After that, from 2011 to 2014, “manufacturing employment has hovered around 12.5 million,” reported the Sacramento Bee.

“There certainly are pockets of success,” Gino DiCaro told CalWatchdog.com; he’s vice president of communications at the California Manufacturers & Technology Association.

A big contributing factor, he said, was the sales tax exemption for purchasing manufacturing equipment passed by the Legislature and signed by Gov. Jerry Brown in 2013. “Until then, we were one of the few states that taxed it,” DiCaro said.

It’s too early to see just how much that tax cut will help manufacturing. But DiCaro cited figures that the state has a lot of catching up to do. Since Jan. 2010, California manufacturing has increased just 1 percent. That’s much less than the 7 percent for the United States as a whole — and a whopping 18 percent for Indiana, a Rust Belt state currently inundated by the record cold and massive blizzard hitting the Northeast.

Toyota’s website boasts it employs “4,500 people here at Toyota Motor Manufacturing, Indiana, Inc. (TMMI), and our local suppliers employ thousands more across Indiana. Our $4.1 billion investment in the state of Indiana gives us the capacity to build nearly 300,000 vehicles a year here, including the Sequoia full-size SUV, the Highlander midsize SUV and the Sienna minivan.”

Toyota shut its California NUMMI plant in Fremont in 2010. And last year it announced its U.S. headquarters was moving from Torrance to Texas, costing 3,000 jobs. However, those are office jobs, not manufacturing.

On the positive, the NUMMI plant now builds Teslas. But even there, Tesla chose Nevada over California to build batteries, albeit because California wouldn’t match Nevada’s $1.3 billion in tax breaks — effective subsidies paid by the rest of the state’s taxpayers.

DiCaro also pointed out that, in 2013, the Golden State enjoyed “only 1.5 percent of new or expanded facilities in the United States,” even though our population is 12 percent of the country.

Energy problem

DiCaro said a big problem with California is that manufacturing paid 70 percent higher electricity rates than the rest of the country for electricity before AB32, the Global Warming Solutions Act of 2006 began to be implemented in recent years.

Currently, he said, “overall energy rates are increasing” due to AB32’s implementation of the cap-and-trade program, which charges companies, such as electricity utilities, for greenhouse-gas emissions that are too high. Also aiding the energy-rate increase is a separate mandate that 33 percent of California electricity must come from renewables by 2020. In his Inaugural Address last month, Gov. Jerry Brown called for an even higher goal of 50 percent renewables by 2030.

The exact cost is unknown. As CalWatchdog.com reported, “Brown recently was rebuked by the Little Hoover Commission for failing to disclose to Californians how much the price tag will be for renewable power in California.”

DiCaro fingered a particular problem. California still is the home for venture capital that funds amazing startups. But when such companies succeed “and want to scale up big time, the overall high energy rates become a significant impediment for a large manufacturer.”

The good, the bad and the weather

DiCaro urged that the manufacturing picture in California has its positive points:

• A fantastic climate — unlike, say, Indiana;
• Great quality of life;
• An excellent university system that produces engineers and others needed by high-tech companies.

The bad points that need to be worked on:

• A high cost of living that has produced the country’s highest poverty rate;
• High electricity costs;
• Environmental quality permitting that can delay projects for years;
• The country’s highest workers’ compensation costs.

On the latter, Greg Jones, western bureau chief of the Work Comp Central news site, reported on Feb. 19, “A flurry of legislative activity next week is expected to present California lawmakers with questions about the state workers’ compensation system that are bigger than whether sports teams should be required to provide coverage for cheerleaders.”

The 2004 reforms signed into law by Gov. Arnold Schwarzenegger since have been eroded, again putting California at a disadvantage for other states.

Along with the 2013 sales tax cut for manufacturers, serious work comp reform could indicate the state at least is trying to move its business climate in the direction of its balmy weather climate.

