High-Flying California Charts Its Own Path — Is A Cliff Ahead?

As its economy bounced back from the Great Recession, California emerged as a progressive role model, with New York Times columnist Paul Krugman arguing that the state’s “success” was proof of the superiority of a high tax, high regulation economy. Some have even embraced the notion that California should secede to form its own more perfect union.

Pumped up by all the love, California’s leaders have taken it upon themselves to act essentially as if they were running their own nation. In reaction to President Trump’s abandonment of the Paris accords, Gov. Jerry Brown trekked to Beijing to show climate solidarity with President Xi, whose country is by far the world’s largest greenhouse gas emitter and still burns coal at record rates, but mouths all the right climate rhetoric.

At the same time California’s Attorney General is spending millions to protect undocumented workers and there’s legislation being proposed  to transform the entire place into a “sanctuary state.” Sacramento also recently banned travel  by government workers to Texas and seven other states that fail to follow the California line on gay and transgender rights.

Past performance and future trajectory

When progressive journalists, including those in Texas, speak about the California model, they usually refer to the state’s economic performance since 2010, which has been well above the national average. Yet this may have been only an aberrant phenomenon. Since 2010, Texas’ job count has grown by 20.6 percent compared to 18.6 percent for California. If you pull the curtain even further, to 2000, however, the gap is even bigger, with employment growing 32.7 percent in Texas compared to 18 percent in California.

The main problem is that California’s once remarkably varied and vital economy has become dangerously dependent on the Bay Area tech boom. Since 2010, the Silicon Valley-San Jose economy and San Francisco have been on a tear, growing their employment base by 25 percent. 

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