Category Archives: Economy

Listen to the Workers, They Need Affordable Housing

Cynthia Carranco, 16, must do her homework on the seats of dining room chairs because there is no other place to write in the three-bedroom house shared by nine people.

She knows her situation is not unique: A friend sleeps in a walk-in closet, and others also live in crowded conditions.

“Sometimes it’s hard being a teenager and not having any privacy,” said Carranco, an Anaheim High School student.

(From OC Register)

Cynthia Carranco was one of the speakers at last night’s forum on affordable housing in Anaheim. She and the other speakers spoke of their dire need for affordable housing. Yes, there’s the controversial push for affordable housing in the “Anaheim Resort” district. You know, the one where Disney is putting up an initiative to “save the resort district”. However, there are other battles being fought here as well. Of the 8,700 new homes going up in Anaheim’s Platinum Triangle “luxury urban high-rise” development, NONE of them will be available for the lower-income workers who already have jobs in the area. There’s a dire need for affordable housing, but that need is just being ignored.

But you know what? It’s not just Anaheim. It’s the entire Southern California region that’s facing this crisis of affordable housing. And what are they doing about it? Follow me after the flip for more…

“My prayer is that you guys think of my daughter when you consider whether to put affordable housing in the Platinum Triangle or anywhere else in the city,” said speaker Maria Mejia, who shares a mobile-home room with her husband and daughter.

Are we even thinking of Maria and her daughter? Are we thinking of Maria’s neighbors at that mobile home park? Do we think of them when they clean our hotel rooms? Do we think of them when they pick up our trash at Disneyland? Do we think of them when clean our plates after we leave the restaurant?

We should. After all, it’s getting harder to keep people filling these jobs, as they can’t afford to live anywhere in the area. Heck, it’s even getting difficult for employers to retain white-collar workers, as even they can’t afford housing in such expensive places as Orange County! Just what are we thinking?

And are we even listening?

[Anaheim] Councilwoman Lorri Galloway was the sole City Council member to attend the forum, put on by Orange County Community Congregation Community Organization, a coalition of faith-based groups. […]

The group asked Galloway to commit to supporting affordable housing as part of Platinum Triangle plans, which she agreed to do.

“It’s not the big developers they should be listening to. They should be listening to you.” Galloway said to the crowd.

We really should be listening to these workers. They are facing a huge financial burden. And as they suffer this burden, so does the entire economy in Southern California. Workers can’t afford to live here, and they can’t afford to shop here. And they can only afford to work here for so long, before that high cost of filling the gas tank finally catches up with them. And if companies start to lose their employees, they can no longer afford to do business here. If we can’t listen to these workers, then we’re not listening to the needs of the local economy.

But are we doing that? Anaheim so far is not.

Statistics were projected on the church hall wall, such as the city’s approval about 11,000 homes for higher-income families, but just hundreds for low-income families since 1998.

Developers don’t want affordable housing at the Platinum Triangle. Disney and the hotels don’t want affordable housing in the “resort district” around Disneyland. So where the heck is affordable housing “permissible”? Where can the workers live? And how long can they keep working here so long as there’s nowhere in the entire area where they can afford to live?

Why can’t Disney and the hotels and the developers and the Chamber of Commerce types realize that affordable housing for their workers is in their long-term best economic interest? Just how long do they think they can retain their workers if the workers can’t live anywhere? Just how long do they think they can can get away with avoiding these long-term crises?

The benefits of affordable housing in the area far outweigh the costs. Employers can keep their employees. Employees can keep shopping at local stores. The city can keep these workers as taxpaying residents. More money is kept in the local economy. Everyone really does benefit in the end.

It’s too bad that this problem is playing out in Anaheim. But you know what? It’s not just Anaheim. It’s Santa Ana. It’s Irvine. It’s Los Angeles. It’s Riverside and San Bernardino (yes, even parts of the Inland Empire are starting to lose their “affordable” edge!). Southern California desperately needs affordable housing. But so far, all our “elected officials and business leaders” want to do is talk about building more “luxury housing” in areas that are already over saturated with “luxury housing”.

