Is CA really barreling down recovery road?

Froma HarropFeb. 9, 2013

By Wayne Lusvardi

Former New York Times journalist Froma Harrop wrote on Real Clear Politics that it’s “tough times for California bashers” because of the recent turnaround of the state.

Harrop argued that those who have bashed California — she sites Steven Greenhut in Reason magazine, George Will of ABC News and Charlotte Allen of the Weekly Standard — are at a loss to explain California’s recent successes:

* A newly balanced budget;

* Public investments in job producing renewable energy;

* An unemployment rate headed downward;

* Replenished funds for public schools;

* New jobs from the state’s cap-and-trade law;

* A bullet train for an “advanced civilization”;

* An upgraded credit rating from Standard and Poor’s.

It’s true that Brown’s budget projects a relatively tiny 0.6 percent budget surplus for 2013, $0.85 billion.  But the Los Angeles Times reported that California has an unaddressed $1.9 billion structural budget deficit.  And the $6.8 billion in new tax revenues from Proposition 30 won’t even offset the projected $7.6 billion in estimated losses to California of federal revenues from the U.S. fiscal cliff. 

Water and power are regional, not local

Harrop claims that the reason the surrounding states have such cheaper energy prices is that Northwest electricity mainly comes from hydropower.

Actually, the water pumped to California through the Colorado River Aqueduct comes from cheap hydropower at a cost of 2 cents per kilowatt-hour from the Hoover Dam and Parker Dam power plants. The U.S. Bureau of Reclamation runs Parker Dam, but the power plant was built and paid for by the Metropolitan Water District of Southern California.  Imported hydropower, mainly from the Pacific Northwest, amounted to about 30 percent of California’s total hydroelectric power in 2007.

It’s true that California’s unemployment rate has declined from a high of 12.4 percent in 2010 to 9.8 percent at the end of 2012. This is still double the 5.3 percent unemployment rate in 2007. And it’s much higher than the 7.9 percent U.S. unemployment rate.

California is slowly recovering from the Mortgage Meltdown and Bank Crisis of 2008.  Its recent success, however, hasn’t come from the public sector. Most of California’s success has been in the private sector with the rebound of Silicon Valley’s economy, increased exports and tourism, a belated increase in oil and gas fracking due to bureaucratic permitting, and a release from environmental lawsuits by the courts for Delta water for Central Valley farming.

Train stop

Harrop’s enthusiasm for the California High-Speed Rail Authority also is misplaced. The only funding available is $9.8 billion in state funds from Proposition 1A in 2008; and $3.5 billion in federal funds. Not just the Republican-controlled U.S. House of Representatives, but the Democratic-controlled U.S. Senate voted to cut off funds for the CHSRA. So no more federal funds likely are to be sent to a project the rest of the country considers a boondoggle. And the federal government, of course, has troubles of its own with its endemic $1 trillion-plus annual budgets.

Even many liberals have critiqued the project. The L.A. Weekly wrote:

“USC professor and transportation planner Lisa Schweitzer recalls that in 2008, when then-Gov. Arnold Schwarzenegger, then–Assembly Speaker Fabian Nuñez and their appointees on the rail authority board insisted the cost would be just $34 billion, ‘the coffee shot out of our noses’ at USC.

“Schweitzer’s graduate class at USC’s School of Policy, Planning and Development later completed an independent estimate, coming up with a figure of $90 billion to $105 billion, which closely aligns with the figure the authority released Nov. 1.”

The current estimated cost for a train the Economist magazine said would be “cheaper, slower” is $68 billion. “Slower,” of course, means the train won’t be “high-speed,” which was the sales pitch given to voters who barely approved the project in 2008.

Will the recovery continue?

The big question now is whether or not the economic recovery continues under the cloud of higher taxes from Proposition 30 and Proposition 39; as well as higher federal taxes enacted last month and the new Obamacare taxes that took effect this year.

By the time Brown’s May Revision to his budget comes out in three months, the praise Harrop and others are making about California’s recovery may have vanished like a February mist.

46 comments

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  1. Rex the Wonder Dog!
    Rex the Wonder Dog! 9 February, 2013, 07:46

    * A newly balanced budget;

    * Public investments in job producing renewable energy;

    * An unemployment rate headed downward;

    * Replenished funds for public schools;

    * New jobs from the state’s cap-and-trade law;

    * A bullet train for an “advanced civilization”;

    * An upgraded credit rating from Standard and Poor’s.
    ==
    Everyone of these are negative factors to elping the state recover, every single one.

    Reply this comment
  2. jimmydeeoc
    jimmydeeoc 9 February, 2013, 09:47

    Harrop (as usual) has no idea what she’s talking about. This is a woman who’s never been west of the Garden State Parkway.

    Reply this comment
  3. Ted Steele, The Decider
    Ted Steele, The Decider 9 February, 2013, 10:19

    Man– the doomers out here hate good news! Is this carping just part of being always out of power? Or is it just ignorance?

    * A newly balanced budget;
    * Public investments in job producing renewable energy;
    * An unemployment rate headed downward;
    * Replenished funds for public schools;
    * New jobs from the state’s cap-and-trade law;
    * A bullet train for an “advanced civilization”;
    * An upgraded credit rating from Standard and Poor’s.

    While some of the above may not pan out, it is certainly better news! You go Gov Brown!!!!! I love it!!!

    Thanks Wayner!!!

    Reply this comment
  4. Donkey
    Donkey 9 February, 2013, 11:13

    George Orwell wrote about people like Harroup and the lies they pass off as reality. Any citizen that works in the private sector knows our cities, counties, and thus state are headed down the road of BK. 😉

    Reply this comment
  5. jimmydeeoc
    jimmydeeoc 9 February, 2013, 12:21

    The sheer ignorance of liberal Manhattan Intelligentsia like Harroup is astounding.

    They sit there in their comfy office at places like Pendant Publishing, pontificating away, telling the rest of us rubes what’s what, wholly oblivious to the fact that everything around them is supported by the taxes from a single industry.

    You take finance out of the equation and everything from Hartford to Trenton collapses within hours.

    Reply this comment
  6. Daniel
    Daniel 9 February, 2013, 13:45

    Ted Steele, you really need to inform yourself using a variety of sources. Have your ever heard of California’s coming pension funding nightmare?

    Reply this comment
  7. Ted Steele, The Decider
    Ted Steele, The Decider 9 February, 2013, 17:26

    Daniel— I don’t drink the Kool Aid ™— Sorry—

    Reply this comment
  8. Douglas
    Douglas 9 February, 2013, 19:54

    And yet, California was number two in total jobs created in 2012,  with 211,000 jobs.  The state led the nation in job creation in June.
    http://www.cnbc.com/id/48018076/page/1

    On the negative side ( according to CNBC):
    “ government payrolls fell by almost 60,000. ”
    The glass is at least half full.

    Reply this comment
  9. Hondo
    Hondo 9 February, 2013, 20:24

    The FACTS:
    Kalifornia has the highest unemployment rate in the country. Kalifornia is the greatest place on earth to make money and jobs. There is no excuse here. The unemployment rate should be below 7%. Period.
    Kalifornia has the highest rate of welfare in the country.
    Kalifornia has the highest paid teachers and is rated 48th and 49th in the 3 r’s.
    Kalifornia has the biggest unfunded pension system, a combined total of nearly a trillion$.
    Kalifornia is a catastrophe compared to what it should be.
    No one can dispute these facts.
    Hondo…
    Hondo

    Reply this comment
  10. Rex the Wonder Dog!
    Rex the Wonder Dog! 9 February, 2013, 21:26

    Here is must see TV and is the most HONEST assessment of America today I have ever seen (warning: F-Bombs Dropped and must have FB account to view);

    https://www.facebook.com/#!/photo.php?v=550154135009477

    Reply this comment
  11. Rex the Wonder Dog!
    Rex the Wonder Dog! 9 February, 2013, 21:33

    And yet, California was number two in total jobs created in 2012, with 211,000 jobs
    ==
    Yes #2, yet we have the largest population of any sttae, and well behind Texas which is #1;
    http://www.cnbc.com/id/48018076/page/11

    Reply this comment
  12. Ted Steele, The Decider
    Ted Steele, The Decider 10 February, 2013, 09:25

    We’e doomed! It will never get better!

