California has lost 366,000 jobs since February 2020. In that same period, the rest of the US economy has added over 5.4 million jobs. California jobs are declining because California is losing people, over 550,000 since 2019. Some who are leaving are moving to states with more affordable housing, better schools, lower costs of living, and better opportunities to start a business. In just 2020‒21, California lost 27,300 taxpayers who earned at least $200,000 in adjusted gross income, and the state lost a total of $47 billion in adjusted gross income between 2019 and 2021. This declining tax base is contributing to California’s budget difficulties, as the state faces a $58 billion deficit in the 2024‒25 fiscal year and annual $30 billion deficits afterward.
California’s ability to right its ship would benefit from having influential, sensible leadership within the US Senate. And with a population of nearly 39 million, there should be some exceptional candidates. But California voters, who will choose among Democrats Barbara Lee, Katie Porter, and Adam Schiff and Republican Steve Garvey in a March 5 special election to fill the remainder of Diane Feinstein’s term, with the top two advancing to the November general election, are not seeing exceptional talent in this race. And if you watched these candidates during the recent Senate debates, then you know that most of them, perhaps none, will be the leaders the state needs.
Lee has represented the Oakland area for over twenty years in the House of Representatives. But Oakland is perhaps the biggest failure among major cities within California, as crime has skyrocketed, rising to the point that California governor Gavin Newsom sent 120 Highway Patrol officers to the city to deal with surging retail crime and auto theft, which now affects about one in thirty car owners every year. Lee advocates for European-style single-payer healthcare, which has led to significant rationing of medical care in those countries, and a $50 minimum wage, which would create a Great Depression-level unemployment rate. She believes public colleges should be free and that $1.6 trillion of student debt held by forty-five million former students should be cancelled. She supports the Green New Deal and wants to spend $1 trillion on moving from fossil fuels to renewables. The printing presses would need to run 24/7 if Barbara Lee were making federal spending decisions.
Porter is worried about lack of competition negatively affecting the economy, particularly big pharma and big tech. She seems to want more antitrust cases against the firms in these industries, but it is hard to see how this will move the needle. Google recently settled an antitrust case with the federal government in which it agreed to pay $700 million in damages, which amounts to a little over $2 per person, and made some changes in how it manages pay options through the Android phone. Small potatoes, particularly in light of the enormous benefits that Google has created for consumers.
When it comes to truly damaging uncompetitive practices, such as public K‒12 education, she is silent. The US public school system is structured as local monopolies, in which most families have little choice where to send their children for school. If their neighborhood school is dysfunctional, then they either must accept that or send their children to private school, which is unaffordable for many families.
Most California public schools are failing, with only one out of four children proficient in math, reading, or science at federal education standards, despite a whopping state school budget of $128 billion. The only reason schools are chronically failing is because we accept it, and in fact we subsidize these failures by protecting them from competition. Charter schools provide some competition in the locations where they exist, but the state’s Democratic Party has fought against the expansion of charter schools and against school choice more broadly. And Porter is silent about these failures because doing anything else would mean fighting against perhaps the most powerful political lobby within her party. Instead, her platform on education policies advertises how she is fighting against for-profit colleges that mislead students. Again, small potatoes.
Schiff turned off some voters by his reliance on the politically motivated Steele dossier in the House of Representatives investigation regarding former president Trump and Russian collusion, his refusal to release the Devin Nunes report, which reached a very different conclusion than Schiff, and his insistence that there was “plenty of evidence in plain sight” of Russian-Trump collusion, an assertion that was not backed by special counsel Robert Mueller’s report, all of which led to Schiff’s censure within the House.
But Schiff doesn’t seem to have learned from this. He stated during the first Senate election debate that his family came to the United States fleeing the Holocaust. The most obvious interpretation of such a statement is that “his family” refers to Schiff’s grandparents or parents. But his grandparents had immigrated to America long before the Holocaust, and his parents were born in this country before Hitler even came to power in Germany. Perhaps Schiff is referring to other family, but this is hardly the type of unqualified statement one makes if trying to repair a reputation for being less than transparent.
Schiff also wants to increase antitrust lawsuits, referencing grocery store mergers as a major problem for consumers. But grocery stores have among the lowest profit margins and return on equity within the US economy. This is another example of candidates not understanding our economic problems or what policies need to be implemented. Schiff should be thinking about how to convince grocery stores, particularly supermarkets, to locate in poor neighborhoods. The big problem people in these neighborhoods face is not alleged antitrust violations resulting from supermarket mergers but the complete absence of such stores in many locations due to crime and permitting issues.
Schiff’s position on housing affordability highlights how out of touch he is regarding California housing, which is not surprising in that he appears to have been living for the most part in Maryland for over a decade, a home which he has declared as his primary residence. He also has a 650-square-foot one-bedroom condominium in Burbank, which he has also declared as his primary residence, but appears to spend little time there. Schiff argues that California must build housing much faster and that the federal government needs to invest in this process. For what is perhaps California’s major problem, his policy statement is grossly inadequate and uninformed.
Garvey is the only Republican candidate among the top four. Garvey has good economic instincts regarding the challenges facing California. He understands that California housing is costly because of policies that raise the cost of building, including policies that create inordinate delays. He understands that homelessness is about mental health and drug addiction issues. He understands that California’s education deficiencies reflect lack of competition and a failure of a broken system to innovate and put kids first. And he understands the need for practical environmental policies that balance being responsible stewards for future generations with addressing the self-serving interests of environmental lobbyists. Unfortunately, neither of his debate performances presented any specific plans. Perhaps Garvey could grow into the job if he were elected, but as a Republican, his candidacy is an extreme long shot.
Whoever is elected in November will become California’s junior senator to Alex Padilla, who has been in office since being appointed by Newsom in 2021 to fill out Kamala Harris’s remaining Senate term. But Padilla has not established himself as a leader. As the senior senator from the country’s largest state, which is also a border state, the fact he was omitted from Biden’s negotiations to forge a border policy-Ukraine-Israel deal speaks volumes about Padilla’s lack of influence and importance within the Senate and his party.
I am tempted to say California deserves so much more. But on the other hand, these are the people we elect. Perhaps it is not so surprising that California has lost so many people in the last five years.
