Explaining Southern California's economy

Reportings: Yahoo takeover; Foxy Amazon; grocery contract; bad housing market

Fred Schuers ponders the various Yahoo-takeover scenarios: "No investor is more of a threat than hedge-fund powerhouse Daniel Loeb, who has recently acquired 5.2 percent of Yahoo's stock. Loeb has gone after companies he thinks are mis-managed before, but the level of vitriol -- and cash -- he’s throwing at the Yahoo board shows that he’s deadly earnest this time." (The Wrap)

 

Fresh off its sales-tax deal with California, Amazon lines up more streaming options from 20th Century Fox. The LA Times, unfortunately, has no details on the money involved. But then again, neither does anybody else. "News Corp.'s 20th Century Fox has reached a licensing deal that adds about 2,000 films and television shows from its library to Amazon.com's instant streaming service, bringing to 11,000 the number of titles available through Amazon Prime." (LAT)

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Visual Aid: California v. Texas on energy use

 

Gotta love Google Public Data Explorer and it's ability to generate cool charts. I like to keep track of how California is doing economically with respect to our big U.S. rival these days, Texas. So I checked out some data on energy expediture as a share of GDP — how much the U.S., California, and Texas are spending, out of all the money we rake in, on power, propulsion, and so on. You can see a big trend here: our energy expenditure peaked in 1981, declined for a long time, then began to climb back up in the 2000s before falling sharply again after the financial crisis in 2008. But look at where Texas has always been. Well above the national percentage, and waaayyy above the California numbers. I guess you could say that Texas, energy-wise, has always been a lot more expensive to power than either California or the nation as a whole.

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Solyndragate: The problem with solar isn't growth, it's scale

At KPCC's Pacific Swell blog, my colleague Molly Peterson has a snappy take on the aftershocks of Solyndragate: SolarCity isn't likely to get a $274-million DOE loan guarantee is was counting on to install solar panels at more than 100 U.S. military bases.

In the post, she refers to a memo that was sent out by the Sierra Club, supporting the solar industry. Here's a taste:

Earlier this week, The Solar Foundation, in partnership with GreenLMI and Cornell University, released its National Solar Jobs Census 2011.  The Census reported incredibly impressive growth in the solar industry – nearly 7% from August 2010 to August 2011.  The solar industry’s growth is even more impressive when compared with the fossil fuel energy industry, which shrank by 2%. 

No one disputes that the solar business is growing. But as Solyndra found out, growth isn't always enough. You also need scale. Because without scale, you're going to have much more trouble attracting high levels of outside investment — enough to match the many billions that governments like China are throwing at their solar industry. And in Solyndra's case, you need to ramp up sales to the point where you can overcome falling prices driven by Chinese manufactures flooding the market with cheap solar panels. 

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Bullet Points: Gov. Brown kicks the can down the road with Amazon compromise

The governor signed legislation today that makes California's spat with Amazon over collecting e-commerce sales-tax go away — for 12 months. That's not exactly how the governor's office spun it, however. It focused on the voter referendum that was avoided, and also on job creation:

“A prolonged, costly ballot battle is a benefit to no one,” Governor Brown said. “This landmark legislation not only levels the playing field between online retailers and California’s brick-and-mortar businesses, it will also create tens of thousands of jobs and inject hundreds of millions of dollars back into critical services like education and public safety in future years. It’s time for Washington to follow our lead and forge a bipartisan national solution.”

So what does this legislation mean, exactly? I'll break it down into bullet points:

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California Trendwatch: Polarizing jobs, polarizing regions

Earlier this week, the UCLA Anderson Forecast released a report on the national and state economy that contained a rather disturbing trend analysis. Since the financial crisis, two California economies have emerged. On the coast, there's growth. Inland, there's near-stagnation. You can easily see this expressed in the Los Angeles region's unemployment numbers. LA is bad, at at 12.7 percent. But Riverside and San Bernadino counties are far worse, at 15.1 and 14.3, respectively.

The industries that are creating jobs in California are also disproportionately located on the coast. Inland, the blast wave of the the housing bust is still being felt, with industries like construction shedding jobs.

So, we have a polarization of economic growth, the to markedly different sub-states in the CA. Meanwhile, Lauren Dame recently produced this brief analysis of job polarization nationally, for the New America Foundation:

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