California is expected to be world 4th largest economy by Q4 2023 (San Diego: real estate, violent crime)

[OyCrumbler]

Originally Posted by moguldreamer

Wrong mogul dreaming.

No, I'm pretty sure I'm talking about what I'm talking about. It's good on California that they've been such an engine of the US economy that they've been able to lift up many stubbornly underperforming economies within the US. Though I guess there's a question if constantly sending that support over to these net receiver states means helping them perpetuate bad policies. It does make you wonder if perhaps there should be more terms enacted on those states in order to receive such funding.

[tstieber]

Originally Posted by TacoSoup

I’ve always found this very misleading. Would California’s economy be so large if it wasn’t part of the United States?

In 2022 the US GDP was $26 trillion and California’s was $3 trillion, or 11%.

The US population is 330 million and California’s population is 39 million, or 11%

See a pattern here?

I’m a huge California homer, but this is like those who think they hit a triple when they were born on 3rd base.

I think that's a good point. Perhaps California is not an overperformer, while other states are either over- or underperforming. We are simply the biggest. But per capita, we are still creating much more GDP than, say, Germany, which has twice the population of CA. Or countries like India, which have a smaller GDP with a billion people in it. So that is still very high performance by world standards for sure.

[moguldreamer]

Originally Posted by OyCrumbler

No, I'm pretty sure I'm talking about what I'm talking about. It's good on California that they've been such an engine of the US economy that they've been able to lift up many stubbornly underperforming economies within the US. Though I guess there's a question if constantly sending that support over to these net receiver states means helping them perpetuate bad policies. It does make you wonder if perhaps there should be more terms enacted on those states in order to receive such funding.

Or, for example, for the national taxpayers to bail out Silicon Valley Bank and the VC funds.

[Tulemutt]

Originally Posted by moguldreamer

Or, for example, for the national taxpayers to bail out Silicon Valley Bank and the VC funds.

I can’t resist asking: in what way is a fed bailout of SVB a California bailout? … and as long as you are clarifying: what VC funds are being bailed out and in what way are they a CA bailout?

[njbiodude]

Originally Posted by Tulemutt

I can’t resist asking: in what way is a fed bailout of SVB a California bailout? … and as long as you are clarifying: what VC funds are being bailed out and in what way are they a CA bailout?

I wouldn’t call it a “California bailout” myself.

That said CalPers and Newsom’s wineries had well over the 250k in that bank and were at risk of losing millions.

Lots of VC company founders would get nonsensical perks for putting money in there too. Interest rates for account holders of a certain size were over 5% when federal interest rates were near 0, and many of these people got amazing home loan deals as well. The bank also dealt with some crypto investors and companies. So it was a garbage bank offering unrealistic benefits to entice large depositors to keep lots of money in the bank. The fact that SVB was buying 10 year treasuries at 1% when 90 treasuries were only a fraction of a percent lower is even more confounding.

I’d call it more a Democrat bailout to rich donors than anything else. While there were a few notable Republican investors the bank’s clients were mainly Bay Area startup founders who are 90% Democrat (and often large donors). There’s no doubt many Northern California businesses and startup founders benefitted immensely however.

Of course, the Fed was happy to throw over $200 billion in liquidity back into circulation. And they wonder why inflation is out of control

[Tulemutt]

Originally Posted by njbiodude

I wouldn’t call it a “California bailout” myself.

That said CalPers and Newsom’s wineries had well over the 250k in that bank and were at risk of losing millions.

Lots of VC company founders would get nonsensical perks for putting money in there too. Interest rates for account holders of a certain size were over 5% when federal interest rates were near 0, and many of these people got amazing home loan deals as well. The bank also dealt with some crypto investors and companies. So it was a garbage bank offering unrealistic benefits to entice large depositors to keep lots of money in the bank. The fact that SVB was buying 10 year treasuries at 1% when 90 treasuries were only a fraction of a percent lower is even more confounding.

I’d call it more a Democrat bailout to rich donors than anything else. While there were a few notable Republican investors the bank’s clients were mainly Bay Area startup founders who are 90% Democrat (and often large donors). There’s no doubt many Northern California businesses and startup founders benefitted immensely however.

Of course, the Fed was happy to throw over $200 billion in liquidity back into circulation. And they wonder why inflation is out of control

Ok? The thread topic is about California’s (the state) achievements in economic status. SVB failure is a management issue of a private financial institution. Democrat (and Republican alike) investors who are / were account holders also are not the state of California. Nothing about what moguldreamer or you are commenting on has anything to do with the state’s GDP advancement. *shrug*

[BeerGeek40]

Originally Posted by TacoSoup

I’ve always found this very misleading. Would California’s economy be so large if it wasn’t part of the United States?

In 2022 the US GDP was $26 trillion and California’s was $3 trillion, or 11%.

The US population is 330 million and California’s population is 39 million, or 11%

See a pattern here?

I’m a huge California homer, but this is like those who think they hit a triple when they were born on 3rd base.

Excellent job! repped.

[joosoon]

Originally Posted by Tulemutt

The thread topic is about California’s (the state) achievements in economic status.

Sort of, but not really if you read the link that accompanied the first post (and it doesn't seem like many did). The theme of that piece is the apples to oranges nature of comparing California, a single state in the U.S., to global competitors, particularly Germany. The emphasis is on the reliance of strictly using GDP as the main comparator and how that's fraught with error. The author pens it nicely when he refers to the two having dissimilar "economic wiring" among other things. It's a good read. You should check it out.

[Tulemutt]

Originally Posted by joosoon

Sort of, but not really if you read the link that accompanied the first post (and it doesn't seem like many did). The theme of that piece is the apples to oranges nature of comparing California, a single state in the U.S., to global competitors, particularly Germany. The emphasis is on the reliance of strictly using GDP as the main comparator and how that's fraught with error. The author pens it nicely when he refers to the two having dissimilar "economic wiring" among other things. It's a good read. You should check it out.

Yes. And I did read it when first posted. And even in the expanded topic view you frame, the comments I referenced are non-sequiturs.

[njbiodude]

Originally Posted by Tulemutt

Ok? The thread topic is about California’s (the state) achievements in economic status. SVB failure is a management issue of a private financial institution. Democrat (and Republican alike) investors who are / were account holders also are not the state of California. Nothing about what moguldreamer or you are commenting on has anything to do with the state’s GDP advancement. *shrug*

Tech is being wrecked by higher interest rates and likely after this SVB debacle higher lending standards for a while too after banking trouble. SVB had an incredible amount of wealthy Democrat account holders that helped them get bailed out but that doesn’t mean banks are going to be lending like it’s 2021 anymore anyway. Some had less than 5% of assets in cash—not going to fly going forward.

If you haven’t learned big tech is going through layoff after layoff as these companies’ stocks crater.

A solid 1/5th of the state economy is tech and even more finance, legal etc goes to support the industry. So yes it could delay California’s ability to be the “number 4 economy”. Biotech and pharma aren’t part of this calculation and also are a substantial part of the state’s GDP. The latter industries are also hurt by rising interest rates.