No surprise that data shows incomes are falling

Census data shows median household income os down nearly 4% and more people are living in poverty.

From the LA Times:

Census data show falling income

The findings indicate the scope of the recession — the percentage of people living in poverty has reached an 11-year high.

By Kate Linthicum and DeeDee Correll

September 30, 2009

Reporting from Los Angeles and Denver - In 2008, the median household income in the United States plummeted 3.6% from the year before, and the percentage of people living in poverty soared to an 11-year high, recently released U.S. Census data reveal.

Economists say the bleak news — which they blame on the slew of layoffs that have accompanied the economic downturn — is significant, if not entirely surprising.

“The current recession has eliminated the gains that have been made in the last 10 years or so,” said Lee Ohanian, an economics professor at UCLA. But, he said, “this is the pattern you typically see in a recession.”

The statistics don’t surprise people like Aura Lopez either.

“It is very difficult to get by always, but it is especially difficult now,” said Lopez, 28, a Guatemalan immigrant in Los Angeles who is unemployed. She said she used to send $450 every month to her two young daughters in Guatemala, but these days, she sends nothing.

The data show the devastation of the recession through various economic indicators, such as the real median household income. In 2007 it was $52,163. A year later it dropped to $50,303, the lowest level since 1997.

The nation’s poverty rate, meanwhile, rose to 13.2%, the highest level since 1997.

The recession is hitting many people, the ones who are least able to withstand economic hardship the most. No surprise there.

Paul

Environmental regulation from EPA could impact utility companies

As Congress considers greenhouse gas reduction strategies, the Environmental Protection Agency targeted the largest emitters with new rules.

EPA proposes regulations on biggest greenhouse-gas emitters

The Environmental Protection Agency’s rules would apply to large-scale industrial sources of the heat-trapping gases, such as power plants, factories and oil refineries.

By Jim Tankersley

September 30, 2009 | 1:23 p.m.

Reporting from Washington - The Environmental Protection Agency announced plans today to regulate greenhouse gas emissions from power plants, factories and oil refineries — a warning shot to Congress that if it does not move to curb global warming, the Obama administration will act on its own.

The proposed regulation would apply to large-scale industrial sources of the heat-trapping gases but not to smaller sources, such as new schools, as some critics of EPA action had feared. It will force new — or substantially modified — industrial emitters to “demonstrate the use of best available control technologies and energy efficiency measures” to minimize greenhouse-gas emissions, according to the EPA.

That approach mimics how the EPA forces power plants and factories to install “scrubbers” and other means of limiting many types of air pollutants.

But it’s unclear exactly how it would apply in the case of greenhouse gases, which scientists blame for climate change . Researchers are still studying and have yet to deploy a commercial-scale method to capture and store carbon emissions from coal plants, for example.

EPA Administrator Lisa Jackson will detail the plans in a speech this afternoon at Gov. Arnold Schwarzenegger’s Global Climate Summit in Los Angeles.

As long as the regulations are applied fairly to each and every utility, refinery and polluter, California companies, and even our local utility company, should weather these regulations without a significant impact on our bills.

Healthcare update as of 9/30/09

From the LA Times (again):

Key Senate panel votes down ‘public option’ for healthcare

Centrists side with Republicans in a blow to advocates of a government program to compete with private plans. The issue will likely be revisited on the Senate floor and in committee with the House.

Police arrest a man calling for universal healthcare in a protest at an insurance office in New York City. Advocates say the “public option” isn’t dead yet. (Don Emmert / AFP/Getty Images / September 29)

By Janet Hook

September 30, 2009

Reporting from Washington - Underscoring the divisions within their party, Democrats on the Senate Finance Committee on Tuesday split over a key issue in the healthcare debate as centrists teamed with Republicans to reject creation of a “public option” for medical insurance.

The committee voted 15 to 8 against establishing a public program, after a sometimes emotional debate that stretched over half a day, revealed tensions between liberal and conservative Democrats and laid bare the chasm between the political parties over how to repair the nation’s troubled healthcare system.

It was the biggest setback to date for liberal Democrats, but did not kill the possibility of a public option being included in final legislation. Liberals argue that such a plan is needed to increase competition among insurance companies, rein in costs and guarantee affordable coverage for all Americans.

Backing an amendment by Sen. John D. Rockefeller IV (D-W.Va.), liberal lawmakers were rebuffed by five centrist Democrats, some of whom argued that such a plan would bankrupt hospitals in rural areas, while others expressed concern that it would hurt the private insurance industry that is important to their communities — an industry that also contributes to their campaign treasuries.

