Jolts

Job openings seem to be the driver.  In 2008, job openings crashed, as did new hires. Job separations was relatively stable in comparison.

Then after the 2017 the Trump corporate tax cut seems to have driven job openings to an unstable value. Openings were much greater than hires.

During 2019 the firms were delevering already, cutting back on future plans. Then covid hit, and I left it off the chart.  Repo madness happened along with the job openings crash. So we were well underway with a restructuring when covid hit.

Let us add in public sector job openings.

The last line uses the right scale, in units of 500 thousand.  Our attempt to hire government workers during the Trump run failed.

We had seen real growth drop in late 2018, California was looking at a 1.5% growth rate, likely enough to shut down public sector hiring.

So, the idea that California gets out of this in a couple of years is not happening. From Calmatters:

In revising California’s budget down to $203 billion today, Gov. Gavin Newsom charted a plan to fill a huge deficit by tying many cuts to additional federal aid. If the feds come through with $1 trillion for state and local governments that Newsom and other Democratic governors have requested, California would not reduce funding to schools, colleges, parks, child care, health care and other programs.

Making California conditional on the Federal government does not last  and Newsom will be hard pressed to separate that conditional, which he must do sooner or later.  The article uses seven years to recover, same number I get, same number being reported to Newsom

How do all the states become conditional on the Federals? They cannot, they are too different in scale.  So Nancy needs a special deal to get through the Senate that favors the large states.   This has to happen in the middle of a national tax battle which has been brewing. This is all too many steps, California will lose its way along this path.