California Keeps Declining అంటున్న WSJ

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California Keeps Declining, and Newsom Tries to Blame Trump

Tariffs don’t help, but the state’s problems aren’t new, and Democrats have governed for years.

 

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Say this for Gavin Newsom, he’s a master of misdirection. California is losing jobs—54,800 during the first three months of this year. Valero this month announced plans to close a major refinery, portending gasoline shortages and price spikes. Insurance and electricity rates are soaring.

Last week Mr. Newsom boasted that California in 2024 overtook Japan to become the world’s fourth-largest economy. “California isn’t just keeping pace with the world—we’re setting the pace,” he tooted. “While we celebrate this success, we recognize that our progress is threatened by the reckless tariff policies of the current federal administration.”

A tortoise can beat a snail, but that doesn’t mean it’s fast. Japan’s sluggish growth, weakened currency and relatively low inflation over the past several years allowed California to surpass it in nominal gross domestic product. But California isn’t keeping pace with America’s zebras. Its economy grew at half the pace of Florida’s over the last five years.

The Golden State’s GDP would rank 11th in the world when adjusted for purchasing power, according to a report by the California Center for Jobs and the Economy. This analysis reflects how the state’s high costs diminish living standards. Californians earn more on average than folks in the rest of the country, but their paychecks don’t go as far.

Filling up a Jeep will cost you $100. Charging a Tesla isn’t much cheaper since California’s electricity rates are double the rest of the country’s and continue to climb owing to Mr. Newsom’s reckless climate policies. Pacific Gas & Electric recently proposed another rate increase, following six last year. Nearly 1 in 5 households is behind on utility payments.

To afford a typical home in the state (median sale price $884,350), Californians need to earn nearly $200,000. Many are increasingly struggling to find work as employers lay off workers and move jobs to more business-friendly states like Texas.

Since January 2020, California has lost jobs in information (54,100), finance (62,200), professional and business services (49,100), leisure and hospitality (59,200) and manufacturing (70,200). While employment initially rebounded after the pandemic lockdowns, most industries have been losing jobs since summer 2022.

Not that Democrats in Sacramento care. They strive to set the pace for job-killing regulations. California has lost 33,400 jobs in “limited service” restaurants since Mr. Newsom signed a law in September 2023 establishing a $20-an-hour minimum wage for fast-food employees. Oh well. These aren’t “good” union jobs.

Fossil-fuel workers are becoming an endangered species in the state owing to predatory government policies that are effectively outsourcing energy jobs. California’s oil production has fallen by a third under Mr. Newsom. The state is importing more oil from the Middle East and South America. Brazil’s leftist leaders send their thanks.

California will soon have to import even more fuel from overseas because of refinery closures. About 20% of California’s refining capacity is set to shut down over the next 12 months. More than a third will have disappeared since Mr. Newsom became governor. The rules will end up increasing CO2 emissions.

Few refineries outside California produce its squeaky-clean blend, and the state lacks the port infrastructure and storage facilities to handle more gasoline imports. University of California, Berkeley economist Severin Borenstein warned last week that prices might rise $1 a gallon if the state “does it right,” though the impact could “be many dollars per gallon.”

Mr. Trump’s election was a blessing in disguise for Democrats in Sacramento. The president provides a convenient scapegoat for the damage wrought by their own policies. Rising unemployment and prices? Not our fault. While Mr. Newsom may try to pass the buck, he surely realizes the state’s problems will be an albatross if he runs for president in 2028.

This is why you hear him now mouthing the “abundance” agenda of liberal writers Derek Thompson and Ezra Klein by, among other things, paying lip service to easing regulations that restrain home construction. But Democrats’ desire to expand government control over the economy invariably produces scarcity—of jobs, energy, housing and more—as California illustrates.