The deep blue Democrat stronghold of California has been the top beneficiary of what Wall Street analysts are calling the “Trump bump” in the economy.
Bloomberg News notes that California has been economically “outperforming the U.S. in job growth, manufacturing, personal income, corporate profits and the total return of its bonds.” California’s gross domestic product (GDP) grew by $127 billion, or 4.9%, to $2.7 trillion last year, and the state jumped from the equivalent of the 7th largest economy in world in 2016 to the 5th largest at the end of 2017.
Despite the good news for Californians, Breitbart News reported that the Democrat-controlled state government has been opposed to almost every economic policy on President Trump’s agenda, California Democrat Attorney General Xavier Becerra filed the state’s thirty-first lawsuit against the Trump administration last month.
Bloomberg describes the policies of Democrat California Governor Jerry Brown and Republican President Donald Trump as polar opposites.
Brown pushed through the highest state income tax in the nation, created the first “sanctuary state” to protect illegal aliens, passed a $15 minimum wage, and has been the global leader in pushing for radical government solutions to fight supposed climate change.
By contrast, President Trump pushed through the largest U.S. tax cut in history, is trying to build a 30-foot border wall to stop illegal immigration, used executive orders to create a domestic carbon-based energy boom, withdrew from Paris climate accords, dumped the Obama-era mandatory requirement to double average fleet-wide vehicle Fuel Efficiency Standards for the 2025 model year, and slashed regulations on business.
Bloomberg analysts report that California’s 4.9% GDP spike last year was more than twice the gain for the United States as a whole. The state’s unemployment rate also dropped to a 41-year low of 4.2 percent. Since 2013, California had a national-high per capita income growth of 20.5 percent, and created 2 million additional jobs.
Bloomberg called the Trump-friendly State of Texas “an also-ran” in comparison, with just $226 billion in GDP from manufacturing, versus California’s national-high $289 billion of GDP from manufacturing. Although Texas has a slightly lower unemployment rate of 4.1 percent, Bloomberg’s data show that California 17-million-strong workforce is about 37 percent larger than the Texas workforce, and its unemployment rate is falling at a faster pace.
Bloomberg credits California as the best-performing state for investors. Its 462 California companies in the Russell 3000 Stock Index produced a ten-year total return (appreciation and dividends) of 587 percent, a five-year return of 262 percent, a two-year return of 76 percent; and a 27 percent annual return.
California’s returns compared much more favorably to the total return for all 3,000 companies in the Russell Index, saw a gain of 371 percent for the decade, a five-year gain of 154 percent, a two-year gain of 59 percent, and a one-year gain of 22 percent.