The Collective 'We'

Al Jacobs

Just two months ago California inaugurated its newly elected governor, Gavin Newsom, who assumed this prominent office despite an inauspicious start in life.  As the child of a broken family, his mother raised him as she worked three jobs. In high school he too took on various jobs to help support the family. And with a history of dyslexia – which still makes it difficult for him to read, write, and spell – he attended remedial reading classes to effectively overcome this impediment.

With this background, it’s abundantly clear he understands the significance of personal accomplishment and the necessity for individual effort in the pursuit of a goal.

Although Governor Newsom’s political career is extensive, having served as Mayor of San Francisco, 2004-2010, and California Lieutenant Governor, 2010-2018, he’s no stranger to the private sector. From 1991 through 2004 he and a family friend created PlumpJack Winery, and with investors he attracted, operated a series of successful businesses including wine stores and an inn, a café bar and grill, and a pair of retail clothing stores.

In all he became a prosperous entrepreneur whose net worth escalated into the mid-seven-figure range. There can be no doubt he knows which human qualities court success and which lead to failure.

It was, therefore, on Monday, January 7, 2019, with a background of undeniable personal accomplishment, that Governor Gavin Newsom delivered his inaugural address. Rather than merely comment on his presentation, I’ll provide you with his pertinent quotations; you may decide if this is the California you choose to embrace.

“We face serious challenges – some deferred for too long. Even in a booming economy – stagnant wages, costs that keep rising, rent, utilities, visiting the doctor – the basics are increasingly out of reach. We face a gulf between the rich and everyone else – and it’s not just inequality of wealth, it’s inequality of opportunity.

“A homeless epidemic should keep each and every one of us up at night. An achievement gap in our schools and a readiness gap holds back millions of our kids. No one should live in constant fear of eviction. We will launch a Marshall Plan for affordable housing and lift up the fight against homelessness to a state-wide mission. In our home, every person should have access to quality, affordable health care. We will never waver in our pursuit of guaranteed health care for all Californians.

“Everyone in California should have a good job with fair pay. Every child should have a great school and a teacher who is supported and respected. Every young person should be able to go to college without crushing debt or to get the training they need to compete and succeed. And every senior should be able to retire with security and live at home with dignity.

“Here in California, we will prove people of good faith can still come together to achieve big things. We will be a “California for all.” We will strive for solidarity, and face our most threatening problems – together. We have the resources to ensure a decent standard of living for all. It’s not a question of whether we can do this, but whether we will.”

You’ll note his reference to the Marshall Plan. For those of you who weren’t around at the time to listen to then-Secretary of State George Marshall’s proposal, upon which his Plan evolved, I’ve capsulized his address delivered to the graduating class of Harvard University on June 5, 1947. I suspect the Governor hasn’t reviewed it lately.

“I need not tell you gentlemen that the world situation is very serious. For the past ten years conditions have been highly abnormal. The feverish preparation for war and the more feverish maintenance of the war effort engulfed all aspects of national economies. Machinery has fallen into disrepair or is entirely obsolete. The breakdown of the business structure of Europe during the war was complete. This very serious situation is rapidly developing which bodes no good for the world. The modern system of the division of labor upon which the exchange of products is based is in danger of breaking down.

“The truth of the matter is that Europe’s requirements for the next three or four years of foreign food and other essential products are so much greater than her present ability to pay that she must have substantial additional help, or face economic, social and political deterioration of a very grave character.

“Aside from the demoralizing effect on the world at large and the possibilities of disturbances arising as a result of the desperation of the people concerned, the consequences should be apparent to all. Any assistance that this Government may render in the future should provide a cure rather than a mere palliative undertaken by this Government. It would be neither fitting nor efficacious for this Government to undertake to draw up unilaterally a program designed to place Europe on its feet economically. This is the business of the Europeans. The initiative, I think, must come from Europe.”

The most telling line in Gavin Newsom’s address is: “We have the resources to ensure a decent standard of living for all.” The single word I find truly foreboding is: “We.” The question I must pose is: Who is We? Will all undocumented aliens up to age 26, which the Governor announced are to be entitled to receive Medi-Cal benefits, be among the We who will share in contributing those resources?

Of equal uncertainty, will middle-class citizens currently eking out a living as they pay fifty percent of their income in rental payments, join the ranks of the We who will “lift up the fight against homelessness to a state-wide mission?” And perhaps even more questionable is whether a multimillionaire investor with a seven figure annual income and a home in prestigious Atherton will, out of necessity, choose to become a resident of Nevada rather than be included as a We who will ensure that “every senior should be able to retire with security and live at home with dignity.”

My fundamental objection to the program devised by our newly elected governor is the realization California’s economic problems will not respond to his proclamation that “… people of good faith can still come together to achieve big things. We will be a ‘California for all.’ We will strive for solidarity, and face our most threatening problems – together.”

As Gavin Newsom’s personal background demonstrates, success in virtually every endeavor is the result of individual effort and achievement … not by the joint efforts of masses of unaware and unmotivated persons. Although government may possess the necessary regulatory muscle, taxing authority, and coercive ability to intimidate its citizens, it cannot get true cooperation or performance for projects which do not directly benefit the individuals being goaded. This is why I must ignore most of the hyperbole he extols. And it’s my belief Newsom doesn’t really aspire to accomplish the goals he enumerated. He’s a bright man who understands both the limits of the governorship and the unlikelihood of resolving the problems he listed. He is, however, an astute politician who knows how to position himself for his next step up.

A final word: As a practical matter, you need pay little attention to the proposals and promises made to you by elected officials. Their only option is to speak in generalities. For you who hope to prosper, don’t look to other persons or entities to enhance your chances. You must do it on your own. One thing is certain: Prosperity is not collective – it’s singular. Although California is becoming a third world enclave, where the vast majority of its residents will wallow in mediocrity, it will still be possible to live a bountiful life in what is truly a magnificent locale. For those of us who don’t fall victim to an overriding bureaucracy, the Golden State will remain delightful.

Al Jacobs, a professional investor for nearly a half-century, issues weekly financial articles in which he shares his financial knowledge and experience. You may view them on


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