By Bob Shanahan
California now has the fifth largest economy in the world, recently surpassing the United Kingdom. But the state’s prioritization of identity politics, illegal immigrants, and anti-business policies have doomed the future of a once great state, resulting in a mass migration of companies and residents.
The Golden State is the most unequal in the nation. Democrats’ one-party rule of the state for decades has helped it become rife with both homelessness and uber-wealthy households. The number of homeless Californians living on the streets increased by 14 percent to more than 130,000 last year. California Democrats’ attempts to alleviate poverty have only made it worse. Its onerous tax system also hurts the very people it is meant to help and aides the wealthy Silicon Valley billionaires it is supposed to hurt.
The middle class of California is leaving leaving the state in droves.
California has been lucky to have the booming tech sector of Silicon Valley, boosting its GDP past $2.7 trillion, approximately 14 percent of the entire U.S. economy. But the tech sector’s rise, combined with ineffective and backward policies making new housing construction nearly impossible, has created an unaffordable state for the middle class.
California is without a doubt the poorest state in the country. An average of 14 percent of Americans live below the poverty line but 19 percent of Californians live below the poverty line.
Residents living under one-party Democrat rule in Sacramento are suffering from out of control housing costs. Californians pay an average of $1,440 a month on rent, $430 above the national average of $1,010. As of 2015, some 40 percent of Californians spent more than 30 percent of their income on housing. Today, almost 30 percent spend more than half their earnings on housing. Median home values are also out of reach, at $529,000, more than double the national median of $239,800. The California Association of Realtors puts the median home price of the state at around $600,000 today. Democrats have done what they always do and made a bad problem even worse by making solar panels on all new single family homes mandatory by 2020, making construction even less feasible for developers which will only exacerbate the current housing crisis in the state. California is going out of its way to signal its virtue by implementing infeasible environmental policies. This has also led to the spike of disastrous wildfires in the state in recent years, but there is too much on that subject to include in this article.
Cities have tried rent control, but that has only made what is undoubtedly a supply-demand issue even worse. Californians will vote on Prop 10 next week, which would repeal Costa Hawkins, a law that prohibits jurisdictions from passing rent control measures on new housing development. Luckily, it appears headed for defeat, with the latest polls showing 60 percent in favor of keeping the law on the books. But I wouldn’t put it past California voters to vote for more rent control. Anything can happen. A rent control measure qualified for the ballot here in Sacramento in 2020 after the capital city led the nation in annual rent increases in 2016 and 2017. However, we are already seeing a softening of rent increases this year, which are less than half of what they were last year with new supply finally catching up to demand.
Instead of focusing on important issues like housing and homelessness, California lawmakers are passing laws banning plastic straws and increasing spending on administration at more than double the rate of teacher pay (from 2011 to 2016). In addition, California’s income tax is already leading to an exodus of residents. The state already has the nation’s highest sales tax and property taxes punish the poor and only exacerbate the housing crisis. No surprise there. In Sacramento, Mayor Darrell Steinberg wants to pass Measure U, a proposal to double a sales tax which was supposed to be temporary, which would get Sacramento to the highest sales tax in the region.
Perhaps most crucial, the welfare state of California has been a problem spiraling out of control. California has 12 percent of the nation’s population, but has almost a third of all Americans on welfare. For comparison, 6 percent of Texas households in poverty receive welfare and 66 percent of Californians in poverty are on welfare.
California is the fourth most unequal state in the union with so many homeless who face diseases like typhus and hepatitis. Facebook’s Mark Zuckerberg is worth $70 billion while San Franciscans walk over human feces and used needles on the sidewalks.
“In many ways, California has long been an example for the rest of the nation. But the middle class conservatism that propelled national figures like Richard Nixon and Ronald Reagan is gone,” writes Kristin Tate in a recent op-ed for the Hill. “It has been replaced with virtue signaling and policies by the wealthy that hurt struggling families. Both sides of the coin, from technology executives to families unable to pay rent, vote for Democrats that only make the problem worse.”
But Californians inexplicably continue to vote Democrat. And with Gavin Newsom assured to be the next governor, should it be any surprise that the state is more messed up year after year?
Recent laws passed by identity politics-obsessed Democrats in Sacramento tell us everything we need to know about the ineffectiveness of the dangerous experiment that is the California Democratic Socialist Banana Republic.
The California Legislature’s most recent session just ended with a host of new laws. About 2,100 bills were passed and signed into law by Governor Jerry Brown. Such monumental laws included bills supporting things like National Arbor Day, the Ritchie Valens Memorial Highway, Cinco de Mayo Week, and Persian New Year. On the legislative agenda were about 50 pages of passed bills with 50 items on each page. Only 7 pages of bills were vetoed by Governor Brown. These laws will only accelerate the migration of companies and residents to other states.
