ICYMI: Bloomberg News: “California keeps making the U.S. great — again.”

News

Apr 5, 2025

California Just a Nevada-Sized Economy Away from Overtaking Germany and Japan as World's No. 3 Economy

SACRAMENTO - As President Trump threatens the U.S. economy with reckless tariffs and rising uncertainty, Governor Gavin Newsom announced new efforts yesterday to strengthen and build international partnerships and seek protections for California-made goods from retaliatory tariffs, building on the state's unmatched economic strength and global leadership.

As Bloomberg recently put it: "California keeps making the U.S. great - again." California is outpacing every other state in major industries, driving the nation's GDP, and according to Bloomberg News, is a "Nevada-sized economy" away from becoming the world's third-largest economy.

"California Keeps Making the US Great - Again"

Matthew A. Winkler, Columnist & Editor-in-Chief Emeritus

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". . . [California] is only a Nevada-sized economy away from supplanting Germany and Japan as soon as this year as No.3 in the world behind the US and China.

It should go without saying California is critical to US economic dominance globally, accounting for more than 14% of US's $28 trillion of GDP as measured by the World Bank and more than 50% greater than the next largest state by the size of its economy - Texas. Among the many superlatives that can be assigned to the Golden State, consider that there isn't a major industry in any of the other 49 states that comes close to overtaking its California counterpart. . .

California, as measured by the balance of payments, sends much more to Trump's America than it gets back, about $83.1 billion more as the biggest "donor state," according to the Rockefeller Institute. That's almost three times more than the No. 2 state, New Jersey, at $28.9 billion. (The top four states are all considered "blue," sending a combined $156.9 billion to DC. Texas, a champion of Republican ideals, takes $71.1 billion more than it gives.)

Here's the scorecard, based on data compiled by Bloomberg:

• California's $539 billion of GDP in 2023 from real estate, rental and leasing beats No.2 Texas by 61%.
• The $414 billion from information dwarfs No.2 New York by 128%.
• The $412 billion from manufacturing is 41% greater than No.2 Texas
• The $257 billion from health care and social assistance exceeds No.2 New York by 59%.
• The $151 billion from construction beats No.2 Texas by 19%.
• The $121 billion from accommodation and food services is 63% greater than No. 2 Florida.
• The $125 billion from transportation and warehousing exceeds No.2 Texas by 30.
• The $55 billion from arts, entertainment and recreation beats No. 2 New York by 68%.
• The $48 billion from agriculture, forestry, fishing and hunting is 150% larger than No. 2 Texas.

California is "an economic and technological powerhouse" that "is literally subsidizing the rest of the United States, red states in particular, through the federal budget," Paul Krugman, the 2008 Nobel laureate in economics, wrote in his Jan. 13 Substack post. Without California, "America would be a lot poorer and weaker than it is." . . .

The California juggernaut shows no sign of slowing, based on the estimated growth of the 2,400 companies in the Bloomberg World Large & Mid Cap Index. The 101 companies based in California that are members of the index are poised to see revenue increasing 27% on average in 2024, while the 42 German companies will see 4.6% growth and the 156 Japanese firms 7%. . .

The stellar performance becomes no mystery once you understand California is the home of more corporate research and development headquarters than any other state, and its 18% share of R&D locations globally is exceeded only by China (22%) and Germany (21%).

Make California Great Again? If anyone in Washington cared to look, they'd find it's never been greater."

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