Governor’s race has a dilution problem

In one lane, we have candidates who understand the operational complexities of funding and leading what is today the fourth largest economy worldwide. In another, we have candidates positioning themselves as a global force, jockeying against the current federal administration to cast California as the counterweight on the world stage. Both are serious visions, but they are insufficient on their own because the governor of California isn’t really a political role in the traditional sense — I see this job to be closer to a CEO role.

A CEO has really four jobs: never run out of money, increase shareholder value, provide air cover and recruit the best team to deliver on a shared vision. What separates an effective CEO from someone who’s playing dress up is the ability to think in complex systems, understanding that almost no decision exists in isolation. As an example, raise the cost of doing business in California to fund important programs, and companies find a lower friction place to call home which costs jobs and tax revenue, undermining the very programs you just funded on paper. A leader who thinks in binaries and operates in slogans will inevitably run into credibility issues for a laundry list of unintended consequences.

So with that as the lens, consider the money problem. In 2022, California sent $83 billion more to the federal government than it got back — the largest donor state in the country by a factor of three. That number fluctuates year to year, but the structural dynamic doesn’t: California has been a net donor in eight of the last nine years measured, consistently funding the federal government at levels no other state comes close to. Yet over a third of the state’s own budget, nearly $175 billion, flows through federal funding channels, the vast majority supporting health care for nearly 15 million Californians. With H.R. 1 slashing Medicaid, food assistance and education, that pipeline is under direct threat. We fund the federal government more than any other state while depending on that same government for a third of our operating budget, and the partner on the other side may not fulfill their end of the arrangement. A leader who only focuses inward without understanding the funding architecture is managing a fragile budget dynamic in a black box, and one who only fights Washington without a fiscal fallback is not leading at all.

On to shareholder value. Some candidates seem to prioritize California’s brand — its standing as a progressive leader, a climate pioneer, a tech economy that shapes global markets. For them the job is external: provide air cover against federal hostility and cement the state as the global economic power that it is. Other candidates define the shareholder as the person who actually lives here — someone who needs housing, insurance, health care, food, child care and quality education they can afford, and energy rates that aren’t second highest in the nation. For them the job is operational: Fix the product and its usability. But, it’s hard to focus on storytelling when the product itself needs refactoring and hard to grow shareholder value if you cannot command the stage.

The honest answer is that both are critically important, and the next governor has to serve shareholder value holistically — which makes the least discussed question in this race the most important: What’s the vision for the team? A leader is only as good as those they entrust to deliver, and few have provided clarity on their vision for team. 

California’s jungle primary means the top two advance regardless of party, and a ballot this crowded risks sending forward those that simply spend the most for name recognition or have the least party dilution. We’re interviewing a leader for a $4 trillion, incredibly complex institution, and it is clear that not everyone checks the boxes or displays the upside for the moment. Now is the time to gracefully bow out.