Walters: California politicians scramble to respond to inflation

Thirty-two years ago, as then-Arkansas Gov. Bill Clinton was trying to unseat President H.W. Bush, Clinton strategist James Carville summarized the campaign in four immortal words, “It’s the economy, stupid.”

Clinton successfully portrayed Bush as someone out of touch with the angst voters felt as they stretched their incomes to cover living costs and debts.

If anything, the economic discomfort is even higher in this election year, particularly from high inflation in recent years. And politicians from the White House level downward are paying attention to a potentially decisive factor.

It explains, for instance, why Vice President Kamala Harris is promising a price-gouging ban on food costs if she wins the presidency.

“It’s an attempt to tackle a clear vulnerability of Harris’ head-on,” according to an analysis by the Associated Press. “Under the Biden-Harris administration, grocery prices have shot up 21%, part of an inflation surge that has raised overall costs by about 19% and soured many Americans on the economy, even as unemployment fell to historic lows.”

Residents of Harris’ home state are certainly not immune.

“Food prices are up 27% compared to April 2019, and gasoline is up 29%,” the Public Policy Institute of California noted in a May report. “While expenditures on these goods and services make up large portions of most household budgets, lower-income households spend almost all of their resources (83%) on food, housing, transportation (including gasoline), and health care.”

The California Center for Jobs and the Economy reports that Californians are now paying the nation’s highest rates for household, commercial and industrial electrical power and gasoline.

The California Public Utilities Commission’s consumer advocate reports that over the last decade, electricity rates have increased 110% for Pacific Gas and Electric customers and only slightly less for ratepayers in other investor-owned utilities.

California housing costs are notoriously among the nation’s highest. Its median home price of $793,600 is by the highest of any state and almost exactly twice as high as the national median according to a recent Bankrate report. Its median rent for a two-bedroom apartment, $1,903 a month, is also the nation’s highest, according to a survey by Consumer Affairs, a consumer research site.

California is fundamentally a one-party state and dominant Democrats needn’t worry about losing offices due to inflation. However, they must at least feign sympathy for their constituents who struggle to pay for necessities of life.

Gov. Gavin Newsom, who has been preoccupied with building his national political image, is apparently planning to seek approval of an electric power relief plan in the final days of the current legislative session.

The Sacramento Bee reports that Newsom wants to commit roughly a billion dollars to lowering power bills, but doesn’t want to tap the state’s deficit-ridden budget. Rather, he would divert money now being spent on some ancillary programs, and attach it to a measure aimed at speeding up non-polluting energy projects, such as offshore wind, that’s being drafted for passage before adjourning Aug. 31.

As word of Newsom’s plan circulates in the Capitol, it’s drawing fire from advocates for the programs that would be axed, such as air conditioning for schools, improving power reliability in poor communities and installing solar power panels on low-income housing projects.

A coalition of renewable energy, environmental and groups this week sent a letter to Newsom and legislative leaders opposing any diversions.

“Cutting them would provide negligible reductions on energy bills in the short-term, while sacrificing the long-term climate and affordability benefits they provide,” the coalition said.

It shapes up as a yeasty confrontation between competing causes in the session’s final days.

Dan Walters is a CalMatters columnist.