Calkfornia Can't Be Bullied

 Popular Economics Weekly

Governor Gavin Newsom today announced that California has officially overtaken Japan to become the world’s fourth-largest economy, according to newly released data from the International Monetary Fund (IMF) and the U.S. Bureau of Economic Analysis (BEA). April, 2025

LATimes

The Trump administration’s efforts to bully California in the past week by sending in contingents of the California Coast Guard and active-duty Marines to ‘guard’ its ICE agents that are bent on rounding up as many undocumented workers in California as possible, is almost comical.

Would they try the same with Japan or Germany, who have economies that are basically the same size? Of course not, though Trump wants to pick on smaller Canada, and maybe Denmark’s Greenland.

Of the 850,000 farmworkers in California that are providing close to one-quarter of the agricultural produce of America, some 400,000 are seasonal workers (i.e., with permits) or undocumented, which is why President Trump has told ICE workers to stop rounding them up, for fear Americans will no longer have enough fresh (or canned) produce to eat.

It’s a sign of the Trump administration’s tremendous ignorance that their efforts to deport as many of the 11 million undocumented U.S. workers is looking worse than ridiculous, it is enraging the populous of those cities that depend on immigrants to work in the service and hospitality industries, as well as feed them.

If Trump also thinks he can humble California by attacking the University of California system (UC) as he is doing to Harvard, he is also mistaken.

The system's ten campuses presently have a combined student body of 299,407 students, 26,100 faculty members, 192,400 staff members, over 2.5 million living alumni, and $41.6 billion in annual operating revenues.

And as an alumnus, I can attest it teaches or promotes no particular ideology or political view, just the scientific and social science truths that are verified and tested empirically, not by rumor or conspiracy theories.

Trump and the Republican Party have succeeded in bullying the smaller red states they have dominated since the 1970s, making them the poorest states in income (many have no minimum wage), health care, social services and education.

Republican led red states are mostly dependent on the excess tax revenues passed on to them from blue states.

“In 2023, the federal government collected around $4.67 trillion from states and their residents through taxes on individuals and businesses and redistributed about $4.56 trillion back to states and residents through programs like Social Security, Medicaid, Medicare, food stamps, and education grants, says USA Facts.

Virginia alone depended on $79 billion in transfer payments in 2023 to balance its budget from states like California and New York, who contributed $78B and $89B in 2023 to the federal kitty.

So why have Republicans gone to all this trouble that will do very little harm to the likes of UC and California’s economy? Their red states can’t do without the income coming from blue states.

Oh, their leaders want more tax cuts, which will continue to increase federal debt. Americans will find out soon enough that’s not how to stay in business.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Our Student Debt Problem

Financial FAQs

College students and former students have amassed some $1.5 trillion in student debts, most of it (90 percent) held by the federal government or guaranteed by same. And this is holding back a whole generation of young adults who have to postpone almost everything—marrying, raising a family, buying a home, even finding a desirable job—in order to pay their debts.

Presidential candidates such as Senator Elizabeth Warren Senator are offering a solution to the student debt problem by offering some debt relief based on income. And there are various proposals to reduce student fees for higher education, as well as smaller institutions of higher education that charge little or no fees.

In 1993, the average debt of a bachelor’s degree graduate was approximately $9,000; five years later, it was about $15,000. By 2003, it had jumped to approximately $17,500, according to the Wall Street Journal.

Today, the average outstanding student loan balance per debtor is roughly $30,000, though one recent study by Fidelity Investments put the figure as high as $35,200. Approximately 20 percent of U.S. households currently owe student loan debt, as do 40% of people younger than 35. This means an increase of nearly 200 percent of overall student loan debt (public and private) over the last 20 years.

This is while the wages of middle-class workers have grown just 6 percent since 1979 and low-wage workers’ wages actually dropped 5 percent during that period, according to the Economic Policy Institute, a progressive think tank.

Marketwatch.com

It is why Senator Elizabeth’s proposal to cancel most public college or university student debts is so important. In the latest Hill-HarrisX survey, 67 percent of respondents between 18 and 64 said they backed Warren's idea compared to 53 percent of voters who were older. The proposal was also supported across all age groupings although voters who are 65 years old and up were somewhat less likely to support it.

What happened to put so much of the burden on students and their families to have what was once affordable to children of a middle-class family? Declining state investment in higher education over the past decades has pushed costs up, making it more difficult for students to afford school on shrinking household incomes, while many more students enrolled in higher education, so that almost 50 percent of the student-age population now attends some college or university.

Something had to give. In the late 1980s, public colleges typically got about one-quarter of their revenue from tuition, now that’s up to about 50 percent, according to Michael Mitchell, a senior policy analyst at the Center on Budget and Policy Priorities who studies state funding trends.

But there’s an even deeper reason college and university costs have risen with state-chartered public institutions like the University of California and California’s State College systems.

It began just after I left UC Berkeley in 1964, and the protests against American involvement in the Vietnam War began. President Johnson declared war on Vietnam on August 10, 1964 after the Gulf of Tonkin incident, and the Selective Service then made every able-bodied American male 18 year old eligible for the draft. That is when Berkeley’s campus anti-war protests began in earnest.

A coincidence?  I don't think so.  My only ‘tuition’ during my six years from 1958-64 was a $150 administration fee for every semester I attended UC Berkeley, and that was the case until Ronald Reagan became California’s Governor in 1966 when he and fellow conservatives on his Board of Regents, which was mostly made up of successful businessmen, decided that Berkeley students were spending too much time on the streets protesting the war, and not enough time in the classroom.

In 1969, Reagan convinced the Regents to begin to charge “education fees” to students for the privilege of attending such a prestigious institution, even though the UC system was a state-funded institution under the federal land grant act; rather than privately-funded Stanford University.

Its University of California system was created in 1868 with the decree that “admission and tuition shall be free to all residents of the state,” and the California State and community-college systems followed suit.

Governor Reagan at his inauguration famously said in reaction to the growing student protests: “Get them out of there, he said. “Throw them out. They are spoiled and don't deserve the education they are getting. They don't have a right to take advantage of our system of education.”

All UC students in the 2019 school year who are residents of California now pay $13,500 per year in tuition fees, while non-residents pay $42,500 per year, according to the UC Admissions Office.

U.S. News and World Reports publishes college rankings as well as those institutions of higher learning with little or no tuition fees. These low or tuition-free colleges are in lesser known states and regions, such as the Dakotas, New Hampshire, Arkansas, Illinois, Kentucky and Texas that give the same quality education without ‘name’ professors; that is, if the student seeks an education that will prepare him or her for meaningful work, rather than a degree from a prestigious and expensive institution (such as UC Berkeley) that that will put him or her on a career track that may turn into a well-worn rut. Even Ivy League Cornell University charges no tuition fee to New York state residents with family incomes of less than $100,000 per year.

Senator Warren’s proposal includes cancelling up to $50,000 in student debt for those that make less than $100,000 a year, with the amount of relief getting gradually smaller as income level goes up, and households that make more than $250,000 not eligible for any debt relief.

Altogether, it would wipe out all student debt — including both federal and private loans — for more than 75 percent of Americans with outstanding loans, according to analysis provided by Warren’s campaign.

These are just a few ideas on how to solve the student debt problem. We know the problem is becoming even more serious as a growing number of students want the advantages of a higher education; the question is how to fix it.

Harlan Green © 2019

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen