Explaining Southern California's economy

The Fed: No longer a temple of secrets

Mercer 1163

Brendan Smialowski/Getty Images

Secretary of the Treasury Timothy F. Geithner (L) and William C. Dudley (R), President and Chief Executive Officer of the Federal Reserve Bank of New York, listen to Federal Reserve Chairman Ben S. Bernanke (C) speak during a hearing of the House Financial Services Committee on Capitol Hill March 24, 2009 in Washington, D.C.

As Bloomberg reports, the Federal Reserve is trying to change its image. And the chief image-changer is none other than Chairman Ben Bernanke:

Bernanke, who took office in February 2006, has pushed the Fed toward greater openness at a faster pace than any of his predecessors. He holds press conferences four times a year and has aired his views on monetary policy and the financial crisis in television interviews.

The 58-year former Princeton University professor has also traveled to town hall meetings in locales such as El Paso, Texas. In addition, the FOMC publishes its forecasts four times a year, compared with two under former Fed chairman Alan Greenspan.

This is absolutely the right thing to do. Most Americans have no earthly idea what the Fed does, so Bernanke's new push for transparency isn't just good for the institution, it's good for the public. 

Read More...

Starbucks price hike: You will pay 10 cents more for your latte!

But only if you live in the Northeast or the "Sunbelt." Southern California will be spared. For now.

I hate to admit this, but I missed the spike in coffee bean prices in 2011. The commodity is now up 42 percent on the five-year average, according to Bloomberg (which also provided the video report on Starbucks that I've embedded above).

Why do I hate to admit this? Because I can't live without coffee. I guess the issue here is that I've been drinking such el cheapo coffee for the past year that I didn't notice. I certainly wasn't closely following the coffee futures market.

Now, I suppose you could take the 10-cent Starbucks price increase, on beverages like lattes and brewed java, as the perfect opportunity to do what those pop personal-finance folks are always counseling you to do, particularly at the beginning of a new year: Quit buying lattes at Starbucks and start investing your savings. 

Read More...

Bike Challenge: DeBord Report goes (Gasp!) carless

In the past, I've definitely tussled with what I think of as the "Bicycles Boys" — after a pre-"Sex and the City" story in the New York Observer by Candace Bushnell. You can sample the disagreement here, here, and here. These are smart gents who believe that the urban landscape can be remade, productively, in the image in of the cyclist.

I think they're starry eyed idealists.

But now the tables have been turned. As much as I love cars and driving — and continue to think that America is car country and there's really no changing that — I now live within easy biking distance of my office. The terrain is invitingly flat. And of course the weather in Southern California is nearly idea for a short daily commute by bike.

Also, I'm not getting any younger. I need daily exercise. So why not get it by biking to work?

Read More...

Debt: It's not as bad as you think

Mercer 20448

Andrew Burton/Getty Images

The National Debt Clock, a billboard-size digital display showing the increasing US debt, is seen on the corner of Sixth Avenue and West 44th Street on August 1, 2011 in New York City.

Paul Krugman does another one of his simple, straightforward Econ 101 columns in which he helpfully ridicules the idea that we're headed down a debt-paved road to ruin. He zeroes in on the tendency of commentators to compare the finances of families to the finances of governments:

First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.

This was clearly true of the debt incurred to win World War II. Taxpayers were on the hook for a debt that was significantly bigger, as a percentage of G.D.P., than debt today; but that debt was also owned by taxpayers, such as all the people who bought savings bonds. So the debt didn’t make postwar America poorer. In particular, the debt didn’t prevent the postwar generation from experiencing the biggest rise in incomes and living standards in our nation’s history.

Read More...

Can Hollywood win young men back from video gaming?

Mercer 5963

Getty Images

Activision’s video game, "Call of Duty: Modern Warfare 2," shattered sales records and became the biggest release of any entertainment property ever in 2009, earning $310 million in 24 hours and solidifying video games as the entertainment medium of today.

At The Wrap, Sharon Waxman offers a list of remedies for what ails the movie business. One of them jumped out at me:

Find a way to connect the gaming obsession of what used to be the core moviegoing audiences – young males 13-24 – with the movie experience. Learn from that interactivity and use that to drive them to the multiplex. (This is a challenge for marketing geniuses. Hollywood has plenty of those.)

Sounds great, but this isn't a marketing problem — it's a medium problem. Apart from technical innovations in digital filmmaking, special effects, and 3-D, the movies are basically the same as they were 30, 40, 50 years ago. A bunch of people sit in a large darkened room and wait for huge moving image to be projected onto a screen. The seats are more comfortable and the sodas are vastly larger. But the medium is about as 20th century as could be. Mid-20th century.

Read More...