    Although housing is picking up
    and construction
    and 5 major economic indicators
    and the budget’s balanced
    and……….

    0 for 14 ™!

    Reply this comment
  13. Rex the Wonder Dog!
    Rex the Wonder Dog! 10 February, 2013, 09:40

    **Double Yawn**

    Reply this comment
  14. BobA
    BobA 10 February, 2013, 12:05

    Hondo, Rex:

    Next, they’ll be touting Kalifornia as a low tax business friendly state. An remember, only in a liberal’s mind is a minimum wage job a “good job”.

    Reply this comment
  15. Douglas
    Douglas 10 February, 2013, 13:21

    “Is CA really barreling down recovery road?”

    I believe that’s what they call a straw man argument. I don’t hear Froma Harrop or anyone else claiming that.

    We are slowly digging ourselves out of a hole. California gained back over 200,000 jobs last year (and reduced government jobs by 30,000). We MAY have a nearly balanced budget this year, which is clearly better than 20 billion dollar deficits.

    We are still below pre-recession levels, but have stopped the downward slide.

    The glass is at least half full.

    Reply this comment
  16. Donkey
    Donkey 10 February, 2013, 14:37

    The real growth of the nation has been flat for the last 23 years and inflation is eating up what is left of the little peoples money after feeding the RAGWUS sows. 🙂

    Reply this comment
  17. Rex the Wonder Dog!
    Rex the Wonder Dog! 10 February, 2013, 15:16

    We MAY have a nearly balanced budget this year, which is clearly better than 20 billion dollar deficits.
    ==
    Put the crack pipe down Dougie.

    Reply this comment
  18. Ted Steele, The Decider
    Ted Steele, The Decider 10 February, 2013, 18:25

    Well said Douglas– but these teabaggy hacks don’t want ANY good news either in Cali or at the fed level——–lol—— I love watching them snivel and whine though!

    0 for 14(tm)!

    Reply this comment
  19. Rex the Wonder Dog!
    Rex the Wonder Dog! 10 February, 2013, 18:46

    We are slowly digging ourselves out of a hole.
    ==
    NO, we are not digging out slowly, we are digging DEEPER, at a faster rate.

    Reply this comment
  20. Rex the Wonder Dog!
    Rex the Wonder Dog! 10 February, 2013, 18:47

    Just paid $4.25 for a gallon of gas, RECOVERY IS HERE!!!!!!!!!!!!!!!!!!!!!!!!

    Reply this comment
  21. 2nd class citizen
    2nd class citizen 10 February, 2013, 20:34

    We hired 100,000 union public employees last year while the rest of the nation retired 400,000 union public employees. For those who don;t understand union public employees are a tax burden not a tax creation, unemployement may drop but the deficiet will increase.

    Reply this comment
  22. Ted Steele, The Decider
    Ted Steele, The Decider 10 February, 2013, 21:05

    LMAO !!!!

    Rex the Wonder Dog! says:
    February 10, 2013 at 6:46 pm
    We are slowly digging ourselves out of a hole.
    ==
    NO, we are not digging out slowly, we are digging DEEPER, at a faster rate.

    THE SKY IS FALLING !!!!!!! The end is near!!!!!!!!!!!!!! Maybe a prediction???????

    0 for 14 ™!

    Reply this comment
  23. Douglas
    Douglas 11 February, 2013, 03:35

    Who hired 100,000 union government employees? Not California.

    California created 211,000 private sector jobs in 2012. The state led the nation in job creation in June.

    http://www.cnbc.com/id/48018076/page/10

    On the negative side ( according to CNBC):
    “ government payrolls fell by almost 60,000. ”

    The glass is at least half full.

    Reply this comment
  24. Douglas
    Douglas 11 February, 2013, 03:45

    Recovery is here!!!!!

    Looks like gas prices are coming DOWN.

    July, 2008……$4.28 per gallon.

    http://zfacts.com/gas-price-history-graph

    The glass is at least half full.

    Reply this comment
  25. Ted Steele, The Decider
    Ted Steele, The Decider 11 February, 2013, 10:00

    Well said Douglas— you are a zephyr of fresh air on this dank, crusty, old white whine board!

