Fucking Around with our Biggest Economy

SUMMARY: The last time California had a “successful” gubernatorial recall, Arnold Schwarzenegger became governor. While we try not to wade into current events, there is significance in this current attempt to unseat Gavin Newsom that goes far beyond the borders of California. In this episode we catch up on what’s happening in California. Beyond the biblical weather events, an ongoing plague and rampant homelessness, there are silver linings in economic terms that could theoretically ameliorate many of the deep issues our biggest state faces. But there’s another dark scenario beyond blowing this moment and upending the political framework of Cali.


New York got rid of its governor so California had to be all like, “why can’t we get rid of our governor. Boo dee fucking hoo.” So here we are. A very real scenario where two of the biggest states in the nation could see turnover at the top within months of each other. 

As you know, we typically look for bigger picture themes and try to provide context and analysis around them rather than dip into punditry, which I loathe. But there’s a thing going on in California right now that is rather fascinating and ties together some prior threads that we’ve pulled on. So we’re going to half unf*ck and half inform on the California recall and some otherwise surprising news that recently came out about the state’s finances. 

On September 14, Californians will tally the votes of the gubernatorial recall to see whether or not sitting governor Gavin Newsom will be allowed to retain his position. As of this recording (and publishing), the turnout is big enough that Newsom is likely to win. But that’s why you hold these things. You just never know.

Unlike the situation here in New York where ousted Governor Andrew Cuomo was replaced by Lieutenant Governor Kathy Hochul, the California referendum includes an option to select Newsom’s replacement and the field of options is, uh, interesting to say the least. 

One of the bigger names on the Democratic side is a YouTuber. And on the Republican side, it’s a conservative, anti-mask, Trump-supporting talk radio host. And Caitlyn Jenner. We’re not here to look at their candidacies, but to talk about the state of the state of California and what this portends for the rest of the country. 

Before we talk about the state, let’s talk about Newsom and how we got to this point. I suppose the funniest and most surreal thing about him is that he was once married to former Fox News host Kimberly Guilfoyle. 

That’s right, human blowtorch and now girlfriend of Donald Trump Jr., Kimberly Guilfoyle was once married to so-called progressive Gavin Newsom. There’s nothing really to report here except that this is some funny shit. Anyway, handsome Gavin had a pretty successful career in business before entering public service and man does he ever look the part. 

Newsom was in San Francisco politics at a pretty young age and was elected as mayor of San Francisco in 2003 where he served until he was elected lieutenant governor and then ultimately governor of California in 2018, succeeding one of my favorite politicians, Jerry Brown. 

Fun fact! I once met Jerry Brown at a party in New York City. He was between gigs at the time and I’ll never forget running into him in a kitchen of a small Manhattan apartment and I was like, “hey, you’re Jerry Brown.” And he was all like, “that’s me.” And then I was like, “cool.” So that’s my Jerry Brown story. 

Anyhoo, when Newsom was mayor he made his first national headlines by refusing to uphold the then law prohibiting same sex marriage licenses. Along the way to ultimately becoming governor, his personal life was a bit icky as he actually had an affair with his campaign manager’s wife when he was mayor of San Fran. He was separated at the time, but, I mean… 

And 2020 was pretty bruising to Newsom on the personal front with allegations of affairs running rampant during the pandemic and a now-infamous incident where he was found dining maskless with donors at one of the most expensive restaurants in California. So master of optics he’s not. And it seems little Gavin has quite the hold on big Gavin. 

Beyond these salacious details, Newsom has been under fire from multiple fronts for failing to implement proper wildfire management planning, allowing COVID to run out of control despite vigorous attempts to shut down the country’s largest economy and running a huge deficit in 2020 as most states wound up doing. The right has been especially tweaked by his policy to extend health insurance benefits to undocumented workers in the state. These circumstances have swirled like a tornado fire around Newsom and given the right some substantial cause and momentum to recall him from his position via this referendum. 

Beyond the recall attempt itself, the way this referendum is constructed leaves a huge potential blindspot for an electorate that may wake up to leading contender Larry Elder, a conservative talk radio host, being installed as the new governor of California. 

Going back to Cali

So pretty boy Gavin is on the ropes on the left coast. At first it seemed like a long shot that he would be recalled, because it rarely happens. Don’t get me wrong, it’s possible because they love their recall efforts out there, but the only time a recall effort for governor was successful was the sudden and precipitous fall of Gray Davis. Davis, a Democrat, was elected in 1999 when California was soaring high economically. Then, the following year the dot com bubble burst, which hit California harder than others and the situation worsened for Davis. 

