Let me set the scene. I am sitting on a deck with a cigarette in my right hand, a mobile device in my left hand, a cup of coffee on a table next to me and Pacific waves crashing in front of me. I also happened to be reading an article about California’s next tax grab.
Robber barons unite!
The story from The Wall Street Journal was titled “Another California Tax Grab.” It seems that California’s brand-new governor, Gavin Newsom, wants Silicon Valley companies to pony up $500 million to match $500 million of California taxpayer dollars to fund his workforce housing budget.
Newsom’s thinking goes like this: Since Silicon Valley companies are very successful, they have created a shortage of low-income housing. Huh? Both my wife and I are perplexed with this line of thinking. If companies are successful and employ tens of thousands of workers, it causes a shortage of low-income housing? You would probably think just the opposite if you lived and breathed.
“Consider this,” the Journal article said. “Apple is investing $1 billion to create 5,000 jobs in Austin, Texas, where a $46,816 salary pays for the same lifestyle that costs $75,000 in the San Francisco Bay Area.” No one should begrudge the high cost of living in San Francisco. It’s just the American way. But blaming the lack of low-income housing on successful companies is flat-out wrong. The lack of low-income housing is due to the failure of government. “Despite boasting the second-highest gasoline tax in the U.S., California’s roads are so potholed it actually pays to buy tire insurance,” the article said.
California has a bunch of homeless people, whom the state subsidizes heavily and treats poorly, according to the Journal. “During a cold and rainy spell in December 2014, the City of San Jose flattened a 300-person homeless encampment and threw away most of the inhabitants’ belongings, including survival items such as tents, clothing and cooking utensils. If it had been done in third-world village, it would have been labeled a human-rights violation.”
Government failure is not a surprise and thoughtful citizens can suggest ways to improve government. For example, let’s discuss the current situation with Dreamers and border security.
If Donald Trump would propose making the status of the Dreamers permanently legal and then detail a plan of border security that doesn’t include building a 2,000-mile-long wall, he would get the support of many voters and possibly insure his re-election. If Trump would propose a substantial tax cut for the middle-class, it would possibly insure his re-election. If Trump would eliminate the insurance industry’s hideous hold on healthcare, it would possibly insure his re-election.
Another government failure is what is happening to America’s educational system. The system needs to tweak the curriculum to prepare students for employment. Right now, there are 7 million unfilled jobs and student debt has surpassed credit card debt. That’s not a good score card for America’s educational system.
The Los Angeles School District recently agreed to its teachers' demands and gave them a raise, agreed to tenure and agreed to better teachers’ benefits — all without demanding better teaching. No one should begrudge better pay and benefits for teachers, but it is not unreasonable to also demand a better educational outcome.
Meanwhile, our good friends in Japan are paying their teachers just as well as they are paying their engineers. The Chinese are retooling their educational system from top to bottom and sending students to India for their higher educational demands. What is America’s educational system doing? It’s telling America’s industries to train their own employees. Letting businesses train their own employees is a good thing, but it is also expensive. A guaranteed income tax credit is just the ticket to make this happen.
Good government is a reasonable goal, but it is going to require substantial effort to achieve. Harry Truman had a plaque prominently displayed on his desk which read, “The Buck Stops Here.”
Robert Pembroke is the former chairman and CEO of Pembroke’s Inc. in Salt Lake City.