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I wouldn't call growing at about the same rate as Iowa and Tennessee as being particularly exceptional, even if it's technically in the top 10. I would. Iowa a

I wouldn't call growing at about the same rate as Iowa and Tennessee as being particularly exceptional, even if it's technically in the top 10. I would. Iowa and Tennessee are much, much smaller economies. It's truly remarkable that California, with an economy ten times larger, can nonetheless grow at a comparable rate. While it's true that the cost of living is higher (in large part because the quality of life overall is higher), it is simply not true that "it doesn't matter how you distribute it." The subjective experience depends quite a lot on how it's distributed. I assure you that millions of middle class Californians would be much happier if their wages had grown even half as much as the massive increases taken by the top 1%.

rayiner 8y ago
> I would. Iowa and Tennessee are much, much smaller economies. It's truly remarkable that California, with an economy ten times larger, can nonetheless grow at a comparable rate. No it's not. California's economy is larger simply because it has more people. That doesn't make it any harder to grow the economy further. According to the same BEA data, the Great Lakes region as a whole (which has a population comparable to California) grew faster than California. If your theory were correct, it should be much harder for the U.S. to grow than France, and for France to grow than Sweden. But that's not borne out by the data: https://snbchf.com/wp-content/uploads/2013/11/GDP-Per-Capita-Developed-Nations1.jpg https://snbchf.com/wp-content/uploads/2013/11/GDP-Per-Capita... (If California's economic production per capita were much higher, you might hit "diminishing returns" effects, but that's not the case.)
- vannevar 8y ago
  That doesn't make it any harder to grow the economy further. Nonsense. Economic growth depends on a complex web of law, culture and resources. Large economies are systematically harder to grow than smaller ones. It's not simply a matter of adding people. It is in fact harder for the US to grow than France, the fact that it actually happens doesn't negate that reality. Remember, the fundamental argument you're making is that California operates under a handicap because of its taxes and regulations. It should be laboring under both that burden and the additional inertia that comes from a larger economy. I think its growth (not to mention the historical success of the rest of the industrialized world, virtually all of it more socialized than the US) belies the conservative old wive's tale that you can't have a stable, growing economy and maintain a sensible tax and regulatory environment at the same time.
  - rayiner 8y ago
    I’d be very curious to read a citation for that assertion. > Economic growth depends on a complex web of law, culture and resources If anything the opposite is true. Larger regions create economies of scale in these areas. A company can amortize the cost of complying with California laws over a much larger market than Iowa law. A product targeted at California cultural trends has a much larger market than one targeted to Iowan cultural trends. Historically, the size of the US internal market has been a huge benefit compared to smaller European countries.
    - vannevar 8y ago
      It's harder to grow a large economy for all the same reasons it's harder to grow a large business (percentage-wise) than it is to grow a small one. Sure, there are some economies of scale. But in the end, there are always fixed components to growth that are less dependent on size, and those less elastic components are necessarily more significant for a smaller economy (or company) than for a larger one. Going back to the original point of my criticism, even if you regard California's growth as merely average, that doesn't explain how that modest growth has resulted in the middle class squeeze. Any loss incurred by the middle class as the result of tax or other government policies pales in comparison to the massive loss of the wage increases that should have accompanied even modest growth. The problem is clear: left to its own devices, the market doesn't distribute growth in anything like a fair (by value actually contributed) manner. Wealth, in and of itself, creates a huge advantage in capturing new growth, and that advantage is nowhere counterbalanced. Money naturally runs uphill until some kind of catastrophe interrupts it.

rayiner 8y ago

> I would. Iowa and Tennessee are much, much smaller economies. It's truly remarkable that California, with an economy ten times larger, can nonetheless grow at a comparable rate. No it's not. California's economy is larger simply because it has more people. That doesn't make it any harder to grow the economy further. According to the same BEA data, the Great Lakes region as a whole (which has a population comparable to California) grew faster than California. If your theory were correct, it should be much harder for the U.S. to grow than France, and for France to grow than Sweden. But that's not borne out by the data: https://snbchf.com/wp-content/uploads/2013/11/GDP-Per-Capita-Developed-Nations1.jpg https://snbchf.com/wp-content/uploads/2013/11/GDP-Per-Capita... (If California's economic production per capita were much higher, you might hit "diminishing returns" effects, but that's not the case.)

vannevar 8y ago
That doesn't make it any harder to grow the economy further. Nonsense. Economic growth depends on a complex web of law, culture and resources. Large economies are systematically harder to grow than smaller ones. It's not simply a matter of adding people. It is in fact harder for the US to grow than France, the fact that it actually happens doesn't negate that reality. Remember, the fundamental argument you're making is that California operates under a handicap because of its taxes and regulations. It should be laboring under both that burden and the additional inertia that comes from a larger economy. I think its growth (not to mention the historical success of the rest of the industrialized world, virtually all of it more socialized than the US) belies the conservative old wive's tale that you can't have a stable, growing economy and maintain a sensible tax and regulatory environment at the same time.
- rayiner 8y ago
  I’d be very curious to read a citation for that assertion. > Economic growth depends on a complex web of law, culture and resources If anything the opposite is true. Larger regions create economies of scale in these areas. A company can amortize the cost of complying with California laws over a much larger market than Iowa law. A product targeted at California cultural trends has a much larger market than one targeted to Iowan cultural trends. Historically, the size of the US internal market has been a huge benefit compared to smaller European countries.
  - vannevar 8y ago
    It's harder to grow a large economy for all the same reasons it's harder to grow a large business (percentage-wise) than it is to grow a small one. Sure, there are some economies of scale. But in the end, there are always fixed components to growth that are less dependent on size, and those less elastic components are necessarily more significant for a smaller economy (or company) than for a larger one. Going back to the original point of my criticism, even if you regard California's growth as merely average, that doesn't explain how that modest growth has resulted in the middle class squeeze. Any loss incurred by the middle class as the result of tax or other government policies pales in comparison to the massive loss of the wage increases that should have accompanied even modest growth. The problem is clear: left to its own devices, the market doesn't distribute growth in anything like a fair (by value actually contributed) manner. Wealth, in and of itself, creates a huge advantage in capturing new growth, and that advantage is nowhere counterbalanced. Money naturally runs uphill until some kind of catastrophe interrupts it.