Well, guess what? We already have plenty of “luxury housing”! What we need is affordable housing for low and middle-class workers! When will we start listening to them, and to their needs?

Laguna Beach: A Rather Exquisite Economy of the Arts

“This is the first time we could quantify what the arts means to Laguna Beach,” said Nancy Beverage, chairwoman of the city’s Arts Commission. “It’s important so we don’t kill the goose that laid the egg.”

And what a mighty goose this is. The OC Register is reporting today that Laguna Beach leads the nation in money spent on the arts. People from across the nation and around the world come to Laguna Beach to enjoy the artistic spirit here. And nearly $55 million was pumped into Laguna Beach’s economy in 2005, thanks to its art scene. Art truly is the economic lifeblood of Laguna Beach.

So just how important is art in Laguna Beach? How is the art shaping the local economy? How is it shaping the city?

Follow me after the flip for more…

Laguna Beach has a long history of artistic creativity. Ever since Norman St. Claire first abandoned the San Francisco fog to document Laguna’s natural beauty on canvass in 1903, art has shaped and molded the community in Laguna Beach. In 1918, the town’s first gallery opened (now the Laguna Art Museum). When Laguna Beach became the first community in South Orange County to incorporate as a city in 1927, it did so as an artists’ colony that was already becoming world-renowned.

And in 1932, out of the economic disaster of the Great Depression, the Festival of Arts emerged. The artists in town were just looking for a way to capitalize off the Olympic games in nearby Los Angeles. Instead they started a great tradition, and a real cash cow for the now booming arts colony.

But in the 1960s, a group of hippie artists were getting frustrated with all the rigid tradition and conservative conformity of the Festival of Arts. In 1966, the young artists staged a revolt against the local art extablishment and their jury system that excluded so many talented local artists. They began their own art festival out of protest, and out of this protest the Sawdust Festival was born. And now, this is one of the top five art festivals in the nation.

Clearly, Laguna knows how to capitalize off its art. And the tradition goes on today. From The OC Register:

Today, the 9-square-mile city with about 7 miles of coastline has about 90 art galleries […]

The findings of the study will help provide the city and its residents with a substantial way to measure the value of Laguna Beach’s artistic community, said John Hoover, member of the board of directors for the Laguna Beach Festival of Arts.

According to the report, “Arts and Economic Prosperity III,” art-related spending in Laguna Beach contributes about $2.7 million in tax revenue to the state and about $2.4 million to the city.

In Laguna Beach, a person attending an artistic event spends an average of $55.41, according to the report. That is about twice the national average of $27.79 spent per person.

Most of the money spent in Laguna Beach pays for meals, lodging and souvenirs, the study said.

Wow, so the tradition continues. Laguna Beach has now made its art into a tourist magnet. Laguna is the ultimate destination for people who enjoy some aesthetic pleasure with their travel. But is all this commercial success killing the artistic spirit?

Is the artistic spirit dying in the midst of all the wealth, all the excess, and all the episodes of that MTV reality show? Is Laguna Beach starting to act too much like its snooty sister next door? Maybe Laguna has become too prosperous for its creative well-being?

No wonder why even the Chamber of Commerce President has called for more affordable housing for local artists and their galleries:

As the Laguna continues to grow and tourism thrives, the city must preserve its artistic community, [Mayor Toni] Iseman said.

As housing costs rise, the city should consider providing affordable housing to artists, some of whom are being priced out, said Dave Sanford, president of the Laguna Beach Chamber of Commerce. Galleries also need affordable space.

“When the city decides where to invest money, they need to consider this,” Sanford said.

Yes, perhaps Laguna beach should ensure that the artists are not priced out of the arts colony. Perhaps as the city considers new development downtown, the city should ensure that these artists’ lofts are spaces that young local artists can actually afford. Laguna has been so wise in making a living off its art. The colony certainly cannot afford to ultimately allow past success to choke future artistic endeavors.

After all if the art is gone, then ultimately the economy is dead. And more importantly, the creative spirit dies as the art leaves. Laguna’s history of artistic passion and astounding success is just too precious to be lost forever.

