The economic transformation of California after World War II — first into an industrial powerhouse and later into a center of technology and trade — owed much to its geographic location on the eastern edge of the Pacific Rim.
As Asia recovered from the ravages of war to become its own industrial colossus, Southern California’s twin ports of Long Beach and Los Angeles became the nation’s primary gateway for imports of everything from children’s toys to cars. Handling, storing and shipping those goods — “logistics,” as it came to be known — developed into the region’s major economic driver
Meanwhile, the San Francisco Bay Area exploded with technological evolution, much of it coming from the minds of Asian-born techies who had been drawn to the region, and Silicon Valley’s major firms became dependent on Asia to produce its cellphones and other consumer gadgetry.
California’s role as a major crossroads in the global economy created enormous wealth and influence, so much that we were no longer compared to other states, but to other nations, boasting of the world’s fifth-largest economy.
Today, however, our global positioning makes us America’s ground zero for the coronavirus outbreak that threatens to become a pandemic disaster.
California has the nation’s third-highest number of confirmed coronavirus cases, Gov. Gavin Newsom banned gatherings of over 250, state officials are rapidly preparing other measures to deal with the disease, and major California industries dependent on ties to Asia, and their workers, are beginning to feel the pinch.
With the stock market reeling, economists believe that if the virus continues to spread, recession is a looming possibility, or even a probability, and were it to occur, California would likely feel its impacts more than any other state because of its high level of involvement in international trade and travel.
Crises put the spotlight on political executives such as presidents and governors — in this case, President Donald Trump and Gov. Newsom. Until recently, Trump has been minimizing, or even denying, the severity of the situation, while Newsom, is taking a measured approach — not minimizing its potential effects but not blowing it out of proportion either.
“The State of California is deploying every level of government to help identify cases and slow the spread of this coronavirus,” Newsom said in declaring a state of emergency. “This emergency proclamation will help the state further prepare our communities and our health care system in the event it spreads more broadly.”
Newsom’s engaged but calm approach would serve him well were coronavirus to trigger a serious recession that would slash state revenues and force him to adjust downward his ambitious plans for expanding public services from health care to early childhood education. Voters would see him as a victim of circumstance who is making the best of a bad situation and not hold him accountable for recession’s impacts.
Newsom’s budgetary staff is already working on what’s known as the “May revise” of the 2020-21 budget proposal he unveiled in January and by then, two months hence, we’ll have a better grasp of both the disease’s human impact and its economic fallout.
CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters.