How Future-Proof Is Newsom’s Master Plan for California?
Gov. Gavin Newsom unveils his first state budget proposal in Sacramento on Jan. 10, 2019. (Marisa Lagos/KQED)
Singularity University isn’t really about the singularity—that point in the future where new technology will change the world so drastically that it’s basically incomprehensible to people alive today. Imagine a society where humans and robots have merged into such a blissfully dystopic union that iPhone Xs are used only by the Amish to print 3D barns.
Nor is Singularity University really a university, at least not in the traditional sense.
Picture instead a very exclusive TED Talk for vice presidents of Fortune 500 companies and assorted government leaders, who pay nearly $15,000 to spend a week on a NASA research campus in Mountain View studying topics such as the rise of artificial intelligence and digital biology.
And you may recognize one of the alumni.
California Gov. Gavin Newsom visited Singularity University multiple times over the past decade (a spokesman for Neseom says he was always an invited guide and neither he nor the state ever paid tuition). Among his study endeavors: a seminar on 3D printing in space.
And Newsom, for the most part, drank the Tang, recalls Pascal Finette, Singularity’s Chair of Entrepreneurship and Open Innovation.
“To his credit, I think he spends a good amount of time to really educate himself on the future and to really understand what the future looks like,” said Finette.
Today, Newsom delivers his first State of the State speech from the Capitol. It comes just a few weeks after unveiling a $200 billion budget proposal that serves as the financial roadmap to the state he envisions. Newsom aims to do a lot of forward-looking things in the next 12 months: build homeless shelters, acquire firefighting airplanes, even (gasp) let drivers pay with credit cards at the DMV.
Odds are, Newsom’s speech will focus largely on his ambitious plans to restore the California Dream. But how does all that money prepare California for that dream — not just next year, but five, 15, 30 years from now?
The following are excerpts from our discussions with three experts about the issues likely to confront California at those various benchmarks on the horizon. We asked each expert what kept him up at night when contemplating that year—and how Newsom’s budget does or does not address those concerns. Interviews are edited for brevity and clarity.
Year: 2024 Issue: Recession Expert: Patrick Murphy, a senior fellow at the Public Policy Institute of California
How worried should we be that California will confront a recession in the near future?
I’m not a betting person, but I would bet we’ll see [one]. What will cause it? How big? How long? I don’t have that. We’ve been in a recovery for a long time, we’re in uncharted territory, and it would be quite surprising if there wasn’t a slowdown in the economy at some time.
What can the state do to gird itself against an economic downturn?
There’s two schools of thought. One would be to make sure your revenues are stable and predictable in the long term, so you don’t have the highs too high and the lows too low.
That isn’t the course we’ve taken. The course we’ve taken now is we have a volatile revenue stream, but we try to hedge our bets by socking away savings. It’s the person that doesn’t work for a salary or works piecework or consulting and has a lumpy paycheck.You have to have money in reserve.
So what is Newsom doing in this budget for saving while the money is pouring in?
First, he’s continuing something that Gov. Jerry Brown had done, which is to focus on setting money aside. Part of that is constitutionally required, but what’s interesting is we’re kind of going over and above that. I’ll spare the weeds, but we’re saving more than we have to.
The other piece is the spending that’s being done. A big chunk of it is being put under the banner of one-time spending. And what that really means is that you’re not commiting someone’s job or salary in the long term, where after year one you’re not committing to year two or year three or four.
What about pensions?
He’s continuing to pay down some of those unfunded retirement liabilities — payments to retirement plans for state and local employees. That’s kind of like putting money in your 401k. You do it today; your benefits multiply over time.
So, grading from A to F, how does this budget fare in preparing us for a recession?
A: I hate to give grades.
You were a professor.
A: That was the worst part of the job. What I will say is that it’s showing a lot of foresight in how to invest a $20 billion windfall. I wish I was doing this at home — I wish I was paying down my mortgage faster. This is kind of the equivalent of trying to pay down your mortgage faster knowing you’re going to benefit from it down the road.
We’re standing right outside the Facebook Campus in Menlo Park, which sits right at sea level on the south edge of San Francisco Bay. What is this going to look like 20 years from now?
