The Swarm

Mix it up with The Bee's editorial board.

About Daniel Weintraub

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Daniel Weintraub is a native Californian. The youngest of eight kids, he learned at the family dinner table the value in listening to all sides before making up his mind on an issue. But as a blogger, Daniel strives to unlearn that lesson and make instant, gut-level judgments while reserving the right to amend them later as he takes in new information. He grew up in San Diego, earned an economics degree from San Diego State University and has now spent almost half his life in Northern California.

September 15, 2009
Mark Williams gets big-time play

Sacramento's Mark Williams, who has emerged as a national spokesman for the Tea Party movement, was interviewed by CNN's Anderson Cooper Monday. Among other things, Williams, a former KFBK talk radio host, defended his description (last year) of Obama as an "Indonesian Muslim" turned "welfare thug." At least one liberal blogger has said that Williams "melted down" as Cooper "destroyed him." But we imagine that Williams was quite pleased with his performance -- and the national air time.

Here's the video:

 

 

September 8, 2009
Bus v. car v. bike
Three members of the Bee's editorial board will set out Wednesday morning on a Great Race to explore different modes of commuting from the Sacramento suburbs to downtown. Ginger Rutland will take the bus and light rail from Fair Oaks near Bella Vista High School to the Bee's main office at 21st and Q. Pia Lopez will make the same trip by car. And Bee columnist Daniel Weintraub will travel by bike, via city streets and the American River trail. Ginger will be struggling against recent pressures on the Regional Transit system, where passengers are payng more and getting less. Pia will be a single occupant fighting against a metered onramp and a crowded highway. Daniel will try to avoid the busiest parkways in the suburbs as he makes his way to the trail but will exit at Sacramento State and then approach downtown on busy H Street. See the Sunday Forum section for the outcome of the race and our thoughts on transportation in Sacramento, then join in and share your commuting stories with us and other Sacramentans.
July 27, 2009
The budget: A state of confusion

 

On Sunday the Bee began a seven-day series of editorials on the revised state budget legislators passed last week and the future of state government. We will examine how the new spending plan will affect the services Californians receive from their government. And in each piece, we will also look at what the Legislature did not do, suggesting long-term reforms that could improve service, reduce costs and stabilize the state's fiscal condition. Here is the schedule:

Sunday: Tough choices ahead

Monday: The state work force

Tuesday: Schools

Wednesday: Health and welfare

Thursday: Prisons and higher education

Friday: Taxes and parks

Saturday: Budget reform
June 22, 2009
Man bites dog? Cali repays bonds

Actually, it is really dog bites man, because California has always repaid its bonds. But it still might be shocking to anyone who is casually following the state's finances. Anyway, it was surprising enough that Tom Dresslar from the Treasury's office felt compelled to publicize it in a short news release:

Today the State paid investors on time and in full $3.94 billion in principal and interest on RANs (Revenue Anticipation Notes) we sold in October 2008.


 

June 10, 2009
What rainy day fund?
I find it beyond strange that the fight over the next budget fix is coming down to a battle over a rainy day reserve. The reserve in question does not even exist, and probably never will. The state is billions in the red. The "reserve" really was just Schwarzenegger's way of saying here are the cuts needed to balance the budget using my revenue projections, and here are the cuts needed using the LAO's projection, which says we will have about $3 billion less to spend. The Democrats are raising hell about that extra $3 billion. But in doing so, are they saying that the rest of the governor's budget is not offensive to them? In other words, they can resolve a $21 billion shortfall without raising taxes, but not a $24 billion shortfall? That's hard to believe. In any case, it seems as if the governor has pulled a fast one on them if they are willing to declare victory after killing a reserve that never really existed.
June 10, 2009
Cash Supply: 50 days
Wow. May is not a big month for tax collections, but still, income and corporate tax receipts down about 25 percent from the levels projected in the May Revision, just a few weeks before. That can't be a good sign. Sales tax, meanwhile, was down a relatively tiny 3 percent. Controller John Chiang reports on the cash situation here. He says the state is down to 50 days on the checking account before he has to start triaging the bills again.
June 10, 2009
Cash Supply: 50 days
Wow. May is not a big month for tax collections, but still, income and corporate tax receipts down about 25 percent from the levels projected in the May Revision, just a few weeks before. That can't be a good sign. Sales tax, meanwhile, was down a relatively tiny 3 percent. Controller John Chiang reports on the cash situation here. He says the state is down to 50 days on the checking account before he has to start triaging the bills again.
June 10, 2009
Cash supply: 50 days
Wow. May is not a big month for tax collections, but still, income and corporate tax receipts down about 25 percent from the levels projected in the May Revision, just a few weeks before. That can't be a good sign. Sales tax, meanwhile, was down a relatively tiny 3 percent. Controller John Chiang reports on the cash situation here. He says the state is down to 50 days on the checking account before he has to start triaging the bills again.
June 2, 2009
Ask the governor about California's budget crisis

 

Join us live Friday as the Sacramento Bee editorial board questions Gov. Arnold Schwarzenegger. Watch the discussion, and participate by sending your questions. It starts at 11 a.m. Friday at www.sacbee.com/live. Or, e-mail your questions for the governor in advance to topics@sacbee.com.
May 22, 2009
On budget borrowing

I want to challenge a bit of conventional wisdom about the state's once and future habit of "borrowing" from local government or from special funds, such as those set aside for transportation.

I don't think we should call this kind of policy choice borrowing, or even think of it that way.

The state and all of its cities and counties are governed, utlimately, by the same people: us. I live in the city of Sacramento. I also live in the county, and in the state of California. I pay taxes that are collected and then disbursed to each of these entities.

If the state "borrows" $10 million from the city of Sacramento for three years, what is really happening is that state legislators are making a policy choice. They are saying, in this time of crisis, that the tax money that used to be going to the city would be better spent going for health care or prisons or education. The city council might not like this. I might not like it. But it is not as if the state is some alien creature or foreign government. It is us. And the money is ours.

In the case of the transportation fund, the misapplication of the concept of borrowing is even clearer. The transportation budget is part of state government. So in that case, the Legislature is simply saying that, in this time of crisis, they think one part of state government is more important than the other. Yes, the voters passed a measure walling off a piece of the tax collections for transportation. Then they passed another saying the Legislature could shift that money in a crisis but would have to "pay it back" within three years. So if the Legislature does this, it is really saying we think education, or whatever, is more important today than building more roads, but we think (or  hope) that in three years we'll have enough money to pay for schools and more roads, including the roads we didn't build this year.

Think of your own family. Suppose you set up a college fund for junior and started contributing 5 percent of your salary to it every year, with every intention of doing so for 18 years. Then, after 5 years, your salary was cut 10 percent. You no longer have enough money to pay your mortgage, buy your food and set money aside for college. Do you starve, move, or stop paying into the college fund? And if you stop paying into the college fund, are you being irresponsible, and are you "borrowing" from your children. I think not, on both counts.

We are so used to binding the Legislature up in fiscal knots that we have forgotten what the Legislature is actually trying to do: govern the state, set priorities, manage our tax dollars. I've been as critical of them as anyone, but maybe we ought to give them the tools to actually do their jobs before we start screaming about what a lousy job they do.

 

 

 

 

 

 

 

 

 

 

 

May 15, 2009
Training for life in the Capitol?
It's not just Republican governors who butt heads with the SEIU, the big public employee union. Down in San Francisco, Mayor Gavin Newsom just got handed a big setback when the union rank and file rejected an agreement he negotiated with union leaders to save $90 million in next year's budget. Now the mayor is poised to order layoffs and perhaps declare a state of emergency so he can unilaterally cut their pay. And he is refusing to support a proposed ballot measure to raise taxes in November. Even San Franciscans, he says, won't support a tax increase to pay for other peoples' raises. Interesting times. Here is an account of the latest development in the Chronicle. 
May 14, 2009
Is California a preview of America's future?

This 10-minute Reason.tv documentary deconstructs the history of Schwarzenegger's transformation from tax cutter to tax-raiser. It's actually surprisingly sympathetic to him, portraying the governornater more as a victim of the powerful public employee unions than a sell-out. Former legislator, now Congressman Tom McClintock plays a starring role.

 

May 5, 2009
NY governor proposes strict spending limit

The Democratic governor of New York has proposed a spending limit that appears to be not only stricter than California's Prop 1A but more severe even than the caps commonly promoted here by fiscal conservatives. Gov. David Patterson's proposal would limit spending growth to the average of the past three years' inflation rates -- adding nothing for population growth. But the idea appears to be going nowhere fast. Here is a New York Times story.

 

UPDATE: A correspondent notes that as long as New York's population is dropping, not growing, this proposal is not necessarily stricter than the approach advocated in California by fiscal conservatives. And it might even be opposed by New York Republicans who like to see state money go to their upstate districts to help keep property taxes down. All politics is local...

April 29, 2009
Republican opposition is dragging down 1A

The headlines on the Field Poll story today were alll about "voters" opposing the May 19 ballot measures, but the real story is in the partisan split.

Democrats and independents favor the most of the package, especially its most importance piece, Proposition 1A. But Republicans are opposed and their position is dragging it down in the overall poll.

On Prop 1A, 52 percent of Democrats said they woudl vote yes, and 37 percent were opposed. Among indpendent and minor party voters, the measure led 47 percen tto 40 percent. But Republicans hate it. Only 24 percent said they would vote yes, while 65 percent are opposed.

Part of this is probably due to the fact that Republicans, out of power in Washington and in the California Legislature, are generally down on anything the government is doing. But a big part of it is also no doubt due to the fact that Prop 1A has been pummelled by partisans for extending the temporary taxes in the budget package for two years.

The irony is that the linkage between the spending limit in 1A and the tax hikes was a Republican strategy. They wanted to tie the two so that Democrats and their allies would not go after the spending limit. Now it appears that it is the Republicans, not the Democrats, who are most likely to bring it down.

The campaign from here on out will be a contest between Republican leaders trying to woo back some of their party faithful to vote in favor of 1A as Democratic-leaning unions try to peel back some of their party's support for the measure. Should be fun.

See the full poll here.

 

 

 

 

 

April 27, 2009
A game of fiscal chicken

The Democratic Party's refusal to endorse (by the required supermajority) the budget package on the May 19 ballot, following the Republican Party's decision to oppose the measures, means more of the same from the state's grass-roots political activists. The Democrats balked mostly because of the spending cap in Prop. 1A, although they also were not wild about shifting money from special funds for mental health and children's programs to other priorities, as proposed in Props 1D and 1E. Earlier, the Republicans opposed the measures because they didn't like the idea of extending the temporary taxes in the package from two years to four years, as proposed in Prop. 1A.

Although the combination of the two parties' positions might help tank the package, both sides cannot ultimately prevail. They are playing a game of fiscal chicken. Eventually, there will be either more cuts, as the Republicans desire, more revenue, as the Democrats want, or a combination of both, as this package proposes.

The Democrats seem to think that a bigger crisis will lead voters to repeal the two-thirds requirement for raising taxes, and with a new Democratic governor in 2010, they will get their revenue without a spending limit. The Republicans think just the opposite will happen: a crisis will prompt the voters to slap a strict spending limit on the Legislature, forcing a solution that relies only on spending cuts.

While that might be the thinking of the parties' hard-core activists, it doesn't appear to reflect the beliefs of the broader electorate. Polls continue to show that most folks accept that any real solution is going to have to include more revenue and more cuts. But that's not necessarily who will be voting on May 19. So the props could very well fail.

And then we will get to see which side wins this all-or-nothing fight to the death.

 

 

 

 

 

 

April 17, 2009
PIT revenues ticking upward
It probably doesn't mean a damn thing, but the state's personal income tax collections are finally showing some signs of a pulse. After an abysmal start to the month, the past three days have each been stronger than the same three days one year ago. Keep an eye on it next week when the real trend for the month should emerge....
April 17, 2009
Cali unemployment: 11.2 percent

       

Here is economist Steve Levy's take on today's California jobs report:

California's unemployment rate reached 11.2% in March, the highest rate on record, topping the 11.0% rate of February 1983. The state lost an additional 62,100 jobs in March. For the past 12 months California has seen 637,400 jobs vanish and the state has lost 727,700 jobs since the peak in July 2007. The Jobs Story California lost jobs in March at the same rate as the nation. For the past year California suffered a 4.2% decline in job levels compared to the nation's 3.5% loss. California's higher rate of job loss is primarily the result of greater exposure to the housing downturn and related job losses in construction and finance. 

 

The nation's job losses are widespread. Thirteen states had greater percentage job losses than California including the three neighboring states of Arizona, Nevada and Oregon. Five southern states, usually thought to have stronger job growth, posted higher job losses than California including Florida, Georgia, North and South Carolina and Tennessee. 

Job losses were widespread with continuing losses in construction, manufacturing, finance, trade and temporary help services. 

 

The Unemployment Story 

The state's unemployment rate at 11.2% is the fourth highest in the nation behind Michigan, Oregon and South Carolina. There are now eight states with unemployment rates of 10% and above and that number will grow in the coming months. 

 

Why is California's unemployment rate so much higher than the national average when our job losses are only slightly above the nation's rate of decline?

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California's unemployment rate is higher because, despite job losses throughout 2008, more than 300,000 workers joined the California labor force and , in effect, became instantly unemployed. For some reason California's labor force growth was three times the national average despite during this recession. 

 

Bottom Line Going Forward 

The job losses are not over and the unemployment rate has not peaked yet in California or in the nation. 

This news is not surprising and the March employment report is not surprising given the bad news in the national jobs report released two weeks ago. 

If the administration's anti-recession efforts succeed the rate of job loss should slow by July. We are seeing some positive economic news mixed in with the disappointing employment numbers and we should see more good news in the coming months. 

 

If the situation is not clearly getting better by July, I think we will see Plan B including additional stimulus efforts and efforts to help homeowners and state and local governments.

 
 

April 13, 2009
Strange 1A fellows move their beds closer together

It's still not clear that the unions will spend money against Prop. 1A, despite Kevin Yamamura's report here that the SEIU, the California Federation of Teachers and the California Faculty Assn. have formed an opposition committee. But it would indeed be a perfect California marriage if the state's biggest public employee union and its anti-tax groups got together to kill this measure. The unions want to increase spending. The anti-tax groups want to reduce taxes. You can't do both, so one of them has to be wrong about the likely outcome of the political and fiscal crisis that defeating 1A would bring about. My hunch is that the union folks are gambling that they can win two-thirds majorities in the Legislature and seat a Democratic governor in 2010, then make the tax hikes permanent without having to worry about a spending limit. The anti-tax folks? The best they can hope for in the Legislature is continued stalemate, which probably means more borrowing and gimmicks. Or, on the ballot, a tougher spending limit not linked to taxes. The voters love that idea at first glance. But will they support it after the unions get down trashing it?

 

April 10, 2009
Unwitting bedfellows

One odd thing about the anti-tax groups' opposition to Prop. 1A is that if they win, they will produce a result that the Democrats in the Legislature would have been happy to accomplish this year.

The Democrats were pushing for a tax increase. They wanted a permanent tax hike, but would have settled for one year, two years, three years, anything that Republicans were willing to vote for. In the end, a few Republicans agreed to a tax increase of up to four years, but only if the Democrats agreed to a spending limit that would have to go on the ballot because it is a constitutional amendment.. The deal was structured to allow the taxes to stay in effect for two years if the spending limit failed at the polls and for up to four years if the reform passes. But it's pretty clear that no Republican would have voted for even a single year of higher taxes without the spending limit.

Enter the anti-tax crowd. By dfeating Prop. 1A, they would block the one big thing the Republicans got in exchange for their tax vote. Opponents are focused on the final two years of the tax increases, but if they win, the end result is this: two years worth of tax hikes, and no spending limit.

And that is a deal that every Democrat, and probably not a single Republican, would have supported in the Legislature.

 

 

 

April 7, 2009
1E shift not a loan? Good.

The No on 1E people say they caught a CTA official stating in error that the money IE would shift from the Prop 63 fund would be "borrowed" and paid back "with interest." The 1E opponents point out that this is not the case, that the money being shifted will not be "repaid." To which I say good. I probably wouldn't support 1E if it were proposing another budget "loan."

We don't need to borrow from ourselves. The mental health fund is money that comes from Californians, or at least the handful who earn more than $1 million a year. It was a mistake to set that money aside for a special purpose in the first place, and there is absolutely nothing wrong with saying to voters, "Hey, do you want to loosen the strings on that money for a year or two so we can use it to avoid cuts in other programs that might be more important at the moment."

That's called setting priorities. It's something the Legislature should do more of, not less. And in this case the people should support them.

The text of the No on 1E statement is below the jump.

April 1, 2009
Paying for their 'failure'

Our friends at the Howard Jarvis Taxpayers Assn. brought this editorial from the Daily Breeze to our attention, noting that today, with the 1-cent sales tax hike taking effect, Californians begin to pay for the "failures" of our leaders. That's the same language often employed by Gov. Schwarzenegger, or at least it was before the economy tanked so badly that even he concluded that California had to raise taxes.

I've never been a fan of that way of looking at the problem. Not because I don't think our leaders have failed. They have, in many ways and at many times. My problem with it is that it distracts the reader from what is really going on.

California has been spending more than it is taking in. The state is spending that money on stuff for us: schools, roads, prisons, mental health care, doctors and hospitals for poor kids, etc. Yes, the state and its leaders should have been more prudent, and should have done more to keep that spending under control. But the higher taxes we are paying now are not some sort of abstract penalty we are all stuck with because our leaders are so feckless. The taxes are paying for services we and our fellow Californians are receiving, or have received in the recent past.

If you think those services are too expensive, or too generous, then say so. It would also be helpful if you noted exactly which services you would like to cut back or eliminate.

That's really what is at issue here.

So when you start paying that higher tax today, and if it bothers you, think about which state services you'd rather do without, and let your legislator know what they are.

 We're not so much paying for anyone's "failure" as we are paying for more services than we could afford with the taxes we were paying last year.

 

 

March 31, 2009
Balance the budget yourself
Next 10 has updated its California Budget Challenge, the online game where you can try your hand at balancing the budget with a selection of cuts and tax hikes...As always, it really brings home the tough choices that legislators, and the public face in trying to close the budget gap. Find it here.
March 30, 2009
Do SacBee commenters reflect broader opinion re budget package?

The Bee's readers, or at least those who comment on line, are in a foul mood about the May 19 ballot package, anyone connected to it and the Bee's commentary about both. Our editorial endorsement Sunday -- backing the spending limit/tax extension compromise and the suspension of ballot box budgeting from Props 10 and 63 while opposing the new funding guarantee for education -- has brought near universal online condemnation from readers who see it as an endorsement of a tax and spend status quo. My column on Steinberg showing leadership by backing a spending limit (and supporting changes to Prop. 63, which he authored) was similarly roasted. This despite the fact that our position is to the right of the Republican leadership in the Legislature, which supported the Prop. 98 revision as part of the package.

Some will say that these readers have blinders on, don't care about the facts and represent such a tiny portion of the potential electorate that they can and should be ignored. I am not so sure. I have a hunch that most people out there have no idea how the spending limit would work and what effect it would have had in reducing deficits had it been in place over the past 10 years.

Linking the tax increases and the spending limit made perfect sense in the Capitol, and it was the only way to get a compromise done. But it might backfire if the campaign in support of the package does not figure out a way to explain it, or a good way to build support for the package without explaining it.

Dan Schnur suggests scaring people into voting yes. I don't like that idea, and I don't think it would work. I am picturing gauzy endorsements from teachers, cops, firefighters and business owners saying it's about time the warring parties put down their weapons and agreed to a common sense solution to start fixing the budget. Let's back this effort and put something into the constitution to make sure the politicians can't mess it all up again....

 

 

 

 

February 17, 2009
Texas businessman who was close to Gray Davis charged with fraud, Post reports
A mysterious Texas businessman who was a major financial backer of former Gov. Gray Davis and donated $2.5 million toward the renovation of the Leland Stanford Mansion in downtown Sacramento has been charged with securities fraud by the SEC, accrording to the Washington Post. R. Allen Stanford, who traced his roots to the Leland Stanford family but never proved a connection, has been charge with fraud in connection with the sale of $8 billion in securities in one of the largest securities fraud cases ever, the Post reports. A column I wrote on Stanford and his connection to Davis in 2001 is below the jump.
February 12, 2009
How the spending limit would work

Here is my understanding of how the spending limit or revenue smoother that is headed for the ballot as part of the budget deal would work, including the provisions that were already adopted in the rainy day fund proposal that was part of the September budget:

 --3 percent of revenues would be taken off the top every year and put in the reserve. The governor could waive this requirement until 2011 -- the first year of the next administration.

--One half of this rake, or 1.5 percent of general fund revenues, must stay in the reserve and be used only in bad economic times.

--The other half would be used to "repay" schools the money they are losing in the most recent rounds of budget cuts, until about $9 billion is made up....In effect this means they get a guarantee on top of their guarantee for about 4 or 5 years, depending on how well the economy rebounds. Once the schools get their money back, this portion would go to pay off debt or for infrascructure. The school repayment provision will be in a separate ballot measure, and it is still not clear how the two will be linnked, if at all. It appears that the schools might get this money whether or not the spending limit passes.

--In addition to the 3 percent rake, any revenues over the ten-year trend line would also be put into the reserve.

--Other than the provision mentioned above, money would come out of the reserve only in years in which new tax revenues were insufficient to grow the budget by a combination of population growth and inflation. In those years, only enough money to bring the budget growth up to that level would come out of the reserve.

--If the reserve reached 12.5 percent of the general fund, any additional revenues could be used for one-time purposes, including paying off debt, pre-payment of retiree health benefits and tax rebates.

--If the Legislature or the people raise taxes, the revenue trend line would be adjusted upward so that the new money could be spent immediately, rather than waiting 10 years for the bump to work its way into the trend line. I think the opposite applies after a tax cut.

--The governor would have the authority to cut state operations spending and suspend cost of living increases midyear if a shortfall developed after a budget was adopted.

January 26, 2009
California Index: welfare

Here is another in my series of charts giving a snapshot of the quality of life in California:

Welfare. California's welfare rolls climbed in the past year for the first time since 2005, and at a faster rate than any time since they began dropping after the federal welfare reform in the mid-1990s. California had nearly 920,000 families on public assistance in 1995 before new work requirements and time limits were imposed. That number bottomed out at 456,000 in 2007. But this year it is back up to 477,000 and likely to keep climbing.

January 26, 2009
McClintock now big fed's big defender

We always thought Tom McClintock was a local-control guy, favoring muni and state government over the big bad bureaucracy in Washington. But now that McClintock has moved from the Legislature to Congress, he wants the feds to keep stomping on California's right to regulate how much smog cars spew into the air here. When word started leaking out that Obama's EPA would likely withdraw federal opposition to California setting more stringent clean-air standards, McClintock claimed that a strong, vigorous federal government is needed to protect consumers (not to mention automakers) from the wrath of California regulators.

