The Governor can no longer satisfy both ends of his party
Gavin Newsom, the would-be president many Democrats hope might be an alternative to the current dodderer-in-chief, has landed himself in hot water. Once an enthusiastic backer of just about every progressive cause, the California Governor must now cope with a budget deficit that has already ballooned to $32 billion. This will no doubt limit his ability to spread largesse to the party’s loyal constituencies.
Perhaps nowhere is this more evident than in the coming battle over reparations for African Americans. Newsom approved a reparations task force in the midst of the frenzy which followed the murder of George Floyd, but he now faces a bill that could top $800 billion. Newsom has already hinted that the reparations discussion is about “more than cash payments”, but in reality cash — estimated as at least $125,000 per individual but sometimes much higher — is what this is all about.
Newsom’s attempt to spin reparations as a moral lesson has been sharply attacked by reparations advocates and, as usual, he has now backed off from his earlier remarks. Yet at some point he will have to confront the outrageous numbers involved in the scheme, which would overwhelm the state’s daily functions and make it all but impossible to pay for things such as public employee pensions and elaborate “green pork” subsidies for key constituencies like consultants, investment banks and tech oligarchs.
The budget shortfall, itself reflective of mass outmigration of both people and businesses, threatens to place Newsom at odds with the environmental, racial, and economic justice advocates who now dominate his party. When the coffers were brimming with Covid aid and money from tech IPOs, Newsom could play Maecenas to the poor in a state with the nation’s highest cost of living adjusted poverty rate, while still keeping close to the oligarchs who would fund a future presidential bid. Now conditions have changed, and Newsom looks increasingly unsure how to cope.
This reflects a larger problem for other blue state governors, including Illinois’s Jay Pritzker and New Jersey’s Patrick Murphy, both of whom have been earmarked as possible post-Biden presidents. This is particularly embarrassing given that the much-hated red states, like Florida, Texas, and even West Virginia, boast large budget surpluses. Evidently, lower taxes, less regulation and even lots of demon fossil fuels is what makes for a healthy economy today.
These other blue states, including New York whose uninspiring Governor is on no one’s presidential list, also show all the problems associated with California: huge pension debts, outmigration of people and businesses, and slow economic growth. But they lack the remarkable assets that California still has in critical fields like space, software, agricultural technology and biomedicine. These are all states that lack powerful economic drivers and have far less potential to stage a comeback than California.
But these advantages, if they are allowed to develop, are not likely to provide Newsom with the news he needs in the near future. Instead, he will be spending his time fighting off the increasingly dogmatic Left on climate policies, housing, reparations and expanding the welfare state. Their solutions tend to be for more taxes, which threatens to accelerate the exodus of high-income taxpayers; 0.5% of all tax returns filed in the state collectively pay about 40% of all California personal income taxes, the state’s primary source of revenue.
Something has to give between reality and progressive fantasy. The days of Newsomesque preening may have to end, and the blow-dried king of Sacramento, like his Democratic counterparts, may have to actually deal with the problems that their policies have caused, rather than rely on ceaseless virtue-signalling.