Good vibrations aren’t a policy platform. While Kamala Harris is campaigning on a promise to create an “opportunity economy,” employers are fleeing her home state of California. Over the past decade, companies from banking to aerospace have decamped from California, taking large numbers of middle-class jobs with them. The Golden State has shed major companies including financial-services giant Charles Schwab, pharmaceuticals supplier McKesson and commercial-real-estate giant CBRE. More recently the exodus has extended to high tech, with the loss of software and hardware giants Hewlett Packard Enterprises, Oracle, Palantir, Tesla and Space X.

Chevron’s decision to relocate its global headquarters is the latest evidence of the Golden State’s increasingly hostile business environment. The company—whose roots in the state run deeper than Apple, Google or even Disney—was the 10th most valuable company in the world 10 years ago. Today it doesn’t even crack the top 25. But managing an oil company in California was like running a whiskey distillery in Utah. One former California-based executive told us that he and his children were ostracized in his community for his employment choice.

Gov. Gavin Newsom, Ms. Harris and other boosters claim the state as a social-justice model, yet California now suffers the nation’s highest poverty rate, the widest gap between middle and upper-middle income earners, tepid job growth, and one of the highest unemployment rates. Adjusting for the state’s sky-high cost of living, nearly 1 in 5 Californians lives in poverty. The Public Policy Institute of California estimates another fifth live in near-poverty. That’s roughly 15 million people in total.

California’s climate policies, while largely irrelevant for global emissions, have chased out large employers like Chevron. A recent report from the California Air Resources Board projects that these policies are directing billions in subsidies to “clean” tech firms whose employees are disproportionately upper-income earners. This is what Holland & Knight’s Jennifer Hernandez calls the “Green Jim Crow.” California’s climate policies drive up the cost of housing, food and electricity while destroying thousands of energy-sector jobs held primarily by black and Latino workers.

Ms. Harris, who embraced California’s climate policies as attorney general and a senator, worked to limit building on the suburban fringe, one reason California now has the nation’s second lowest homeownership rate. A recent study by Knock.com found the median family in San Jose or San Francisco would need 125 years to save the money necessary to make the down payment on a median-priced home; in Atlanta or Houston (where Chevron’s new headquarters is) the figure is 12 years. Not one unionized construction worker can afford to buy a median-priced home in any coastal California county, according to a recent study by economist John Husing.

Is there any chance of this turning around? Last month the Bay Area Council, a centrist business group, called out California’s “misguided policies that make it incredibly difficult to do business here” and urged the state’s policymakers “to take stock of the decisions they’re making that affect millions of families and workers, impact the state budget and have grave consequences for the future economic health of this state.”

All too often companies think they can negotiate some sort of settlement with antibusiness activists. Executives seem more like victims of Stockholm syndrome, in which they seem to mimic the ideology of their tormentors. In 2021 Chevron, under pressure from a climate-change nonprofit, announced that it was investing $10 billion in new renewable-energy projects, three times what the company previously committed to spend. It later pledged support for “the global net zero ambitions of the Paris Agreement” and published targets for reducing the company’s carbon footprint.

But enough is never enough. Instead of accepting the olive branch, California sued Chevron and other major energy companies for, as Mr. Newsom put it, “wreaking havoc on our planet and lying to people about the dangers of fossil fuels.” Meanwhile, Chevron’s California-focused investment decisions failed to pan out. In 2020 it was a more valuable company than Exxon Mobil. Chevron’s market cap today is half of Exxon’s.

As Chevron prepares to refocus on maximizing the value of the company, Texas is poised to reap the benefits. Like much of Texas, greater Houston is gaining people and jobs while both are stagnant or declining in Los Angeles and the Bay Area.

Even as the media embraces the Harris and Newsom narratives about California, people on the ground know better. When hundreds of a state’s most well-established companies pick up and leave, it’s a sign that something is seriously off with the regulatory climate. If California’s leaders fail to address this, more companies will follow Chevron out the door. And if the country adopts the California model this fall, we’ll need a lot more than good vibes to face what’s next.

This piece first appeared at Wall Street Journal.

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Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Michael Toth is a founding partner of PNT Law, based in Austin, Texas.

Homepage photo: Gage Skidmore via Flickr under CC 2.0 License.

A recent Politico article breathlessly reported on Kamala Harris’s enhanced standing as the newly anointed “favourite daughter” of the Bay Area political cabal, led by Nancy Pelosi, powerful Silicon Valley oligarchs, and progressive Hollywood moguls. But as this group celebrates its most recent political coup against the hapless and outmatched Joe Biden, few are examining what their policy agenda has imposed on my adopted home state. This could spell trouble for Harris in November.

