Monthly Archives: December 2012

COMMENTARY: A Death In The National Family: Public Confidence

  • By Joseph J. Honick 
Joseph J. Honick

Joseph J. Honick
Editor’s Note: This column was originally published in late October of 2008; the author believes it’s worth reprinting because little or nothing has changed in more than four years.

The most devastated victim of the current economic debacle is the death of public confidence … confidence in what has passed for national leadership … public confidence in a war that was drummed up on a lie and has drained our national financial treasures and cost our treasures of men and women sent out to fight in a foreign land whose millions of people could not rise to defend themselves even after their dictator was toppled.

But where is the outrage? Where is the editorial anger from the silenced media lambs? Why are so many seemingly paralyzed by confusion, fear and emotional turmoil? Where are the calls for accountability, meaning justice, meaning some public court trials?

The death of public confidence has not appeared in the tombstone pages of the usual obituaries in daily media or announced in somber tones on radio and television. It merely occurred as our political leaders from the White House down and sideways continued to wring their hands while banging away on the nation’s cash register and federal ATM’s to grind out hundreds of billions to guilty financial houses and claiming that health care for the needy would be socialism.

Perhaps the reason the death just slipped by is that two political parties contending to run the nation were consumed by the need to tell us how they will bring the change that will turn war and economic disaster into progress and a Disneyland wonderland of economic renewal, something called “market based” health care and a new world of leadership as we have never known it.

Somehow we have managed to funnel a trillion dollars (read that as $1,000,000,000,000) just into the endless war in Iraq that also included a billion for private public relations firms to help propagandize it, another billion for private security outfits like Blackwater … hundreds of millions more for private contractors like Haliburton and its subsidiaries to run mess halls for the military that soldiers used to handle and lots of other things we may never learn about.

While all this continues unabated, and another billion will have been spent for the current race for the White House and not including the untold millions for state and local elections, we are told unabashedly it is socialistic to provide health care for those is need, again even as we know those who could vote for it are granted single payer government health insurance…those people are called United States Senators and Members of the House of Representatives.

Is it any wonder that the very heart of public confidence has come a cropper?

The real wonder is why so few seem to care enough to participate in the funeral ceremonies or rally to demand answers from those who have been anointed to provide them?

No matter your beliefs or lack thereof, there are no resurrections of public confidence easily arranged given the disappearance of a sense of reliance on questionable governmental officialdom and confused and contaminated representative governance.

Matters are made still worse, if that is possible, by the emergence of some of the worst propaganda designed to discredit leadership candidates, propaganda in many instances that would have made the McCarthy era of guilt by association seem tame in comparison.

So what should the public want and deserve?

It is time to realize that the political buffoonery of this administration and the lax Congress in dealing with it must be brought before the bar of justice the same as occurred with Enron and other sleazy operations. The people want to know that even such power operators can be face with criminal review the same as slobs who drive too fast in the wrong traffic lane and wind up in the clink.

The place to start is right at 1600 Pennsylvania Avenue in the Oval Office. The chance to propose impeachment is long past and overdue. However the chance to censure the President is right before the Congress. Ironically, nearly 10 years to the day, on December 6, 1998, the Washington Post, citing the snowballing effort to impeach President Clinton, pleaded instead for censure. It said in an editorial:

“Tough censure is not the perfect outcome. There isn’t a perfect
outcome to this miserable case. But censure beats impeachment.
On the basis of the evidence as assembled (this time on Bush and Company)
…..that’s the grudging judgment we (the Post)have reached, and we hope the
House reaches it as well.”

That was the Washington Post speaking at the time. Certainly no enemy of the Democrats then or now but addressing an issue that had struck the public mind so intensely, what with special legal counsel dancing all over the Clintons so publicly but virtually absent today for some reason when the public needs, demands and deserves complete transparency from a government that has permitted the nation to sink into an economic abyss from which it now seeks to escape responsibility.

And that transparency must include those who have hardly asserted its power to get in the way of some of these crimes against the public: Members of Congress, Regulatory Agencies and, yes, media of right, left and the middle who have not done their investigative jobs like old school muckrakers and permitted if not endorsed these political ne’er do wells to get away with their irresponsibility.

