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President Newsom?

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eye on the news

President Newsom?

Conservatives should not dismiss the potential national appeal of California’s governor. August 30, 2022
Politics and law

Conservatives often see prospective presidential contender Gavin Newsom as a tool of the far Left—and, as such, politically doomed by the seemingly endless crises afflicting California. Yet the Golden State governor is a more formidable candidate than this portrayal suggests. Rather than being a progressive windup doll, the 54-year-old is in fact a skilled political opportunist, with far less dogmatically left-wing views than most of his party’s legislative delegation. He would have no qualms abandoning unpopular progressive stances to pursue the goal of succeeding a doddering President Joe Biden.

In just the last week, Newsom provided two indicators of his flexibility. He vetoed a bill that would have legalized “shooting alleys”—so-called safe drug-injection sites—in San Francisco, Los Angeles, and Oakland. Many of his progressive allies, who favor such programs, denounced the veto. They may be untroubled by rising street crime and drug overdoses, but Newsom knows that disorder in California’s major cities offers a devastating talking point for his opponents—especially those to his right.

Even more striking was Newsom’s recent turnaround on California’s last nuclear plant, and even its gas plants. The green constituency in California detests both forms of energy production and even seeks to ban gas stations, gas heaters, and anything else tainted by fossil fuels. California’s green policies have helped make its energy prices among the nation’s highest and have created conditions likely to cause massive energy shortages on the power grid. Large-scale blackouts and brownouts could also become fodder for anti-Newsom political ads in 2024.

Newsom’s recent moves on public safety and energy have outraged California progressives, particularly the powerful green lobby, which denounced his energy move as “incredibly dangerous.” (California’s greenhouse-gas emissions are statistically meaningless next to those of China, which emits more carbon than all other industrial countries combined.) Newsom knows that green pronunciamentos about the distant future—for example, the recently announced ban on the sale of new gas cars after 2035, and the goal (set in 2018 by his predecessor) of relying on a zero-carbon electric grid in 2045—make better politics than trying to shut down an economy that still depends on fossil fuels today. Newsom spokesman Anthony York suggested that the alternative policies proposed by greens “feels like fantasy and fairy dust.”

Yet none of Newsom’s recent moves should be surprising. He is, after all, not the product of the radical social-justice crowd but the anointed candidate of the Bay Area’s uber class. He generally backs causes embraced by Silicon Valley and the heirs of inherited wealth—on gay marriage, gender, abortion, gun control, and climate change—rather than those focused on expropriating the wealth of the tech, entertainment, and financial elites who have financed his career.

Indeed, compared with Jerry Brown, his far more interesting and sometimes more intellectually driven predecessor, Newsom tends to bend with changing conditions. As mayor of San Francisco, he ran as a “dogmatic fiscal conservative and a social liberal,” who moved ahead of the pack on issues like gay marriage but also proved friendly to the tech firms that transformed the city during his reign. After winning election as lieutenant governor, in 2011, Newsom ventured to Texas to witness firsthand that state’s thriving economy—a move many saw as implicit criticism of then-Governor Brown.

As he eyes a White House campaign, in the event Biden doesn’t seek reelection, Newsom faces some homegrown obstacles, including the presence of his fellow Californian, Vice President Kamala Harris, in the Biden administration. But Harris generates little enthusiasm these days, even among California progressives, and many expect her to be bought off by a plum private-sector job or perhaps an appointment to the Supreme Court. Yet even if Harris leaves on demand, Newsom will still have to cope with the negatives associated with his patrician profile.

Ultimately, Newsom’s fate is tied to California’s. The Golden State did not fare well in the pandemic, and its prime source of funding—the capital gains enjoyed by the rich—is now shrinking. State finances have relied increasingly on past gains in tech stocks and the IPO market, and on rising property values—these, too, show signs of weakening. In Silicon Valley today, therapy is the big growth industry. Though state officials and their media amplifiers enthuse about California’s nearly $100 billion surplus, the Legislative Analyst’s Office predicts the return of budget deficits.

