This should be the best of times in California. A vigorous national economy is providing record numbers of jobs and robust growth in tax revenue. But far from flourishing, California is increasingly beset by social and economic problems, from homeless encampments to rubbish-strewn streets to blackouts.

“California is what America is going to look like,” Gov. Gavin Newsom boasted in a TV interview recently. The state, he said, “is America’s coming attraction.” The rest of the country can be forgiven for finding Mr. Newsom’s...