Assemblywoman Lorena Gonzalez (D-San Diego) best exemplifies the reason thousands of businesses are departing California.
Her attitude toward one of the state’s most successful companies, Tesla, was made clear with a childish vulgarity she aimed at the company’s CEO after learning that he was threatening to leave the Sunshine State. “F*ck Elon Musk,” she tweeted unapologetically in early 2020. This wasn’t the first time Gonzalez dropped the “f-bomb” in a public forum.
The assemblywoman wasn’t “too concerned” about the innovative billionaire packing up his manufacturing plants because she believed the CEO needed the state more than taxpayers needed him. Tesla receives numerous green grants from Southland taxpayers.
Apparently, she misjudged the balance in the relationship. Musk’s response to the assemblywoman signaled his next move at the time: “Message received.” Gov. Gavin Newsom reportedly held the same ill-advised view and wasn’t too concerned about Musk moving his billions in revenue and more than 40,000 employees to a friendlier business environment.
They have learned otherwise. Tesla joins a formidable list of high-tech companies fleeing bad government and relocating to Texas, including Hewlett Packard Enterprise Co., Oracle Corp. McKesson Corp., and expansions of Apple, Google and Facebook. There is a new name for the trend: “Techsodus.”
Musk will be the first to admit that insults are hardly the tipping point for a CEO deciding to relocate to another state. The best reason is summed up by a relocation specialist cashing in on the trend: “California’s regulatory environment is the most costly, complex and uncertain in the nation,” Joseph Vranich recently said. And it’s gotten worse.
The laws have become so confusing and so complex that California has earned the dubious distinction as rated among the top “judicial hellholes” in the nation, according to CEOs polled by Chief Executive magazine. It has reached a point to where the lawmakers fail to understand what’s in the laws -- all 10,000s of new pages.
Assemblywoman Gonzalez has contributed to this bureaucratic quagmire with her job-killing AB5 bill, targeting independent contractors. Her aim was to dismantle the gig economy (labor market with short-term contracts), specifically hurting part-time workers for Uber, Lyft, and DoorDash. Now they will be taxed as “employees,” forced to absorb the myriad layers of additional taxes, while struggling to earn a living.
The mandate ended up hurting not only adults, but children, too. Parents desperate to establish learning pods -- as an alternative to 
school closures -- were particularly upset dealing with the rigid standards of the mandate. Numerous conditions of the legislation must be met before hiring private tutors and teachers. Parents can wade through the legislation and take the law’s prescribed “ABC” test, to determine whether they meet the onerous definition of being an established business, according to the mandates.
Those most impacted by AB5 are the most upset. “Lorena Gonzalez is hiding behind a carefully worded and deceptive statement when she knows the state of California has already issued guidelines that make parents and tutors subject to AB5’s absurd requirements,” says Carl DeMaio, chairman of Reform California, an organization fighting against the mandate. “Even liberal attorneys are having to admit that the law is so fatally flawed as written that it traps everybody…”
Perhaps Gonzalez could gain greater insight into her constituents’ lives by getting up out of her chair, leaving her office and speaking to struggling taxpayers overwhelmed by the “fundamentally unfair” conditions of her signature legislation, according to DeMaio.
Regrettably, fiscal realities rarely come between Gonzalez and her like-minded progressive colleagues. One of the most poignant examples of Gonzalez’ economic illiteracy was to label Elon Musk a “union buster,” and to suggest he was feeding off the public coffers by accepting green grants.
It appears to have escaped her notice that the United Auto Workers (UAW) was recently handed a crushing defeat by the employees at the Volkswagen manufacturing plant in Tennessee. Those hard-working folks voted to keep the union out of their paychecks. And the more than 10,000 employees at the Tesla plant in Alameda are most grateful for the allocation of green grants which have contributed to their employer offering lucrative salaries.
The next time Gonzalez decides to drop the “F*ck” bomb on a CEO, she may wish to take into account those benefitting from her antagonistic actions. Corporate relocation experts are happy to help out CEOs desperate to leave behind poor governance and tempted by the open road. Many of them anticipate their best year ever in 2021.
“Departures are understandable when year after year CEOs nationwide have declared California the worst state in which to do business,” adds Joseph Vranich, the much-quoted corporate relocation expert. “Signs are that California politicians’ contempt for business will persist.”
Vranich admits he “loves the climate in California,” but knows the worst Arctic chill now blowing over Texas will not effectively stem the tide of corporations seeking a saner business climate.
Image: Jimmy Emerson, DVM
California state assemblyman Kevin Kiley (R.) called for a corruption investigation into Governor Gavin Newsom's (D.) management of public contracts awarded during the coronavirus pandemic to companies that contributed to his reelection campaign.
Kiley proposed Tuesday that state authorities probe Newsom’s role in alleged influence-peddling by corporations, many of which were able to receive no-bid contracts from the California government because of the state of emergency declared in response to the pandemic.
Reporting by local outlets indicates Newsom’s government issued contracts and other opportunities to at least half a dozen companies that made major donations to Newsom’s reelection campaign. The contracts offered by the state range from $2 million to $1 billion.
Companies that received no-bid contracts include large donors in the health care industry. Blue Shield of California has given Newsom more than $300,000 since 2018 and won a $15 million contract from the state government. UnitedHealth has contributed more than $200,000 to Newsom’s political efforts since 2018 and won multiple no-bid contracts totaling more than $400 million.
