Bad News for California Haters

The U.S. Bureau of Labor Statistics reports that California led the nation in job growth in May, creating 33,900 jobs. Over the last year, California added 221,500 jobs, continuing the recovery that began in earnest last year, when the state’s real growth outpaced the country’s as a whole. California’s performance is even more notable because it has been achieved against major headwinds, particularly the continuing depression in housing construction (housing starts are projected this year to be only about a quarter of the housing bubble peak) and the shrinking of government employment due to budget cuts.

This is, of course, very bad news. A whole industry has grown up around the meme that California is an economic cesspool, bound to fester in the sun for the rest of eternity because of — take your pick — hostility to business, environmental extremism, rampant spending, “imperial” public employee unions, exorbitant taxes, illegal immigrants.

That industry now faces existential peril, and a strategic choice of direction. The options:

  1. Ignore the facts. In the 21st century, where we can each construct an echo chamber of our own choosing, it doesn’t matter what the facts might be. What matters is how loudly you can shout out the reality of your own construction to your own followers.
  2. Declare victory. Is California again growing faster than the rest of the country? Point to the reversal of illegal immigration from Mexico, the reduction in state taxes, the deep budget cuts reducing the size of state government to levels not seen since Ronald Reagan was governor and take credit for the news.
  3. Admit that California’s economic woes of recent years had little or nothing to do with state policies and were almost all the product of the bursting of the housing bubble, which had grown particularly large in the state; the financial crisis; and the global recession, which hit California particularly hard because of its deeper links to world trade. This has advantage of being the most accurate statement.

Which course will the Hate California industry choose? I have my bets on No. 1.