Until and unless those elected to lead our nation at all levels are brought before the bar of justice, the clearly devastated public confidence of the millions of Americans who are coming to realize the fraud imposed on them will not recover.

Neither pretender to the White House in this historic election year has proposed a path to begin that rehabilitation. The propagandists of the right sound more like the old William Randolph Hearsts in smearing character without proposing solutions; the propagandists of the left are dealing in generalities that at least are more in tune with possibilities but still lacking in specifics.

We all now await at least a germ of wisdom and courage that will demand justice for the perpetrators and concurrently some clear vision as to where we might go next, no matter how tough the road ahead. 

* * *

Joseph J. Honick is an international consultant to business and government — based in Bainbridge Island, WA — and writes for many publications, including www.huntingtonnews.net.

 

2012 in review

The WordPress.com stats helper monkeys prepared a 2012 annual report for this blog.

Here’s an excerpt:

600 people reached the top of Mt. Everest in 2012. This blog got about 4,300 views in 2012. If every person who reached the top of Mt. Everest viewed this blog, it would have taken 7 years to get that many views.

Click here to see the complete report.

OP-ED: Our Intolerable Risk: Nuclear Weapons Threaten Us All

  • By Peter G Cohen 
Peter G Cohen

Peter G Cohen

In a 2012 Status of World Nuclear Forces report, The Federation of American Scientists (FAS, founded in 1945 by many of the original group of scientists who invented and built the first atomic bombs and who later came to oppose them) estimates that 1,800 Russian and U.S. nuclear warheads are on “high alert,” ready to strike at the push of a button.  This, two decades after the Cold War ended. While it is difficult to ascertain how many nuclear warheads exist in each nation without access to classified information, based on publicly available information, the FAS counts approximately 16,200 stockpiled nuclear warheads, of which almost 4,000 are “operational.”

 

That this level of risk is holding the people of the world hostage is intolerable. At any moment, a miscalculation, human, electrical, mechanical, or electronic hacking could plunge us into a worldwide nuclear holocaust. The tragic events at Fukushima have clearly demonstrated that we cannot prevent our technology from being overwhelmed by such natural events as an earthquake, or the fires, floods and storms of climate change. The hacking of Iranian nuclear systems by the Stuxnetworm within the last several years suggests that any firewalls against unauthorized launch of missiles could be in question.

If a small fraction (as few as 50, according to the American Geophysical Union) of those 1,800 “high alert” warheads were to detonate on either of our nations, Russia or the U.S., such a detonation would cause a worldwide catastrophe. Target cities and all their contents would be incinerated in minutes. The nuclear fireballs and the following firestorms would lift millions of tons of radioactive soot into the stratosphere, where it would circle the earth, creating a nuclear winter that would catastrophically reduce food crops and cause famine. It would disrupt the ozone layer, allowing stronger rays to reach the surface, injuring eyesight and increasing skin cancers. The radioactive fallout would increase stillbirths, leukemia, cancers and other diseases wherever it settled, on friend and foe alike. Even a relatively small exchange of nuclear weapons would threaten life worldwide, unjustly impacting billions of civilians in countries with no stake in any struggles between the nuclear weapons states.

Do Russians and Americans really want to incinerate each other? These two great nations — clever enough to reach the moon – must act to preserve themselves and all others from the horrors of nuclear war. We have reduced the total number of deployed weapons, yet this intolerable risk remains. There should be no nuclear weapons ready for rapid deployment anywhere on Earth. Now that we are fully aware of the indiscriminate nature of these weapons and their widespread effects, it is a massively costly Crime Against Humanity to “update and modernize” these weapons. The people of the world must demand that all the nuclear weapons states reduce this danger by removing the warheads from their delivery vehicles, and allow international inspection of their delivery systems.

The tragedy is that for some people in the nuclear-equipped nations, this insane behavior is their way of life; they think of themselves as patriots. The sad truth, eloquently detailed in a 2012 Center for International Policy report, “Bombs Versus Budgets: Inside the Nuclear Weapons Lobby,” is that Senators and Representatives, strongly influenced by military-corporate lobbying, are demanding that the nuclear facilities in their states and districts be preserved. The future of life on Earth is jeopardized for the profits of military corporations!

