Demonstrators gather in Downtown Los Angeles for the "Occupy L.A." protest
The Occupy movement has spread its influence so far now that it's inappropriate to limit it to just Occupy Wall Street. Some common cause is also emerging. Occupy Wall Street, which started out on the lawn in front of City Hall, has declared its intent to march on Los Angeles' financial sector this weekend. This is not Burning Man. This is a movement with a mission.
I know, I know — You didn't even know LA had a financial sector, right? It does, but more importantly, the Occupy movement is now focusing on a coherent foe. "We are the 99%" has decided that they're protesting the 1% — and by that they mean the financial elite. Those who control most of the nation's wealth and through their leverage with high finance, have plunged the U.S. and the world (Hello? Greek debt default?) into chaos and misery.
Vehicles pass by a darkened Staples Center on October 10, 2011.
As my new KPCC colleague Eric Richardson reported this morning, NBA commissioner David Stern has decided to cancel the first two weeks of the season, in the face of an ongoing labor impasse. This is going to cost money, in terms of lost ticket sales and the spending that people engage in when they attend games. If more games are cancelled, the costs are going to be significant.
Here's the math, for the sacrificed Lakers and Clippers games at the Staples Center, assuming the cancellation extends throughout the rest of 2011:
- $30 million in ticket sales
- $40 million for everything else
- Grand total: $70 million
As Richardson points out, the $30 million is less relevant than the $40, because the latter is money that won't go to Downtown businesses (the $30 million represents "sunk" costs — money already expended that can't be recovered). The $40 million will get spent elsewhere in the city.
Netflix CEO Reed Hastings has stuck a fork in Qwikster, the briefly lived spinoff of the company's DVD rental business.
Netflix has backtracked on plans to spinoff its DVD-rental business into a separate company, Qwikster — a bad move that has been resoundingly ridiculed everywhere bad moves can be resoundingly ridiculed. The cost is that CEO Reed Hastings now looks like a nincompoop, whereas before the Qwikster debacle he looked like a man who knew the future.
That's part of the problem, of course. Hastings grasped that the DVD business wasn't sustainable over the long haul. The future lay with online streaming. But to build that business, Netflix needs to license more content from TV and movie studios. The game plan was to raise subscriptions to generate the needed revenue and begin to phase out the old DVD business.
Hastings has been speaking directly to customers via Netflix's blog. His message is small miracle of concision in the ongoing hell that has been the needless messing-up of once-beloved, now-embattled Netflix:
Mario Tama/Getty Images
Declining incomes plus frugal shoppers equals a whole new ball game for retailers.
Are we starting to see some kind of paradigm shift in the way people earn and spend? I'm far from sure, but in the last week and a half, I've seen a few signs that's something's afoot. Median household income has evidently declined since the end of the recession, while consumers have reduced their spending — and may not increase it any time soon.
Reuters Felix Salmon offers a quick summary of a some U.S. labor data data now being processed by Sentier Research. You can easily see what the really troubling thing is: "In dollar terms, median household income is now $49,909, down $3,609 — or 6.7% — in the two years since the recession ended. It was as high as $55,309 in December 2007, when the recession began."
This is why the "recovery" feels like anything but. Meanwhile, the Wall Street Journal took a look at the new frontier of frugality:
Chip Somodevilla/Getty Images
Calif. Republica Rep. Darrell Issa has some questions for Energy secretary Steven Chu.
California's own Darrell Issa has started asking some tough questions in the aftermath of the Solyndra bankruptcy and the ensuing fracas with the Department of Energy's loan-guarantee program. This is from Jake Tapper at ABCNews:
Issa…chair of the House Committee on Oversight and Government on October 7 wrote to Energy Secretary Dr. Steven Chu to see just what other problematic loans might exist.
Specifically, Issa is seeking “additional information regarding the loans approved on the final day of the program,” ones made to First Solar Inc, SunPower Corp., and ProLogis Inc.
“Did DOE have an independent audit of First Solar, SunPower, or ProLogis conducted prior to finalizing loan guarantees for these companies on September 30, 2011?” Issa asked in the letter.”Does DOE have any ongoing concerns about the financial viability of First Solar, SunPower, or ProLogis? In their respective loan applications, did First Solar, SunPower, or ProLogis disclose their cash reserves?”