My Review of "California Comeback"

California Comeback

4 out of 5 stars.....

The author, Narda Zacchino, is well-qualified to analyze what is happening in California, both by growing up and having a long, distinguished journalism career in California.

And I, having lived in California since 1973, think she has done a fine job in concluding that this is not just a comeback, but as her subtitle states, a model for the nation.

The book starts with the California Dream beginning with the 1849 Gold Rush and the hope for anyone striking instant wealth, but just story-like until 1963 when CA overtook NY as the most populous state, signaling the Eastern elite better take notice. Governor Pat Brown, inspired by FDR's New Deal, basically had brought about a CA New Deal,

Then CA turns Right, the Reagan Revolution, all leading up to the 2008 crash, where CA was ridiculed.

Enter Jerry Brown, Pat's son, as governor in 2011. Having been governor from 1975 to 1983, plus having served in many positions like Secretary of State, Attorney General and Oakland mayor. Always socially liberal and fiscally conservative, plus with such experience, pragmatic, he set CA on a remarkable path, just passing France as the world's 6th largest economy and distancing itself from the previously heralded Texas model.

The book covers many more details and history, such that I do recommend the book.

Negative Interest Rates

Negative interest rates spreading around the world are a result of globalization and technology, a unique combination in history, resulting in powerful deflationary effects.

But, rather than the deflationary effects being all bad, not only are many good because of increased productivity, but even many of the bad like reduced income in nations or localities with inefficient economies, can improve efficiencies by investing in things like education, healthcare, technology and infrastructure.

This is a unique time in history in that because of low or negative interest rates, such investments are a no brainer for wise economies.

As for misappropriation of capital, that is possible whatever interest rates are. The US housing bubble behind the 2008 crash was mostly due too poor lending standards and lax regulation on complex new securities and derivatives. Now, Denmark is mitigating a housing bubble by restricting foreign money into Danish housing and other restrictions/regulations.

The resultant large income inequality is an opportunity to redistribute some of the wealth for investments mentioned above, including increasing minimum wages or earned income tax credits. This even helps the wealthy long term.