Stop the Wal-Martian Invasion This Weekend!

I just got this in my email inbox from Frank Barbaro, Chairman of the Democratic Party of Orange County:

Wal-Mart’s destructive impact on communities is well- documented. Local competition is driven out, noise and traffic increases, and local governments and taxpayers get a raw deal.

Wal-Mart is planning to open a 170,000-sq. ft. supercenter at Chapman Avenue and Brookhurst Street in Garden Grove and the only thing standing in their way is the City Council.

Come help to keep a Wal-Mart Supercenter out of Garden Grove. We will be walking door to door to educate residents and build support for the Main Street Coalition. We hope to see you there!

So how can YOU support what’s best for local small businesses and healthy communities in Southern California? Well, follow me after the flip for all the details…

OK, so we know that Wal-Mart isn’t good for workers. We know that Wal-Mart doesn’t provide its workers adequate health care… So they just dump the workers into taxpayer-funded Medicaid programs. We know that Wal-Mart’s “low prices” don’t do anything to alleviate poverty. And yes, we know that Wal-Mart loves to bleed taxpayers dry with all those subsidiesBut they don’t even have the decency to pay their taxes!

So why the heck would Garden Grove want all this trouble in their city? We need to educate people in the community about why Wal-Mart doesn’t really save us money. We need to let folks know just how much money Wal-mart costs us every year! We need to get out and talk to our friends and neighbors in Garden Grove, and the OC Democrats are ready to team up with the Main Street Coalition to do just that!

Date: Saturday, May 12
Time: 10:00am-2:00pm
13252 Garden Grove Blvd.
Garden Grove, CA 92843
Meet in the Courtyard

Residents will be able to sign support cards, join the coalition, and receive more information about the campaign.

As we build in numbers in the community, the stronger our voice becomes to before the council. It is imperative the community become aware and involved in this campaign so that we can keep Wal-Mart out!

Yes, let’s keep Wal-Mart out! And let’s keep good jobs and good living in Garden Grove! Wal-Mart may be big and powerful, but we won’t let them take away what we like about our community. : )

Announcing Choices for Working Californians: Plus Primary Poll

(crossposted from Working Californians)

We want “Choices” to be your one-stop-shop for tracking the 2008 Presidential candidates on key quality-of-life and economic security issues. Why? Because our polling shows these will be key to determining voters’ choices for President, along with the dominant issue of Iraq. But thus far, likely voters report hearing strikingly little from the candidates on anything other than Iraq.

The site should be a two-way street — a place for voters to track the candidates, and a place for the candidates to speak directly to voters about core quality-of-life issues that so many voters rank as their greatest concerns. So we’re engaging the campaigns to encourage them to provide Californians with their plans for quality education, economic security & good jobs, the environment, energy & and sustainability, and health care.

To start, you can read about the strategic research, see the pollster’s two memos — the issues and the horse race.

You will see statistics from that poll sprinkled throughout the site.This week we are just rolling out the Democratic candidates, in conjunction with the CDP Convention this weekend.  Next week, the Republicans will be released.

It may have a bug or too and we are working on getting rid of that scroll bar right now, but poke around.  Click on a candidate’s name and you will get four choices of issues up top to go in more depth.  Some candidates are talking a great deal about Californian’s top issues, others barely at all.  Enjoy! Leave any bugs in the comments, or hit the contact page.

Mark Mellman conducted a fabulous poll and an even better memo, complete with graphs on likely Democratic primary voters in California.  Error margin is +/-4.9%.  Overview:

Our just completed statewide poll shows Hillary Clinton with a 19 point lead in the California Democratic primary. Despite Senator Clinton’s lead, however, the race is far from over. Her advantage is based importantly, but not completely, on two malleable factors: her higher name recognition and the belief that she would be the strongest general election candidate. She is the best known contender, but Obama and Edwards are more popular among Democratic primary voters who know them. Furthermore, a plurality (27%) of Democratic primary voters would support Barack Obama’s candidacy if their first choice candidate were no longer running in the primary. There is room for other candidates to break through to the California Democratic primary electorate between now and February 5, 2008; the race is very much still up-for-grabs.

