It's not just because the bursting of California's housing bubble created such a massive hangover, according to Lt. Gov. Gavin Newsom. There are also larger structural issues that have been brewing for a long time, and we need an entirely fresh approach to dealing with them.
California cleaned everyone else's clock from 1950 to 1980, Newsom said. As a result, we got a little too cocky. Since then, we've basically flatlined, and the state hasn't had a holistic growth plan in decades. Our politics have become tribal, and both sides can't keep digging in with rhetoric that bats outdated 1980s-style solutions back and forth.
Newsom led a team that just issued a 38-point economic growth blueprint focusing on growing exports, accelerating innovation and building on existing regional assets. He is particularly alarmed by what he termed an "ominous" skills mismatch: Despite the state's double-digit unemployment rate, half a million open jobs can't be filled in specialized areas like high-tech.
Uncertainty is the main reason we're stuck in neutral, argued Chevron's Shariq Yosufzai, who is also the chairman of the California Chamber of Commerce. He believes industry is constantly in the crosshairs of people who want targeted tax increases, while the projects bog down under the weight of regulations and litigation. Providing stability and certainty would go a long way toward getting things moving again.
Much of time, we treat private investment with skepticism, said Michael Kelly of the L.A. Coalition for Jobs and the Economy. But we can't let big projects get sidelined, and it's time to stop the partisan trench warfare. As Kelly put it, we can't line up the pro-business camp vs. the pro-labor camp. Everyone needs to be pro-economy, pro-growth.
The panel also sounded an alarm bell that gutting education funding can't go on forever. Yosufzai put it bluntly: California can't keep using the UC and Cal State systems "as an ATM for failed policies elsewhere." He recalled that when economic development officials in Singapore -- now a model of growth -- came here to uncover the ingredients of California's secret sauce, they discovered the degree to which innovation starts with our universities. "We have to relearn the lesson that we taught the rest of the world," he said. "It starts with education."
Everyone agreed it's important to invest in the workforce and systems of the future, but there's a pesky question behind that imperative: Where do we get the resources to pay for education and infrastructure?
We have to have a serious conversation with the public about where the money will come from, said Dale Bonner of Cal-Infra Advisors, and that means being more transparent about the true cost of infrastructure and more frank about the depth of the hole we're starting in. He argues that we have to shred the notion that there are short-term fixes. Some investments won't provide instant results, but they're necessary -- and when they pay off, the returns will be huge.