    Reply this comment
  26. jimmydeeoc
    jimmydeeoc 11 February, 2013, 15:38

    California created 211,000 private sector jobs in 2012. The state led the nation in job creation in June.

    http://www.cnbc.com/id/48018076/page/10

    On the negative side ( according to CNBC):
    “ government payrolls fell by almost 60,000. ”
    ————————

    The problem, Douglas, is most of us recognize a long term trend when we see one.

    Looking over the past 20 years…sure there are occasional upticks—

    It reminds me of the Lakers yesterday. They score three straight buckets at the beginning of the second half…..closing the lead to 6. Fans pee themselves in excitement…Hey were are coming back!!!

    No you’re not. They lost 107-97.

    Reply this comment
  27. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 February, 2013, 19:29

    Douglas says:

    Recovery is here!!!!!

    Looks like gas prices are coming DOWN.

    July, 2008……$4.28 per gallon.

    ==============
    Put the crack pipe down!

    Gas prices hit a historic high: What’s driving them up?

    Gas prices hit a national average of $3.59 Monday – the highest ever for a Feb. 11. Several factors will continue to drive up costs, but not to last year’s highs, analysts say.

    http://www.csmonitor.com/Business/2013/0211/Gas-prices-hit-a-historic-high-What-s-driving-them-up

    The glass is EMPTY!

    Reply this comment
  28. Ted Steele, The Decider
    Ted Steele, The Decider 11 February, 2013, 22:15

    LOL Douglas— the two above posts prove that the doomers out here know only too well the tea baggy am rant radio white whine!

    Garbage in—garbage out!

    lol

    Reply this comment
  29. Rex the Wonder Dog!
    Rex the Wonder Dog! 12 February, 2013, 07:23

    Gas prices hit a historic high: What’s driving them up? 2-11-13

    BAM!!!!!!!!!!!!!! Teddy how did that feel, are you still living in last week from that knock out punch 🙂

    Reply this comment
  30. Ted Steele, The Decider
    Ted Steele, The Decider 12 February, 2013, 08:48

    LOL– knock out? Bwahahahahaha— oh man let me catch my breathe.

    I am still waiting for you to enter the ring little buddy! Zzzzzzzzzzzzz.

    But I do see that my rent check is due———————— wait for it———- For camping out in you peas sized skull!

    Bam Baby!!!!!!!!!!!!!!!!!!!!!

    Oh—-0 for 14 ™!

    Reply this comment
  31. Chief661
    Chief661 12 February, 2013, 09:28

    @Ted Steele, “The Decider” – I read these articles daily including your comments in response to Rex, etc. with some amusement as your comments always reflect an alternate reality. I will gladly grant that you love CA that you seem to agree with what the Democrats in Sacramento do with your money and freedoms. I was transferred here in 02 thinking it couldn’t be as bad as everyone said. I soon learned that I was way wrong; it’s much worse and has gotten even more so in the last 10 years. You can have this “paradise” beautiful weather and pretty views notwithstanding. You must really enjoy: 1) having people tell you what you can eat, 2) when you can burn a fire, 3)what firearms you can or cannot have, 4) paying outrageous taxes and exorbitant housing costs. 5) A Union controlled government, 6) outrageous vehicle license fees and gasoline/diesel prices. I will leave here, God willing, in 2014 and will happily return my share of “paradise” to you and those like you who think this is the best, the only place to live in America. You keep telling yourself that all is well in CA that businesses and tax payers aren’t leaving because of a repressive environment on many levels. As Josef Goebbels said “If you tell a lie big enough and keep repeating it, people will eventually come to believe it.” That is as long as “the state” can shield the people from reality. At some point the unfunded liabilities for the union pensions will need to be paid and that money will need to come from somewhere; look in the mirror because it will come from…surprise, more taxes. Good for you if you don’t mind paying that in return for living in “paradise”. I would rather live in a one room cabin or a dirt hut as long as it was in a state with more personal freedom. The nice weather and the beautiful views here in CA “cost” way too much for me.