The fat lady has not sung. There is much greater detail in the memo, but here is the graphical representation of the candidate’s favorability rankings.

Here are the straight up numbers:

Hillary Clinton 38%
Barack Obama 19%
John Edwards 17%
Richardson 4%
Joe Biden 4%
Mike Gravel 2%
Dennis Kucinich 1%
Chris Dodd 1%

Clinton’s lead is slightly greater (41%) among those paying very close attention to the primary, while Edwards and Obama tie for second place with 18% each. However, among those paying only somewhat close attention, Clinton’s support slips slightly to 36% while Obama’s support jumps to 25%, and Edwards receives 16%. Democratic primary voters who are not closely following the election are the least supportive of Obama, offering him just 13% of their vote, compared to 38% to Clinton and 17% to Edwards.

The race is far more competitive among voters who are familiar with all three top-tier candidates. Among these voters, Clinton’s total drops to 34%, while Obama’s support increases to 24% and Edwards’ support rises to 20%; just 10% of these most knowledgeable voters are undecided. This provides further evidence that part of Senator Clinton’s lead is based on her higher name recognition, an advantage that could disappear as primary day approaches.

Other interesting tidbits: Clinton has strong support from Californians who are highly concerned about jobs.  Obama gain support as voter’s second choice and demonstrates room to grow.  Go read the polling memo for all of the juicy details.  One more pretty chart. 

First Time Delegate Asks You to Support College at the Democratic State Convention!

(Yes, let’s support the students! What’s the point of preparing for college if we can’t afford it? – promoted by atdleft)

Hi, I’m Charlie Carnow, a freshman in Urban Planning at USC, and a first time delegate from the 40th Assembly District introducing my first resolution, supported by the California Young Democrats, San Fernando Valley Young Democrats, and Valley Grassroots for Democracy as well a college Democratic chapters throughout the state. Together, we are urging the state party to take a firm stand on an issue crucial to our state, and especially to young voters: college affordability. 

Hi, I’m Charlie Carnow, a freshman in Urban Planning at USC, and a first time delegate from the 40th Assembly District introducing my first resolution, supported by the California Young Democrats, San Fernando Valley Young Democrats, and Valley Grassroots for Democracy as well a college Democratic chapters throughout the state. Together, we are urging the state party to take a firm stand on an issue crucial to our state, and especially to young voters: college affordability. 

I never want to hear a story like I heard from a friend of mine in the 40th District again. Raised by a single mother, my friend moved around a lot, but finally reached some stability and got into her dream school, UC Davis. But the aid package was too stingy, so she was forced to go to a community college for two years, and work to save for an eventual transfer to a UC. The state needs to invest in higher education to ensure that students of all backgrounds are able to attend the school that best fits their dreams and abilities, regardless of cost.  Supporting Democratic efforts in the Legislature and Congress and urging further action through this resolution is a good first step. 

In 1960, the California State Legislature made a firm commitment that all qualified students would have a high quality affordable college education. From Silicon Valley to the San Fernando Valley, our investments in higher education have helped make California an economic and educational powerhouse on an international scale. . 

Today, as millions of baby boomers begin to retire, California has compromised its commitment to college affordability, making it harder for our young people to take advantage of these opportunities. Rated an A in affordability by the National Report Card in Higher Education in 2000, California slipped to a C- in 2006. Since 2000, fees have risen over 72% at the University of California. This year, even the Legislative Analysts Office calls the Governor’s proposed 10% increase at California State University and 7% increase for UCs  excessive. The average Californian now leaves college with $16,356 dollars in debt, limiting their ability to choose lower paying public service careers that the state needs to fill as baby boomers retire. The Cal Grant B,  which provides low income students with money to pay for books, housing and other educational expenses has not kept up with inflation, and the Cal Grant award to students at private schools have not kept up with the increasing cost of tuition. In Congress, Californians like House Education and Labor Committee Chairman George Miller and Speaker Nancy Pelosi have fought to cut student loan rates in half and in the House. Senator Kennedy’s Student Debt Relief Act would cut student loan interest rates in half, make student loan debt manageable, and cut the massive subsidies to student loan companies, freeing up funds to pay for increased grant aid for students. 

