It’s Time to Draw a Line in the Sand…
Yesterday, the National Federation of Independent Business/California, the state’s leading small business association, formally joined in legal efforts to prevent legislators from circumventing the state Constitution by cleverly replacing the word “tax” with “fee” in an effort to obtain a simple majority vote to raise taxes on hard-working Californians.
Why did our organization, and the 23,000 small businesses we represent, choose to engage in this lawsuit? Frankly, because California’s “mom and pop” business owners – indeed, our state’s number one job creators – are absolutely outraged. As well they, and millions of other voters throughout the Golden State, should be!
Last November, California voters sent a new crop of presumed “leaders” to Sacramento with the hopes that they would not only create the law, but that they would abide by it as well. Moreover, voters approved Proposition 11, the Voters First Act, to put redistricting into the hands of the people of California, not the elected leaders (foxes) who have for too long been guarding their precious and plum positions (henhouse).
Governor is Right on Economic Stimulus
One of the main reasons Governor Arnold Schwarzenegger vetoed the Democratic budget bills yesterday was that the bills did not create the economic stimulus the governor was seeking. He is right in taking a hard line position on creating jobs and stimulating the economy. Economic history is clear that the greatest revenue boosts for the state government have come with economic growth not from tax increases.
One way to create jobs and get pubic infrastructure projects rolling is to expedite the environmental review process and the permitting process for projects already in the pipeline. The legislature balked at this request from the governor. But, if legislators are concerned about job creation, expediting the process is an important step to take. Not only will it get money flowing through the system, it will get important projects completed faster.
After the 1994 Northridge earthquake, Governor Pete Wilson led the effort to expedite the rebuilding of the freeways by waiving standard operating procedures. California got back to business in record time. That is a model that should be implemented to a degree now.
Housing continues slide in California
The bottom to the California home price free-fall is still not in sight. Last week Standard and Poor’s released its monthly index of metro home prices, and California still registers a growing year-over-year drop. The composite average for San Francisco, Los Angeles and San Diego prices dropped in October by 28 percent from the previous year, the largest year-over-year drop recorded by the state, and exceeded only by the Sunbelt cities of Phoenix, Las Vegas and Miami. As you can see from the chart below, the trend is accelerating.
According to this index, California’s composite home prices are equivalent to where they were about five years ago, in the summer of 2003.
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California Composite Home Price Index
2008: Thirty Trillion – Up in Smoke!
Of all the grim economic statistics produced in the debacle of 2008, one really nailed me as I reviewed the news of the first day of 2009: “The World Federation of Exchanges, which tracks stock markets in 53 developed and emerging economies, said that some $30 trillion in market value evaporated through the end of November.” ((Wednesday 31 December 2008, Kim Coghill and Claudia Parsons, Reuters). And that doesn’t even include December!
“Evaporated” is the key word here. It was not lost in the sense that somebody came and took it away or buried it in a box in the desert and forgot where – it evaporated from the world’s balance sheets via stock markets around the globe, like the morning dew on your front lawn when the sun first comes up. Up in smoke. If my math is correct, that means $44, plus a few dimes and pennies, each, theoretically evaporated from the pockets of every man, woman and child on earth – all 6 ¾ Billion on them – in 2008. To put this into some perspective, according to World Bank statistics from 2003, half the world’s population – some 2.8 billion people — live on less than $2 (U.S.) per day, with 1.7 billion of those getting by (somehow) on less than $1 per day.