His tenure was also marked with rolling blackouts, which while more the fault of prior administration’s deregulatory actions, happened with increasing frequency on Davis’ watch. Questionable fundraising tactics and favors put voters over the top and a referendum was called, resulting in the election of Arnold Schwarzenegger. 

Yes. For those who don’t recall, this total recall (see what I did there?) gave us the governator. And the fact that it’s made it this far for Newsom should be seriously worrisome to the Democrats because as much as Californians like to float the idea of a recall - they’ve done it 179 times - once a recall effort qualifies for a ballot like this one, it’s not a pretty picture. 

Prior to Newsom, only 10 recall attempts made it far enough to hit the ballot and of those 10, six recall efforts were successful. So if history is any judge, my man is right to be very, very concerned. 

So pretty Gavin has trouble managing through a crisis, has seemingly even more trouble keeping his pee pee on lockdown and literally has the forces of nature bearing down on him. But if we know one thing about Americans, it’s that they value one thing above all: Money.

As Bloomberg noted:

“No one anticipated the latest data readout showing the Golden State has no peers among developed economies for expanding GDP, creating jobs, raising household income, manufacturing growth, investment in innovation, producing clean energy and unprecedented wealth through its stocks and bonds. All of which underlines Governor Gavin Newsom’s announcement last month of the biggest state tax rebate in American history.”

California isn’t just winning, it’s winning bigly. If you listen only to the right, you would think California is not just falling into the ocean but everyone is leaving in droves and buying mansions in Texas. As Paul Krugman recently noted in a Times op-ed: 

“It’s also startling, given all the talk about people fleeing high taxes, to learn that highly educated, high-income workers — who do indeed pay higher taxes in California than in most other parts of the U.S. — were continuing to migrate into the state.” 

On manufacturing growth, GDP growth, employment growth and population, California is leading the pack. So much so that its GDP once again makes California the fifth largest economy… in the world. Only the U.S. as a whole, China, Japan and Germany are bigger with the U.K. being neck-and-neck at $2.8 trillion. 

With a population larger than all of Canada, California also has the distinction of being the most innovative place in the world along with China. Take Silicon Valley and the green renewable industries out of the mix and the U.S. is lagging so far behind the world in innovation it’s laughable.

So, fucking A! Turns out Newsom’s doing a pretty good job! It’s a Hollywood fairytale!

(In your mind, insert screeching brakes sound here.) 

Eeeeehhhh, not so fast. As great as it is to grow, sometimes it comes at a cost. 

The Caldor Fires continue to rip through the state. Homelessness is as bad as it’s ever been due to the pandemic, economic dislocation among the poor and rising housing prices. Droughts have become more and more severe over the past several years. Oh, and there’s still a fucking pandemic to contend with. 

Let’s see. Plague? Check. Drought? Check. Homelessness and famine? Check. Sweeping biblical fires? Check. We should be to zombies in no time. 

Rage below the surface

Apart from the biblical shit, it’s the human suffering by our own design that creates a groundswell of anger. Remember from a 10,000 foot perspective, things looked pretty decent under Obama but right there, just below the surface, there was rage. Rage that comes from gross and rampant inequality. Rage that comes from seeing your fellow man splayed out on the street with nowhere to go. 

No one has been able to deal with the broken social contract that has come with success at the top of our system, and nowhere is it more highlighted than in California. These intractable issues existed under Arnold, and Jerry Brown and now Newsom but it’s never been this stark. 

On the one hand California grew beyond anyone’s expectations. And, because details matter and we make a big deal of getting the economics of things right on this show, I should point out that the surplus in California this year, in real terms, is about half of what the Newsom administration claims. But still. They crushed it on the big stuff at the top.

Having said that, right now, today, 17 percent of Californians live in poverty. That’s $26,000 for a family of four or $12,000 for an individual. 

Couple that with the fact that the median price for a home in the Bay Area is a staggering $1.3 million, in SoCal it’s $760,000 and in the Valley it’s $452,000 and there’s no wonder so many families are out on the street. California is the beating heart of technology and innovation. We have homeless management information systems - HMIS - that can track and manage an entire population of unhoused people and match them with wellness providers and shelters. Of course, that’s only a bandaid and presumes we have enough open shelter to house those in need. The real issue is the structural imbalance of wages and opportunity and the cost of housing, food and other basic needs. 