The State Party must support these efforts and encourage our Senators to cosponsor legislation containing these concepts. Furthermore, as a UC Berkeley study on the Returns to the State of Higher Education found, for every additional $1 the state spends in higher education now, the state can expect to expect to reap $3 in additional tax revenue in the next decade. Buying out the fee increase, and increasing Cal Grant B awards to take into account increases in the cost of living can ensure we protect and preserve the California Dream, and stand together against a Governor often hostile to students. We can restore the California Dream by putting our party on record as opposing unnecessary fee increases, supporting more grant aid to students, and aiding the efforts of our Democratic Congress to increase the Pell Grant and cut student loan interest rates. 

I invite you to join me at the Resolutions Committee to support this resolution. If you have any insights on how I can get this through the resolutions committee and ensure this remains a priority for them, please let me know in the commentss or contact me at [email protected] would be the first time at least since before 2003, that they address college issues in a resolution. It’s crucial this year as we try to pass some good Assembly bills to expand the Cal Grant B program, and take the wind of this year’s fee increase.

Text of the resolution follows:

Funding California Education Resolution

WHEREAS, since the 1960 Master Plan for College Education, California has guaranteed college opportunity to all qualified students, making California a national center for emerging industries and the world’s sixth largest economy, and

WHEREAS, over the last ten years, college costs have increased 26% nationally and 72% at the University of California,  while the percentage of college-bound high school graduates has declined and college graduates now carry an average of $19,000 in debt, and

WHEREAS, on January 17th, 2007, under the leadership of Speaker Nancy Pelosi and Education and Labor Committee Chairman George Miller, the House of Representatives passed the College Student Relief Act of 2007 to cut the student loan rate on subsidized loans in half, 

THEREFORE BE IT RESOLVED, that Valley Grassroots for Democracy supports efforts in the United States Senate and the House by Senator Edward Kennedy, Representative George Miller and others to improve national competitiveness by drastically cutting federally subsidized student loan rates and increasing Pell Grants, making loan debt manageable by limiting loan payments to a reasonable percentage of income and allowing payment over a longer period of time, and

BE IT FURTHER RESOLVED, that Valley Grassroots for Democracy urge the California State legislature to provide the necessary funding to buy out the proposed fee increase at California State University and also at the University of California, and implement the Legislative Analyst’s Office recommendation to support students at private universities by increasing Cal Grants.

Submitted by: Charlie Carnow, 40th AD

Wal-Mart Wants a Supercenter in Garden Grove… But Does the New City Council Agree?

“It’s too early to decide… I dare not express any opinions until after I see the environmental impact report on that project.”

(From OC Register)

So what is newly appointed Garden Grove City Council Member Steven Jones talking about, and why is everyone paying such close attention to it? And why is everyone looking at Garden Grove as if what happens in this town may change everything for working people in Orange County? Follow me after the flip for the answers, and much, much more…

So what’s the big news? Wal-Mart’s coming to town… And they want it “Super-sized”!
Here’s what was said in The LA Times about Wal-Mart’s proposed Supercenter back in December (via Topix):

While other Southern California cities pass laws to prevent Wal-Mart Supercenters from opening, Garden Grove appears to be all but holding open the front door for the big-box retailer.

Pressed for money and looking for a way to revive a tired commercial district in central Garden Grove, city officials see a Supercenter as a potential savior. ‘This is going to enhance the quality of life of our residents, and it will be an anchor to a blighted area,’ said Councilwoman Janet Nguyen. Twenty-one Supercenters, which combine a regular Wal-Mart with a discount supermarket, have opened in the state, most in north Los Angeles County and outlying areas of the Inland Empire.

However, this proposed project would mean the very first Wal-Mart Supercenter in Orange County. Now, many local officials and business people are quite excited about this. They are excited about the prospect of increased tax revenue from Wal-Mart. They are thrilled about all the new customers flooding into Garden Grove to do business. Basically, they can hardly wait to see Wal-Mart revive this under served and largely ignored part of town.

