The Swarm

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:

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."

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.

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.

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.

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.

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.

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.

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!

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: