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Copyright © 2012 by the first tuesday Journal Online - firsttuesdayjournal.com;
P.O. Box 5707, Riverside, CA 92517
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Once out of hibernation, the Bear Flag Republic will flex its fierce economic muscles
By ft Editorial Staff • Nov 18th, 2009 • Category: real estate newsflash
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California’s economy is not down for the count, it is merely winded from a blindsided punch.
The Golden State is typically branded as one of the least business–friendly states. Fortunately for Californians, the measure behind this scarlet letter is overly simplistic. It is based solely on tax rates and wages, rather than on production levels or the level of economic diversity and entrepreneurialism.
Data gathered by the Public Policy Institute of California shows business losses in California made up less than 1% per year between 1992 and 2003.
California boasts 28 million residents and a $1.8 trillion economy (comparable to top developed countries), so it is misleading when California is cited as the leader in foreclosures and layoffs.
California remains a powerhouse, reshaping the game by taking the lead (as it always does) in the next economic booms: high tech and clean energy.
California’s per capita carbon emissions are less than half of the national average. California investment in clean technology is five times higher than the second leading clean technology state.
Energy consumption in California has stayed stable while the rest of the nation’s energy use has doubled (saving Californians nearly $56 billion in energy costs). This trend will continue as California utilities are required to integrate renewable sources into one-fifth of their energy production by next year, increasing that rate to one-third by 2012.
On top of that, California is pulling away from a car-dependant transportation paradigm and suburban sprawl, backed by recently passed legislation.
What has caused recent dysfunction is California’s absurd budget. California is plagued by mandated government spending sprouted from special interest groups, a fickle and absolutely unequal tax system spawned by Proposition 13, and an impossible two-thirds supermajority required to fix any budget problems.
The economy actually grew last year, but state revenue crashed because of the gaping holes in the pocket of the state’s tax system. [For more information on California misinformation, see the first tuesday California Myths Archive.]
first tuesday take: Brokers and their agents can take in a breath of fresh air. The truth amid the smoke of supply-side demagoguery and depressing pessimism is that California is a powerful and dynamic economy, a step beyond most other American states. The best of the best live in California, as California has always lead the charge in economic innovation. The state’s business leaders prudently pulled back as the recession set in. But they are making the best of the recession, and are poised to spring into action at the right moment. That flexibility is the envy of all other state economies, even those with commodity economies which are doing well, for the moment.
Brokers know that jobs will return. Hibernation only lasts for the winter – an economic spring will come, and California’s strong economy will return to its natural glory. We note that many brokerage offices are restructuring and growing in numbers, producing agents and sales. [See our first tuesday market chart, How California’s Mighty Have Fared, One Year On.]
Re: “Despite Its Woes, California’s Dream Still Lives,” from Time Magazine.
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Copyright © 2012 by the first tuesday Journal Online - firsttuesdayjournal.com;
P.O. Box 5707, Riverside, CA 92517
Readers are encouraged to reproduce and/or distribute this article.
Copyright © 2012 by first tuesday Realty Publications, Inc. Readers are encouraged to reprint or distribute this information with credit given to the first tuesday Journal Online — P.O. Box 5707, Riverside, CA 92517.
ft Editorial Staff is the writing staff comprised of legal editor Fred Crane and writer-editors Connor P. Wallmark, Giang Hoang-Burdette, Bradley Markano, Jeffery Marino, Mary Balash, Carrie B. Reyes and Sarah Cantino.
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WHAT????????HYBER WHAT? UNTIL CA GOVT LAYS OFF 1/2 OF ALL WORKERS & CUTS BUDGET 70% AND AUDITS IT SELF AND ANSWERS TO THE TAX PAYERS AGAIN WILL THE STATE BE GREAT AGAIN TILL THEN I AM RETIRED BROKER….. STARTING BUSINESES OUT OF CA
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What happened to the other 5 million people, did they move to other states. The state had 33 million pop.
I’m pretty much in agreement with Stevie that the state has to get back to a reasonable budget, lay off more
state employee’s and not ask for more taxes. Increased taxes only lead to larger budgets and more non-
ending spending. More employee’s means more pensions. Just look at where the job increases are, and
look at the percentage of increase in California spending since Schwartzenegger became governor; I think
that we may have been better-off keeping Grey Davis, and I’m a Republican. We have to get rid of our corrupt
politicians and push back the Unions. I believe that we won’t see good times for at least 5 years. Fortunately,
I’m retired. Proposition 13 is not the probem, nor is the 2/3 majority to increase taxes, the problem is spending, and until our politicians come to that conclusion progress will be slow, if at all. Happy 2010 to all.
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