But wait! Is everyone all that excited about the new Wal-Mart Supercenter? And does everyone really think that Wal-Mart will be a great boon for Garden Grove?

Wal-Mart critics argue that the retail giant would depress wages, especially compared to the pay of unionized workers at grocery stores that would be the Supercenter’s main competition. Ismail Majoo, who owns a discount variety store in neighboring Santa Ana, is a member of the Main Street Coalition, a small group of clergy, labor leaders and small-business owners concerned about a Supercenter’s impact on small business. ‘The Supercenter will wipe out the small-business owner because of the store’s aggressive pricing policy,’ Majoo said. ‘I’m not really worried about my business, but I do worry about the whole neighborhood.’ The Rev. Wilfredo Benitez, rector at St. Anselm Episcopal Church in Garden Grove, has been the religious leader most outspoken against the Supercenter, attending two anti Wal-Mart rallies and raising the issue three times in recent Sunday sermons. ‘It’s a bit frustrating,’ Benitez said. ‘It’s territory a lot of pastors won’t go into on Sunday morning. But we all have the moral imperative to stand on the side of the poor and those who would be exploited.’ ‘We don’t want that Supercenter here,’ he added.

Actually now that they mention it, Wal-Mart does have a nasty record of hurting the community that it comes into. They’ve been known to rely upon taxpayer-funded corporate welfare to artificially “lower prices” and cut down their honest playing competition. They don’t exactly have the best record of keeping bigotry and discrimination out of their business. Well basically, Wal-Mart isn’t the type of company that cares about the diverse, working-class community in Garden Grove.

So what can you do about it now? Well, why not sign the Courage Campaign’s petition asking Garden Grove City Council Member Steven Jones not to allow Wal-Mart to hurt the small businesses in Central Orange County. He may be the key deciding vote in determining whether or not Wal-Mart is allowed to come in and change the entire dynamics of doing business in Garden Grove and Central Orange County. The future of our small businesses and our working-class communities is on the line, so we need to let Council Member Jones know how we really feel about what may potentially be a VERY RAW DEAL for the people of Garden Grove.

Join Rick Jacobs for a Special Screening of “Wal-Mart: The High Cost of Low Price”

I just got something in my email box from the Democratic Party of Orange County. And I guess since this is such a special event, I should share it with you. There will be a special screening of the eye-opening documentary, “Wal-Mart: The High Cost of Low Price”…
And Co-producer Rick Jacobs, who also happens to chair the Courage Campaign, will be here to talk to us after the film about how Wal-Mart is affecting Orange County’s economy and communities, as well as the entire rest of the nation.

Follow me after the flip for more on this special event…

OK, here’s the email:

The Democratic Party of Orange County and Orange County Central Labor Council are proud to present a special OC screening of “Wal-Mart: The High Cost of Low Price.”

The screening will be on Tuesday, April 10, 2007, at 7:00 pm, and will take place at the IBEW Local 441, 309 N. Rampart, Suite M, Orange, CA 92868. Immediately following, there will be a group discussion about the effect Wal-Mart is having on Orange County, and the entire nation.

Joining us will be Rick Jacobs, co-founder and chair of Brave New Films as well as Chair of the Courage Campaign, an independent political committee on progressive issues in California. He chaired the presidential campaign of Howard Dean in California and serves as Senior Advisor to Democracy for America. He is a featured contributor to Arianna Huffington’s huffingtonpost.com.

“Wal-Mart: The High Cost of Low Price” takes the viewer on a deeply personal journey into the every day lives of families struggling to fight against a goliath. The film is based on individual human beings, all over the world, at all levels of society, telling their story in very personal terms.

The event is open to the public and media. Please RSVP to attend.

You can RSVP by clicking here: http://walmart.brave…

See you there!

Sincerely,

Mike Levin
Democratic Party of Orange County

So would you like to join us on April 10, and find out how Wal-Mart is REALLY affecting our community? If so, please RSVP for the event
And join us at IBEW Local 441 in Orange for the movie!

Legislators Ask California to Invest in Its Own Future

This is an intriguing bill.  Some California legislatures would like to provide every newborn in California with a $500 savings account for them to use as they wish when they turn 18 (say, for college, or for the down payment on a home).  It’s would be a $283 million dollar annual investment in the state’s people, an opportunity for kids to lighten their debt burden and use the magic of compound interest to give them a real head start in life.  Such a system has been in place in Great Britain since 2002.  Interestingly, it’s a bipartisan bill (about as frequent in California as a Britney Spears book on proper parenting), promoted by Sens. Darrell Steinberg (D) and Bob Dutton (R).

Fox News’ story on the bill made sure to mention that children of immigrants – IMMIGRANTS! – would be eligible for the account, forgetting the fact that children born in this country are American citizens, and that any money for the account would not be available until the child turned 18 (but if illegals came to our country, and waited 18 years… they’d be taking our money!).

One of the biggest problems we have in our society is the negative savings rate, which ensures that everyone in the country is in hock to credit card or student loan companies for most of their young adult years.  Giving Californians a chance to stay in the black, and teaching them the value of saving money, is the least we can do for our citizens.

California’s Worsening Economic Crisis

In today’s San Francisco Chronicle urban scholar Joel Kotkin has an op-ed entitled Golden State may be blinded by its luster – California slipping in rate of growth and in job creation. It’s an important, if imperfect, look at the growing disparities in the California economy and the social and economic relations that are being created here, with growing poverty, a lack of economic opportunity, and an economy increasingly dominated by a small but wealthy elite. Below I offer my thoughts on Kotkin’s ideas, and why they matter to we who are interested and engaged in California politics.

The core of Kotkin’s argument is that in the 2000s, California politicians from both parties have utterly failed to address structural changes that have seen only slight economic growth on the coasts, a bit more inland, and most of it favoring the upper class, leaving the middle- and working-classes almost totally behind:

Changes in the economy are clearly suspect. From the 1930s to the 1980s, California created a broad spectrum of opportunities for white- and blue-collar workers alike. Even the 1990s expansion, suggests Debbie Reed of the policy institute, helped reduce poverty by expanding a wide range of employment opportunities…

…For example, despite all the hype about the renewed Internet boom in Silicon Valley, there has been only modest expansion of employment, even in the past year. Undoubtedly lavish takings by a relative handful of engineers, managers and investors are boosting high-end restaurateurs in San Francisco and revving up BMW sales, but benefits don’t seem to accrue as much to assemblers, midlevel managers and other high-tech workers.

In other words, California’s economy may seem to be growing, based on official stats and political pronouncements, but only a very few people are seeing the benefits of this growth. This is not an economy that lifts all boats – only if you already were making a lot of money have you seen any significant improvement in your situation.

This jibes with what I’ve seen in the CA economy, and I’ve not actually lived there full-time since September 2001 (except for several months in 2006). I am returning in June, and have steadily grown more and more worried about my economic prospects in my beloved home state.

Kotkin shares these concerns, and quotes a Citigroup strategist who worries about the long-term effects of this uneven growth:

Today, economic growth in California — like that in much of the Northeast — seems tilted largely toward elites. Once a state known for its relative social democracy, the Golden State is becoming what Citigroup strategist Ajay Kapur has dubbed a plutonomy, dominated largely by a small wealthy class and their spending.

I have to agree with this conclusion. Rising housing prices, combined with stagnant job and wage growth for most workers, has wrecked the earning power of most Californians. The boom days of the second half of the 20th century seem to now be over, and as Kotkin describes, more and more Californians are joining the diaspora and moving to greener pastures in search of cheaper housing and better jobs.

Unless something is done, we run the very real risk of creating a plutonomy, maybe even a gerontocracy. Kotkin rightly attacks Proposition 13, which he correctly points out benefits only “older Anglo homeowners” while starving the state of its ability to provide educational and social benefits. In many areas of coastal California it’s only the wealthy or people who bought their homes 30 years ago who seem to still have a decent standard of living – everyone else is being squeezed more and more tightly, as poverty rates approach 20% in places like Monterey, SF, and LA.