So Newsom has a mess on his hands and frankly he’s no Jerry Brown. Hell, he’s not even Arnold. But he’s the guy they have for now and this recall is super scary because as a Democrat in the most Democratic state in the nation, he does have the legislative backing and now, due to the surplus, the wherewithal to affect positive change. Take him out at the knees and risk having a YouTuber in the top spot or a conservative wholly misaligned with the majority of the state attempting to take away all of the social gains and frustrate any progressive momentum we might otherwise have in the biggest, most important, innovative and reliably blue state in the nation. 

Is this yet another mealy-mouthed devil you know argument? Yup. Because it’s a fucking recall and a special election. If you want to put up a true progressive that can keep their libido in check and take this opportunity to advance a massively progressive agenda next year then great. This ain’t the time to be fucking around. 

Honestly this has the same smell and feel as Brexit. One of those holy fuck I didn’t think they’d actually do it kind of moments. And that’s scary. But it’s not the thing that is really scaring the establishment Dems. 

Jump back just a few months when the right and the left were all a titter over the thing that’s actually scaring Dems the most. The visible and stunning cognitive decline of Dianne Feinstein. 

As the Atlantic points out: 

“If Dianne Feinstein, the state’s aging and ailing senior senator, was unable to finish her term, whoever wins the recall—if not Newsom then most likely a Republican—would appoint her replacement. The Senate is split 50–50, and Vice President Kamala Harris holds the tie-breaking vote. How much Californians care to keep Newsom, a governor who often provokes only tepid support even among his voters, could end up deciding the fate of the Democrats’ Senate majority and the entire Biden agenda.”

Oh, fuck. 

I know this is the second or third time that I’ve veered off course into vehement ageist rhetoric but what the actual fuck already? New rule! If you’re past the point of cognizance and continence, you gotta go. Sorry, not sorry. RBG, love ya but you fucked us. Nancy, Dianne, Joe, and even my beloved Bernie, it’s time to develop a fucking bench already. Enough is enough. 

Yes, another “devil you know” argument

I don’t think Gavin Newsom is necessarily the right person for this job. His personal choices are questionable at best and while he has a lot to stand on with respect to progressive reforms, the tasks ahead to minimize inequality, deal with unhoused populations, manage the demands of immigration and create a more resilient infrastructure to battle the ravages of climate change are enormous and likely require someone of greater talent, conviction and moral fortitude. Not to mention support from colleagues, voters and peers. 

But ending it now is too risky. The alternative is too dire and the election is just a year away. 

Theoretically, California is maintaining a thin balance of power in the Senate if Feinstein really is in sunset mode. It’s also the engine of growth and innovation in the country. Without exaggeration, we all have a stake in this recall. 

In so many ways, the story of California is all of us. It’s always been first. The ultimate trendsetter. And it wasn’t always blue. Remember that this was the home state of Richard Nixon and where Ronald Reagan crafted his national platform and persona as an anti-welfare, anti-big government politician. California was red as red gets.

Slowly, over the past couple of decades as the population grew, innovation was fostered, environmentalism took center stage, and the immigrant population grew and thrived, California went true blue and led the way in adopting progressive measures. The rest of the country, if you look through history, whether it’s politics, or food, or fashion or technology - whatever- the rest of the country runs about a decade behind California. 

So if we dare to extrapolate this tendency and project a bit, if California is the ultimate national bellwether and has demonstrated that a massively red state can evolve and reform through innovation, social welfare spending, ecological consideration and conservation and humanitarian immigration policies, maybe there’s a lot more blue in our future. It’s a vision that is certainly worth cheering and supporting. 

So we need our left coast family to ensure that this momentum isn’t interrupted on a fucking technicality. 

Hard no on the recall. But find his replacement for next year. And fuck Ronald Reagan. 

Here endeth the lesson. 


CalMatters: Measuring California’s progress on income inequality

The Atlantic: What California’s Recall Election Says About America

Wikipedia: 2003 California gubernatorial recall election

California Secretary of State: Recall History in California (1913 to Present)

New York Times: California Could Throw Away What It’s Won

Bloomberg: California Defies Doom With No. 1 U.S. Economy

Statista: Real value added to the GDP of California in 2020

LA Times: After decades of Republican victories, here’s how California became a blue state again

ITEP: Who Pays? 6th Edition – State-by-State Data

PPIC: Who’s Leaving California—and Who’s Moving In?

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