Bond Sales Give CA Time, but Action is Needed
Wall Street’s loss appears to be California’s gain. At least temporarily.
With stocks taking another nose-dive yesterday, investors gobbled up California bonds at a faster rate than anticipated. With their set interest rate, even California bonds backed by our shaky economy seemed preferable to the stock market rollercoaster.
These instruments are known as revenue anticipation notes. Given all that is going on with the state economy, can the state be sure it will receive the anticipated revenue? Yesterday, the Department of Finance revealed the state’s unemployment rate increased to 7.7% for August and the General Fund fell $923 million below expected revenue forecast in the 2008-2009 budget act. Investors are betting on the odds that governments rarely go belly up and are relying on the fact that government has the power to tax.
Good News & Bad News Projected for CA Home Sales in 2009
Which would you like first? The good news or the bad? How about the bad and the even worse?
According to the LA Times’ October 15 edition, the California Association of Realtors’ 2009 forecast will include both. Maybe.
Sales will go up- that’s the good news; prices will go down- that’s the bad news. Of course, if you read closely, it’s all pretty grim news because the projected increase in sales is really due to all those foreclosures. This is particularly so in the Inland Empire where the CAR Report found, according to the LA Times article, that sales increased by 143%– mainly due to increased foreclosures there. The other part of the news is the ‘fun with statistics’ part: in 2007 sales dropped statewide some 26%. So, if we project a 12.5% increase for 2009, as CAR does, then we are really talking about re-gaining a little less than half the ground lost last year.
"We’re not in a ‘happy days are here again’ scenario," Leslie Appleton-Young, CAR’s chief economist, is quoted as saying. I’ll say. Not by half!
The Changing Face of Local Governance
In a typically humorous aside, the late Senator Daniel Patrick Moynihan said, “citizen participation is a device whereby public officials induce non-public individuals to act in a way the public officials desire.” Of course, there are many examples of municipalities and school districts “marketing” their pre-determined positions under the guise of civic involvement, but current events and several recent conversations with local leaders in California reveal that we are moving into a unique period in municipal governance – one in which officials at the city and school district levels around the state are proactively engaging their residents in policy-making. Most of the reasons offered for this change fit into three main themes.
The first is technological. The growth of the internet as both a communications and research tool has completely altered the relationship between our political leaders and citizens. In his best-selling book, Here Comes Everybody, author, Clay Shirky, declares, “We are living in the middle of the largest increase in expressive capability in the history of the human race. More people can communicate more things to more people than has ever been possible in the past.” Through blogs, every citizen has a bullhorn and can broadcast her issues with the local government or school system. Through social network sites like Facebook, MySpace, and others, citizens are organizing more easily than ever before. Through email campaigns, citizens can barrage local officials with hundreds (even thousands) of messages.