California Shows Why Trump is Wrong
(3BL Media/Justmeans) — President Donald Trump is at war with clean energy, immigration, taxes, and regulations, because, he says, these things represent a threat to our economy. He yearns for the days when oil companies, not tech firms, were the largest in the world, and when white people comprised an uncontested majority of the US population.
But his claim that re-establishing that order in a world that has totally changed will somehow make America great again, is misinformed. As Matthew Winkler brilliantly showed in Bloomberg View, he need only look at California to see the error of his ways. While actively embracing the things that Trump wants to get rid of: regulations, renewables, and immigrants, California, whose economy, at $2.3 trillion (according to the WEF) falls, just behind the UK, as the world’s sixth largest, “is the chief reason America is the only developed economy to achieve record GDP growth since the financial crisis of 2008.”
The state’s economic growth is expected to continue to outpace the rest of the nation, through 2020.
And yet, California is not on the US Chamber of Commerce’s top ten list of business-friendly states with low taxes and regulations (which was topped by TN, SD, and WY). The Chamber’s idea of what drives a state’s economy seems to be in sync with the president’s, yet at least in the case of California, both deviate from reality. But then the Chamber, as witnessed by this report from the Cato Institute posted on their website, characterizes regulation as the antithesis of freedom (as opposed to protection) and ranks the US 22nd in the list of countries that are most free (2011 data), largely because of it.
Yet, California, this economic role model, according to Winkler, “has more regulations than any state, perhaps more than any country.”
As for some of the other issues, California, where according to Governor Jerry Brown, “39 percent of us are Latino and the majority are from Mexico," enjoys the most improved creditworthiness among states since 2012, and borrows money at 15 basis points less than the average of all states. Stocks of California companies, despite all of these regulations that Trump says are, “crushing our economy” have outperformed all other companies in the Russell 3000 Index over the past five years.
Nowhere does the divergence show itself more clearly than in the area of energy. While Trump continues to speak of resuscitating a coal industry that is dead and should remain buried, California is minting jobs and money with clean energy. California’s 20 clean energy companies saw a total return of 45 per cent, while increasing jobs by 14%. California has over 150,000 workers employed in the solar industry alone.
But that’s not just true in California. According to a recent Sierra Club report, clean energy jobs “overwhelm” fossil fuel jobs in all but nine states. A full 72% of all energy jobs are now in the clean energy sector nationwide.
The only economy growing faster than California’s right now is China, and that’s where Governor Jerry Brown is headed next month to discuss clean energy policy, attend a conference and tour several regions that have committed to maintaining temperature rise below two degrees, as California has, as part of the Under2 Coalition.
The key point to Winkler’s story is, not so much about regulation as it is about leadership. When you have the three legs of civil society: government, business, and the public, all on the same page, and all committed to the same vision of how they want to co-exist, as California does--you end up with a flourishing economy. Regulation is only a sore point when the relationship between business and the public is an adversarial one, leaving the government to play referee.
As companies become more enlightened, more transparent, and more concerned about ensuring that their role in the world is a positive one, the issue will diminish, regulations will be understood to be as necessary to the common good as traffic lights, and honest dialogue among all stakeholders will determine the fairest outcome for all.