California’s looming economic challenges

Good morning, California. It’s Thursday, December 10.

Newsom at an inflection point

Even as 59% of Californians expect the state to be bogged down by widespread unemployment and financial depression for the next five years, 58% approve of how Gov. Gavin Newsom is handling the economy.

The findings, from a statewide Public Policy Institute of California survey released late Wednesday, come as the state braces for another economic hit. Greater Sacramento will tonight become the third region to shutter vast swaths of its economy after its ICU capacity on Wednesday dropped below 15%. But even as cash-strapped businesses and frustrated residents demand data justifying Newsom’s restrictions, support for the governor seems steady. Newsom had an approval rating of 58% in October, identical to this month’s marks for his approach to the economy. (The survey was conducted from Nov. 4-23, before the new regional shutdown was announced.)

Nevertheless, the governor is approaching an inflection point — and how he handles it will determine a lot about his political future, CalMatters’ Laurel Rosenhall reports. Next month, Newsom will enter the second half of his first term, key for his re-election prospects in 2022. Already, there is a challenger waiting in the wings: Kevin Faulconer, San Diego’s outgoing GOP mayor. And Newsom has a lot of challenges to overcome.

• Roger Salazar, a Democratic political consultant: “How he gets through the pandemic, restarting the economy and putting behind these missteps — whether the personal one like the French Laundry or institutional ones like (the unemployment department) — he’s got to be able to say ‘I came, I saw, I solved it.'”

With a new chief of staff, a new public health director and a soon-to-be new unemployment department director — plus a Californian as vice president — Newsom has opportunities to reboot. But he will also have to contend with Californians’ deepening economic anxieties. According to the PPIC survey:

• 26% of Californians are seriously considering moving out of state due to a lack of well-paying jobs.
• 26% worry every day about the cost of housing.
• 45% don’t think the American Dream — that if you work hard you’ll get ahead — holds true anymore.
• 63% say that when California children grow up, they will be worse off financially than their parents.

______________

The coronavirus bottom line: As of 9 p.m. Wednesday night, California had 1,420,558 confirmed coronavirus cases and 20,243 deaths from the virus, according to a CalMatters tracker.

Also: CalMatters regularly updates this pandemic timeline tracking the state’s daily actions. And we’re tracking the state’s coronavirus hospitalizations by county.

---

Advertisement

---

Other stories you should know

1. State reverses playground policy

California quietly reversed its policy on playgrounds Wednesday, allowing them to reopen in counties under the regional stay-at-home order just a day after it had defended their closures. The abrupt reversal is likely to increase already mounting pressure on the state to provide specific data justifying its restrictions. Indeed, public health experts said reopening playgrounds was a win for evidence-based policy, CalMatters’ Elizabeth Aguilera reports.

• Rebecca Fielding-Miller, a UCSD professor of public health: “There is little to no evidence that playgrounds are a major driver of risk, and rather a lot of evidence that playing outside in the fresh air is good for children.”

Pressure is also increasing on the governor to reopen schools. Eight state lawmakers in January will introduce a bill requiring public schools to plan the transition to in-person learning within two weeks of their counties advancing out of the most restrictive purple tier, CalMatters’ Ricardo Cano reports. The lawmakers say the bill is in response to many public schools choosing to continue remote learning this fall despite being cleared by the state to physically reopen.

• Patrick O’Donnell, a Long Beach Democrat and bill coauthor: “We don’t want to get to a point where schools have sat on their hands for 12 months.”

2. California sues Facebook

Even as he packs his bags for Washington, D.C., California Attorney General Xavier Becerra sued Facebook on Wednesday alongside the federal government and 48 other states. The sweeping lawsuit seeks to break up the $800 billion company, alleging that Facebook illegally stifled competition and engaged in monopolistic practices by acquiring emerging rivals like Instagram and WhatsApp. It’s a striking development in California’s relationship with one of its highest-profile, most lucrative, and most controversial companies. Facebook’s initial public offering, in 2012, gave the Golden State a $2.5 billion windfall, helping it emerge from a recession-induced slump. The social media giant last year pledged $1 billion to address a housing crisis in California it helped inflame, and this year founder Mark Zuckerberg’s philanthropy gave millions to the Yes on Prop. 15 campaign. Had the measure passed, it would have hiked property taxes on big businesses.