At some unknown point in the future,this area will likely be fully inundated by the sea. I say at some unknown point because we know sea level is rising, and we know it will rise at an accelerated rate, but we just don’t know how fast that will happen. It depends on how effective we as a species are at reducing the emissions and carbon dioxide we put into the air.
It will happen, though? It’s just a question of when?
It’s a question of when. This area will flood for a day or two, and that will happen more and more frequently. Eventually the new reality will be what is now an extreme event that occurs every 10, 15, 20 years will occur every 10,15 or 20 days and then eventually all the time.
California’s coastline has almost always been considered an economic asset. But is that going to be the case decades from now?
Oh, it’s inevitable that vast parts of the coastline, which is now the most expensive real estate in the world,will be written off and have to be abandoned. That may be a more difficult crisis to deal with than the actual physical problems, because of the economic impact of that.
So what can the state actively do to protect against sea level rise?
What the state can actively do is begin to plan for this inevitable future now. And that means sorting out what areas we can protect, how we can protect them, are we going to try to use wetlands, do we want to build higher levees? Or are there areas where we decide to pull back, perhaps prohibit new development and remove existing or older development.
What did you make of Newsom’s budget?
Most of the money in the budget to deal with climate change is really addressing mitigation, which is reducing greenhouse gases to slow the impact of climate change. The other side is adaptation, which is to acknowledge no matter how effective we are at reducing greenhouse gases, we are still going to have sea level rise in the future. Relatively speaking, there’s not much money in the governor’s budget for [adaptation] right now.
How would you grade his first budget on planning for a future with sea level rise?
It would be difficult to grade somebody like the governor who has been in office now for a [month] on a long-term issue like this. It’s like giving him a grade on a final exam when he just walked in the door to class for the first time. But I have worked with Newsom when he was mayor of San Francisco, and he could turn around and teach the course.
If Facebook goes underwater, is that necessarily a bad thing?
Year: 2050 Issue: Robots and Automation Expert: Johannes Moenius, professor of global business at University of Redlands
Is there a date in the future that’s a tipping point for automation?
At this point, we don’t really know dates. We just can project certain developments and see what can happen. My personal view is we won’t see much in the next two to three years. We need to start worrying about five years from now, and then again probably by 2040. By 2050, if we haven’t solved the problems, then we’re in really bad shape.
Can you give us some examples?
If you think of Southern California, once self-driving trucks come on the road, [labor] replacement can happen quite quickly. All the trucks that we see on the roads right now pretty much have what they need for self-driving except for the [artificial] intelligence. You need a device a little bit smarter than a smartphone, and then you can send a truck from an on-ramp all the way across the country to an off-ramp. And that can have a major effect on employment.
What about the argument that automation and technological advances in the past have typically produced more jobs than they’ve replaced. In the end, isn’t it a net positive?
Yes, historically, technological progress has been great at creating jobs. But there’s always been winners and losers. During the Industrial Revolution, some researchers estimate we saw more than 60 years of stagnant real wages. We’ve never had it historically that so many different technologies matured at the same time, and the speed of that replacement is also completely unprecedented.
So what can Newsom’s budget do about a change that massive?
One pillar that I think is very important is education. A second one is entrepreneurship. And a third will be creating resilience and providing adjustment assistance for people who will be replaced.
What would you specifically like to see with workforce development?
There are possibilities for strategic use of workforce development funds. So, for example, truck drivers: If you’re a truck driver, you know the writing’s on the wall. Why don’t you start something with evening education classes or things along those lines that would be more future-proof?
So more workforce development money focused on retraining. What about education?
There’s a few really good things in the budget that point in the direction of the future, although they might not have been implemented with automation in mind. One is an increased focus on 4-year-olds from low-income families, and also a focus on transparency and accountability for school districts. We already had this large effect of digitalization on the income distribution by strengthening the top end and the bottom end. If we’re not starting to prepare low-income families and helping them attain certain levels of education, it’s going to be quite critical.
The California Dream series is a statewide media collaboration of CALmatters, KPBS, KPCC, KQED and Capital Public Radio with support from the Corporation for Public Broadcasting, the James Irvine Foundation and the College Futures Foundation.