve with the state’s new ethnic studies curriculum. As the expansion of the welfare state competes with the demands of the public sector, the financial crush could lead to a tax hike—forcing California Democrats to choose between their wealthiest backers and the union–social welfare juggernaut.

Hopefully, California will not become a role model. In a better world it would be a cautionary tale:

Governor Newsom has survived the recall, but that doesn’t mean that the Golden State is destined to become the role model for the country—it might not even represent the inevitable future for most Californians.