“Living costs may not be particularly burdensome for those at the top of the economic ladder – the fortunate folks who live in Beverly Hills, Hillsborough or other affluent enclaves. But they do affect those on the middle and lower rungs, as a new Census Bureau report underscores.

“California’s official poverty rate of 16.5 percent is somewhat higher than the national rate of 15.1 percent, but under an alternative Census Bureau method of calculating poverty that includes cost of living, our poverty rate soars to – by far – the highest rate of any state. Nearly a quarter of Californians, 23.8 percent, live in poverty.

“This is, or should be, a matter of shame, especially for politicians who profess to represent society’s underdogs but who enact policies that raise their struggling constituents’ cost of living, or inhibit the creation of jobs that would lift poor Californians out of poverty. … [While] the state’s media and political elites may sneer at Texas and other states that lack our mild weather and scenic attributes, they should note that Texas’ poverty rate is just two-thirds of California’s and Iowa’s is just one-third.”

But don’t expect the anti-Texas sneering to stop. It’s just one part of an overall mindset in the Obama era, in which the left views the right as not just wrong on politics but as pathetic, racist inferior beings. Admitting that a conservative state is better governed than California? Admitting that there are far fewer poor people in Texas than the Golden State? In San Francisco, west Los Angeles and Democratic legislative chambers, that’s akin to hate speech. The CalBuzzers are probably laughing themselves silly at the very thought these facts might be true.

Of course. But here in California, where the incompetence of the media can scarcely be exaggerated, almost nobody is aware that the Golden State is no. 1 in economic misery.

This malpractice is nothing new. On the debate over whether California should encourage hydraulic fracturing of its massive oil reserves, the state media never note that the Obama administration considers fracking safe. On the debate over education policy, the state media never note that Gov. Brown’s prescription for education reform — local control — is the same flawed, status-quo-reinforcing policy choice that led to the two big education reform moments of the past 30 years. On AB 32, the state’s landmark 2006 climate-change law, the Los Angeles Times waited until March 2012 to note that it was a risk to California’s economic competitiveness to force its energy costs to be higher than rival states and nations. On this front, the L.A. Times trailed the New York Times by years.

So on the economy, why would the fact that California has the highest effective poverty rate in the nation be mentioned? If key details are routinely ignored on other big stories, why change the template on poverty and human misery?

The governor thinks he’s the bomb. Why won’t media push back?

Which brings me to my Sunday U-T San Diego editorial.

“… what one would never guess from his press clippings is that Brown presides over the state with by far the nation’s highest poverty rate. According to a 2012 Census report, once the cost of living is factored in, nearly one in four state residents — 23.5 percent — live below the poverty line. And according to a U.S. Bureau of Labor Statistics measure that includes those who have given up looking for work, California has the second worst unemployment rate in the nation. More than one in six Californians who want to work full-time — 18.3 percent — can’t find such jobs.

“How anyone can look at this picture and conclude the Golden State has solved its economic miseries is baffling. Silicon Valley and the Bay Area are doing well. San Diego and Orange counties are much improved. But the Great Recession never ended in the Central Valley, Imperial County or the Inland Empire. Nor did it end for millions of Latino and African-American families in the minority neighborhoods that don’t reflect the tidy picture offered by the national media.

“Brown, alas, won’t acknowledge the depth of our economic woes. Such is his hubris that he’d rather enjoy the fawning than push back at the narrative of a booming, healthy California. Last month, he even gave a boastful interview to The Los Angeles Times that carried this headline: ‘Gov. Brown sees his ambitious agenda as a template for nation.'”

A normal newspaper would see a politician being this boastful and choose to point out the counter-narratives that undercut his claims. But not the L.A. Times’ reporting staff. Or its editorial page. Or its Sacramento columnist George Skelton.

What’s news vs. what’s not news: Aaauuugghh!

I have seen pack journalism my entire professional life. But I have never seen anything like the last few years out of Sacramento. I don’t think that the following four questions are only ones that would occur to a partisan individual. I think they’d occur to anyone who is reasonably well-informed.