The saga continues.

Paul

Governor’s task force lays out new tax strategy

The Governor backs the proposals to change personal income tax rates and do away with sales tax in favor of a California version of the Value Added Tax.

Only Schwarzenegger seems to like it.

This from the LA Times:

Schwarzenegger seeks overhaul of state tax system

The governor calls a special session of the Legislature to consider a plan to cut the number of income tax brackets and replace retail sales and corporation taxes with a new business tax

Reporting from Sacramento - Gov. Arnold Schwarzenegger endorsed a plan Tuesday to radically alter the way Californians pay taxes, calling on state lawmakers to make dramatic changes before year’s end to take the state off the “roller coaster ride” of boom-and-bust budgets.

The governor called a special session of the Legislature to consider proposals in a 415-page report from a government commission that spent nine months studying ways to modernize the state’s tax system.

Among the ideas from the bipartisan Commission on the 21st Century Economy presented in the report and draft legislation are dramatically reduced income levies and a revolutionary new business tax that would replace existing retail sales and corporation taxes.

“I would sign it immediately,” Schwarzenegger declared at a Capitol news conference. “It’s an unbelievable compromise between Democrats and Republicans.”

Also from the Times:

Tax commission report falls flat, but it’s a start

By Eric Bailey

Proposals to eliminate the sales tax and levy an experimental business tax are said to have ‘zero percent’ chance of passing. But an overhaul is needed, and the ideas may provide a jumping-off point.

Reporting from Sacramento - It was to be the sort of big-game victory that California political leaders rarely pull off. Gov. Arnold Schwarzenegger and legislative chiefs set out to shake the roots of the state’s tax system to spur the business climate and resuscitate the treasury.

But as the commission they formed for that purpose prepares to release its final report this week, business leaders are grumbling, labor unions have turned wary and once-bullish lawmakers are backing away.

There are definitely some concerns from people who are not at all sure how it will impact their business, their income or how they do business. Will this make California more competitive? Less? Have no effect at all?

I hope we have some thoughtful analysis so careful consideration can be given this astonishing proposal.

Paul

David Lazarus on healthcare

The LA Times‘ Lazarus consistently makes me think about issues in a different way. 

Let’s dive into a healthcare insurance pool

The employer-based system isn’t working but would be preserved under the Senate reform proposal. It’s time to try something new.

By David Lazarus

September 20, 2009

The compromise healthcare reform proposal unveiled in the Senate last week accomplishes a number of things. But its main purpose is to maintain employer-based insurance plans as the bedrock of the healthcare system.

In this way, the bill by Sen. Max Baucus (D-Mont.) would ensure that what began as a historical accident ends up as one of the biggest bait-and-switches ever foisted on working Americans.

Since the employer-based system took root during World War II as a way for businesses to cope with a government-imposed wage freeze, the deal has been fairly straightforward: Employers would offer this great benefit as a way to attract and retain workers, and workers in turn would be guaranteed affordable coverage for themselves and their families.

Your basic win-win situation.

But things have radically changed as healthcare costs continue to soar and as employers cut back on coverage, or require workers to shoulder an ever-growing share of expenses. Or both.

Lazarus’ solution (from later in the piece):

Here’s what I propose instead:

Rather than having employers cut deals directly with insurers, they should contribute to a pool of funds that would be used for all U.S. residents to buy private insurance. The pool could be administered by the government or by a nonprofit organization.

Each employer’s contribution would be defined by a variety of factors, including number of employees and annual revenue.

I’ll leave it to more astute number crunchers to determine what the range of those contributions might be, but I’m fairly confident they’d be more than the measly $400-per-worker fine included in the Senate bill for any company with more than 50 employees that drops health coverage.

For their part, private insurers would offer a menu of standardized plans that everyone could choose from. Employers would still be able to woo the best and the brightest by supplementing workers’ base plans with premium add-ons, such as more comprehensive dental or vision care.

If a worker becomes unemployed, coverage would still be maintained for, say, up to six months with the assistance of a separate fund to which large employers would also contribute, just as many now contribute to the Pension Benefit Guaranty Corp., a government-run entity that protects people’s pensions.

After that, you’d have to shop for a new plan in the exchange envisioned by most reform plans in Congress, by which insurers would theoretically compete with affordable forms of coverage.

An alternative to consider. Certainly more than we’re getting out of Washington.

Paul  

 

Another call for a Constitutional Convention to address California’s problems

This time it’s the LA Times:

Taming the California beast

So many problems, so many competing interests — only rewriting the Constitution will do.

