Neel Kashkari goes slumming, misses the bus

GOP gubernatorial candidate wants to take an axe to California taxes, as he did in this campaign ad.
(Kashkari for Governor)

Former investment banker Neel Kashkari, who is the Republican candidate for governor of California, staged a bravura act of political agitprop the other day.

Kashkari posed as an unemployed worker in Fresno for a week, searching for work, sleeping outdoors, trying unsuccessfully to live on the $40 in his pocket. Then he wrote about the experience in the Wall Street Journal, where all the low-income and unemployed Californians he wants to help would be sure to find it. He also posted a video.

We don’t criticize Kashkari for spending a week in the shoes of the unemployed in one of the most poverty-stricken parts of the state. We wish more politicians of both parties followed his example; then we might not have a Congress that believes that the real America encompasses only people who earn more than $150,000 a year.

But it would have been better if Kashkari hadn’t approached the task with preconceived notions about economic policies, then used his experience merely to reinforce them.


His main takeaway is that “California’s record poverty is man-made: over-regulation and over-taxation that drive jobs out of state, failing schools and misguided water policies.” This doesn’t appear to be different from what he thought before taking the bus to Fresno.

Of course, his goal is to blame all these faults on Democratic Gov. Jerry Brown, who he will be facing in November in a steep uphill battle.  The first step in fashioning a remedy for a problem is to diagnose it correctly. Does Kashkari do so? Let’s see.

Kashkari’s platform focuses on two areas, education and jobs. In general terms, he’s against raising the minimum wage and opposed to affirmative action in the universities. He wants to cut taxes. In K-12, he wants to devolve more spending decisions to the level of the district, even the school. That isn’t a bad idea, though the devil is in the details. He’s enamored of charter schools, though whether they can consistently outperform conventional schools over time is by no means clear.

He’s really enamored of school vouchers, a very orthodox GOP plank. His shining example is the voucher program in Gov. Bobby Jindal’s Louisiana. Is this a program to be emulated? The signs are that it has increased racial segregation, while funneling students and taxpayer money to creationist schools that all but use the Bible as a science text. This is good for California students, as is any program that dumbs down out-of-state kids who might otherwise compete with them for jobs in the modern world. But why import the model here?


Kashkari describes the “middle class tuition shock” at the University of California and Cal State as Brown’s “legacy.” This is a teensy bit unfair, since base tuition and fees at both systems actually have been frozen since Brown took office. (See the accompanying graphic.) 

The real problem with both systems is that they’ve been consistently starved of state resources since the 1990s. That’s when budget cuts started to send tuition and fees on an upward trajectory, rising most sharply under Brown’s predecessor, Arnold Schwarzenegger (Republican).

Kashkari needs to take a longer view if he’s going to fix the problem of dwindling seats and higher costs in public higher education for California students. If he really wants to make a dramatic break with the recent past, here’s a suggestion: Make UC tuition free again, as we proposed in 2012. It would cost about $3 billion and would be a great investment in California’s future.

On jobs, Kashkari plays the political game of blaming California’s current economic profile on Brown. All’s fair in politics, but as an investment expert he surely knows better.

It’s true that California’s unemployment rate is higher than the national average, but it has also been coming down faster than in the country as a whole. This is typical--the state’s boom and bust cycle tends to intensify the boom and the bust. As for Fresno, as a farm community its unemployment rate is highly volatile; it has also been far above the statewide average for well more than a decade. (See the accompanying graphic.) 

On jobs, Kashkari proposes to cut way back on regulations and offer rich tax incentives to companies that create as few as 100 jobs, which makes him sound a bit like the second coming of Meg Whitman. He wants to reform California’s environmental law, CEQA, to make it more business-friendly, which makes him sound like the second coming of Jerry Brown. He wants to encourage fracking. 

The oddest piece of his plan involves water. Playing to the complaints of Central Valley farmers, he wants to spend billions on increased storage--building new reservoirs and expanding the old ones. As a water policy, this won’t do. That building new dams will solve California’s drought problem is a myth, as UC Davis experts put it: Dams are incredibly expensive and devastating to the environment. Moreover, the most suitable sites are already taken. For some reason, dam-building is an option favored by the right wing, possibly because it drives environmentalists nuts, but that’s no recommendation as water policies go.

Some of the state’s biggest reservoirs are operating today at 35% of capacity; making them bigger or building more of them won’t produce water that isn’t there. What’s needed is a comprehensive water policy that mediates among the demands of farmers, industries and urban dwellers, and treats water scarcity here as a product of natural events. Brown hasn’t showered himself in glory on this issue, but Kashkari hasn’t shown that he has any useful ideas, either.


It would be healthy for the state if Brown, who expects to coast to victory, had a worthy opponent with real ideas that might make this a race. Kashkari won himself some attention on the front pages by traipsing around Fresno trailed by a camera operator. But putting the terrible economic condition of the region on video is only the start of the discussion. What would really open people’s minds to the Kashkari candidacy is if his journey to the lower depths gave him some new ideas.

Keep up to date with The Economy Hub by following @hiltzikm.