When regulations are killing your business, who you gonna call?
The California governor, in one of his many efforts to salvage his political reputation ahead of his inevitable 2028 run for president, is trying to get people to forget that he presided over the hollowing out of California businesses. According to the California Policy Center, 237 companies left California between 2005 and 2023, with the rate of businesses leaving increasing after Newsom took office in 2019. That includes a high of 64 businesses leaving in 2021 and 30 more leaving in 2019, many of which made their way to Republican Texas.
To fix this, Newsom has not rolled back California’s burdensome business regulations, cut California’s high taxes, or altered anything that makes living in California (let alone running a business there) so expensive. Instead, he decided to give CEOs his phone number so they could call him whenever they needed.
It isn’t just that, though. Newsom didn’t just give them his phone number. He gave them their own new phones. Newsom handed out burner phones with his number programmed into them to around 100 California business leaders. As silly as it may seem to copy the practice of drug dealers and other criminals, it does have a purpose: Using burner phones means Newsom doesn’t have to share any information about the calls under California’s public records laws.
And who is funding these phones? That would be the California State Protocol Foundation, a nonprofit organization that funded Newsom’s swearing-in ceremonies and trips to China, El Salvador, and Italy. So, to recap, Newsom took money out of the charity that funds his global trips to use on burner phones that serve as a lamer version of the Bat-Signal for CEOs whose businesses are being strangled by California’s regulatory environment.
You can say many things about Newsom, but you can’t say he has never come up with an overly complex solution that doesn’t really solve anything to a problem he helped create in the first place.
It does not take a CEO to tell you what the problems are in California’s business environment. It is one of the most regulated states in the country, which includes an ever-increasing minimum wage and banning people in certain industries from being independent contractors. California also has the sixth-highest corporate income tax rate in the country.
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These facts make running businesses costlier in California than in low-tax, low-regulation states such as Texas. This also increases the cost of goods in California, which causes Democratic legislators to step in and mandate higher minimum wages for workers. In turn, businesses spend more money, and the cost of goods increases, and on and on it goes.
The burner phones will not solve that if countless people in and out of California don’t make Newsom aware of this problem. All Newsom is getting out of this is “valuable interactions,” which is great for his future presidential campaign and reputation for talking about problems while never solving them.