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THE NOONER for November 7, 2013

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  • AD15 (Berkeley): removed community organizer Peggy Moore (D)
  • AD54 (Culver City): added opthomologist Moory Waksberg (D)

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Good morning from Los Angeles, where the second California Economic Summit is taking place today and tomorrow. The event is hosted by California Forward, and featured speakers include Lt. Gov. Gavin Newsom and Senate President Pro Tem Darrell Steinberg, along with several legislators from both parties.

Concidentally, the summit begins on the day of the initial public offering of Twitter, which is poised to be the second largest technology IPO behind Facebook. In short, many more California millionaires will be created today, at least on paper, and billionaire co-founder Jack Dorsey, will see his wealth swell, while Ev Williams joins the billionaires club. Unfortunately, it doesn't look like CalPERS had its money with the venture funds which saw some of the biggest payoffs today.

(Side note: for those who ridiculed the FB IPO price of $38 and laughed at its drop to $18, it is now trading at $49, 29% above the May 2012 IPO price and 2.7x its low.) 

California has added 826,500 non-farm jobs since the low of February 2010, but is still short 541,400 non-farm jobs from California's July 2007 high. However, there are also 692,511 more workers than in July 2007, meaning there is a gap of 1.2 million jobs (8.2%). This also doesn't include those individuals who have left the workforce because they believed looking for a job was futile.

Construction currently accounts for 616,500 jobs, 35% off the high of 945,100 set in February 2006, up only 13% from the low 544,700 in September 2010. 

The bright spot is in business and professional services, which at 2,310,500 jobs in August 2013, is at an all-time high, now accounts for 16% of California's non-farm jobs, and is the second largest non-government supersector just behind Trade, Transportation, and Utilities. Compare the ten-year table on that sector to that of Manufacturing, which has been on a decline for two decades.

California's unemployment rate was 8.9% in August, a significant reduction from the 12.4% that haunted most of 2010, although some reduction in the rate (as pointed out above) is due to to disaffected workers leaving the workforce. Even at 8.9%, that is significantly higher than the roughly "full employment" rate of 5% the state saw through most of 2006 into early 2007.

Despite many of these gloomy numbers, there's a fascinating thing: California's personal income was at an all-time high of $1.768 trillion in 2012, and will likely set another record this year. That's 15.1% higher than the recession's low in 2009 and 10.7% above the pre-recession high of $1.596 trillion in 2008. Even on an inflation-adjusted basis, personal income is higher than the all-time high before the recession.

However, the swelling personal income does not appear to be buoying retail. While the Business and Professional Services sector has seen a jobs increase of 2.5%, Trade, Transportation and Utilities--which includes retail--has only increased 1.3%. One bright spot is new car sales, which at 146,498 in June are double the 2009 lows and at levels not seen since 2007, as financing has eased and consumers return to a more regular car replacement schedule (yes, I am still driving a 2005 Prius).

But, from the data we have, much of the "new wealth" reflected in the state's personal income is not being spent. This is likely because it's "extra" income being reinvested by already financially secure individuals, or it's being held on the sidelines by would-be investors (including a small business owner holding off on an additional hire or equipment replacement) because of continued economic uncertainty.

And, that's where the tension lies. That personal income is concentrated among high-income workers in limited sectors, as well among wealthier Californians who have had the ability to participate in the stock market's recovery. After all, the Dow Jones set another all-time high yesterday, although the close of 15,746.88 was actually a couple hundred points below the inflation-adjusted all-time high set in October 1997 and about four hundred points below the high of December 1999. 

I don't want to go all socialist on you, as like many readers of The Nooner, I'm blessed to have a great job. But, from a public policy standpoint, we have to take note when the economic recovery is concentrated at one end of the socioeconomic spectrum, as that's what leads to political upheaval and will create more strain in Sacramento.

We're seeing signs of the strain this morning as protestors are in front of Twitter's headquarters to protest gentrification of San Francisco, which has gone out of its way to keep Twitter in the city. And, the proxy for that may be the fight against $4 toast.

Let's applaud the innovators and investors who are leading California's recovery, but also note that the top line number of personal income or state tax revenues doesn't tell the whole story.

I am not an economist, know that there are dozens of metrics one can use to make an argument, and I look forward to hearing from the real experts over the next 24 hours and to put a little more thought into the impact of California's economy on state politics and policy.

More after the jump . . .



Stop Fooling California!

WSPA is behind newest attack on clean energy, calling itself CARE (Californians for Affordable and Reliable Energy) and scaring people with misinformation.