Why isn’t it relevant that the Obama administration considers fracking safe?

Why aren’t Jerry Brown’s education policies placed in historical context?

Why did it take more than five years for a small part of the media to admit AB 32 was risky?

And on poverty, why isn’t the fact that California is worse off than Mississippi and West Virginia front-page news? Or back-page news? Or news at all?

I await sincere answers. But what do I expect, at least from Sacramento journalists? Snark.

The analysis took Brown's view seriously. But should it have?

California has the highest effective poverty rate in the United States. The state auditor just put out a report that lists fundamental state problems that never get any better. The state government is pushing a project on track to be the biggest boondoggle in world history. And Jerry Brown thinks the rest of America should copy California!

But the single most hilarious part of the Times piece was Brown's suggestion that he had figured out how to counter income inequality:

“Since retaking office in 2011, Brown has raised concerns about growing income inequality across the country, calling it a risk for the United States' long-term political and economic stability. Months after persuading state voters to increase income taxes for those making more than $250,000 per year, Brown is now set to raise California's minimum wage to $10 per hour by 2016 — the highest in the nation.

“Democratic leaders hope the changes in California could help build momentum for national change.

“'This new law puts Californians ahead of the curve. Now, it's time for Congress to follow suit,' House Minority Leader Nancy Pelosi (D-San Francisco) said after Brown signed the wage increase.”

Tinkering on income margins hardly a national solution

Economists who read that will want to laugh or cry or both. Raising taxes on the rich and upping the minimum wage literally addresses problems on the margins — a relatively small reduction in the wealth of the rich and a big increase in minimum pay that still doesn't lift people into the middle class. It is no long-term response to income inequality, which is the product of big societal and economic shifts. I wrote about them here:

“When you set aside the class-warfare rhetoric that Democrats so enjoy, the drivers of income inequality are plain. The first is rarely acknowledged. It’s the increasing tendency of highly educated professionals to marry each other. Doctors used to marry nurses. Now they marry other doctors, concentrating family wealth.

“The second is that the modern economy places an ever-higher premium on job skills, and yet we don’t have a public education system that responds to this fact. In 2013, how is it possible that a year or more of computer science isn’t a universal high school graduation requirement?

“It’s not just information-technology jobs going unfilled because of a mismatch between what schools teach and what employers need. In many skilled-job categories — welders, critical-care nurses, electrical linemen, special-education teachers, geotechnical engineers, respiratory therapists — unemployment is practically zero.

“So long as we have an absurdly complex tax code in which the amount that the very wealthy pay depends on the skill of their tax attorneys, the Occupy argument that the U.S. is rigged to help the rich will resonate with some. But this doesn’t address the disconnect between what our schools teach and what our economy needs.”

Better education get to limiting income inequality

My views are not fringe views. They're in the mainstream of how economists look at income inequality. This is from a Harvard professor's piece for the Huffington Post:

“High and rising income inequality in the United States has recently been widely commented upon. What has not been as widely discussed is the role educational attainment has played in these disparities. …

“In many ways, our two economies have created two separate societies. Those with low educational attainment drift permanently between recessions and depressions, with little stability. Those with high educational attainment experience increased wealth, only mild recessions, and interesting projects with personal growth.

“Additionally, these numbers suggest that our lack of highly-skilled knowledge workers is a major binding constraint on the growth of the American economy. In 2006 and 2007, unemployment rates for the highly-skilled group were as low as 2% — a figure viewed as basically beyond full employment. These results also imply that further economic growth in 2007 would have resulted in even higher wages (and more income inequality) for the more highly educated group.”

Jerry lucky to be covered by hagiographers

How strange that Jerry Brown, who wants us all to think that he's the smartest guy around, would offer the simplest and dumbest “template” for addressing income inequality — one that largely treats symptoms of income inequality as the causes of it. Unfortunately, it's not strange that the L.A. Times would let him get away with it.