    Reply this comment
  32. Rex the Wonder Dog!
    Rex the Wonder Dog! 12 February, 2013, 12:40

    @Ted Steele, “The Decider” – I read these articles daily including your comments in response to Rex, etc. with some amusement as your comments always reflect an alternate reality.
    ==

    LOL…..Teddy lives in Fantasyland down in Anaheim!

    Reply this comment
  33. Ted Steele, The Decider
    Ted Steele, The Decider 12 February, 2013, 15:27

    Chief—- GREAT post!!!!!

    I think we have seen improvement in Sacto— obviously we have. Is all well on the fiscal side? Not yet but we are on the right track in spending less.

    So tell me— exactly and specifically what “freedoms” you have lost?

    Union controlled gov? Hmmm– well, I assume you like democracy…..right? Then you must embrace prop 30 and prop 32….right?

    So back to the original question——-EXACTlY WHICH FREEDOMS you’ve lost??????

    Thanks for reading my posts! That’s why I bother! I enjoyed yours as well—–!!

    The Ted Steele System!!
    From Paradise!!!

    Reply this comment
  34. Ted Steele, The Decider
    Ted Steele, The Decider 12 February, 2013, 15:29

    Poodle—- I bet you wish you could write as well as the “CHIEF” does!!!!

    0 for 14 ™!

    Reply this comment
  35. Sean Morham
    Sean Morham 12 February, 2013, 15:44

    Just wait, health care provider shortage to cope with masses of uninsured in California will overwhelm the medical system fiscally, but more importantly staffing wise. Obamacare will be to health care in California what Enron was to energy costs. Hee, Hee, Things are good in the Golden state and getting better all the time.

    Reply this comment
  36. Rex the Wonder Dog!
    Rex the Wonder Dog! 12 February, 2013, 17:09

    I think we have seen improvement in Sacto— obviously we have. Is all well on the fiscal side? Not yet but we are on the right track in spending less.
    ==
    Put the crack pipe down teddy steals, another useless comment.

    Reply this comment
  37. Ted Steele, The Decider
    Ted Steele, The Decider 12 February, 2013, 19:11

    Poodle—- with EVERY post you continue to prove my point—- I live in your skull! Where do I send the——wait for it—– rent check!!!! LMAO!!!!!!!!!!!!!!!!!

    Reply this comment
  38. Rex the Wonder Dog!
    Rex the Wonder Dog! 12 February, 2013, 19:34

    Teddy, your brain is still smartin from that smack down I gave you yesterday!

    Reply this comment
  39. Ted Steele, The Decider
    Ted Steele, The Decider 12 February, 2013, 21:11

    lol—- another delusion of adequacy little fella?

    OUCh!!!!!

    Reply this comment
  40. Rex the Wonder Dog!
    Rex the Wonder Dog! 13 February, 2013, 09:40

    You still see the lil birdies I gave ya!

    Reply this comment
  41. Ted Steele, The Decider
    Ted Steele, The Decider 13 February, 2013, 13:15

    LOL— He HAS to comment about me! LOVE IT!!

    Hurry — post NOW!!!

    0 for 14 ™!

    Reply this comment
  42. Rex the Wonder Dog!
    Rex the Wonder Dog! 13 February, 2013, 13:32

    BAM!!!!!!!!!!!!!! Another knock out 😉

    Reply this comment
  43. Ted Steele, The Decider
    Ted Steele, The Decider 13 February, 2013, 17:10

    Post now slave troll!!!!!

    Hurry!!!!!!!

    Reply this comment
  44. Rex the Wonder Dog!
    Rex the Wonder Dog! 13 February, 2013, 18:59

    Still seeing Birdies from the Rotti KO I see 😉

    Reply this comment
  45. Ted Steele, The Decider
    Ted Steele, The Decider 13 February, 2013, 19:19

    You’re a poodle little buddy –sorry!

    and you can’t resist the ob/comp urge to comment
    hence you’re a troll
    and
    of
    course
    still

    0 for 14(tm)!

    Hurry!!!!

    Reply this comment
  46. Rex the Wonder Dog!
    Rex the Wonder Dog! 14 February, 2013, 20:29

    Teddy bring your sock puppets back, you’re a punk…. 😉

    Reply this comment

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