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  • Join the New Leaders Council for a happy hour meet and greet tonight, Thursday, November 7th from 5:30-7:30 p.m. at Sapporo Grill Japanese Steakhouse, 1118 16th Street. Meet the NLC Advisory Board, Alumni and learn why you may want to apply to be a 2014 Fellow, or simply come to network. The NLC Institute is a rigorous, six-month progressive entrepreneurship training program. It is the premier leadership and professional development, training, mentoring, networking, and career and political advancement program for young professionals and emerging leaders. Applications close 11/12. Do you know any promising young leaders? Nominate a fellow today:
  • The California Grocers Association is looking for a Director of Southern California Local Government Relations. Position is based in Burbank, responsible for local government advocacy, grassroots , limited media, member recruitment and retention. Competitive salary and benefits ($75,000+). Full job description and instructions available HERE.
  • Internship opportunity - The Office of Congressman Ami Bera is looking for individuals who have a strong interest in Government and Public Service. Strong oral and written skills are required, as well as an ability to work on projects individually and collaboratively for the day to day operations of a Congressional District Office. 15-20 hrs/wk. Contact Daniel at 916-635-0505.
  • Pacific McGeorge's Capital Speaker Series presents “Dark Money – The 11 Million Dollar Problem Defined” with Chip Nielsen and Lance Olson, Wednesday Nov. 13, Noon, $15 lunch, Sutter Club, 1220 9th Street. MCLE. Register at:
  • The fastest, most cost-effective way to learn the legislative process and effective advocacy. Veteran lobbyist Ray LeBov presents his introductory " Lobbying 101" and advanced "Lobbying 201" seminars October 31-November 1. $250 each. Valuable for principals / support staff at lobbying firms, organizations that employ lobbyists, public agencies. Info / or 916 442 5009.


POINT: California has 12 of the 20 most expensive housing markets (by city) in the country, and none of the 20 most affordable. [Buzzfeed]

VOTER ID: An initiative has been filed for title and summary to increase voter ID requirements in California.

$$$: Diversity PAC: Ron Calderon's Slush Fund for Luxury [John Hrabe] - "A shadowy political action committee cited in the FBI’s case against state Senator Ron Calderon, D-Montebello, has spent hundreds of thousands of dollars on private jets, five-star hotels, elite golf courses and extravagant meals at the country’s finest restaurants, a analysis of campaign finance reports has found."

SACDA: Third candidate announces bid for Sacramento County district attorney job [Andy Furillo @ SacBee] - "Todd Leras, 50, most recently worked for five years as an assistant U.S. attorney in the Eastern District of California, which is based in Sacramento. Before that, he was a 13-year line prosecutor for the Sacramento DA's Office who handled a number of high-profile cases."

The employee who was fired: "Hey, we should get rid of these movie rental stores and instead mail DVDs on a subscription basis with free postage."

The employee who just became a multi-millionaire: "Hey, we should create a service where people can share their 140-character thoughts."

YESTERDAY'S QUESTION: Which statewide constitutional officers were included in the 1849 constitution, and when were the others added? 

YESTERDAY'S ANSWER: Governor, Lt. Governor, Sec State, Comptroller, Treasurer, Attorney General, Surveyor General, Sup. Public Instruction. Insurance Commissioner was created in 1988 by Proposition 103, and the office was filled in the 1990 statewide election.


#CAKEDAY: Happy birthday to Gilbert Martinez!


Political Money Needs A Tighter Rein
George Skelton @
Contributions to campaign funds, 'officeholder' accounts and other legislator pots need tighter restrictions.’s Head Tech Guy Is Out
Ezra Klein @
A Medicare official who oversaw's botched launch will leave the federal government for the private sector, according to an e-mail sent late Tuesday to Medicare employees.

$4 toast prompts housing petition
Kurtz, political director for the Courage Campaign, cited it as an example of an increasingly unaffordable San Francisco that motivated his group to launch a petition calling on Mayor Ed Lee to do something. [...] the petition is really about pushing the mayor to fight for affordable housing, not affordable toast, but it's all linked in the realm of this city is crazy expensive. Kurtz cited the mayor's boosterism of the 8 Washington luxury condo development - which voters rejected Tuesday - as a prime example of his off-kilter priorities. Christine Falvey, Lee's spokeswoman, said that the campaign is simply misinformed and that the mayor's support of the tech industry has helped cut the city's unemployment rate in half and filled its coffers to help pay for parks, schools and social services. Coleman Advocates for Children and Youth, a San Francisco grassroots advocacy organization, has launched a campaign against the city's school district in an effort to lower suspension rates, specifically among African American students. [...] despite Coleman's ready-for-a-fight flyer announcing the Solutions Not Suspensions campaign, it is unlikely to face much opposition among school board members. State law includes willful defiance as a valid reason to suspend a student, and legislative efforts to eliminate it have failed.

Senate Leader Wants Ron Calderon Suspended From Committee Posts
Melanie Mason @
The investigation, detailed last week in a television report by Al Jazeera America, includes allegations that Calderon accepted $88,000 in bribes in exchange for his help in influencing legislation. The allegations were contained in what the network reported as a sealed FBI affidavit.

