Explaining Southern California's economy

Is Jerry Brown's tax deal a win for small business?

At Fox & Hounds Daily, John Katabeck of the National Federation of Independent Business thinks so:

California's tax policy currently rewards out-of-state corporations for selling their goods in California but keeping their manufacturing and employee bases elsewhere. These companies can play games with their taxes year after year robbing the state of critically-needed funds and denying hard-working families of good-paying jobs.

Small business desperately needs all the help it can get during these tough economic times to ensure they can keep their doors open and operate in their communities. This measure puts California on a level playing field with other states like Texas and New Jersey where similar policy was put in to place by Chris Christie and Rick Perry.

There is however a legitimate question about whether small businesses are actually going to become the engines of job creation that everyone seems to think they can be. This post from Business Insider is fairly mean-spirited, but it makes some solid financial points:


Reportings: Blackout in San Diego; Mitt's plan; Big Tobacco; defending Bernanke

What caused the massive San Diego-area blackout? Seems that a worker in Arizona may have, um…pulled the plug. (KPCC.org)


Mitt hands out the homework. Still working my way through Romney's 160-page "Plan for Jobs and Economic Growth." (mittromney.com)


Treasury Secretary Tim Geithner makes the case for a catch-up plan on monetary stimulus. "The repair and restructuring of financial systems has to be accelerated where it has lagged. Countries that forced more capital into their banking systems early in the crisis are better placed to support the recovery. Those that did not should move more forcefully now." (Dept. of Treasury)


Big Tobacco doesn't like Jerry Brown's new tax deal. "As word of the accord spread through the Capitol, tobacco lobbyists were camped outside the State Senate chambers, trying to persuade Republicans there to torpedo the deal." (LAT)


Snap reaction to the Obama jobs speech: Infrastructure bank?

Nothing too deep dish here. That can wait. But just quickly, President Obama did dangle a big carrot in front of Southern California voters with his $447-billion jobs plan: infrastructure. The Big "I." That's roads, bridges, airport improvements — and also schools, which Obama emphasized in particular. I suppose I could include energy infrastructure with that, which matters a lot at this very moment to San Deigo, where reportedly a million people have lost power.

What was unclear from the President's speech is whether his bill will call for an infrastructure bank. It sounds to me like it will go beyond just transportation, exceeding a $6-billion-over-six-years outlay that the GOP transport bill already includes, getting closer to the $30-billion I-Bank Obama has talked up before and that I've both blogged and discussed.


How to save the U.S. Postal Service: bank the 'unbanked'

In the last week, we've all learned just how dire the outlook is for the U.S. Postal Service. The Postmaster General, Patrick R. Donahoe, has been pleading for federal assistance in helping the USPS overcome not just a problem with meeting an impending $5.5 billion pension payment, but also a looming $10 billion fiscal deficit.

The post office is such a fixture of American life that the story was immediately picked up by pretty much everybody. On the left-hand side of the political spectrum, Tom Hartmann argued that Republicans have always hated the post office and that this latest crisis is a manufactured one to enable mail delivery to be privatized. On the right, GOP Congressman Darrell Issa of California had already introduced legislation in June to implement "sweeping, structural reforms" of the USPS.


Econ 474: Is Social Security a Ponzi scheme?

If you followed my live-econoblogging of last night's Republican debate at the Reagan Library, you know that Gov. Rick Perry of Texas refused to back down on his assertion that Social Security is a "Ponzi scheme." Bear in mind that Perry has been on the record with this position for a while, but most of the post-debate punditry focused on whether it was politically wise for him to so stridently restate the view. 

Perry was clearly playing to his base — and maybe even providing some cover for his lack of a comprehensive economic plan compared to Mitt Romney, who laid out his jobs plan in detail prior to the debate. Regardless, he's certainly not the first person to call Social Security a Ponzi scheme, but he's the latest and arguably most prominent figure to completely misrepresent how Social Security actually works.