McClintock said Gov. Arnold Schwarzenegger was "asking the president to waive a federal law that currently protects California consumers from the governor's crusade to save the planet by destroying California's economy." McClintock added:

"The net effect of his request would add between $1,000 and $5,000 to the price of every car sold in California. Automobile sales normally account for one-fifth of sales taxes paid in the once-Golden State and total sales tax receipts are already down $1.5 billion over the last 12 months."

But shouldn't California consumers have the sovereign right to raise the price of their cars in the cause of cleaner air, if that's really what would happen?

Here is a McClatchy story on the issue.

UPDATE: Here is a reaction from McClintock: "Dan Weintraub suggests that advocates of limited government like myself should welcome the federal government allowing states like California's to impose radical new restrictions on vehicle emissions that will raise the price of a new car by as much as $5,000. The reason our Constitution empowers Congress to regulate interstate commerce is precisely to prevent one state from running amok, impeding the free flow of commerce across state lines and negatively impacting the economies of other states and of the nation." 

January 22, 2009
California Index: spending

This chart is one in a series using statistical measures to assess the well being of California. This one is by request, sort of. A reader asked us to track the trend in taxes as a percentage of the economy over time. I have not found a ready source for those numbers, but this is close. This chart tracks state spending as a percentage of the economy, and since spending is financed by taxes one way or another (a deficit simply means the postponement of the tax collections), this is a close approximation.

The chart shows that spending since 1991 has tracked within a fairly narrow range. For the general fund it has been roughly between 6 percent and 7 percent of the economy. For all funds, between the high-sevens and the mid-nines:

 


Source: Department of Finance, state budget
January 22, 2009
California Index: Poverty

Here is the latest measure from the list of statistical indictors that are part of my California quality of life index published in Sunday's Forum.....We are going to archive these and update them. Let me know if you think of additional measures we should be using.

 Poverty. Poverty declined markedly in California during the dot-com boom. It wasn't just the rich who got richer. But once the boom went bust, the poverty rate went pretty much stagnant, hovering around 13 percent, give or take half a point. It went up early in this decade, then declined, and in 2007 it climbed again, up to 12.7 percent.

January 21, 2009
California Index: jobs

Here are the latest charts in my California Index of quality-of-life indicators....

Jobs. This chart shows that the number of jobs in California generally kept pace with the growth in the labor force over the past decade -- until this year,when the number of jobs declined while the number of people entering the labor force grew. Overall, from 1998 through 2008, the cilvilian labor force has grown by about 2.3 million since 1998. The number of civilian jobs has climbed by about 1.7 million.


Source: Employment Development Department

Unemployment. The result of that divergence between the number of jobs and the number of people seeking jobs in 2008 was a big jump in unemployment.


Source: Employment Development Department

 

UPDATE: Here is a chart I did not have room for in the print column. It shows the recent trend in jobs by industry category. This chart shows November 2006, 2007 and 2008, seasonably adjusted. You can see that the biggest drops have come in construction. manufacturing, retail trade and financial activities. Leisure and hospitality has held its own while education, health and government have grown.


Source: Employment Development Department
January 20, 2009
'I know what you're all about'

When I got in this morning I had an angry voice mail on my machine that was left by an anonymous caller over the weekend. The caller said he had looked at he charts that went with my Sunday column but did not read the column because, he said, "I've read you before and I know what you are all about." 

The funny thing is, at that moment in listening to the voice mail, I realized I had absolutely no idea what he was going to say next. What am I all about? I think I know, but it is hard to explain, impossible to pigeon hole and somehow I didn't think this guy had figured it all out by just looking at the pictures. Turns out his answer was that I am a "Republican and a conservative" and it is people like me who got this state into the mess it is in. Ok. But he could have been an angry conservative accusing me of being a liberal big spender and I would not have been surprised.

I don't know if it is me, or our readers managing to see what they want to see, but I have been accused of being on both ends of the ideological spectrum. Usually not by the same person.

January 20, 2009
California Index: income

My column on Sunday featured the latest update of my Quality of Life Index, in which I check in on a dozen statistical measures of life in California. But in this age, 12 measures seems like a puny number, and once a year is not often enough for an update. So I am going to try to create an archive of charts that I can update as new data is available, and I can add more if readers suggest good ideas. Here are the first two charts, on personal income per capita and median family income. You can click on the data points on the graph to see the underlying numbers:

 Personal income per capita. This chart shows that income per capita measured in current dollars and adjusted for inflation has climbed over the past ten years. Adjusted for inflation, income per person in California climbed by about 27 percent between 1997 and 2007. In the most recent year for which numbers are available, per capita income grew by 4.3 percent, or 1.7 percent after inflation.

Source: Department of Finance

Median family income. Median family income has not risen as fast as per capita income. Between 1997 and 2007, median family income increased by about 18 percent after adjusting for inflation. In the most recent year, median family income grew by 8.8 percent, or 6.1 percent after inflation.


Source: Department of Finance

January 15, 2009
Schwarzenegger strikes the right tone

I thought the guv's speech was just about right. There has been plenty of combat already, and there will be more. This was a chance to take things down a notch, and he succeeded, with an almost plaintive tone. He is right about the partisanship. The Capitol is obsessed with ideology and defending narrow interests in a way that the general public just cannot understand or relate to. The state is $20-billion short on an ongoing basis. Revenues are $10-billion-plus below the level that Republican lawmakers thought were adequate a few months ago, so adequate that they threatened to override the governor's veto if necessary to put in place a $100 billion dollar general fund. Now revenues are below $90 billion.

We all know the problem is not going to be solved without new revenue, or without deeper cuts. It is just a matter of finding the right combination of the two, and the right mix of temporary and permanent measures and reforms. I don't agree with everything Schwarzenegger is proposing, but right now he does seem to be the only person in the room talking honestly about the problem and willing to try anything to find a solution.

