President Donald Trump has promised to radically change the trade relationship between the United States and the rest of the world.
President Donald Trump has promised to radically change the trade relationship between the United States and the rest of the world.
Californians are correct to be worried about the future of the Affordable Care Act (ACA) now that the Republicans control both branches of Congress and the White House. But they should be more worried about a looming crisis that neither presidential candidate addressed during the contentious election season...
Donald Trump’s victory a few weeks ago threw the political science world into turmoil.
In California, this year’s bumper crop of confusing and often contradictory ballot propositions are the best example of a bad idea that has rapidly grown out of control (our most recent post, The Tyranny of Direct Democracy, lays out the serious and intensifying problems associated with the state’s Initiative system).
Remember when the biggest thing arriving in your mailbox over the course of the year was the massive old Sears catalog? Times have changed. For many, this year’s heftiest arrival was probably the 2016 California Voter Guide, which came in at over 200 pages.
It sometimes seems like the Inland Empire is the Rodney Dangerfield economy—it just doesn’t get any respect. But given the region’s ascendency as an economic engine, that will likely change.
Humans by nature are inherently discontent—not that this is a bad thing. Much of human progress can be traced to people striving to improve their own personal circumstances.
When the UK voted to leave the European Union, it set off an explosion of media coverage even as equity markets around the globe, including in the United States, dived in the aftermath.
A few weeks ago Governor Jerry Brown suddenly, and seemingly without warning, reached a deal with union groups under which California’s minimum wage will be sharply raised to $15 per hour by 2022. The measure was quickly rubber-stamped by the state legislature and puts California firmly on a path to one of the highest wage floors in the nation.
This year started with a thud rather than a bang as financial markets across the globe saw major selloffs.
The good news is that El Nino came back in 2016 bringing with it much needed rains and a snowpack that is already well above normal.
As we kick off 2016 here at No Nonsense Economics it’s the perfect time to give a nod to the ‘official’ start of the presidential election year. This week’s Iowa caucus has once again raised eyebrows – and hackles.
It’s that time of the year again. Not the holiday shopping season—I’m referring to the rampant speculation over what might happen at the next bi-monthly Federal Reserve (Fed) board meeting on December 15 and 16.
As the tech sector continues its robust expansion, concern over whether the economy is in another bubble and speculation about when the next recession will hit, has deepened.
Advocates pushing for both education and immigration reform in the United States often invoke the ‘needs’ of the U.S. labor market in making their pitch.
Although immigration has been a leading and controversial issue in recent presidential primary campaign debates, a lesser-known part of the nation’s immigration policy has been extended with barely a notice.
Between California’s odd summer storm, rising seawater temperatures, and muggy summer, it’s pretty clear that the El Nino weather phenomena is starting to form out in the Pacific Ocean.
There has been a lot of ‘bubble’ talk lately. Sure, there is the lunatic fringe—such as Ron Paul’s online interview about the coming crash of the U.S. currency, or Jim Rickard’s dire warnings of the impending 25-year depression conveniently laid out in a $25 hardcover book ($13.99 for the Kindle edition!).
Here in Los Angeles, the first thing visitors learn is that our public transportation system won’t get them anywhere. The second thing they learn is that, according to legend, Henry Ford is the reason why.
Not long ago I wrote a short piece here on No Nonsense Economics noting that the current water situation in California should more aptly be named a ‘water shortage’ rather than a ‘drought’, the difference being that a drought is a water shortage with significant negative economic consequences.
Well, we recently went through the annual process of moving our clocks ahead an hour for daylight savings, and once again, the whole process has come under attack.
EDITOR'S NOTE: This post was co-authored by Christopher Thornberg
Governor Jerry Brown announced in his recent budget proposal that California should stop issuing school construction bonds. This came as a bit of a surprise to many.
If you haven’t caught the news, which would be tough given recent press exposure, it looks like the ongoing conflict between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) has finally come to an end.
For the first time ever, we now have a detailed picture of California consumers and how their expenditure patterns compare to consumers in the nation overall.
EDITOR'S NOTE: This post was co-authored by Christopher Thornberg
Much noise has been made over the years about California’s unfriendly tax environment. But an ongoing mantra at Beacon Economics is that California is not so much a ‘high’ tax state as a ‘dumb’ tax state.
Oh what a year 2014 was. Not so much for what actually happened – all said and done it turned out to be a pretty good year, in a relatively ordinary sort of way.
