Military spending drops warning to California

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In summary

Pentagon spending was once a huge factor in the California economy, and its decline tells us that we shouldn’t take prosperity for granted.

California has experienced amazing socio-economic and political developments over the past three decades, to the delight of some and the despair of others.

There are many reasons behind this change, but perhaps the most important is the end of the Cold War between the US-led West and the Soviet Union.

During World War II, California flourished as an industrial powerhouse for making weapons of war, and it became the primary staging post in the war against Japan, with dozens of military installations.

The Cold War quickly followed World War II, and California continued to play its role as the nation’s west coast arsenal. In 1953, according to a research paper written by James Clayton of Hamilton College in 1962, California had overtaken New York in national military spending and would end up receiving more than a quarter of the Pentagon’s national budget.

“In the Golden State, defense spending has served as a monolithic catalyst, dramatically accelerating California’s industrial expansion and population explosion over the past decade,” Clayton wrote.

Military spending not only fueled economic and population growth, especially in Southern California, but also supported the scientific research that sparked the economic eruption of Silicon Valley.

However, as the economy of the San Francisco Bay Area exploded in the 1990s, the end of the Cold War crushed the Southern California-based defense industry.

Arms contracts were canceled and the Pentagon closed many California military bases, triggering a severe recession centered in southern California. More than a million people, especially skilled defense industry workers and their families, have left the region for other states, taking their conservative voting habits with them.

The exodus changed the political orientation of the region enough to overturn the whole state, as I had to detail in a 2008 book, “The New Political Geography of California.” Obviously, Los Angeles County, with a quarter of the state’s population, went from being almost even partisan to very strongly Democratic in the 1990s. Combined with other factors, this transformed what was a purple state into a very blue state.

California voted Republican in all but two presidential elections during the postwar period until Democrat Bill Clinton won the state in 1992. The state has voted Democratic in every presidential election since. with ever-larger margins, Democrats hold three-quarters of state legislative elections. seats and also overwhelmingly control the state congressional delegation.

This walk through history is offered because the Pentagon has issued its Annual Report on state-by-state spending this month, revealing that in 2020 it was $ 61 billion in California. Sounds like a lot, but it’s less than 2% of the state’s over $ 3 trillion economy. Texas is No. 1 the Pentagon spends these days at $ 83 billion or 4.6% of its economy.

To put it another way, California defense spending in 1960 was $ 5 billion, several times the state budget, but the $ 61 billion in 2020 is about a quarter of the state budget. It is also only 10.3% of national military spending, which is less than California’s share of the national population.

Does it matter that the Pentagon no longer finances the California economy? Maybe not, but the sharp decline in its once-heavy impact is a warning to take prosperity for granted. While high tech reigns supreme in Northern California these days and logistics – the movement of goods – dominate the Southern California economy, both are fragile.

We are seeing tech companies, such as Hewlett-Packard and Tesla, flee to Texas and other states due to high costs in California and the horrific human safeguard of freighters in Southern California may cause shippers to seek out. more efficient entry points. .


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