The Mess Donald Trump Says He Inherited Will Only Get Worse if He Ignores California

May 11, 2017 – To describe the United States as being a “mess” upon President Trump’s ascendancy to the office of President is hard to justify based on the growth of employment and the overall economy in the last year of the Obama administration and the first four months that followed it. The United States, when compared to almost any other Western economy, is humming along. But the engine driving it is largely from states that didn’t vote for Trump, that is, California, and New York.

In an article appearing in today’s Globe and Mail Report on Business, Bloomberg columnist, and editor-in-chief emeritus, Matthew Winkler, points out that California “is the chief reason the United States is the only developed economy to achieve record GDP growth since the financial crisis of 2008 and ensuing global recession.”

California voted two to one in favour of Hillary Clinton last fall giving her an overall majority of the popular vote. And it appears that California, and to a lesser extent, New York, operate in a different paradigm than much of the rest of the country.

Winkler puts together some pretty interesting data to share with us.

1. California has 39 million residents, 1/8th of the country’s population.
2. California’s GDP is $2.3 trillion, 1/7th of the country’s economy.
3. California’s population is 39% Latino, the vast majority from Mexico.
4. California’s companies have outperformed companies in the rest of the nation in terms of stock value for the last 5 years and since Trump became President have really taken off.
5. California’s creditworthiness has seen its Treasury Bonds increase in value, a 2 to one ratio when compared to Texas, the second largest U.S. state, and one that voted for Trump.
6. California’s municipal bonds at 2.3% outperform the United States benchmark.
7. California’s environmental regulatory regime, the most rigorous in the United States has been a more attractive place for investors than almost any other state.
8. California is home to 20 of the 130 companies in North and South America that meet the most rigorous clean energy standards.
9. These companies have outperformed the S&P 500 index by 19% and have reported revenue growth of 26%.
10. California companies spent 13% of their revenue last year on research and development, 5% above the national standard. California technology focused companies generated $720 billion in 2016, 54% of the entire country’s technology revenue.
11. Jobs at clean energy companies increased by 14% in 2016, double the rate within the overall industry.
12. California companies are invested in the clean energy boom. The economy in the first 3/4s of 2016 grew by $43 billion, almost as much as New York and Florida combined.
13. California is a capitalist juggernaut with a commitment to fighting climate change. The citizens of the state favour what their government is doing with the legislature receiving 57% approval and Governor Jerry Brown, in his fourth term, at 61%.

Stated Governor Brown in a March 2017 interview, “We have a goal of million-and-a-half electric vehicles in 2025, and that’s quite a steep curve to get there…..No matter what Trump says, China, the world, the academies of science and all the major countries have all recognized climate change. Certainly, businesses have acknowledged that they have to make these investments. California is well on its way.”

It would be an oversight not to recognize that California enjoys some unique advantages when compared to older Rust Belt states that gained much of their wealth from manufacturing industries that have dramatically downsized domestically in the last two decades. But at the same time, California which recently suffered from a prolonged drought with climate change implications has managed to weather that period and still outperformed the rest of the country.

Where Trump wants to place his bets on reviving coal, California is moving ahead with solar, wind and other forms of renewable energy. Where Trump wants to double down on more fossil fuel development including offshore drilling with potential ecological and environmental consequences, California is vested in roofs covered by solar panels, an electrical charging infrastructure for motor vehicles, and other clean and green initiatives.

It seems that being far removed from the Trump economic model of doing business will produce much better returns for the economy.

Today the United States federal government has sent its smallest delegation yet to a climate conference in Bonn, Germany, focused on the next steps in implementing the goals set at the Paris Climate Conference of 2015. At the same time, the Environmental Protection Agency is being gutted by newly appointed Trump administrators who are decidedly climate change skeptics. And other U.S. federal departments with responsibilities for energy and the environment are scrubbing their websites clean of any references to climate change science.

For a President who prides himself as a businessman first and foremost, you would think he would look at California’s success and rethink his approach to governing the country. Four years of this willful ignorance will serve America poorly.

A final note…..

I’ve been layed up for a few days because of my osteoarthritis and am couch bound working on my Chromebook. So forgive me for having missed a day in sending out one of my posts. I should be back in the saddle tomorrow having been somewhat immobilized after my latest cortisone injection. I must say the few times I have been up and walking around my knee feels 1,000% better. So I will be dispensing with my cane as of tomorrow.