One thing I definitely don't like is his cheap hit on taking away pay if the budget is not done on time. The public loves that idea but it is bad policy. It creates a deep, personal economic conflict of interest for lawmakers at budget time. Those who are independently wealthy could hold out forever. Those who depend on their state paycheck to pay the bills would be forced to cave in. Bad idea.

January 12, 2009
Fox: tax hike likely
Longtime taxfighter Joel Fox appears in this blog item to be all but resigned to the idea that higher taxes will inevitably be part of any budget deal. But he says a spending limit will be, too.
January 12, 2009
Shorter school year not a bad idea

In this editorial the SF Chronicle rips the guv's idea for allowing schools to shave five days off the 180-day school year in 09/10 to save as much as $1.1 billion. The editorial calls it a "dunce" of an idea. But is it that bad? Anyone who has had kids in school knows there are plenty of wasted days. Many schools ease up completely once standardized testing is done for the year, usually in May. And the final week is notoriously frittered away with movies, parties and the like. So in this economic climate, facing what amounts to a fiscal emergency, taking 5 days off the academic year certainly seems like an idea worth discussing rather than dismissing out of hand. It surely must be better than many other options for saving $1.1 billion. The biggest downside effect from the change might be that it would force parents of young children to find alternate supervision for their kids.

Here is a Q and A on the proposal from the Bee's Cap bureau.

November 21, 2008
Cali Unemployment at 8.2 percent

Economist Steve Levy has a quick analysis of today's California unemployment figures. He points out a puzzling set of numbers that show the labor force growing and the number of unemployed growing far faster than the number of jobs lost. Read his report after the jump:

November 12, 2008
A little problem for Schwarzenegger's budget plan

In Article 4 of the state Constitution:

The Legislature may not present any bill to the Governor after
November 15 of the second calendar year of the biennium of the
legislative session.

Has anyone figured out how they could act on the governor's proposals given that deadline?

UPDATE: The governor's office says they have a legislative counsel opinion that the deadline does not apply to the special session.. So they are all good.

And from the governor himself, this message:

"Don't be so negative. You will be shocked and smiling at what comes out of this special session."


November 12, 2008
Michael Lewis strikes again: explaining the crash
Michael Lewis, who first chronicled Wall Street abuses in "Liar's Poker" (and later wrote "Money Ball" among other books), has written a masterful explanation of the end of the boom for Portfolio Magazine. The piece profiles Steve Eisman, a trader who saw the crash coming and profited handsomely from his wisdom:

Lenders were making loans to people who, based on their credit ratings, were less creditworthy than 71 percent of the population. Eisman knew some of these people. One day, his housekeeper, a South American woman, told him that she was planning to buy a townhouse in Queens. "The price was absurd, and they were giving her a low-down-payment option-ARM," says Eisman, who talked her into taking out a conventional fixed-rate mortgage. Next, the baby nurse he'd hired back in 1997 to take care of his newborn twin daughters phoned him. "She was this lovely woman from Jamaica," he says. "One day she calls me and says she and her sister own five townhouses in Queens. I said, 'How did that happen?' " It happened because after they bought the first one and its value rose, the lenders came and suggested they refinance and take out $250,000, which they used to buy another one. Then the price of that one rose too, and they repeated the experiment. "By the time they were done," Eisman says, "they owned five of them, the market was falling, and they couldn't make any of the payments."

The piece is not perfect; he does not quite describe some of the more arcane practices in layman's terms (at least for this layman). But if you can get past that, the gist of the story is crystal clear, and the anecdotes are chilling.
November 11, 2008
Kevin Johnson education ally in D.C. spotlight
The Wall Street Journal has a profile today of friend-of-KJ Michelle Rhee, a former St.HOPE board member and chancellor of the troubled Washington, D.C. public school system. Rhee has made waves by seeking to fire teachers whose students are performing poorly while offering big raises to instructors whose students excel. In the article, she says it is "complete crap" that students from disadvantaged backgrounds cannot master basic skills of reading, writing and math.

"It's easy to blame external factors as the reason why poor minority kids aren't achieving at the same level. It's a false premise. You have to put supports and mechanisms in place around those kids, but I refuse to allow the adults in the system to use that as an excuse."
Read the whole thing here.
November 6, 2008
Inside the Republican legislative mind

The Legislature's Republican leaders, as expected, have condemned the governor's call for a combination of tax increases and spending cuts to bring the state's budget back into balance. I understand their ideological position in favor of smaller government and more individual, rather than collective, action. In fact I share it. But I have never understood the refusal of virtually every California Republican legislator to ever even consider raising taxes. It seems to me like a position of weakness that allows one's decisions to be dictated by the actions of long-dead legislators who established today's mix of tax types and tax rates.

November 6, 2008
California voters still passing local bonds, tax hikes
City government analyst Michael Coleman is out with his first quick look at how local revenue ballot measures fared Tuesday. You can download the whole thing here. His summary:

         In the November 4, 2008 presidential election, California voters decided the fate of over 380 local measures including 239 concerning taxes, fees or bonds for cities, counties, special districts and schools.[1] There were 95 school bond measures seeking approval of a total of nearly $22.5 billion in elementary, high school and community college bonds.   There were also 21 school parcel tax measures requiring two-thirds voter approval.



November 5, 2008
Odd coalition keeps Prop 11 in narrow lead
Prop. 11 was still leading narrowly this morning, by 95,000 votes with many more still to count.

