GRASP OF FREE-MARKET BASICS ELUDES NEWSOM
In the grand theater of politics, Gov. Gavin Newsom has recently taken center stage, from high-profile meetings with international leaders like Xi Jinping to orchestrating photo ops at the APEC Conference of world leaders in San Francisco. Even President Joe Biden publicly said Newsom has been “a hell of a governor” who could have any job in his administration, even his. However, as Newsom’s national and international exposure rises, California finds itself mired in a multitude of deepening crises.
The state is grappling with rampant homelessness, an extreme housing shortage, an exploding cost of living, energy blackouts, devastating wildfires, escalating crime with stores closing in major cities, educational results trailing other states, small businesses crushed by regulations and water shortages. When we do get heavy rains, as we did in early 2023, most goes to the sea because of regulations and not enough reservoirs.
Meanwhile, taxes and the state budget have soared, increasing after adjusting for inflation and population growth, leading to a current budget deficit exceeding $68 billion, yet the governor’s photo ops and press conferences persist, with targeted pandering and using funds the state can ill afford, while more pressing issues remain unaddressed.
Gavin Newsom isn’t the only politician doing this. He’s now one of the most prominent, and on a faster track for a likely run for president of the United States. He is a poster child for the plagues that continue to steal power from the people: a system fueled by partisan politics and extremes, special interest money from unions and other advocacy groups, big media bias and negative campaigning on both sides.
Citizens need to be back in control of the government before it’s too late. I should note here that I’m not running for Newsom’s job or any other political office. Been there, done that, most recently running for California governor in 2018.
I am very concerned about what I discovered in my political experience in the campaign.
It’s been a wake-up call for me, seeing how Americans are being used by the very system they have been made to believe only helps them. The people are often distracted by what seems to be more “free” benefits, even as they’re being used as political pawns for the powerful.
In a recent display, Newsom proudly signed Assembly Bill 1228, promising a $20 hourly wage for fast-food workers in California by April 2024. The well-choreographed press conferences and smiling politicians create an illusion of progress, but the reality behind the scenes paints a different picture — one of unintended consequences and economic naivety.
Minimum wage hikes, lauded as a means of improving workers’ lives, are akin to price controls with a history of causing a ripple effect on compensation demands and rising prices.
Despite the cautionary tale of the 1970s, Newsom appears set on repeating those mistakes. The fast-food industry, already reeling from the economic aftershocks of the pandemic, now faces an automation wave triggered by rising labor costs. As workers celebrate higher wages, the industry turns to self-serve kiosks. In North Texas, McDonald’s experiments with a fully automated restaurant, rendering the irony stark: Politicians win immediate approval, while workers face long-term consequences. At the same time, higher minimum wages mean higher costs,which translates into higher prices for the very low wage workers Newsom purports to want to help.
The recent signing of Senate Bill 525, mandating a $25 minimum wage for many health care workers by 2026, further highlights the gap between political posturing and economic reality. While the health care industry deserves recognition for the essential work it does each day, imposing such wage mandates risks hospital closings, financial strain and decreased accessibility to critical health care services. At the same time, it also results in higher costs and prices, translating into higher costs and insurance prices, further burying lower income residents into poverty.
The allure of arbitrary wage figures, exemplified by Rep. Barbara Lee’s fantasy goal of a $50 minimum wage, is a perilous game. Economic and fiscal understanding must prevail over political posturing. The consequences of such policies impact workers losing jobs to automation, businesses forced to close and communities left with diminished services.
Navigating a rapidly evolving economy requires policymakers to embrace a nuanced understanding of free markets. Leaders must consider the long-term ramifications of decisions, steering away from populist measures. Only then can California hope to strike a balance between uplifting workers and fostering an environment where businesses can thrive without succumbing to government-imposed wage controls.
All of this translates into a need for better leadership. Leadership is what separates a successful government from one that damages its constituents’ living standards and opportunities for the future. Unfortunately, California and the country are stricken with leadership more attuned to fundraising and pandering to the media than pursuing good long-term policy for its own sake.
America has been blessed with strong leadership throughout most of its history. The advent of the media age and the need for huge fundraising has damaged our ability to attract the type of leader that focuses on the longer term good instead of the short term. What is needed is an electoral structure that fosters that kind of long-term thinking that puts our country in the best position to weather the tough times ahead.
is a businessman, 2018 Republican nominee for governor of California and chairman of the Rescue California Education Foundation. He’s the author of the new book, “The Newsom Nightmare: The California Catastrophe and How to Reform Our Broken System.” He lives in Rancho Santa Fe.