This chart, from the just-released UCLA Anderson Forecast, tells a very clear story about both why California's economy is so bad and what it needs to do to make it better (Sorry I can't make the actual chart a bit more clear!). We're creating jobs in health care, tourism, and scientific and technical services. We're losing jobs in construction, retail, and government. Everything else is pretty much flat.
Here's what that means. California needs to play to its strengths and be strategic about its future. We have a good shot at being the global leader in keeping people heathy longer and in caring for not just our own aging population, but the aging populations of other countries, especially China.
People still like beaches, sunshine, and Disneyland. Probably the Golden Gate and wine country, too.
So the Federal Reserve, to no one's surprise, is going to adjust its portfolio, selling short-term debt and buying long-term debt in a effort to drive interest rates down below the surface of the sea and involve mermaids in the magical business of monetary policy and the recovery of the U.S. economy. They're calling it "Operation Twist," after a similar maneuver that was last executed in 1961, back when Chubby Checker had the kids a-twistin' like Ben Bernanke after a barbecue lunch with Rick Perry in Lubbock. (MSNBC actually tracked down Chubby for his perspective, and he provided the in-fact quite good advice to just spend money).
Even the Fed, it turns out, can't get enough of the 'Mad Men' era. What's next? Let's hope it's not "Operation Cuban Missile Crisis."
Operation Twist Again probably isn't going to perform miracles — economists figure it could add slightly to GDP growth and bring unemployment down marginally. But it's disappointing that our economy is in such a downer that our Central Bank has to set the Wayback Machine to the Kennedy Administration to come up with its voodoo — and that American culture has gotten so bad at generating cool new names for dances that the Fed has to reference a year when the Dow started at 610 and finished at 731. Not that we'll headed for those numbers again. But I'm just saying'…
Full Tilt Poker wasn't a Ponzi scheme. It was just a troubled bank! "The issues at Full Tilt should be likened to that of a problematic bank, rather than an illegal investment scheme, according to Jeff Ifrah, an attorney who represents the company in related litigation and is the personal attorney of Chief Executive Raymond Bitar." (WSJ)
China may be a great trading partner for the U.S., but all that trading hasn't been good for California jobs. "California was the hardest hit, losing nearly 455,000 jobs from 2001 to 2010 due to trade with the Asian giant." (LAT)
Say it ain't so! R.E.M. calls it quits. It's the end of the world as we know it, bit Sasha Frere-Jones thinks it took too dang long: "R.E.M.’s break-up is classy, and a decade late—but who cares? Their good stuff is durable and gorgeous, and they pulled off a trick that indie rock has struggled with ever since: How do you stay weird if you also like singable songs?" (The New Yorker)
Posting will be light today, as I'm attending the Forward Motion symposium on mobility and urban transit at Art Center College of Design in Pasadena, moderating and co-moderating some panel discussions. The focus of the symposium is to bring mobility experts from the U.S. and Canada together to talk about how design can provide some solutions to the contemporary problem of moving people around.
This is the kind of conversation that engineers, economists, politicians, and policy wonks have all the time. But the design community brings its own unique perspective, mainly by being able to think beyond urban transportation as a project-by-project challenge. Designers are good at seeing both the big picture and how all the moving parts of the big picture fit together. A lot of times, they can offer a "third way," between government and business solutions that may have been tried, successfully and unsuccessfully, dozens of times. They "think different," indeed!
Breaking the law of supply and demand? Fewer grapes in California's wine industry, but not higher prices. And…better business? "Despite the challenges, the report says 71 percent of respondents believe the economic health of the wine industry would show improvement in the coming year." (AP)
The split between the economies of coastal and inland California is screwing up the pricing of the housing market. "In coastal areas, the state needs lower housing prices that will draw in buyers and keep them from leaving for states where housing is cheaper…But in inland areas where housing prices have dropped and left many homeowners underwater and in debt, houses are too easy to come by." (NBC PropZero)
Is education the key to a more robust recovery? "California's labor market recovery is being slowed by a serious “skills mismatch.” The sectors leading the recovery generally require higher levels of educational attainment, but residents without a college degree made up more than 75 percent of the state's unemployed in 2010." (CVBT)