There is a big difference between analysis and advocacy. If you are an anlayst, you start with a question and try to find an answer.
EDITOR'S NOTE: This post was co-authored by Christopher Thornberg.
One of the closest races in November’s mid-term election in California was for the normally obscure post of State Superintendent of Public Instruction.
EDITOR'S NOTE: This post was co-authored by Adam Fowler.
So the midterm election is finally over and, as the pollsters predicted, it was a big win for the Republicans.
It’s a cliché to point out that we live in the era of big data – from piles of personal data collected by the web geniuses at Google and Facebook to financial data compiled by credit rating agencies to the new government sponsored economic databases open to use by any number of firms including Beacon Economics.
California’s housing markets have been enjoying double-digit price gains for several years now – and we’ve been celebrating that change as a sign of recovery after suffering huge losses during the recession.
In recent months California’s news has been filled with stories about the state’s water situation, many of which lead with declarations such as “California’s crippling drought,” “the state’s devastating drought,” or similar rhetoric.
JP Morgan did it. Citibank did it. Now Bank of America is about to do it as well—pay the U.S. government a whopping fine for their role in the subprime mortgage disaster and the financial market meltdown that followed.
Over the last few months, the International Longshore and Warehouse Union and the Pacific Maritime Association have been negotiating a new contract that will cover nearly 20,000 dockworkers at 29 West Coast ports...
EDITOR'S NOTE: This post was updated on June 19, 2014 to include newly released and revised data from the U.S. Bureau of Economic Analysis.
You don’t hear many people talking about how great California’s manufacturing industry is doing. In fact, it’s regularly called out as an industry in demise in the state. How then do we account for the data – which shows that over the past decade, California’s manufacturing industry has been one of the state’s primary engines of economic growth?
EDITOR'S NOTE: This post was co-authored by Dustin Schrader.
If you haven’t caught the news, there is a new bill floating around Sacramento that attempts to deal with the affordable housing crisis in California.
Wow, I’m not feeling too good lately about what’s happening with the economy in California and its regions.
If you’ve been following California’s budget news lately, you’re probably aware that the state achieved a sort of budget surplus this year. I say ‘sort of’ because while it’s true that state revenues came in modestly higher than expenditures, the gap doesn’t come close to covering our underfunded public pensions, leftover debt from the last few years of deficits, and deferred maintenance on decaying infrastructure.
A recent, well-publicized report on the Los Angeles economy paints a relatively dire future picture of the City, and in part, of the Los Angeles County region as a whole.
Newly revised benchmark estimates of employment in California paint a completely different picture of the state’s economic recovery than has previously been reported—one that shows California has not been trailing the nation in job growth, but has been leading it.
Wealth and income inequality has been in the news a lot this past week. Why an issue that has been a growing problem for so long has suddenly become the topic du jour in Washington DC is unclear to me—but I am glad it is finally rearing its head so publicly.
Throughout 2013, I spent a good portion of my time here on No Nonsense Economics bashing far rightwing views that grossly exaggerated both the danger of the Federal deficit and the positive economic value of tax cuts.
Well, it’s that time of year again, and I’d like to think I was a good little economist in 2013. I guess that means it’s time for my Christmas wish list, although I’m sure there are more than a few folks who think I deserve less than a stocking full of coal!
You may not have noticed, but California managed to dodge another regulatory bullet when Governor Brown recently decided to veto AB1229—a bill by Assemblymember Toni Atkins that would have made “inclusionary housing” part of the entire California housing landscape.
The expansion of the Panama Canal has prompted a lot of concern about the future of not only the Ports of Los Angeles and Long Beach but also Southern California’s logistics sector, which serves these maritime gateways.
Together, the Ports of Los Angeles and Long Beach handle approximately 40% of all inbound containerized trade entering U.S. seaports.
Five years ago, Lehman Brothers filed for bankruptcy. The collapse caused the markets to swoon and billions of dollars in taxpayer support was handed out. I remember it well because in many ways it was the final vindication of the warnings I had been giving over the previous two years, after I had left UCLA’s Anderson Forecast and started Beacon Economics.
California has experienced negative domestic migration in recent years. The increase in the number of residents moving out of the Golden State to other places in the United States is often blamed on California’s high personal income taxes.