Rather than being able to show real improvements, Harris, California Governor Gavin Newsom and their backers specialise in virtue-signalling, particularly on issues of race, gender and climate. Their regulation-heavy approach has forged a neo-feudal state that now has the highest gaps nationally between the rich and the vast majority of inhabitants, who suffer severe housing shortages and the country’s highest levels of poverty. It’s no wonder, then, that four in 10 Californians are considering an exit.

More revealing, at the elite level, has been the emergence of the tech Right in Silicon Valley. Until this year, liberals such as Harris could rely on California’s uniform backing. But many, including people involved in startups, are beginning to switch sides. Venture capitalist Marc Andreessen, who recently compared California to the declining Roman Empire, has joined Elon Musk and David Sacks in endorsing Trump. In fact, Musk has not only backed Trump but also announced he was pulling both X and SpaceX out of the state.

If this trend continues, California’s political climate could start to change. While that may not happen overnight, the Golden State could lose two or three House seats to the GOP. This should be a warning sign to Harris if she intends on implementing a California plan for the rest of America as president.

Members of the California cabal are only dimly aware of changes taking place outside their bubble. Newsom-backers such as economist Chris Thornberg even claim that the loss of SpaceX — arguably the most important exploration company in the world — is only a matter of a few C-suite jobs and “Elon being Elon”. This repeats earlier claims in the progressive media about the unimportance of 3.8 million net domestic migrants leaving since 2000.

The bigger problem, though, will be when the Harris campaign has to defend her efforts, in both California and the Senate, on open borders, race quotas, banning fracking, wiping out parental rights and the use of fossil fuels. If these policies are increasingly unpopular in California, just imagine how they will be received in Texas, Michigan or Wisconsin, or for that matter in Arizona, Nevada and North Carolina.

To win in November, the Vice President will have to somehow place distance between the failures of her backers and her campaign. If not, we could see the second coming of Trump — their greatest nightmare and the ironic legacy of the cabal’s politics.

This piece first appeared at UnHerd.

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Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: Kamala Harris during her tenure as Attorney General of California Wikimedia in Public Domain.

Two Californians, Governor Gavin Newsom and Vice President Kamala Harris, are widely seen as the most likely successors to doddering President Joe Biden. But, as things stand, one has to wonder if the rest of America really yearns to become a greater California.

Embracing “the California model” may have worked when Ronald Reagan rode on his white horse, or even when Jerry Brown projected a future shaped by technology and space exploration. But with the current crop of leaders in charge, the model is a sure loser.

The facts are grim. Newsom and Harris may like to claim California’s preeminence as the hotbed of new ideas, racial justice, and economic progress, but that has little to do with reality. California suffers from the highest poverty rates in the US, tepid job growth and some of the country’s highest rates of unemployment. Once the supreme beacon for talented people from around the country and the world, it is coming to terms with its new problem of massive net emigration, an exodus that has increased sharply since 2019 — the year Newsom became governor — and was made worse by the pandemic. The state has, however, attracted one group: it now has 30% of the nation’s homeless population.

When it comes to education, California was once an admired leader. The state primary school system is now ranked consistently among the worst in the country. Despite being the “home” of social justice, the results are particularly poor for minority students. For example, Californian Hispanics, who make up roughly 40% of the overall population, do far worse when it comes to educational attainment than their Latino counterparts in Right-leaning states such as Texas and Florida. This has a huge impact on potential earnings in later life.

California is also a great example of how not to rebuild America’s shoddy infrastructure. The rebuilding of the San Francisco-Oakland Bay Bridge has seen costs rise from an estimated $250 million in 1995 to $6.5 billion in September 2013. Or take the California high-speed rail line, which Newsom has refused to abandon despite costs that have escalated from $33 billion in 2008 to as much as $100 billion today.

How about climate policy, which has dominated the agenda under Newsom? It’s had negligible impact on warming but has done a fair job of undermining the prospects of the state’s largely Latino working class. Even without adjusting for costs, no California metro area ranks in the US top 10 in terms of well-paying, blue-collar jobs. But four — Ventura, Los Angeles, San Jose, and San Diego — sit among the bottom 10.

These are the facts that naturally haunt either of these candidates. Newsom and Harris may be able to fool the star-struck reporters of the mainstream media into waxing about the state’s current status, but Californians know better. In one recent opinion survey, some 57% said the state was headed in the wrong direction, up from 37% in 2020. Four in 10 are considering an exit.

Read the rest of this piece at UnHerd.

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Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Marshall Toplansky is a widely published and award-winning marketing professional and successful entrepreneur. He co-founded KPMG’s data & analytics center of excellence and now teaches and consults corporations on their analytics strategies.

Homepage photo: composite of photos of Kamala Harris and Gavin Newsom via Flickr under CC 2.0 License.