It’s not always easy to identify the tentacles that are strangling California and keeping it from fulfilling its promise for 38 million residents. Who wrecked our public school system, which was once the envy of the world? Who ruined the nation’s premier network of highways, the most ambitious and reliable water delivery system, the best state parks? Who killed the spirit of opportunity and innovation that once made California the headquarters for banks and oil companies, for makers of surfboards and electric guitars, for computers and communications?

Even if we can’t identify the culprit, people here intuitively know that some kind of monster has wrapped itself around the Golden State. Well over two-thirds of registered voters said recently that they would vote yes on two key ballot measures to pave the way for a constitutional convention to wrest back control of the state for Californians. 

Reading the entire piece, The Times’ editorial writers make a good case for what we all know: something has to be done to address California’s political malaise. Is a Constitutional Convention the best way to address the political gridlock, budget dysfunction, special interest manipulation and lack of leadership among our state’s electeds? 

Perhaps. I have yet to see another alternative. Leaving it to the people who have been elected to lead California is not working, is it?

Paul

Spending can help, in all sorts of ways

From the LA Times:

Business trips could boost companies’ profits, groups say

Also: Forecast worsens for airline losses, and flu shots might come to LAX.

As the nation struggles to climb out of the worst recession in decades, two reports released this week suggest that increased spending on business travel can help companies profit and put the U.S. economy back on track. (Amy Sancetta / Associated Press)

By Hugo Martín

September 19, 2009

Jump on a jet for that next business meeting and you may be doing more than pocketing free peanuts. You may be helping the American economy.

That is the message from two studies released this week that claim a direct tie between spending on business travel and increased company profits. The conclusions shouldn’t come as a surprise, considering the studies were released by two organizations dedicated to promoting travel, the U.S. Travel Assn. and the National Business Travel Assn.

 

Consumer spending will help, though I am cynical enough to expect the American Fast Food Association (if there is one) would say buying burgers and fries will aid the recovery. 

For me, buying what we always buy from the people we always buy it from HERE IN PASADENA will help our economy. 

 

Paul  

Recession over?

 

Economists at UCLA see indications of recovery. From the LA Times:

Southern California’s vital signs are improving

Data suggest that an economic recovery has begun in the region. But the state’s picture isn’t all bright.

By Alana Semuels and Ronald D. White

September 16, 2009

Signs are increasing that an economic turnaround has begun in Southern California, even as residents and businesses continue to struggle in the worst downturn in decades.

The state’s exports are growing as overseas consumers, especially those in Asia, are demanding computers, electronics and agricultural products from California. Tourists are starting to return to the region’s hotels and beaches. And home prices appear to be stabilizing in some of the Southland’s hardest-hit markets.

“All of the indicators are that the recession is over with, even in California,” said Jerry Nickelsburg, senior economist at the UCLA Anderson Forecast.

Tell that to 12.2% of Californians:

California’s unemployment rate hits 12.2% in August

The rate rose from 11.9% in July, setting a record, but the pace of job losses slowed.

Service Employees International Union member janitors rally in North Hollywood to protest the decision to close the only unionized Toyota plant in the U.S. and the recent layoffs of unionized cleaning staff at the carmaker’s national headquarters in Torrance. (David McNew / Getty Images / September 18)

By Alana Semuels

September 19, 2009

California’s jobless rate set a fresh postwar high in August, rising to 12.2% from 11.9% in July and putting more pressure on the state’s tattered unemployment insurance fund.

Though the state may be in the early stages of an economic rebound, the latest figures underscore what many economists fear: There is no obvious engine of job growth to put California’s more than 2.2 million unemployed residents back to work quickly.

There was some encouraging news in the job figures released Friday by the state Employment Development Department. The pace of payroll job losses has slowed dramatically. California employers slashed a net 12,300 jobs last month. That’s down from 39,000 jobs lost in July and the average of more than 70,000 jobs shed monthly during the first half of the year.

Even in recovery, it will be a long, slow climb to equilibrium. AND we may never return to the booming prosperity of 2007.

Paul

A different twist on energy efficiency

One reason The Atlantic is one of our best magazines. Alternative views and different perspectives can give us reasons to examine long held views.

Forget the solar panels and the rain barrels—if you want to save energy, leave the suburbs.

by Witold Rybczynski

The Green Case for Cities

NOWHERE HAS THE greening message had a bigger impact than in the building industry. Green or sustainable architecture is all the rage—as well it should be, because buildings use a lot of energy. The construction and operation of residential and commercial buildings consume as much as 40 percent of the energy used in the United States today.

