Explaining Southern California's economy

Should Occupy LA pay $400,000 to restore City Hall park?

Corey Moore/KPCC

Occupy LA encampment the morning after Mayor Villaraigosa's eviction order went into effect.

The bill is in for Occupy LA. This is from AP:

A preliminary report by the Los Angeles city administrative officer estimates the nearly two-month Occupy LA encampment at City Hall cost the city at least $2.3 million...

[...]

But the report notes that the estimate does not include the cost of restoring City Hall park. A rough early estimate of restoring the park to its original condition was $400,000.

That's some not-inconsiderable coin. And it does raise an important question: Should Occupy LA, in as much as it's able, defray some of the cost? After all, Occupy Wall Street could make a mess in Zuccotti Park in Lower Manhattan, but a few high-pressure hoses, some disinfectant, and a small fleet of dump trucks could clean it up (after the protesters had left, of course). 

Occupy LA, on the other hand, camped out for weeks on what had been green(ish) grass. Which is now neither green nor grass anymore. 

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Internet uproar forces GoDaddy flip-flop on SOPA support

Ford 300 - Qualifying

Jared C. Tilton/Getty Images

GoDaddy is no longer supporting SOPA. It's sticking with Danica Patrick, however. (Photo by Jared C. Tilton/Getty Images)

The Internet registrar GoDaddy was one of the big proponents of the Stop Online Piracy Act (SOPA) — opposed to the likes of Google, Facebook, Yahoo, and Twitter — but now it suddenly isn't. Why? Simple: GoDaddy's stance toward SOPA was seriously threatening its bottom line.

It was a victory for the anti-SOPA contingent. This is from VentureBeat:

As one of the largest domain registrars, Go Daddy’s support of SOPA was extremely alarming to many people and companies with a strong presence on the internet because it could make de-indexing domain names much easier.

Talk of a Go Daddy boycott began yesterday on community link sharing site Reddit, and quickly grew to include several influential business leaders and media personalities. Among them were Y Combinator founder Paul Graham, Cheezburger CEO Ben Huh and celebrity/investor Ashton Kutcher.

The company initially shrugged off the protests, issuing a nonchalant response to let people know it hasn’t negatively impacted its business — which was the equivalent of shaking the hell out of a giant beehive and not expecting to get stung. Boycott participators responded by publishing step-by-step tutorials for transferring a bulk of domains to a new registrar, complete with recommendations to competitors.

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Good rich people v. bad rich people: Whom to hate

Dow Jones Industrial Average Closes Slightly Down

Spencer Platt/Getty Images

At the Nation, Jamelle Bouie pretty well summarizes not just what the Occupy Movement stands for, but what lots of everyday Americans are feeling:

It’s hard to look at the wealth worshiping of American culture and conclude that Americans hate the rich. Rather, Americans hate people who become rich through rent-seeking, and then use their power and influence to pull up the ladder for everyone else. Financial elites crashed the economy, but rather than suffer any adverse consequences for their reckless behavior, they’ve prospered. Worse, they’ve yet to show any contrition for their actions, even as millions of Americans—who had no part in the sideshow—languish in a wounded economy.

This is the end result of what some have called the "financialization" of the U.S. economy, with the financial-services sector accounting for a historically disproportionate share of GDP. 

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Falling unemployment plus rising GDP growth equals a Happy New Year

A jobs sign hangs above the entrance to

KAREN BLEIER/AFP/Getty Images

A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC. New claims for US unemployment insurance dropped last week to a level last seen more than three years ago, government data showed December 15, 2011 in a sign of stabilization in the troubled jobs market.

There's been a big debate in economics over the past few months about whether the U.S. will fall into another recession. One side points to continued high unemployment and sluggish growth, as well as the perception that the economy is in the dumps (and in an economy, perception is very important to consumer behavior, which accounts for 70 percent of economic activity in the U.S.). 

The other side says, basically, that we aren't seeing unemployment go up or GDP growth go down, and besides, most industries have declined so far that there's nowhere to go but up. Therefore, no double-dip recession.

The data favors the latter argument. This is from the LA Times:

Growth has picked up steam through the fall as dropping gas prices put more money in consumers' pockets and businesses rebuilt their inventories. Economists project the annualized growth rate from October through the end of the year could be as high as 4%.

Helping fuel that recovery is continued improvement in the job market.

New jobless claims declined again last week, falling to 364,000, the lowest level since April 2008, the Labor Department said Thursday. The four-week average of 380,250 is below the 400,000 figure that economists say is key to cutting into the unemployment rate.

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Remember Lehman Brothers? It's coming out of bankruptcy

Financial Crisis Inquiry Commission Holds Hearing In Washington

Chip Somodevilla/Getty Images

WASHINGTON - SEPTEMBER 01: Lehman Brothers former Chairman and CEO Richard Fuld is sworn in before testifying to the Financial Crisis Inquiry Commission about the roots and causes of the 2008 financial and banking meltdown in U.S. and worldwide markets on Capitol Hill September 1, 2010 in Washington, DC. The commission begins two days of questioning about how two specific financial companies, Wacovia and Lehman Brothers, failed and why some institutions were considered "too big to fail" while others were allowed to fail. (Photo by Chip Somodevilla/Getty Images)

Not that that means anything. All that's left of the once-proud Wall Street investment bank, whose bankruptcy precipitated the financial crisis, is $65 billion. And every single penny of that is spoken for.

This is from Reuters, via the LA Times:

Unsecured creditors will receive about 21 cents to 28 cents on the dollar, depending on the type of security they held. Shareholders, whose stock in the company hit a high of $86.18 in February 2007, according to Reuters Data, will receive nothing.

The company had $639 billion in assets when it went bankrupt. Some of that money was returned to brokerage customers in a separate proceeding. There remains $65 billion to be returned to creditors who have $450 billion in claims, a group that includes debt investors and trading partners from before the bankruptcy, such as Goldman Sachs.

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