• Becerra: “Innovation in Silicon Valley and elsewhere depends on a fair and competitive marketplace. California consumers deserve options — not oppressive monopolistic behavior.”
• Facebook General Counsel Jennifer Newstead: “Our acquisitions have been good for competition, good for advertisers and good for people.”

3. Liane Randolph to lead air board

Newsom made yet another major appointment with national implications Wednesday, naming Liane Randolph as the new chair of the powerful California Air Resources Board. Randolph takes control of the agency at a critical moment — not only will she be responsible for establishing relationships with President-elect Joe Biden’s administration and automakers who recently dropped emissions lawsuits against California, she’ll also oversee efforts to actualize Newsom’s gas-car ban and reevaluate the state’s landmark climate strategy. Randolph said another major area of focus will be addressing air pollution disproportionately concentrated in low-income communities of color.

Randolph’s appointment ushers in a new era for the board helmed for the past 13 years by Mary Nichols, who is stepping down Dec. 31 and is also a frontrunner to lead the federal Environmental Protection Agency. Randolph, who has served on the state Public Utilities Commission since 2015, will be the board’s first Black chair. Newsom faced pressure from lawmakers and other advocacy groups earlier this year to diversify a board that was 75% white.

4. California leaders team up with the Pope

In today’s segment of “Partnerships You Wouldn’t Expect,” two California state officials — and Salesforce CEO Marc Benioff — have been named to the Council for Inclusive Capitalism, a group of 27 leaders from across the world who will meet annually with Pope Francis to “create stronger, fairer, more collaborative economies and societies” by adapting capitalism “to address the challenges of the 21st century.” California State Treasurer Fiona Ma and Marcie Frost, CEO of the California Public Employees’ Retirement System, will represent the Golden State on the council alongside Benioff.

• Ma: “This is the decade that we must address the environmental and social challenges of the 21st century, stop climate change and improve people’s lives.”
• Frost: “As a trust fund fiduciary, we know that sustainable value creation rests on stewardship, not only of financial capital, but human and natural capital. That‘s why we need to incorporate issues like climate change and diversity and inclusion into our investment strategy.”

---

Advertisement

---

CalMatters commentary

CalMatters columnist Dan Walters: A new survey finds that California has the roughest roads of any state due to neglected maintenance — but the second-highest gas taxes.

California’s vaccine campaign: The state must leverage health data to rapidly identify high-risk patients and prioritize them for vaccination, writes Claudia Williams of Manifest MedEx.

Making all-electric easier: If California wants to achieve its climate goals, it needs to make electric vehicle chargers more accessible to low-income and disadvantaged residents, argues Amanda Myers of Energy Innovation.

---

Other things worth your time

Companies part of group founded by Newsom get $3 million collectively in PPP loans, data shows. // ABC 7

Silicon Valley’s embattled chamber of commerce names new interim CEO. // Mercury News

How the dialysis industry emerged as a power player in California politics. // California Healthline

Sacramento City Unified suspended Black students at ‘egregious’ rate, report finds. // Sacramento Bee

Mayor Kevin Faulconer wants to take his homelessness approach statewide. // Voice of San Diego

End-of-life care has boomed in California. So has fraud targeting the elderly. // Los Angeles Times

Sheriff’s officials knew about a ‘superspreader’ party in Palmdale. Why didn’t they stop it? // Los Angeles Times

Formerly homeless motel residents were kicked out — to make room for other homeless people. // Los Angeles Times

Meant to clarify, California’s BallotTrax confused some voters. // CalMatters

California’s drought conditions could stretch into spring. // KQED

---

See you tomorrow.

Tips, insight or feedback? Email emily@calmatters.org.

Follow me on Twitter: @emily_hoeven

Subscribe to CalMatters newsletters here.

Follow CalMatters on Facebook and Twitter.

CalMatters is now available in Spanish on Twitter, Facebook and RSS.

---