The New South-North Economic Dialogue – OpEd
Residents and businesses fleeing California have left the Golden State with a budget deficit as high as $73 billion, a sharp contrast to a $31 billion surplus in 2022. Gov. Gavin Newsom has responded by cutting some 10,000 “vacant” state jobs.
“These are programs, propositions that I’ve long advanced—many of them,” Newsom told reporters. “But you’ve got to do it. We have to be responsible. We have to be accountable.” If the governor really seeks accountability for taxpayers, he should take aim at positions and programs that serve little if any purpose. Consider, for example, the California Coastal Commission (CCC).
A legacy of recurring Gov. Jerry Brown, this unelected body overrides the duly elected governments of the state’s coastal cities and counties on land use issues. The CCC rides roughshod over property rights and commissioner Mark Nathanson served prison time for extorting bribes from Hollywood celebrities.
In 2022 the Commission voted unanimously to reject the Poseidon Water desalination plant in Orange County, which would have provided 50 million gallons of fresh water a day. More recently, the CCC told the organizers of a Huntington Beach surfing event that they must allow a biological man calling himself Sasha Jane Lowerson to participate.
Gov. Newsom could also target the California Institute for Regenerative Medicine (CIRM) the $3 billion state stem cell institute that in 2004 promised life-saving cures for Alzehimer’s, Parkinson’s, and other deadly diseases. By 2020, CIRM had produced not a single promised cure but wanted $5 billion more. To get it on the ballot, they indulged in some shady signature gathering practices that have yet to be audited.
CIRM works best as a soft landing spot for over-the-hill politicians such as former state senator Art Torres, former chairman of the state Democratic Party. Torres had no medical or scientific background, but in 2009, then-Lt. Gov. Newsom nominated Torres for vice chair of CIRM. Now governor, Newsom should not neglect wasteful infrastructure projects.
California’s high-speed rail project, the vaunted “bullet train,” boasts a Sacramento headquarters and three regional offices but has yet to carry a single passenger. The costs have soared from $33 billion to $100 billion, with no completion date in sight. As UCLA economist Lee Ohanian contends, the bullet train was a fantasy from the start and “the only reasonable decision is to end a project that should never have begun.”
Other candidates for elimination include the State Board of Equalization, a wasteful tax agency that can’t seem to get its own books straight. As veteran California commentator Dan Walters contends, a genuine reform effort would “abolish the board entirely.” A true reformer would also target the state’s network of licensing boards, which limit Californians’ job opportunities
In 1997, the state legislature eliminated the Board of Barbering and Cosmetology but brought it back in 2003. The board now claims to “protect consumers by licensing and regulating the state’s barbering and beauty industry.”
If he wants to make a run at the presidency, Gov. Newsom might cast a glance at Argentina’s president Javier Milei. He took over a nation in worse financial straits than California.
President Milei reduced state spending, cut in half the number of federal ministries, halted new infrastructure projects, and reduced government subsidies in energy and transportation. He also targeted the parasite class of political appointees who perform no work but show up once a month to pick up their salaries. These tough-minded reforms have lowered inflation, and Argentina could soon see single-digit monthly inflation rates for the first time since October of 2023.
Gavin Newsom prefers to cut “vacant” jobs and leaves wasteful state bureaucracies in place. In similar style, the Biden administration has left in place agencies such as the federal Department of Education, which dates from 1979, and the Consumer Financial Protection Bureau, a more recent creation of dubious utility. The paradigm seems to be shifting.
In the old “North-South economic dialogue,” the nations of the northern hemisphere supposedly exploited those of the south. In the new “South-North” economic dialogue, Argentina shows the U.S. how it’s done. Embattled Americans, especially in California, will have to see what happens.
- This article was also published in The American Spectator