Here's my take. At a time when President Trump and Republicans are faring poorly in most polls, the story has been different. In California, Republican Steve Hilton finished ahead of many high-spending Democrats in the governor's race to advance to the November election, facing Democrat Javier Becerra in Los Angeles, an overwhelmingly Democratic city. Spencer Pratt, a Republican former reality television personality, looked as if he might make the mayoral general election before finishing third. California Democrats will be tempted to dismiss all this as a sideshow, but the frustration is real and justified.
California is one of the most dynamic places on the planet. It has Silicon Valley, Hollywood, world-class universities, extraordinary agriculture, sports, talent and natural beauty. But it is a case study in how a rich society can spend more and more while producing less and less of what its ordinary citizens need.
The paradox of California today is a successful economy attached to a failing model of governance. Consider the fiscal record. Since 2000, California's population has grown by roughly 16%, but the state's general expenditures have grown more than 200%, from $78 billion to about $248 billion. General spending per person has risen from about $2,300 to about $6,300. The number of state employees has grown by more than 50% by one count. Does anyone think that California government and its benefits have gotten 200% better in the last 25 years?
Housing is the central failure. California has long spoken the language of compassion while building a system of exclusion. Alicia Finley writes in The Wall Street Journal that from 2021 to 2024, the L.A. metro area with nearly 13 million people issued only 118,000 building permits for new homes. Atlanta, with about half that population, issued 163,000. California has made it too hard, slow and expensive to build.
The result is predictable. Home prices and rents rise. Workers commute farther. Homelessness grows. Young people leave, and people are leaving. Over the past seven years, the state has lost a net 1.9 million people through domestic migration. For generations, people moved to California to pursue the future. Now, many middle-class people are leaving because they can't afford it.
Or look at education. For years, California schools had a plausible excuse: they were underfunded. Total spending on education through 12th grade has more than doubled since the early 2010s, and per-pupil spending by 2023 was well above the national average. Yet the results remain dismal. In the 2024 Nation's Report Card, California was 43rd in fourth-grade math, 39th in fourth-grade reading, 36th in eighth-grade math, and 38th in eighth-grade reading.
Homelessness tells the same story in a more painful register. A 2024 audit revealed California had spent $24 billion on the problem over a five-year span. Yet in 2024, California reached a record high in homelessness, almost 200,000. Homelessness did decline by about 3% from 2024 to 2025, but the state's expansive, expensive and elaborate homelessness aid complex has not proven to solve homelessness in any significant way.
California's headline prosperity, generated in good part by a few industries like high tech, masks weaknesses underneath. Job creation has been sluggish. In 2025, California essentially failed to add any new jobs on net. Private industries outside government and government-supported health care actually shed jobs, according to the Center for Jobs and the Economy. The state is using public spending to paper over private-sector stagnation.
Nowhere is this more vivid than Los Angeles, where Hollywood, the city's defining industry, is in slow-motion collapse. The effects are being felt not by celebrity actors and influencers, but by the carpenters, costumers, sound engineers, camera operators, editors, drivers, caterers, dry cleaners, prop houses and small businesses that once formed one of the world's great industrial clusters.
The numbers are stark. One report found L.A. shoot days fell from 36,792 in 2022 to just 19,694 in 2025. Another report estimates film, television and sound jobs fell by nearly 30%. Motion picture employment in L.A. County fell from about 142,000 at the end of 2022 to roughly 100,000 two years later.
Hollywood is still the symbol, the brand, the mythology, and it still houses the big studios that produced most of the world's greatest entertainment for almost a century. But thanks largely to high taxes, costs and regulations, the work has moved elsewhere — to Georgia, New Jersey, Toronto, London and Warsaw. Michael Lynton, who ran Sony Entertainment, told me that the big studio lots look like ghost towns now, with tens of acres of soundstages and recording studios where nothing is happening, he said. Los Angeles is becoming a sunny version of Detroit.
Consider the simple fact. According to Fortune, none of the ten films nominated for Best Picture this year were primarily produced in Hollywood. Los Angeles still hosts the Oscars, but increasingly it does not actually make the movies being honored there.
For years, Democrats in California have governed without any real competition. The recent primary results suggest that even in deep-blue territory, voters are restless. They are not becoming Republicans, but they are asking a reasonable question: Why does a state with so much money, talent and promise make life for ordinary people so hard?
A new Reuters/Ipsos poll out this week finds that more than half of Americans believe AI could put them, or someone in their household, out of a job. And yet, unemployment in May sat at just 4.3%, well below the historic average of 5.66%. So what is really going on? Is AI actually displacing workers, or is the fear outpacing the reality? Joining us now to help make sense of all of this is Molly Kendall, who studies AI's impact on jobs. So Molly, explain that paradox everyone is worried about.