Recently, on July 31st, the U.S. Bureau of Economic Analysis (BEA) released it comprehensive revisions of the National Income and Product Accounts (NIPA). This is a process that occurs once every five years, and incorporates the results of the most recent Economic Census and benchmark input-output accounts.
This new revision of NIPA has brought about major changes in the way real output is measured across the U.S. economy.
Although long overdue, moves to reform the California Environmental Quality Act (CEQA) are finally gaining traction among lawmakers on both sides of the aisle.
The California Department of Finance (DOF) and the state’s Legislative Analyst’s Office (LAO) each recently published new, and somewhat conflicting, revenue forecasts for the next few years.
Since 2000, the populations of Riverside and San Bernardino Counties have been booming. From 2000 to 2012, Riverside County’s population grew by 46.8%, the fastest growth rate of any California county, while the population of San Bernardino County increased by 21.8%, the eighth fastest growth rate.
Beacon Economics was surprised recently when a speech I was scheduled to give was cancelled a couple of weeks before the event. We later learned that my talk was called off because at least one or two of the organizers were upset about my opinions on Proposition 13.
First quarter GDP data just came out and growth is up—2.5% (seasonally adjusted) compared to a paltry 0.4% in the fourth quarter of 2012. Yet despite the better number, many economists still say the first quarter is a disappointment because it came in below expectations.
Things are about to change drastically for everyone involved in California’s public pension system, including CalPERS, employers, employees, and taxpayers.
The sudden surge in the housing market here in Southern California has caught most people by surprise—and is already starting to cause worry in some circles.
Since the 2010 enactment of the Patient Protection and Affordable Care Act (PPACA), individuals and businesses across the nation have been planning for potential economic uncertainties related to the historic law.
In Part 1 of this series I discussed how the 1999 passage of Senate Bill 400, which increased state workers’ pension benefits, represents one of the main reasons for today’s skyrocketing pension liabilities among state and local governments in California.
Any reasonable person understands the need for a strong, if limited, government in a modern economy. Setting the rules that guide market behavior, enforcing property rights, and maintaining a basic social safety net are essential lubricants for economic prosperity.
NOTE TO READERS: This is the first in a three-part posting on California's pension crisis. Please look for additional posts over the next few weeks.
Why do so many state and local governments seem to be in a constant struggle to balance their budgets? One reason is the volatility of public revenue streams.
As we make our way through the holiday season, I want to ‘wrap’ up my posts for the year with a challenge to the conventional economic wisdom regarding gift giving.
I was gratified the other morning to hear a long report on NPR’s Morning Edition pointing out what we have been saying here at Beacon Economics for some time—that the fiscal “cliff” isn’t any such thing.
If you managed to peer through the blizzard of news reports about the presidential election, you may have heard that there is another country out there that is also going through a major change in leadership—albeit one with far less public scrutiny about the process than ours.
Why do we allow empty promises of economic gain and preposterous assignment of business cycle blame to cloud the issues that are truly important in the race for the White House?
In the short time since I last posted an insight, the issue of ‘accuracy vs. bias’ has raised its head yet again. Last time it was about something as broad as a debate on the national unemployment rate. This time it is very specific—namely an attack on Beacon Economics’ study of the potential economic impact of raising the minimum wage in the City of San Jose.
Last Friday’s relatively positive national employment report from the U.S. Bureau of Labor Statistics (BLS) elicited cries of foul play from the far right – started by none other that Jack Welch, the former head of GE who tweeted that the books were being cooked to help President Obama following his disastrous debate with Mitt Romney. Numerous other right wing pundits quickly jumped on board and started building on the story.
This November, as usual, California voters will face a slew of state propositions at the ballot box. One deserves a closer look and, we believe, should be passed. Prop. 39 would change the current system that allows inter-state corporations a choice in how they calculate their liability for California corporate taxes. If passed into law, Prop 39 would enact a system where a company's income tax liability would be based solely on its sales in California. And then for the first five years, about half of the estimated $1 billion in additional annual revenue would be dedicated to energy-efficient projects at schools and other public buildings.
The upcoming presidential election will likely go down in history as the great Super Pac race—given the tremendous amount of cash the campaigns are taking in and starting to spend.
Given the rhetoric coming from supporters of the healthcare reform bill following the Supreme Court’s upholding of the ‘Individual Mandate’, it may be hard to believe that in the larger scheme of things, Obamacare is no cure-all for the healthcare crisis.
