Newsom's fiscal conservatism undermines his agenda

Gavin Newsom laid out a bold agenda last night, but no way to pay for it.
Luke Thomas/Fog City Journal

Gavin Newsom's nomination for lieutenant governor places many San Franciscans in an uncomfortable position, one that was illustrated well by the victory speech that he gave last night just as our story our on his latest budget – in which he proudly rejected taxes in favor of deep spending cuts and future budget deficits -- was coming off the presses.

Even though most San Francisco progressives don't like our fiscally conservative mayor, few of us would rather vote for his Republican challenger, Abel Maldonado, despite the fact that this moderate Latino is actually fairly close to Newsom ideologically. “We don't want to underestimate the challenge we have. There's never been a moderate Latino on the statewide ballot,” Newsom pollster Ben Tulchin told me last night.

SF Labor Council President Tim Paulson was at the Newsom event gritting his teeth as he talked about the opportunity progressives now have to work with “a mayor of San Francisco we have issues with,” noting that, “What I find interesting in the easy win for Newsom is how there is going to be a real campaign around this man. It could establish a narrative for what California is about.”

And he's right, but the danger is if Newsom sticks with his inflexible and longstanding “no new taxes” stance then the narrative could be that neither major political party's top nominees are willing to tap millionaires, oil companies, and other entities that can afford it in order to fund education, health care, and the development of a green economy, which Newsom said are his top priorities. That and “jobs,” by which he means only private sector jobs, based on his past statements and actions and current failure to support new tax measures.

But Newsom doesn't seem to see the glaring contradiction in his political philosophy, which he illustrated as he told a story about the potential to achieve strong economic growth while aggressively pursuing solutions to global warming and other environmental challenges, which he and progressives both seem to believe are not just possible, but “the opportunity of a lifetime.”

Newsom noted that the only four wealthy countries that signed the Kyoto Protocols and met their greenhouse gas reduction goals – Sweden, Denmark, United Kingdom, and Germany – have similar economic strategies. “All four of these countries had three things in common vis-a-vis the United States: Lower unemployment, higher growth, and lower income disparities,” he said.

Yet Newsom left out another key commonality that was even more central to their success, and big reason for two of Newsom's three items: All have far higher tax rates than the U.S. and a more vibrant, respected, and well-funded public sector that was able to guide that economic transformation and ensure a smart, equitable distribution of the country's wealth – something Newsom has been overtly hostile to as mayor and while campaigning for statewide office.

Nonetheless, he continued, “What's interesting about these four countries is they dramatically shifted their framework in terms of economic growth and economic development towards a cleaner and greener energy future and they were rewarded with higher growth and lower unemployment. I think that's suggestive, in the context of this debate.”

So do I, suggestive of the need for Newsom (and Jerry Brown) to finally realize it's going to take money and a rejuvenated public sector to meet his stated goals for education, health care, and the environment. In San Francisco, his reluctance to challenge the Chamber of Commerce fallacy that taxes kill growth has left a legacy of dangerously diminished social services and increasing budget deficits running indefinitely into the future.

But the four countries that Newsom claims to admire don't think that way. They don't boast of cutting social services while proposing even more business tax cuts, and they don't say things like, “It'll take an entrepreneurial look at solving problems in this state.” He's sounds like Meg Whitman and the Republicans.

What we need is the other Gavin Newsom, the one who last night also said, “Now is the time for serious problem solving in California....It is a time for California to fundamentally change.”

But first, Mr. Mayor, you're going to need to embrace a few fundamental changes of your own.