The calculation of a building’s total environmental impact must factor in everything from annual energy consumption to how and where building materials are manufactured and the handling of storm water. This requires some sort of rating system, and there are currently more than 40 of them in use around the world. Most, like LEED(Leadership in Energy and Environmental Design), which has become the standard in the United States, award points based on a checklist—daylighting, water recycling, solar panels, bicycle racks, and so on.

Although it is estimated that fewer than 6,000 projects have been certified in the United States in the 10 years since LEED was established, the program has significantly raised public and professional awareness. Yet a checklist approach has drawbacks. It tends to focus attention on unusual features, such as green roofs. Growing grass on a roof is definitely photogenic, but it is not as energy- and cost-efficient as simply painting the roof white (see “The California Experiment,” page 66). And checklists—even weighted checklists—may produce misleading results. Both a suburban office campus and an urban high-rise office building, for example, can receive a high rating. As David Owen points out in his forthcoming Green Metropolis: Why Living Smaller, Living Closer, and Driving Less Are the Keys to Sustainability, in the office campus, people work in sprawling buildings and drive between them; in the high-rise, people work in a compact building, use elevators (which are inherently energy-efficient, since they are counterweighted), and walk to lunch.

Putting solar panels on the roofs doesn’t change the essential fact that by any sensible measure, spread-out, low-rise buildings, with more foundations, walls, and roofs, have a larger carbon footprint than a high-rise office tower—even when the high-rise has no green features at all.

The argument made is simply that traditional suburban development, single family homes on large lots away from amenities and commercial areas have much more significant impacts than high density projects in urban areas. It is interesting to note that AB 32 and SB 375, California’s groundbreaking greenhouse gas reduction and environmental land use regulations actually call for building dense-housing and workplaces in close proximity to each other and transit.

Something to think about as we revisit Pasadena’s General Plan and envision our city’s future.

Paul   

California continues to lead

A terrific article in The Atlantic delineates California’s leadership in environmental stewardship.

ENERGY OCTOBER 2009 ATLANTIC

Busted budgets, failing schools, overcrowded prisons, gridlocked government—California no longer beckons as America’s promised land. Except, that is, in one area: creating a new energy economy. But is its path one the rest of the nation can follow?

by Ronald Brownstein

The California Experiment

AMID ALL THE starpower assembled in the White House Rose Garden on a crystalline afternoon last May, the unassuming gray-haired woman who sat beaming in a prime first-row seat went largely unnoticed. But if not for California state Senator Fran Pavley, none of the other people who had gathered might have been there at all. In 2002, as a first-term member of the California Assembly, she had steered through the nation’s first law requiring automakers to reduce the tailpipe emissions of carbon dioxide and other gases linked to global warming. Fourteen other states indicated they planned to adopt the California law. But George W. Bush’s administration refused to provide the federal waiver the state needed to proceed, and the major auto companies added new hurdles by challenging the state law in court. In January 2009, when Bush left office, the California plan was as stuck as a commuter caught behind a rush-hour pileup.

With the change of administrations, though, the road suddenly cleared. Candidate Obamaendorsed the California initiative, and once he became president, his aides negotiated an agreement between the state, environmentalists, the auto-workers union, and the leading auto companies to use the California law as the basis for nationwide regulations to dramatically improve the fuel efficiency, and reduce greenhouse-gas emissions, of all new cars and trucks. The result was the unprecedented, almost unimaginable, scene that unfolded, fittingly enough, under perfect California weather that May afternoon in the Rose Garden. On the podium, President Obama stood flanked by senior executives from 10 global auto companies (including eight that the U.S. government did not own). In the chairs arrayed across the lawn, environmentalists mingled with auto-industry lobbyists, and Californians who had led the fight for stronger fuel-economy standards, like Pavley and Republican Governor Arnold Schwarzenegger, wedged in beside Michigan legislators who had fiercely resisted them. Obama didn’t acknowledge Pavley by name, but he made clear that without California’s “extraordinary leadership,” the landmark environmental agreement he was announcing might never have been reached. Californians “have led the way on this,” Obama said, “as they have in so many other efforts to protect our environment.”

We lead the nation in reductions of carbon emissions and energy efficiency. Let’s hope when the federal government passes environmental legislation is recognizes our state’s gains and doesn’t penalize us.

It is nice to see an article that lauds our state’s leadership in something positive.  

Paul