Dennis Meyers of the California Department of Finance has recently been writing a series of articles arguing that the state’s economy is not in the midst of a massive economic collapse as some have characterized.
A few days ago President Obama made what the press have been referring to as a major ‘gaffe’ when he said during an interview that “the private economy is doing fine.” Republicans pounced, painting the President as ‘out of touch’ and declaring the statement symptomatic of his inability to lead the nation out of its severe economic crisis.
Each fiscal year, California goes through several rounds of budget estimates for revenues and expenditures. At the various stages of the budgeting process, several parties are involved in the forecasting process.
The California economy is in the middle of a moderate recovery and California housing numbers have improved during the early phases of the spring home buying season.
Jon Coupal’s new op-ed in the Orange County Register is an understandable response by the President of the Howard Jarvis Taxpayers Association to what is starting to happen in California: The growing recognition that Prop 13 was a terrible idea that has had far more negative consequences for the state’s economy than positive – and that it needs to go.
I was recently invited to Sacramento to testify in front of the California Assembly Revenue and Taxation Committee about tax reform in the state – specifically Prop 13, the limitation on property tax increases enjoyed by current property owners.
Back when the housing market was booming, Wall Street firms were handing out record bonuses, and unemployment had fallen all the way to 4.5%, I was regularly being called “Dr. Doom” by the various groups I spoke to, and by members of the media who called me to get an ‘alternative’ opinion.
Last week Ener1, a U.S. car battery manufacturer, filed for bankruptcy protection. This would not normally make headlines, except for the fact that a subsidiary of the company received funds from the U.S. Department of Energy in 2009 – and of course, it’s an election year.
Governor Jerry Brown recently announced a plan to fix California’s budget issues by raising income taxes on high-income earners and increasing the state sales tax. These measures will be presented directly to voters in an initiative on the November ballot. And the rhetoric on both sides will surely be theatrical.
There are plenty of fear-filled stories driving the 24-hour news cycle these days: Double dip recession, Euro zone financial collapse, failed super-committee debt reduction efforts.
After months of deliberation, the Congressional super committee created to reduce the Federal deficit over 10 years finally acknowledged its failure to reach an agreement at the time the deadline was reached last week.
Gee... this had to be one of the least surprising political outcomes in quite some time.
This week, the Legislative Analyst’s Office (LAO) released an updated economic and revenue forecast for the state of California. Overall, Beacon Economics has found little to disagree with in those revenue projections for the 2011-12 and 2012-13 fiscal years. In total, the LAO is forecasting that the State will end the 2011-12 fiscal year roughly $3.7 billion lower than estimated in the Budget Act. The entirety of this variance is explained by the $4 billion in additional revenues that were attached to the Budget Act and Automatic Triggers, which has failed to materialize.
Striking down a controversial rule at the Port of Los Angeles was another triumph of nasty politics over good policy.
Cuts in public spending and tax cuts for individuals at any level of income are not going to cure what currently ails the U.S. economy.
With all the market turbulence, and mediocre economic reports that have come out lately, that old specter ‘the Double Dip’ is yet again being splashed across the headlines. And along with the headlines have come the odds makers—the folks in my profession who like to attach probabilities to economic events.
It has been a wild ride in the equity markets over the past few days. The 5-day volatility index has hit highs that were topped only during the days following Lehman Brothers’ collapse, and Black Monday in the late 1980’s. Even after yesterday’s rally, the markets are roughly 10% to 15% off from where they were in July of this year. What comes next, we will have to wait to see.
Reaction to the latest news on home prices proves that, when it comes to housing, hype trumps logic. These price declines are not terribly troubling or surprising, and flat or mildly falling home prices can be a good thing in California. Why? Because it would allow business and government alike to lower costs.
Press coverage was intense through the weekend as the White House and Congressional leaders worked to pull together a budget compromise to allow the debt limit to be raised.
Today the Bureau of Economic Analysis released new and revised estimates of U.S. GDP. The release told us some things we already knew. It also changed the picture of what happened over the course of the recession.
Interpreting news about the economy is tricky. What you see and hear on the surface may not accurately represent what is really going on underneath. Economic data is filled with unexplainable ups and downs, and can be easily misinterpreted or manipulated to support a particular point of view. No Nonsense Economics is a new feature from Beacon Economics where we hope to provide clear, relevant insights about what is happening in the economy - without the hype or hyperbole that seems to dominate the headlines.