California Forward Summit Leading California Backward

California Governor Gavin Newsom speaks at a VA Facility in Los Angeles, Calif., on Nov. 10, 2021. (John Fredricks/The Epoch Times)

Commentary

The California Economic Summit provides a good snapshot of where the state’s political and economic leaders are taking the state. It’s sponsored by California Forward, a major state think tank especially connected to such powerful politicians such as state Sen. Bob Hertzberg (D-Los Angeles).

Its 10th Summit took place this year in beautiful Monterey. The first day featured Gov. Gavin Newsom, who explained he skipped his scheduled appearance at the Glasgow Climate Summit to spend more time with his family.

“I’ve been on this ... treadmill, we’ve gone from crisis to crisis,” he said. “The kids, literally, they kind of had an intervention. They said they couldn’t believe that I was going to miss Halloween.” That seems reasonable. Although rumors persist the normally publicity-avid governor had an adverse reaction to his COVID vaccine shot.

“California has no peers … continues to have no peers,” he said, perpetuating the common trope state politicians use to flatter themselves, of California as a separate country, instead of a subsection of the USA. “We are world-beating in terms of our economic growth. In the last five years, no other western democracy has outperformed the state of California. … The United States has not … Germany, Japan, the UK … no other Western democracy has outperformed this state in your economic output of 21 percent GDP over the last five years. …

“No state in America has created more jobs since January than the state of California … 812,000 jobs. … We’re the tent pole of the American economic recovery … 44 percent of America’s jobs in August came out in the state of California. No state is creating more factory jobs than the state of California.”

The problem with such numbers is some of them are not proportional. Because California still is by far the largest state, at nearly 40 million residents compared to 29 million for No. 2 Texas, it’s going to lead in most fields no matter what. The state also is recovering from Newsom’s COVID lockdown in 2020 that was more severe than in most states. It currently is rising faster because it has more ground to make up.

A bigger problem is the state’s jobs and business growth disproportionally occurs in the Bay Area because of Silicon Valley, which still propels worldwide tech growth. But what about the rest of the state, which continues to flounder? Not everybody is a 160-IQ computer programmer.

The unemployment rate in giant Los Angeles in September was 9.8 percent, below double digits for the first time since COVID hit. Houston’s rate, 4.5 percent, was less than half.

“What defines this conference is this bottom-up notion to regionalization framework,” Newsom added. He boasted of his $600 million Community Economic Resilience Fund, which is supposed to advance regional planning.

The Summit’s commentary on him called that statement one of its own “priorities.”

Surreal Analysis

But the Summit’s general themes are surreal, as if they were dealing with the issues and problems of the 1960s, not the 2020s.

It its discussion of “Home Ownership and Wealth Creation” on Nov. 10, the Summit discussed, “Home ownership has traditionally been the way families create intergenerational wealth, but barriers such as redlining and restrictive covenants have kept many families of color from accessing that wealth.”

Redlining is where realtors and banks draw “red lines” around certain districts according to race, in particular keeping blacks and Latinos out of certain neighborhoods. After the Legislature banned it in 1963, in 1964 Proposition 14 brought it back. Then the California Supreme Court and the U.S. Supreme Court both banned it.

Restrictive covenants are written into home ownership contracts and limit specific races from purchasing a house. The U.S. Supreme Court banned them in Shelley v. Kraemer in 1948.

It’s surreal to think either redlining or restrictive covenants have anything to do with the unaffordability of housing in California for poor people or minorities. Anyone who puts a house up for sale immediately is showered with offers, commonly well above the purchasing price and often with cash on the barrel. Nobody cares about the race or ethnicity of the purchaser. Chinese investors seeking to shield some of their wealth from control or confiscation by the Chinese Communist Party also are frequent buyers.

The median price of a California home soared above $800,000 in September, and is expected to go even higher. Just 24 percent of Californians can afford a home in the third quarter of 2021, down from 28 percent a year prior.

That’s the real problem. And as I have pointed out in some of my earlier Epoch Times articles, it’s not going to get better. Although building more houses certainly would help, there’s only one thing that can make housing more affordable: higher wages for workers. But California’s stultifying high regulations and taxes are preventing that from happening—excepting, again, the case of Silicon Valley.

A December 2019 analysis by the liberal California Budget & Policy Center found, “It’s hard work to be able to afford to live, raise a family, and eventually retire in California, especially for workers with low or moderate incomes. … [R]esearch shows that wages and benefits have significantly eroded for many Californians in recent decades. Many workers are being paid little more today than workers were in 1979 even as worker productivity has risen.”

Of course, middle-class and poor Californians have found one way to get affordable living conditions—leave for another state, such as Tennessee. Several of my friends recently sold their houses and are headed to the Volunteer State.

But at the Summit in Monterey, Tara Lynn Gray, director of the California Office of the Small Business Advocate, said we need “to invest in communities and neighborhoods where there has been traditional and historical disinvestment. Whether we’re talking about the wealth gap, the earnings gap, the education gap, to even the healthcare gap, we have to intentionally and systematically create policies and programs and, mostly importantly, partnerships that work to close those gaps.”

That reminds me of the “mineshaft gap” line from the movie “Dr. Strangelove.” Is she kidding? She’s just talking about even more bureaucracy and “partnerships” with favored contractors.

This is ideology, not solutions.

In addition to higher wages from cutting taxes and regulations—and getting rid of useless bureaucracy—what’s really needed is to build, build, build.

Equity Instead of Equality

The Summit also featured the new buzzword “equity.”

“We truly need to apply an equity lens in the work that we do, especially in the work that directly effects the lives of the people we are trying to help,” said Director of the California Office of Planning and Research Samuel Assefa.

“Equity” is the replacement for the “equality” we all have been working toward since the 1960s, following Dr. Martin Luther King’s 1963 “I Have a Dream” speech, where he urged, “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.”

Equality means equality of opportunity. Roadblocks to achievement, such as redlining and restrictive covenants, are removed. Efforts are made to improve education, and so on. But it’s still up to you to develop “the content of your character” so you can achieve.

Equity, on the other hand, is socialism—where the government forces everyone into the same mold, as determined by bureaucrats.

This can be seen in a comparison. Take two college students, age 22. Student 1 decides to get a decent job, working eight hours a day to have time to start and raise a family. Student 2 decides to strive for a top executive job, working 12-hour days, starting a family later, if ever.

Equality says both had the same equal opportunity, but took different paths. Student 1, while making a fraction of Student 2, chose a different path to pursue happiness. In any case, each made a free choice on a level playing field. That’s what America is supposed to be about.

Equity says Student 2 unfairly makes more money than Student 1, and ought to have his or her unearned surplus taken away and given to Student 2. That’s socialism. And it makes everyone more miserable and impoverishes them.

For better solutions, I suggest reading my three-part ET series reviewing the new book “Saving California: Solutions to the state’s biggest policy problems.” For each of the 10 chapters I provide bullet-point summaries of the solutions offered.

• Can California Be Saved? Part 1
• Can California Be Saved? Part 2
• Can California Be Saved? Part 3

California needs to push aside the Summit’s dreamy La La Land illusions and get down to basics for real reforms.