California's economy is the antithesis of Donald Trump's vision of the US economy.
And the economy of California is the chief reason America is the only developed economy to achieve record GDP growth since the financial crisis of 2008 and ensuing global recession, according to data compiled by Bloomberg.
In fact, much of U.S. economic growth can be traced to California laws promoting clean energy, government accountability and protections for undocumented people. Governor Jerry Brown, now in his fourth term, considers immigrants a major reason for the state's success: "39 percent of us are Latino and the majority are from Mexico," he said in March in his Sacramento office.
In the stock and bond markets, where investors show no allegiance to political parties, California has outperformed the rest of the U.S. the past five years, especially since the Nov. 9 election, when Trump became the fifth person to win the Electoral College and lose the popular vote.
California's creditworthiness keeps getting better, measured by the declining cost global investors must pay to ensure against depreciation of the state's debt obligations. That premium has diminished more than any other state since 2012, according to data compiled by Bloomberg.
California, whose voters favored Hillary Clinton two to one, outperformed Treasury bonds since the November election. Texas, which is the second-largest state in population and which supported Trump, lost ground compared to Treasuries and California in the market for state and local debt since the November election. Investors see better security in the state with more regulations that protect investors and more support for immigrants.
California's borrowing cost is 0.15 percentage points lower than the average for states and municipalities and has declined to just 0.24 percentage points more than the U.S. pays on its debt, down from 1.97 percentage points in 2013.
At the same time, bonds sold by California's municipalities produced a total return of 2.3 percent since November, outperforming the benchmark for the general U.S., according to data compiled by Bloomberg. The growing popularity of bonds sold by California issuers is a consequence of the state's more rigorous regulation of the bond market, specifically legislation signed by Brown last year, creating greater transparency and accountability for issuers of California debt.
The Clean Energy Economy
Moreover, no state in the US or no country in the world has created as many laws discouraging fossil fuels and carbon pollution while promoting clean energy. That convergence of policy and voter preference is clearly paying off in the stock prices of companies domiciled in California.
California is also home to 20 of the 130 companies in North America and South America that meet the standard classification of clean energy. These 20 companies produced a total return of 40 percent during the past 12 months, beating the clean energy benchmark's 13 percent, the S&P 500's 19 percent and the S&P 500 Energy Index's 6 percent.
California clean energy companies reported annual revenue growth of 26 percent, almost three times the benchmark, and they turned more revenue into profit with an average gross margin of 46 percent, compared to 41 percent for the benchmark. California companies also spent 13 percent of their revenue on research and development compared to 8 percent for the benchmark.
Jobs at clean energy companies in California increased 14 percent last year, double the average rate for the industry. Analysts surveyed by Bloomberg say these 20 stocks will gain only 1 percent during the next 12 months, because they achieved their target valuations much sooner than predicted. Tesla Inc., the Palo Alto-based manufacturer of electric vehicles, appreciated 60 percent since Trump's election and is now worth more than $50 billion, greater than Ford Motor Co.'s $45 billion market capitalization and almost as much as General Motors Co.
"We have a goal of a million and a half electric vehicles by 2025 and that's quite a steep curve to get there," Brown said in the interview in March. "No matter what Trump says, China, the world, the academies of science and all the major countries have all recognized climate change. Certainly, businesses acknowledge they have to make these investments. California is well on its way."
Technology driving the clean energy boom is the reason California companies lead most of their peers in U.S. The 467 California-based firms in the Russell 3000 Index produced a total return of 185 percent since 2012, easily surpassing the 94 percent for the index, according to data compiled by Bloomberg. Analysts also are more bullish on companies in California than the rest of the U.S., predicting a 12-month average total return 12 percent (income plus appreciation) versus 9 percent, according to data compiled by Bloomberg.
Behind such a favorable outlook is the diversity of the California economy, which grew $42.3 billion during the first three quarters last year. That's almost as much as the next two fastest-growing states, New York and Florida, combined.
California's revenue from agriculture, forestry, fishing and hunting totaled $39 billion in 2015, plus $279 billion from manufacturing. The trailing 12-month revenue from California technology companies is $720 billion, or 54 percent of the U.S. industry, according to data compiled by Bloomberg.