If you look at the map here you will see what looks to me like a strange geographic split. In general, the measure is doing better in Republican counties than in Democratic counties. But it is winning in some Democratic counties (Santa Clara, San Mateo, Sacramento) and it is losing in some Republican counties (Kern among others). It almost looks as if the map paints a picture of more moderate counties in support and more heavily tilted counties in either direction opposed, with the possibility that the location of state prisons and CCPOA members even played a role. At any rate, it is still too close to call. If the measure passes, though, it will be a big win for Gov. Arnold Schwarzenegger, who began pushing for an independent redistricting during his first campaign for governor in 2003 and has not really let up since. It would also be a signal that the voters want to fix the dysfunction in Sacramento and are willing to ignore the misleading campaigns of party leaders to do it.
November 5, 2008
Democrats pick up seats in the Legislature

The Democrats appear to have picked up a net of two seats in the Assembly and one in the Senate. This would give them a 50-30 majority in the Assembly, four votes shy of two-thirds, and a 26-14 edge in the Senate, just one vote short of a veto-proof majority.

Several of these races were very close, but it looks like the Dems picked up AD 15, 78 and 80 while losing Nicole Parra's 30th AD. The Republicans narrowly held the seats of termed-out members Aghazarian (26th) and Nakashini (10th).

In the Senate, Hannah Beth Jackson stands 108 votes ahead in the 19th. That would be a huge ideological shift in the seat now held by Tom McClintock.

November 4, 2008
SOS: Crashing and burning at Bowen's house

A few days ago Secretary of State Debra Bowen said she was confident that California could handle its crush of new voters without a hitch. Well, the election might have gone off pretty well, but the counting has been dreadful. And Bowen's computer system is the worst of the worst. While individual counties are reporting some results, the Secretary of State's web site appears to have been overwhelmed by people seeking to get the numbers. Bowen came into office boasting of her knowledge of technology. Looks like she has failed her first major test.

 UPDATE: Bowen posted this on her Facebook page nearly two hours ago:

Debra has officially declared the polls in California to be closed. Let the reporting begin!

November 4, 2008
San Benito -- bellwether results?

Readers of my former blog know that I am a fan of tiny San Benito county as a bellwether for California election results. The county has an uncanny knack for getting statewide election results right on the mark....With a third of its vote counted, here is how SBC is voting on the props:

 

October 31, 2008
Democrat registration still soaring

Debra Bowen has just published the latest voter registration numbers for California, and they continue to reflect the Demcratic Party surge that has been ongoing for most of this year. As of Oct. 20, the Democrats are now back up to 44.4 percent of the electorate, and the Republicans have sunk to just 31.4 percent. Decline to states now make up 19.9 percent of the voters.

Since 2004, California has added a net of about 750,000 voters. During that time Democrats have added 563,000, or 8 percent, and decline to states have grown by 519,000, or 18 percent. Republican registration has declined by 317,000, or 5.5 percent.

October 31, 2008
California's budget crisis at a whole new level

Gov. Arnold Schwarzenegger's Department of Finance is planning to explain its latest, dire forecast at some point this afternoon. But if there is really a shortfall of $8 billion to $10 billion in this fiscal year alone, I don't think people are grasping yet what that means.

We're not talking here about a shortfall in a hypothetical, projected budget. This is a shortfall in the budget that is already approved and nearly half spent.So if, by the time any cuts could take effect, $50 billion of the $100 billion general fund is already out the door, that would amount to a 20 percent shortfall over the remaining six months of the fiscal year.

We have been using the phrase "budget crisis" for so long in California that the words no longer have much meaning. But this takes the situation to an entirely new level that will require cuts, and presumably revenue, at a level far beyond what voters and interest groups can probably imagine....Stay tuned. We will monitor this afternoon's briefing and offer an update here.

UPDATE: The Department of Finance has scrubbed plans for a briefing. Word is that they will detail the problem and potential solutions next week.


 

October 28, 2008
Advice for next mayor?

Would you like to tell the next Sacramento mayor where to go, and what to do? I am planning a Sunday Conversation for the Bee's Forum section for the weekend after the election. The theme will be advice for the next mayor, whether that's Heather Fargo or Kevin Johnson.

I'd like to hear from you with your suggestions for the winner on everything from crime to economic development, the K-Street Mall to auto malls, transportation, education, the homeless and anything else that's on your mind.

Please email me at dweintraub@sacbee.com and, if you are willing to have your thoughts published, include your real name and the town or neighborhood in which you live.

Thanks!

Daniel Weintraub

October 18, 2008
The myth of media intimidation
Ever since the United States came up empty-handed in the search for weapons of mass destruction in Iraq, the American media have been beating themselves up for their failure to more aggressively challenge President Bush on that issue and others in the run-up to the war in early 2003. That's fine, but this self-flagellation has now also taken to including the idea that the media stood down because Bush was a very popular war president and the hyper-patriotic American public was jonesing to invade Iraq. That was apparently the conclusion at this recent media confab on "The lessons of our failure."

The media may well have failed, but it is a stretch to say that fear of reprisals was behind that performance. As these polls in the LA Times archive show, Bush's national approval rating in February 2003 (57 percent) was declining, and was the lowest it had been since he took office. Here is what the Times Poll said about Bush and Iraq after the president tried to rally the nation behind his policies in his State of the Union address:

Iraq and Saddam Hussein: Nearly three out of five Americans approve of the way George W. Bush is handling the situation with Saddam Hussein in Iraq, while 38% disapprove. Virtually all Republicans are solidly behind Bush on this (74% approve strongly), while 59% of Democrats and 63% of self-described liberals disapprove. More men than women also approve (65%, 50% respectively). A majority of Americans (55%) trust that George W. Bush will make the right decision about Iraq. Women are not entirely convinced of that--49% trust him to do the right thing, while 43% don't.
That's support, but not overwhelming, certainly not enough to justify a media clampdown out of fear of retribution from the government or the public.

And while those numbers went up, at least briefly, once the war began, that was after the media had supposedly been cowed into submission. So if reporters missed the story, they are going to have to come up with another reason.