In flush times, Newsom could hand out thousands of dollars in goodies to households and direct massive subsidy programs for housing and health care for the poor and the underemployed. But now the state looks poised to see a repeat of the last recession, which ended in 2009. Back then, it took California five years to bring revenue back up to pre-downturn levels, and the government had to cut state programs by roughly $45 billion to compensate for the deficit. California also has the fifth highest long-term debt of any state—more than $500 billion—and that will increase with higher interest rates.

In his reelection campaign for governor this fall, Newsom will not run on increasing taxes, preferring to position himself as a fiscally conscious moderate. But after November, his political allies, notably the public employee unions, will likely respond to a new budget crisis with calls to raise the state’s income tax, already the nation’s highest, and to add new payroll taxes to pay for universal health care. Even worse news for Newsom politically are progressive plans for a wealth tax that would apply even to some of those who move out of the state. Such proposals could drive more high-profile billionaires to flee, as Elon Musk and Larry Ellison have already done.

There’s even a proposal to reduce the work week to 32 hours, spread over four days, with all additional work counted as overtime, and a host of bills meant to regulate small businesses, such as fast-food outlets. Meantime, California pushes policies that limit contract labor, contributing to work stoppages at the Port of Oakland and causing distress at the much larger Ports of Long Beach and Los Angeles, which have resisted automation and are losing market share.

Newsom’s prospects could also suffer from California’s lagging new investment compared with states like Ohio, Florida, and Texas, as well as its severe underperformance compared with its rivals in areas like construction, manufacturing, and professional and business services. It’s hard to sell the “California Model” when such a high percentage of all jobs created in the state pay below the median income. More embarrassing yet is the fact that tech—the last great driver of California prosperity—is increasingly leaving the state. According to the widely regarded CompTIA Cyberstates projections, most of the top-ten states for tech growth by 2032 will be red ones, including Utah, Nevada, Florida, and Texas. Texas has now even passed California in terms of creating new tech jobs. .

The Biden initiatives favoring high-tech and “green” energy may not be of too much help to California. Though much of the semiconductor industry is currently headquartered in the state, the new surge of chip production is taking place almost entirely in places like Ohio, New Mexico, Arizona and Texas. Similarly, most new electric vehicle and battery plants are located either in the Heartland, the South, or other locations east of the Sierra Nevada.

And Newsom also will have to answer for California’s enormous level of inequality. California now has the nation’s worst cost-adjusted poverty rate and, remarkably, the highest rate of functional illiteracy. When the last California governor to become president, Ronald Reagan, entered the Oval Office, the state’s allure was still strong. But as Newsom gears up for a possible presidential run, the magic is gone, particularly for young families. The new Californian, on average, is young and single, and even immigrants are starting to avoid the state. Population growth, already slowing in the last decade, has now turned negative for the first time in modern California’s history.

And yet, amid this storm of woes, it would be a mistake to underestimate either Newsom or California. The state still has a way of reinventing itself and projecting its story onto the rest of the country. It remains well-positioned in the critical fields of software, medical-equipment manufacturing, trade, and space—all industries with bright long-term futures. Even if the country suffers a recession next year, California could emerge, at least in aggregate, as a plausible success story.

Given the apparent need among Democrats for a viable alternative candidate to Biden in 2024, Newsom could prove the most alluring option to face off against Florida governor Ron DeSantis or—better for his chances—Donald Trump. Newsom could, like Bill Clinton, seek to connect with voters by shifting toward the center-right. Republican presidential hopefuls who dismiss Newsom for his blow-dried hair or his shifting convictions do so at their own peril. If replacements for Biden are in the offing in 2024, Newsom’s name will be near or at the top of the list.

Photo by Brian van der Brug / Los Angeles Times via Getty Images

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