California has the second-highest unemployment rate in the nation. Yet when polled by USC Dornsfire/Los Angeles Times, 49 percent of voters said that cutting government spending is the path to prosperity. "Stimulus is almost a four-letter word here." (LAT)
Major private-equity player the Carlyle Group wants to go public. Competitor Blackstone has a market cap of $13.4 billion. Carlyle wants to be in that league. And the "giant California pension fund Calpers has owned at least a 5.5 percent stake in the firm for several years." Cash-out time? (DealBook)
Environmental backlash to AEG's fast-track, allegedly carbon-neutral NFL stadium legislation. "Well, what would you expect to happen when a bunch of cocky bizjocks from L.A. insist on a bill that would exempt them from many of the legal hurdles that everyone else must go through - including developers looking to build stadiums in other parts of the state?" (Lacter/LA Observed)
Gov. Jerry Brown isn't sure. This is from the L.A. Times' Money & Company blog:
Brown on Thursday did not dismiss the Amazon bid out of hand. But, he stressed that he's mostly concerned about losing an estimated $300 million in badly needed state revenues that his budget expected to get once Amazon complies with a new law that took effect on July 1.
"I'm concerned about anything that would reduce revenues going forward because we're in a very uncertain economy," the governor said after attending an awards ceremony for correctional officers in Sacramento. "We need more revenues unless we're going to keep curbing schools, courts, corrections."
Amazon, so far, has refused to collect the tax on purchases made by California customers. Instead, it's contributed more than $5 million to a referendum campaign to repeal the new sales tax collection law.
Whenever times get tough, you often hear about how laid-off workers took advantage of their involuntary freedom to get entrepreneurial and start businesses. You also hear about folks who lost their jobs but found themselves. The SoCal economy is struggling with joblessness that's much higher than the national rate — 12.4 percent in L.A. County versus 9.1 in the U.S. — so you might expect the entrepreneur story to be running hot here.
But you have to be careful about these things. There are definitely arguments on both sides. At the Atlantic, Sara Horowitz is kicking off a series on the freelance surge and how it could transform work. She's not holding back:
Jobs no longer provide the protections and security that workers used to expect. The basics such as health insurance, protection from unpaid wages, a retirement plan, and unemployment insurance are out of reach for one-third of working Americans. Independent workers are forced to seek them elsewhere, and if they can't find or afford them, then they go without. Our current support system is based on a traditional employment model, where one worker must be tethered to one employer to receive those benefits. Given that fewer and fewer of us are working this way, it's time to build a new support system that allows for the flexible and mobile way that people are working.
The BLS jobs report that hit this morning was…how to put it? Demoralizing? Particularly headed into a holiday weekend that's supposed to celebrate the American worker. As some commenters have already pointed out, that fact the U.S. economy added zero — yes, zero — jobs in August is both depressing and symbolic.
Depressing because it came in well under even worst-case scenarios produced yesterday by the likes of Goldman Sachs, which had anticipated a fairly demoralizing 25,000 jobs to be added (Take that, starry eyed Goldman optimists!). I guess you could throw up your hands and say, Well, at least we didn't drop into negative territory! The national unemployment rate stayed at 9.1 percent (and presumably, the California rate will stay stuck at 12 percent, with L.A. County above that at 12.4 percent — that data will come later in the month).
The official August employment numbers will be released by the BLS tomorrow. But a few other notable sources have already provided data:
- ADP reports the the economy added 91,000 jobs, a decrease from July
- Goldman Sachs cut its estimate from 50,000 jobs added to 25,000
Meanwhile, the economic consensus is expecting something in the neighborhood of 100,000 jobs added to non-farm payrolls.
The economist Peter Morici, who's been hammering away at the jobs problem for over a year now, summed up an unpleasant situation rather nicely at CNBC:
The economy must add 130,000 jobs each month to accommodate a growing adult population seeking work.
The key factor stifling jobs creation is sluggish GDP growth, which only advanced 1.3 percent in the second quarter and 0.3 percent in the first. Businesses can’t hire and pay new workers without more customers.