The capitalist juggernaut that is California helps explain why the state's per capita income increased 9.5 percent since 2015, the most of any state and the most since 2012, according to data compiled by Bloomberg. Far from losing jobs overseas, California keeps creating them with an unemployment rate declining to 4.9 percent from 5.7 percent in 2016, faster than the national average.
None of this is lost on the residents of California.
They are proudly enacting policies in opposition to Trump's economic mindset. The California legislature became the first to vote to become a sanctuary state, and supported raising gas taxes and vehicle registration fees to improve infrastructure. While Trump gets the lowest approval of any new president after 100 days and the Republican Congress does worse, the politics of California are the opposite. A recent University of California Institute of Government Studies poll found 57 percent of California's registered voters approve of the legislature's job performance. Governor Jerry Brown gets 61 percent approval.
If that's an economic "mess," as Donald Trump declared about "liberal" economies during his first week in the White House, we all could only hope for more of California's multicultural green energy economy in many more states nationwide.
Mathew Winkler, Bloomberg View, May 10, 2017
Why are so many House Republican politicians willing to throw over 25 million struggling Americans off the health insurance rolls? Will the Senate Republicans act in such a mean-spirited way?
Why does the so-called populist Trump administration submit a budget that slashes job training programs for the very same jobless white folks he claimed to represent - who probably voted for him?
Why cut Meals on Wheels, child care, after-school programs and learning centers for the poor, affordable housing and aid to the homeless?
Why “zero out” occupational safety training and economic growth assistance in distressed communities in Appalachia and the Mississippi Delta (more Trump constituents)?
Why slash legal aid and medicine and food for the sick and hungry in the developing world, among many others?
Why implement the above budget cuts, and then propose to increase the US military budget by 10%, a budget that is already twenty times larger than any other country on Earth?
Don't Ask Why, Only How!
To save our democracy for a right wing nationalism that is bordering on fascism, journalists must aggressively ask Republican leaders about their policies, mechanisms and money. But those are technical questions, when the real and simple question they should be asking is a moral one: Why do Republicans seem intent on hurting the most vulnerable among us?
Unfortunately, the answer may just be, to paraphrase Clint Eastwood’s Dirty Harry on why serial killers murder: they like it.
Sure, we know the rote ideological answers. Republicans love to talk about “choice” and “freedom” and “markets” and “deficit reduction” and “personal responsibility” and all sorts of ideological claptrap that seems to slap the concept of principle on what really is punishment.
At best these are smokescreens, at worst traps that have succeeded in entangling the corporate media, drama queen Democrats and naive Americans in arguments about tactics or priorities - rather than arguments about motives and their real-life consequences.
There once was a time when Republicans worried they might be perceived as being on the wrong side of morality, even if that worry didn’t move them to get on the right side. They used to dress up their cruelty not only in those old Milton Friedman free market clichés but in new ones like “compassionate conservatism,” because even as they knew there was nothing compassionate about it, they also knew that most Americans weren’t buying into letting the poor totally fend for themselves. That wasn’t American. That was inhumane.
Some of that window dressing remains in the Trump era, but not very much. During its negotiations, Republicans felt obliged to misrepresent that their health care plan would cover more Americans at a lower cost - but everyone knew they were lying. By one report, when the White House ran the numbers, it predicted 26 million would lose health coverage - 2 million more than the Congressional Budget Office figure.
Speaker of the House Paul Ryan was more than gleeful about those who would suffer. He flashed a vulpine smile in recounting the CBO numbers, actually saying they were better than he had thought, which is to say that the American Health Care Act, as they called it, would have been intended to deny coverage, just as Trump’s budget clearly was intended to hurt the most vulnerable, including his now vulnerable supporters. These callous comments weren’t collateral effects. They were the very reasons for the now failed health care plan and the budget.
What kind of political leaders are dedicated to inflicting pain on others?
Since millions of Americans will be hurt from both a Republican health care plan and Trump's budget, when does it finally violate most precepts of basic decency? Well, it probably comes from a meld of Calvinism with social Darwinism. From Calvinism, Republican politicians seem to have borrowed both a pinched and unsparing view of humanity as well as the idea of “election” — namely, that God “elects” some folks for redemption, which, when rebooted with modern evangelical conservatism, has a clear unforgiving economic component.
In Republican Party speak, plain and simple, rich people are rich because they are better than poor people.
By the same token, poor people are poor because they are "cursed." This seems to be a sort of Republican Party edict, so to speak. From social Darwinism, Republicans borrowed the idea that this is the way the world should be: winners and losers - those who can succeed and those who can’t (or won’t). It is a world without luck, except for tough luck.
From this perspective, Republican politicians may not actually think they are harming the vulnerable - but instead harming the "undeserving," which in their view is very different.
In effect, Republican politicians believe they are only meting out life's divine and natural justice, American style. It’s convenient, of course, that this justice turns out to also be economic redistribution, except here it's taking resources from the poor and middle class and funneling them to the wealthy. But in reverse, notice how Republican leaders quickly howl about redistribution when the rich are asked to fund programs for the poor!
Where many of us see need, Republican politicians see indolence and impotence. It is, by almost any gauge, not only self-serving but also wrong — moralistic rather than moral.
But if Republican politicians see their moral duty as denying help to the weak, that denial is part of a larger and even uglier social equation: to give anything to the less fortunate is to subtract it from the Republican Party vision of itself - a zero-sum game between the rich and "blessed Americans" - and the rest of America.
This isn’t about governing or politics. This is bedrock Republican Party philosophy. And it may have no more eager avatar than Donald Trump, who is all about winning and losing.
Trump has always professed an elitist billionaire form of anarchy - wanting to blow up the welfare state of the great unwashed. He is like a child knocking down a tower of blocks, only in his case the blocks are American compassion and social assistance.
As we saw with the latest Republican health care plan - and now Trump's Draconian budget, one that even a few Republicans (fearing voter retribution) blanched at, Trump may not have blown up the system so much as he has blown the Republicans’ political cover. In fact, Trump has even emboldened the most callous of Republicans – the House Freedom Caucus - to come out of hiding and admit that any health care assistance for satan's poor is simply too much.
What is harder to parse is the joy Republican leadership seems to get in hurting the weak, making the GOP the punishment party. Or put in different terms: Republicans didn’t create meanness, but meanness sure created the new Republican Party.
We might be able to understand that sense of moral and social superiority from doctrinaire Republican politicians who spout Ayn Rand and detest those whose hurdles are the highest. We all know hate can be intoxicating.
But these past weeks Ryan and Trump have been gambling on something else — that many of their fellow Americans agree with them, that these Americans share a deep and abiding hostility to those who need government assistance. Whether Ryan and Trump are "right" may very well determine the fate of this country.
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What about Republican Voters?
So the second big question, alongside why Republican polticians seem to luxuriate in their political form of cruelty, is why any other ordinary American would allow it.
There have been predictions that once those ordinary Americans feel the sting of losing health care or job training or work safety regulations or clean water and air, they will revolt, and Trump will be dust.
Although this will happen to some Americans eventually, there is no certainty to a populist revolt. A recent New York Times piece on this very issue indicated that at least some Trump supporters know they will suffer from his budget - and will still support him.
Another Times article, by Eduardo Porter, quoted a Harvard economist suggesting that the white working class feel they get so little benefit from the so-called neoliberal welfare state that they see things through the same zero-sum prism as Ryan and Trump. In other words, if the poor gain at all, the white working class loses.
Is Government bad, or is who runs government bad?
When you think how much the government does for so many Americans across such a wide spectrum, you wonder what world these people are living in. Indeed, a signal achievement of neoRepublicanism, decades in the making, has been pitting the “have littles” against the “have nots” while the “have lots” stayed above the fray, getting ever more tax cuts.
Of course, by that calculation, you might think the struggling white working class would be on the losing side of the ledger, sentenced to defeat by their own deficiencies in our Darwinist world.
But in another neat political trick, Republican politicians have managed to convince their constituents they are victims of twin demonic forces - government and liberal elites. Combined, these two devil worshiping entities disrupt the natural order of things. In this way, the Republican Party helped turn many Americans into citizen brutes and our American community into a state of dog eat dog nature. There couldn’t have been a President Trump without it. There couldn’t have been an inhumane Republican health care plan or a Trump budget either.
This is a vital moment for American civility, morality and compassion, and to the extent the two are intertwined, American democracy and capitalism.
Neil Gabler, Moyers and Company, March 22, 2017