Following the bankroll for SF's Propositions B, C
Like many others, including Mayor Ed Lee and Lt. Gov. Gavin Newsom, I supported building the condo development 8 Washington, which failed at the polls Tuesday. Supporters will have some laments - it was an off-year election, the moderates never mobilized, the "No Wall on the Waterfront" campaign may have been effective but it wasn't actually, well, true. If they did, more than a quarter of the city's registered voters would have turned out. The developers came up with a concept - build condos and make money - and dutifully went through the arduous San Francisco approval process, which dragged on for more than seven years. After considerable review and rigorous debate, the commission gave its approval. Because we're wasting a lot of everybody's time and money. Here's the second quibble: the narrative that a coalition of grassroots organizers got together, pooled their meager resources and set out to battle scary corporate interests. Presumably the Stewarts didn't want their view blocked, although that's just a guess because they didn't make any public statements. [...] at least the developer was up front about the motives - build condos and make money.

Gov. Jerry Brown Names David Lanier New State Labor Secretary
Anthony York @
Marty Morgenstern, a longtime confidant of Gov. Jerry Brown who returned to state government to head the state’s Labor and Workforce Development Agency in 2011, has stepped down, according to a statement released by the governor’s office Wednesday.

The Buzz: Campaign finance rule trips up former California lawmaker
California lobbyists can play a big role in helping political candidates raise the money they need to run for office. But one thing California lobbyists can’t do is personally write checks to state-level campaigns.

Rehab Clinics Cut Off For Questionable Billing Still Reaped Federal Funds | The Center For Investigative Reporting
Click for larger image The offices of Goretti Health Services were in this building in Lawndale, Calif. The drug rehabilitation clinic's Drug Medi-Cal contract was canceled in 2008, but it kept itself afloat with a second taxpayer-funded program, receiving $380,000 in federal Access to Recovery grants.

Sebelius cites 'couple of hundred' problems with health care website
Alan Fram and Laurie Kellman @
Prodded to be more candid with Congress, Health and Human Services Secretary Kathleen Sebelius said Wednesday the administration's flawed health care website needed a couple of hundred fixes when it went online more than a month ago and conceded that 'we're not there yet' in making all needed repairs.

Steinberg seeks to remove Ron Calderon as Insurance chair
removing Calderon @
Senate President Pro Tem Darrell Steinberg, D-Sacramento, has asked the Senate Rules Committee to strip besieged Sen. Ron Calderon, D-Montebello, of his Insurance Committee chairmanship.

Five Big Takeaways From Election Results - Washington Wire - Wsj
Off-year elections are always picked through for harbingers of the bigger ones to come, and the races Tuesday night across dozens of cities and states offer a bigger trove than normal. One has to be cautious not to overstate the lessons, but here are some clear takeaways from Election Night 2013:

California Lawmakers Grill Officials Over Jobless Benefit Delays
David Siders @
“The system is working,” EDD Chief Deputy Director Sharon Hilliard, center, with Deputy Director Sabrina Reed, left, tells the Assembly Insurance Committee Wednesday at the Capitol.

Senators Cannella and Vidak Call For Investigation of EDD
Senator Anthony Cannella (R-Ceres) today joined with Senator Andy Vidak (R-Hanford) in calling for a hearing to investigate the practices of California Employment Development Department and their actions following a stoppage in the issuance of unemployment insurance checks in September and delaying benefits to nearly 150,000 Californians.

Editorial: Redo draft rules for spending new education dollars
the Editorial Board @
The State Board of Education’s first draft of rules under the state’s new education funding formula eviscerates the promise to provide extra resources to disadvantaged students.

California Stem Cell Report: Denny Sanford Donates $100 Million For Stem Cell Research At UC San Diego

Cal State Trustees Approve Plan That Seeks More State Funding
Carla Rivera @
Cal State University trustees Wednesday asked the state to increase funding for enrollment and other needs, despite doubts from Gov. Jerry Brown and the prospect of a tough sell during rough-and-tumble budget negotiations.

Senate Moves to Final Vote on Workplace Gay-Bias Ban
A final vote in the Senate was scheduled for later in the day, but nothing is guaranteed in the House, where Speaker John A. Boehner has repeatedly said he opposes the bill.

Dan Walters Daily
Jeremy B. White @
A hearing on California's unemployment insurance issues, coupled with the probe of the federal healthcare website's failings, has Dan shaking his head.

In Disputed Election, Palmdale Chooses First Black Council Member
Jean Merl @
In the midst of a widely watched court battle over its system for choosing its leaders, the city of Palmdale elected its first African American councilman Tuesday. 

Local Tax Measures Fare Well In California Elections - 95 Percent Accurate

Ron Calderon to lose committee assignments
Jeremy B. White @
Senate President Pro Tem Darrell Steinberg, D-Sacramento, has asked the Senate Rules Committee to strip besieged Sen. Ron Calderon, D-Montebello, of his committee assignments, including Calderon’s chairmanship of the Senate Insurance Committee.

Senator Nielsen Issues Statement On U.S. Supreme Court's Rejection Of California Prison Plan | Senate Republican Caucus
For more information on Senate Events visit the State Senate Website.

Billionaires Received U.S. Farm Subsidies, Report Finds
Ron Nixon @
The federal government paid $11.3 million in taxpayer-funded farm subsidies from 1995 to 2012 to 50 billionaires or businesses in which they have some form of ownership, according to a report released Thursday by the Environmental Working Group, a Washington-based research organization.