The Times Poll from that era, by the way, has some other interesting numbers. After the war began, four out of five respondents said they would consider the invasion a success even if WMD were never found, and 85 percent said the war would be worth it as long as Saddam Hussein were killed or captured.
October 16, 2008
Sam's Club CEO: With sustainability, `You sell more'

Sam's Club CEO Doug McMillon talks to Fortune Magazine about how the company benefits from its sustainability push:

Your boss, Lee Scott, has made sustainability a big theme for Wal-Mart. Is it actually helping your business?

Yes. It's been an interesting journey. I remember the first conversation that Lee had with a group of us, and I didn't really understand what he was talking about. "Sustainability" was defined in a financial sense for me. As he started to broaden the conversation into the environment and then social issues, it sounded like potentially a big distraction. But in fact it fits within our overall mission - to save people money so that they can live better.

We underestimated how much financial benefit we could get from it. We found items that if you simply reduce the amount of packaging involved, save cost, and pass that on to the customer, you sell more. You're just eliminating waste. We thought we were efficient before, but we really weren't. It was as if somebody handed us a different pair of glasses, and the whole world looked different.

Any benefits beyond cost?

Yes, we got a secondary benefit that I also don't think we understood. Many of our associates have an emotional connection to this subject. When we started declaring goals, some of them very aggressive, the path to achieving them not clear, they responded in a way that was surprising. They said, Count me in, let me have a piece of that responsibility, and I'll help figure it out. Now it's moving with two million associates behind it, not just a small group of leaders.

 

 

October 15, 2008
Finance: Revenues down in September
The Department of Finance just posted its latest revenues numbers, for September, and they are bleak. Revenues were down about $900 million below the forecast for the month, and more than $1 billion for the first quarter of the fiscal year. Finance says that's consistent with its projection that revenues could be short $3 billion for the full fiscal year. At this point, though, even that admission looks optimistic. I would think it could still get worse than that...Not going too far out on a limb here, but I think 2009 might go down as the ugliest on record for California finances, including local government. It's going to be a real bloodbath. Here is the link.
October 14, 2008
Johnson on his pledge: 'irrelevant'

 Following up on Ginger's post below, here is an edited transcript from the Bee editorial board's most recent meeting with Kevin Johnson, when the mayoral candidate discussed the pledge he signed to support a firefighters' union inititiative to lock current contract terms into the city charter. In the conversation, Johnson says he saw signing the pledge as only "agreeing in concept" to support the firefighters' campaign, even though, if you look at the document, it clearly goes further than that. Also of note, Johnson, when pressed, said the pledge was "irrelevant," in part because the firefighters had already agreed to endorse him.

October 13, 2008
SoCal wildfires
I am in Burbank in route to Malibu to talk to students about California government and the Schwarzenegger years. As we landed, we flew through thick smoke from nearby fires. It looks as if hundreds of people are being evacuated from neighborhoods north of here, near Sylmar. Two major freeways are closed. The winds are howling. Hope they can get the flames under control
October 13, 2008
Levy on the California economy
Economist Stephen Levy offered this summary of his views on the condition of the economy over the weekend. A Democrat, Levy has steadfastly maintained that the state's economy remains fundamentally sound and should experience a relatively brief recession, not one as bad as the early 1990s. He continues to hold that view.

October 9, 2008
Why bail out people who paid nothing down?
The Bee's Jim Wasserman reports some grumbling from the local real estate community that McCain's mortgage relief proposal wouldn't help people who put no money down to "buy" their houses and now find themselves underwater on the mortgage. But why should the taxpayers help such people, anyway? If they borrowed 100 percent of the home's purchase price, they are essentially the same as renters, except that they get a tax deduction on the interest they pay, unlike tenants who get nothing back from the government for their rent. These buyers had nothing to lose and everything to gain from the transaction. If they lose their home now, they go back to renting. Which is really what they were doing all along. It would be crazy to force people who stayed in a rental and didn't take out a risky loan to bail out people who borrowed 100 percent.
October 3, 2008
Some loose ends from the debate
Here is a good round up of Biden's errors last night from the conservative National Review Online. He mangled what the Constitution says about the VP, and where it says it, misstated how much we're spending in Afghanistan, and wrongly claimed that the US had kicked Hezbollah out of Lebanon, among other goofs. And for good measure, we could take him up on that offer to test his middle-class cred by walking with him to Katie's restaurant on Union Street in Wilmington, if the place had ever been on Union Street, and if it hadn't closed 20 years ago...
October 3, 2008
Cash crunch

Gov. Schwarzenegger is saying that, because of the credit crunch, the state is having trouble borrowing $7 billion it needs to smooth out its cash flow. Unless the bailout bill passes, he says, California is going to have to go begging at the Federal Reserve window. Not sure whether this helps or hurts the chances for the bill. A lot of folks in Congress probably wouldn't mind seeing California finally declared insolvent.

See the governor's letter to Treasury Secretary Henry Paulson here.

October 2, 2008
Biden wins the debate even if Palin exceeded low expectations

I  listened to the entire debate on the radio in my car, so I don't know if I have a different impression than those who watched it on television. My sense is that from a debate scorekeeper's point of view, Biden definitely won it. He took the offensive, stated his points clearly, offered evidence for his claims and used language and repetition effectively to drive home his arguments. I say this even though on many points I disagreed with him, and on a few I think he was exaggerating or even misleading. But he did communicate effectively what he was trying to say.

Palin might have lost the debate, but she did more than just survive, and she definitely did not embarrass herself. She was not as smooth as Biden. But Palin did offer some cogent, clear answers (though too many times those answers were to questions that hadn't been asked) and she did not sound nearly as nervous as she has in her television interviews. She played defense all night, but she played it well enough. Probably too well for some Republicans, with her frequent attacks on Wall Street and her calls for more regulation.



About The Swarm

The Swarm is written by members of The Sacramento Bee's editorial board. They meet daily and are separate from the newsroom. Views included here are those of individual writers, and do not necessarily reflect those of a majority of the board or the positions expressed in The Bee's editorials.

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