Kotkin also addresses the political system of the state and assigns blame for the present crisis, but here is where he begins to lose his way. He rightly criticizes Arnold’s administration for favoring executives over managers and workers, and calls out “doctrinaire Republicans” for bashing immigrants and clinging to Prop 13.

His critiques of Democrats seem forced, an effort to be even-handed in his political assessments. Democrats are blamed for protecting a “corrupt” workers’ comp system and for overregulating and redistributing the wealth of small business and the middle class. None of these seem to be useful or even accurate criticisms – Kotkin shows his hand in his repeated attacks on regulations, suggesting his tonic is merely more of the neoliberalism that has hurt California these past 30 years.

California is facing a growing crisis, there’s no doubt about it, and I am glad Kotkin has helped draw attention to it. But his suggested fixes are small and not terribly significant – more vocational training is nice, but without jobs for them, are we merely training people to join the diaspora? Cutting regulations won’t spur activity, it’ll just continue to benefit a few while leaving the many at the mercy of corporate malfeasance.

To me, the core problem in California is that the cost of living is soaring, while incomes are stagnating. The bursting of the housing bubble will hopefully keep costs at least from rising much in the next few years, though as most non-wealthy Californians have used their rising home values for equity cash-outs to stay financially afloat, the bubble burst will hurt the CA economy deeply.

Job creation would help, but to do so through cutting regulations would merely immiserate more people. Universal single-payer health care would do much to reduce costs, both for employers and residents, but until the tax system is fixed it is unlikely we will see this happen, and certainly not with Arnold in office. And since Republicans remain happy with the status quo – or simply seek to limit prosperity further – they aren’t going to be offering solutions either.

It is up to Democrats, then, to find the path out of California’s slide into a stratified economy that provides benefits to a tiny few and provides stress and struggle for the vast many. And ultimately it will be up to us – the netroots, the base of the party, those who have their ears closest to the ground but also gaining the knowledge of how to operate in the political system – to craft solutions that will help return California to a more socially democratic situation, and take us off the path to an uneven, unbalanced, and unworkable economy.

california housing defaults double last year

(check out the photoshop after the flip – promoted by Brian Leubitz)

things are not all that rosy w/the housing market in california. the east bay business times reports that mortgage defaults are at an 8 year high:

the number of mortgage default notices filed against california homeowners jumped last quarter to the highest level in more than eight years, a real estate information service reported.

lending institutions sent homeowners 37,273 default notices during the october-to-december period. that was up by 36.9 percent from 27,218 the previous quarter, and up 145.3 percent from 15,196 for the fourth quarter 2005, according to dataquick information systems.

more, including a nifty skippy photoshop, after the jump!

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last quarter’s foreclosure activity was the highest since 38,053 default notices were recorded statewide in the third quarter of 1998. defaults peaked in the first quarter 1996 at 61,541. an average of 33,615 notices of default have been filed quarterly since 1992, when dataquick’s statistics begin.

“several factors are at play here. the numbers last year and the year before were very low because of strong sales and appreciation. also, most defaults occur a year or two after the loan was made, so we’re in a period where the loan pool is at risk. and then there are those inventive loans that have been made the last few years, where qualifying involves assuming more risk. we’re in the midst of an adjusting market right now, and we won’t know until spring or summer if this is ominous or not,” said marshall prentice, dataquick’s president.

we like that euphamism “inventive loans.” 

these would be the ajustable rate mortgages, sold to the unsuspecting homeowners w/the comforting lie “they probably won’t go up.”  the sfchron:

california is experiencing a rise in defaults because so many people took out adjustable-rate mortgages, economists say. about 28 percent of all outstanding loans in california are adjustable, more than in any other state in the country, according to first american loanperformance, which tracks mortgage risk. borrowers with such loans have seen their monthly payments increase at the same time that home price appreciation has slowed, making it more difficult for homeowners in financial trouble to sell or refinance.

“the state of california has been tremendously dependent on adjustable-rate mortgage products,” said scott anderson, senior economist for wells fargo. “when people have overstretched and are spending more than 50 percent of their net income on housing, it doesn’t take much of a surge in interest rates to lead to financial problems.”

no, not much.