According to recent reports, California lost 21,800 jobs in February and 11,800 jobs in March. Getting behind those numbers, the report is even bleaker. In March, the state lost 26,800 private sector jobs, but added 15,200 “taxpayer-funded” (read bureaucratic government jobs). Since March of 2024, California has lost 164,700 jobs in private jobs (like finance, manufacturing, professional and business services, information, construction, leisure, and trade), while adding 56,000 jobs in government and 155,000 in “health and private education.” The canary in the coal mine that will lead to California’s economic collapse is that private jobs are disappearing and government jobs are increasing.
We are told that California added 46,300 jobs since March of 2024. But look at the jobs. The private economy pays for the government. Government pays for government employees and most of the health care and education costs. So, we have been losing “government revenue increasing jobs,” and gaining increased government costs in employees, health and education. Almost all of this occurring before Trump took office.
We are on the precipice of a major collapse in our state, and in our economy, that is not being reported, that started occurring long before Trump took office, and won’t be reported until the collapse is complete so the press and the Democrats can blame Trump.
Jobs losses in February and March, before Trump announced his tariffs, had nothing to do with anything Trump did in his first 70 days in office. No one is that good. No one can fix four years of bad economic policy in 70 days, but the Democrats and the press want you to believe that the coming recession will be Trump’s fault. These numbers show it is not. The recession is the fault of increasing the size and cost of government over the last four years, and it can only be fixed by a massive cut back in that increase in government’s size and cost.
This is proven by history. For those who are old enough to recall, between 1977 and 1981, President Jimmy Carter and the Democrat majority in Congress exploded the size and scope of government, pushing up inflation, decreasing private production of goods and services, and creating an economy that seemed like it couldn’t fix or grow. President Jimmy Carter and then Governor Jerry Brown said we need to lower our expectations, America’s best days were behind it. Our children were not going to live as well as us. The limits of demand-side Keynesian economics had been reached.
Enter Ronald Reagan, the Laffer curve, and supply side economics. The first thing Reagan did was claw back government regulations and the growing role of government in our lives. We saw two years of a recession that was necessary to fix the inflation and the related loss of private sector jobs that occurred in the four years of Jimmy Carter. Everybody blamed Reagan economic policy for the recession. They were wrong.
Reagan cut taxes, cut regulations, cut government, and once the private markets were freed from government control and the taxpayers were freed from oppressive taxes, the economy saw unprecedented growth from 1983 to 1991. It only ended in 1981, when President George H.W. Bush re-regulated financial markets and cut off access to private capital. Private growth created huge increases in government revenue. Reagan tried to stop the Democrats from spending that increased revenue, but ultimately decided to take some of that increase to destroy world communism through his “peace through strength” initiative.
The point of the Reagan retrospective is that some recession may be necessary to reorient the economy and increase private investment in private production. Hiring government workers is NOT the way to do that. The test is not overall employment, the test is increasing employment in the private sector. That has not happened in California at all in the last year. That is the canary in the coal mine.