California used to be the land of opportunity.
As a native Californian, I remember every New Year’s Day when the Rose Bowl Parade was being broadcast with blue skies and moderate temperatures, and my parents predicting that another spring of westward migration was coming from the cold Midwest and East to the Hollywood sunshine.
Now, 50 years later, California’s “golden state” status has become tarnished as its major cities — San Francisco and Los Angeles — have an intractable homeless problem, state income taxes for the average person are the highest in the nation, traffic congestion has become legendary and U-Haul reports that the state is 48th out of 50 in trailers leaving the state and not returning.
How did my home state go from being the dream destination to a horror show that people cannot escape from fast enough? If you Google the search terms “California” and “war on” you will find a plethora of material discussing how the Golden State’s liberal politicians have declared war on just about everything that is keeping our economy strong.
Whether it is small businesses, workers or middle-class families, no one is immune from the regulatory hammer that lawmakers in Sacramento yield under the guise of “consumer protection” or worker’s “rights.”
Regulation, of course, has consequences. Earlier this year, a survey found that “53 percent of Californians are considering moving out of state due to the high cost of living.” Of those who are millennials, the number jumped to 63 percent. This hits home for me personally, as my sister who had lived her entire life in southern California has moved to Arizona due to how unsustainable living in her beloved home state had become.
California’s housing market is just one of the most visible signs of this destructive overregulation, where what the Wall Street Journal called, “a thousand regulatory burdens” have led to housing shortages and an outrageous cost of living.
One example of a recent mistake was Governor Gavin Newsom’s signature on legislation to reign in the gig economy. Nothing is more emblematic of the California spirit than thousands of independent contractors using technology to supply things like ridesharing services, think Uber and Lyft. Alas, this dream is no more as Newsom’s signature gigged the gig economy by making people who used to be able to work when they want or have time into formal employees with all of the strings attached.
Another bill Newsom just signed will regulate small-dollar, short term loans by capping interest on those loans with an arbitrary rate of 36 percent. This so-called “Fair Access to Credit Act” is anything but fair and will cut-off access to credit for millions of Americans who rely on these loans in times of financial need and stress.
In fact, many homeless Californians have jobs and so in some cases a short-term loan can help as a temporary financial bridge in the event of an emergency.
Julian Canete, who serves as president and CEO of the California Hispanic Chambers of Commerce derided the attempt to shut down access to credit for homeless and poor populations stating, “California has one of the highest costs of living in the nation and it can be extremely difficult to budget and save for financial expenses.”
The sad truth is that many of the homeless population along with those who are clinging onto their shelter one paycheck at a time are the truly underserved by the banking industry, and a bridge loan is in many cases the difference between clinging to the social safety net and falling completely through the cracks.
One of the biggest mistakes politicians make when passing these kinds of price control bills is that they forget that while lending services will decrease with this regulation, the need for credit does not.
As the nation’s most populous state continues to spiral downward, Governor Newsom has hundreds of bills sitting on his desk, many of which will serve as poison pills by exacerbating the already crisis level conditions in the state.
It is bad enough that Newsom chose to limit workers’ options to take advantage of the gig economy. However, taking away access to credit in the toughest of times is just plain cruel. It is no wonder millennials who have the most mobility of any group are looking at an en masse exit from the place of which young people used to dream.
