Californians Souring on Newsom

The wonder is how someone who has held such high elected offices could be so clueless about the fundamentals of political games. Gavin Newsom—twice-elected San Francisco mayor, twice-elected Lieutenant Governor, and twice-elected governor, plus winner of a 2011 recall election—hasn't the foggiest idea. His $30 million net worth doubtless helped him climb upward, as did his far-left agenda and well-placed connections, including those to the Pelosi family.

But Newsom, consumed by Trump Derangement Syndrome, remains oblivious to the first rule of national politics: tack to the middle. Reaching the middle ground may be less important in this era of progressive extremism, but the center nevertheless remains a good place for candidates to launch their campaigns. At his recent speech delivered at Los Angeles' Japanese American Museum, Newsom—surrounded by radicals Mayor Karen Bass and U.S. Senators Adam Schiff and Alex Padilla—opened with a paean to diversity, declaring Los Angeles the world's "most diverse city, in the most diverse country, in the most diverse state." His speech may have resonated a decade ago, but the governor appears unaware that California and the nation have moved red in the latest elections. Newsom's more serious misjudgment is that he missed an opportunity to reach Independent or undecided voters. Instead, that bloc came away with the valid impression that Newsom is as extreme as they thought—or worse.

Newsom's first objective is to win the primary, a formidable challenge for which he needs to immediately lay the groundwork. Prevailing in the primary will be a tough road for Newsom. People who are rarely wrong—Las Vegas bookmakers—have pegged Newsom with only a modest lead over U.S. Rep. Alexandria Ocasio-Cortez to win the 2028 nomination in Los Angeles, a date that is three years away but not so far in the distance that Newsom can afford to squander time. Newsom likes to brag that California has the nation's largest economy and, having just surpassed Japan, the world's fourth largest at $4.1 trillion, behind only the U.S., China, and Germany. But California's impressive multi-trillion-dollar economy, based at least in part on currency exchange calculations rather than productivity, covers up multiple failures. Among them:

1. Economic Stagnation The Legislative Analyst's Office, in its report on California's financial health, wrote: "California's economy has been in an extended slowdown for the better part of two years, characterized by a soft labor market and weak consumer spending. While this slowdown has been gradual and the severity milder than a recession, a look at recent economic data paints a picture of a sluggish economy. Outside of government and health care, the state has added no jobs in a year and a half."

2. Labor Force Struggles Since February 2020, the state's labor force has grown by just 126,100 workers—a 0.6% increase. As of July 2025, state's unemployment rate of 5.5% is higher than any other and has been stuck at that elevated relative position for several years. Beacon Economics, in an analysis of recent data, added: "This slower growth is being driven largely by the state's chronic housing shortage and the retirement of aging workers." Justin Niakamal, Beacon's research manager, wrote: "It's difficult to see how California will be able to break out of its slow-growth cycle when there has been virtually no increase in housing production. This is an elemental problem that is impacting the state's ability to grow its population, industry, and its economy."

3. High Cost of Living California has high housing prices, gas, and electricity costs, which drive people out, making it difficult for many to afford living there. Electricity rates in California are among the highest in the nation and growing faster than in other states because of wildfires and climate change. A University of Southern California analysis predicted that California gas prices could rise 75% by the end of 2026.

4. Business Exodus High taxes and regulations have driven businesses to relocate, including Elon Musk's, Tesla, X and SpaceX and Hilton Hotels. Since 2019, over 200 companies—including Chevron, Hewlett-Packard, Palantir, and Charles Schwab—have left California, pushed out by high tax rates and crippling regulations.

5. Quality of Life Issues Traffic, pollution, and long commutes negatively affect daily life and diminish quality of life.

6. Housing Crisis Strict zoning laws and limited supply have created a severe housing shortage.

7. Policy Misalignment Some residents feel the state's liberal policies do not align with their values. Governor Newsom plans to use taxpayer dollars to block federal efforts to deport illegal and criminal immigrants and has renewed efforts to block voter identification requirements.

Newsom is blind to what the tea leaves are telling him, including recent polling that found his favorability dropping. Many believe Newsom has put his personal political agenda ahead of Californians. Nothing will stop Newsom, however, from forging ahead on a crash course to oblivion. With luck, once denied the presidency, Newsom's fate will be the same as Kamala Harris'—out of sight and out of mind.

Joe Guzzardi is an Institute for Sound Public Policy analyst. Contact him at jguzzardi@ifspp.org