Competition begets innovation. That’s as true in politics as in business. Unfortunately, California’s one-party system is holding back the state from engaging in the national debate on many issues.
The Republican Party here is so moribund it has difficulty escaping its super-minority status—fewer than one-thirds of the seats in the state Senate or Assembly. Even if they regain enough seats to go above that one-third threshold in November, as is possible, the party will do so only barely.
The last Republican to win statewide office was Gov. Arnold Schwarzenegger in 2006, and he spent the last five of his seven years in office governing like a Democrat.
Consider taxes. California led the global tax revolt by passing Proposition 13 on June 6, 1978. I was stationed here from my native Michigan as a U.S. Army soldier studying Russian at the Defense Language Institute in Monterey. My local friends all were in favor of the initiative, which passed with a lopsided 63 percent of the vote.
It was a harbinger. That Nov. 6, Jimmy Carter signed into law the Revenue Act of 1978, whose main feature was cutting the capital gains tax from a maximum rate of 50 percent to 28 percent. That fueled investment in the fledgling computer startups located in Silicon Valley, such as Apple and Oracle.
On May 4, 1979, Margaret Thatcher became prime minister of the United Kingdom, at the time the “sick man of Europe.” It was beset with the high tax rates mocked in the Beatles’ song “Taxman”: “There’s one for you, 19 for me”—meaning a top tax rate of 95 percent. The radical leftist labor unions periodically shut down the country with strikes. She changed all that with free-market tax cuts and privatization, restoring much of the UK’s greatness.
That set the stage for the Nov. 4, 1980 election of former California Gov. Ronald Reagan as president. His large tax cuts and slashing of bureaucracy restored the country from the Carter-era “malaise.” Held aloft by the stunning 7 percent economic growth of 1983, Reagan could challenge the stagnating but still dangerous Soviet Union, prevailing and spreading liberty across a large swath of the world.
California was the center of it all in the 1980s: The defense companies that rebuilt the military under Reagan. The Silicon Valley companies that created the microcomputer revolution, paving the way for the global internet revolution—also largely begun here—in the 1990s. And the philosophy of freedom that spread around the world.
People flocked here, including yours truly in 1987. The state gained six congressional seats.
Compare that to today’s California. On the November ballot is Proposition 30, which would raise taxes 1.75 percentage points on those making $2 million or more, to fund dubious electric-car programs. But those are the investors needed to create businesses and jobs of the future. The top income tax rate would go from an already staggering 13.3 percent to 15.05 percent, the highest in the nation. I’ve known a couple of billionaires who left the state because they had enough, taking their businesses with them.
I don’t know him personally, but the most prominent exile is Elon Musk, the world’s richest man, who relocated himself and his corporate HQ to Texas. If Prop. 30 passes, more will follow.
Let’s look at another area, social policy—in particular, abortion, after the recent U.S. Supreme Court ruling reversing Roe v. Wade, which meant the issue was tossed back to the states, where it ought to be. In the pre-Roe era, California also was the center of the issue. In 1967, Reagan signed into law a liberalized abortion law, one of the first in the country, although he later regretted it. He became a pro-life leader.
In the post-Roe world of 2022, other states are having serious debates on whether to make abortion legal again. Some, such as Michigan, are holding initiatives on it. Others, such as Indiana, are banning most abortions through the legislature.
Responding to the new situation, this November, Californians will vote to make abortion here even more legal by passing Proposition 30. According to the best interpretation, and pending court challenges, it would allow abortion right up to the second before birth. That’s a radical change, because even the most liberal European countries limit it to pregnancies at 12 weeks or before. It’s expected to pass with something like 75 percent of the vote.
But what’s crucial for now is there’s little debate on it. People here and elsewhere just assume California has become so radical this is expected. Unlike other states grappling with some way to deal with their restored, state-level constitutional powers on abortion, California is just taking the most radical position available.
Thus, on this issue California will become not more relevant, but less. Prop. 30 will be seen as just another California aberration.
It didn’t used to be like this. We used to alternate political parties in the governor’s chair every eight years. Even the Legislature used to become Republican sometimes through the 1960s. We used to be a policy contender.
No wonder the state, instead of gaining several seats in the U.S. House, just lost one.
Today, under one-party rule, California politics has become predictable, absurd, boring, and irrelevant.