The president of BYD, a Chinese manufacturer, donated $40,000 to Newsom and received more than $1 billion from California to produce N95 and surgical masks. BYD ultimately failed to complete its contract on time and had to return $247 million in public funds.
Kiley slammed Newsom’s coronavirus management as a strategy to aid "special interest allies" over working Californians.
"This governor has repeatedly used extraordinary emergency powers to reward special interest allies as millions of Californians have paid the price," Kiley said. "It's hard to imagine a worse betrayal of the public trust."
Scrutiny over Newsom's management of the pandemic comes as the governor faces a recall effort led by Republican politicians and conservative activists. Roughly half-a-million Californians have reportedly signed a recall petition against Newsom, with 1.5 million signatures required to force a special election. The movement gained enough steam in recent weeks to merit a response from the Biden administration. White House press secretary Jen Psaki tweeted last week that President Joe Biden opposes any recall effort against Newsom and shares "a commitment to a range of issues" with the governor.
California Republicans, including former San Diego mayor Kevin Faulconer and former gubernatorial candidate John Cox, have lined up to challenge Newsom in a potential recall election, which would take place later this year if the signature campaign is successful.
Under normal circumstances, a California conservative like Kevin Faulconer would stand little chance of toppling Governor Gavin Newsom (D.), the polished product of San Francisco's powerful political machine. But after nearly 12 months of harsh lockdowns and shuttered schools, the state's political landscape is anything but normal.
"You can't underestimate the anger and frustration of California families right now," Faulconer told the Washington Free Beacon.
The former two-term San Diego mayor launched his campaign to succeed Newsom in early February, promising a "California comeback" centered on common-sense policies. The timing proved opportune: Just two weeks later, Republicans called for a corruption investigation into Newsom over no-bid contracts the Democrat awarded to campaign donors. And with a recall effort against Newsom sweeping the state, Faulconer is eager to capitalize on what is undoubtedly the best chance for a Republican to take the governor's mansion since Arnold Schwarzenegger's recall win nearly two decades ago.
Fed-up residents launched the long-shot recall petition in June. It began as a modest effort, amassing roughly 55,000 signatures by November 5. Just one day later, however, Newsom committed a term-defining blunder—he attended a lobbyist-filled party at the luxurious French Laundry restaurant in Napa Valley, violating his own coronavirus restrictions in the process. Even NFL star and California native Aaron Rodgers joined the pile-on as signatures skyrocketed, reaching 1.5 million in February, according to activists.
"In the midst of all the lockdowns, to see that happen? That really struck a nerve for Californians across the state," Faulconer said. "It's the classic ‘do as I say, not as I do' hypocrisy. There was a lot of frustration already, but that sent it into the stratosphere."
The incident did serious damage to Newsom's COVID credibility, but it did not stop the Democrat from instituting additional shutdown measures. Newsom ordered a 10 p.m. curfew, closed outdoor playgrounds, and shuttered outdoor dining all within weeks of his French Laundry outing, sparking outrage from many small business owners, who refused to comply. Faulconer railed against the governor's "constantly changing metrics," describing the orders as draconian and ineffective.
"The governor shut down outdoor dining with absolutely no science showing that outdoor dining was contributing to the spread and transmission of COVID-19," he said. "We had businesses that were open and shut four different times because of the conflicting measures. The goalposts kept changing."
Newsom has also struggled on school reopenings, an issue Faulconer hopes will be the driving force of his unlikely recall campaign. The Republican held a Wednesday news conference at San Francisco's Abraham Lincoln High School, where school board members have postponed discussions on in-person learning as they work to rename the school in order to "dismantle symbols of racism and white supremacy culture."
Newsom attempted to intervene with a December plan aimed at opening California schools by mid-February. The deadline passed with little progress—"another broken promise," according to Faulconer. The state legislature is now pushing its own reopening bill that would resume in-person instruction in April, but Newsom says the legislation "doesn't go far enough or fast enough." As pressure mounts, there is evidence that the delay could resonate with voters in the state's bluest cities—San Francisco, with the blessing of its Democratic mayor, recently sued its own school district to force open classroom doors.
"There are no results. There's rhetoric and virtue signaling and failed plans," Faulconer said. "A computer screen is no substitute for a classroom. California kids are falling behind, and there's absolutely no reason for it."
Faulconer emphasizes that the campaign is about more than just Newsom's failed leadership. He plans to run on his own record as San Diego mayor to woo an overwhelmingly Democratic population. He spearheaded initiatives that saw the city rank among the nation's best in safety and cleanliness—all while working with a city council comprised almost entirely of Democrats. Under Faulconer’s leadership, homelessness went down in the past two years, and home prices soared at the third quickest rate in the nation. He said the same policies that drove San Diego's success could help California turn the tide on the mass exodus of residents and businesses in the past decade.
"I can't say enough how many folks and companies are looking to leave California. My job as governor would be to keep them here," Faulconer said. "We're so proud of San Diego, we're so proud of California’s innovation and spirit. But you don't see that same spirit in our state government."
Faulconer sees San Diego as a "microcosm of California," expressing confidence that his bipartisan experience will resonate with disgruntled voters in both urban and rural areas.
"Ten years of one-party rule in Sacramento has failed us," Faulconer said. "It's time to replace the status quo."
The deadline for the recall petition is March 17.
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