The Democratic Socialist Republic of California appears to have been hijacked by feminists. Senate Bill 826 was signed into law and mandates publicly-held corporations to put women on their boards as California puts identity politics above all else. This new law requires at least one woman board member by 2019 and then two for five-member boards and three with boards of six or more by 2020. Competency does not matter. Women need to be in power, so say the utopians in Sacramento.
Democrats try to back up this inexplicable new law with statistics from studies that fail under the most minimal level of scrutiny.
Catalyst, a nonprofit that promotes women in the workplace, did a widely quoted study that claimed: companies with the highest percentages of women board directors outperformed those with the least by 53% for return on equity, companies with the highest percentages of women board member directors outperformed those with the least by 42% for return on sales, and companies with the highest percentages of women board directors outperformed those with the least by 66% for return on invested capital.
However, there is an overwhelming body of research that proves that these claims are simply not true. Women board members have little or no effect on a company’s performance. Correlation does not denote causation. Just because something exists then something else happened does not mean that that something caused the end result.
Professor Alice H. Eagly, a fellow at Northwestern’s Institute of Policy Research, and an expert on women in leadership roles, recently stated in the Journal of Social Issues, “Despite advocates’ insistence that women on boards enhance corporate performance and that diversity of task groups enhances their performance, research findings are mixed, and repeated meta‐analyses have yielded average correlational findings that are null or extremely small.”
The research used to pass this new law was more political advocacy than fact-based science.
A Wharton study titled, “Does Gender Diversity on Boards Really Boost Company Performance?” by Wharton management professor Katherine Klein, vice-dean of the Wharton Social Impact Initiative, concluded, “Rigorous, peer-reviewed studies suggest that companies do not perform better when they have women on the board. Nor do they perform worse. Depending on which meta-analysis you read, board gender diversity either has a very weak relationship with board performance or no relationship at all.”
Two sizable studies are referenced by Kelin. One reviewed the results from 100 studies of firms in 35 countries and five continents and the other looked at 140 studies of more than 90,000 firms from more than 30 countries. Klein said, “The results of these two meta-analyses, summarizing numerous rigorous, original peer-reviewed studies, suggest that the relationship between board gender diversity and company performance is either nonexistent (effectively zero) or very weakly positive.”
These studies do not mean women should be excluded from corporate boards simply because they are women. Instead, women should be appointed to boards if they are competent and add value. Mandatory identity politics-inspired laws like the one California just passed are destructive to an already fragile business climate. Businesses should do whatever is in their own best interest and promote anyone to their board who is competent enough to help the company succeed and grow.
This new law, along with many others, will only accelerate the migration of California-based companies to states that are more business friendly and less identity politics-crazed.
Residents have been packing up and moving to lower tax states for the last decade now. California’s ridiculous housing costs, high taxes, homelessness, burdensome regulation, and unhinged identity politics, have spurred a pouring out of California residents to other nearby cities outside of the state. They are moving to areas like Boise, Phoenix, and Reno, helping these local housing markets see significant home price gains. Nevada home prices jumped 13 percent in August, the biggest increase of any other state, according to CoreLogic. Close behind in housing gains was Idaho, with a 12 percent bump. About 29 percent of Boise’s home listing views are from Californians, according to Realtor.com.
Only 26 percent of California homebuyers could afford to purchase the median single family home of around $600,000, according to the California Association of Realtors. The middle class of California is moving to states where they can actually afford to live.
In 2016 alone, approximately 143,000 people left California than moved there. And the latest level of craziness coming out of Sacramento will only expand that number in 2017 and 2018.
If you don’t want the country to become like California, then you need to show up and vote next Tuesday. Democrats put illegal immigrants above American citizens. Democrats make housing unaffordable. Democrats make homelessness worse. Democrats do not help the middle class. Democrats want to tax us into oblivion. Democrats want to pass laws that fit their progressive agenda instead of implementing policies that help all citizens and companies.
Don’t let the United States become like California. Don’t let the Democrats get any more control in Washington. I’m begging you.
Follow me @BobShanahanMan
Bob is a freelance journalist and researcher. He remains forever skeptical of the mainstream media narrative and dedicated to uncovering the truth. Bob writes about politics (in DC and CA), economics, cultural trends, public policy, media, history, real estate, Trump Derangement Syndrome, and geopolitics. Bob grew up in Northern California, went to college in Southern California, and lived 4+ years in Seattle. He now lives in sunny Sacramento. His writing also appears in Citizen Truth and has been posted on ZeroHedge and Signs of the Times.