For 67 years we have poured money and lives into nuclear security, only to realize that it is a very costly illusion. Nuclear weapons are suicide weapons. There are no problems that can be solved by indiscriminately incinerating human beings or by gradually destroying the genetic basis of human life with fallout radiation. Taking these warheads off their delivery systems is a first step toward greater security for all people. Surely we humans are clever enough to be rid of this terrible, fruitless risk.

* * *

Peter G. Cohen, artist-writer, is the author of the website nukefreeworld.com, a veteran of World War II, and writes forPeaceVoice.

Column submitted by Tom H. Hastings, Ed.D. Director, PeaceVoice Program, Oregon Peace Institutehttp://www.peacevoice.info/

FREDDIE MAC: 30-Year Fixed-Rate Mortgage Finishes Year Near Historic Low

  • By David M. Kinchen 
FREDDIE MAC: 30-Year Fixed-Rate Mortgage Finishes Year Near Historic Low

Freddie Mac (OTC: FMCC) has released the results of its Primary Mortgage Market Survey (PMMS) — the final one for 2012 — showing the average fixed mortgage rates finishing the year near record lows, helping to keep homebuyer affordability high. The 30-year fixed eased slightly this week to average 3.35 percent, while the 15-year fixed remained unchanged at 2.65 percent.

 

“Mortgage rates ended this year near record lows,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The 30-year fixed-rate mortgage averaged 3.66 percent for 2012, the lowest annual average in at least 65 years. Rates on 30-year fixed mortgages were nearly 0.6 percentage points below that of the beginning of the year, which translates into an interest payment savings of nearly $98,600 over the life of a $200,000 loan. Moreover, opting for a 15-year fixed mortgage at today’s rates, a homeowner could save an additional $138,400 in interest payments.”
> The 30-year fixed-rate mortgage (FRM) averaged 3.35 percent with an average 0.7 point for the week ending December 27, 2012, down from last week when it averaged 3.37 percent. Last year at this time, the 30-year FRM averaged 3.95 percent.

> The 15-year FRM this week averaged 2.65 percent with an average 0.7 point, unchanged from last week when it averaged 2.65 percent.A year ago at this time, the 15-year FRM averaged 3.24 percent.
> The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.70 percent this week with an average 0.7 point, down from last week when it averaged 2.71 percent. A year ago, the 5-year ARM averaged 2.88 percent.
> The 1-year Treasury-indexed ARM averaged 2.56 percent this week with an average 0.5 point, up from last week when it averaged 2.52. At this time last year, the 1-year ARM averaged 2.78 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

U.S.: New Home Sales Rise 4.4% in November, the Highest Monthly Total Since April 2010

  • By David M. Kinchen 
U.S.: New Home Sales Rise 4.4% in November, the Highest Monthly Total Since April 2010

Sales of new single-family homes increased 4.4 percent in November to a seasonally adjusted annual rate of 377,000 units, according to figures released Thursday, Dec. 27, 2012 by HUD and the U.S. Census Bureau. It was the highest monthly total since April 2010 when the federal home buyer tax credit expired. New home sales are 15.3 percent above November 2011.

The median sales price of new houses sold in November 2012 was $246,200; the average sales price was $299,700. The seasonally adjusted estimate of new houses for sale at the end of November was 149,000. This represents a supply of 4.7 months at the current sales rate.

“New-home sales are gradually picking up momentum as the economy improves,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “Prospective home buyers who have been sitting on the fence for years are moving back into the market due to continuing low mortgage interest rates, attractive pricing and the improving economy,” he said.

“This increase is consistent with NAHB’s member surveys, which show increasing confidence in the market,” said NAHB Chief Economist David Crowe. “We’re projecting a total of about 365,000 new-home sales in 2012, an increase of almost 20 percent over the previous year. The year ahead will see a similar gain as more people who have been sitting on the sidelines decide that it is time to purchase a new home.”

Crowe cautioned, however, that failure to address the “fiscal cliff” could set the housing market back. “Continued uncertainty about the fiscal cliff has the potential to affect new home sales and other aspects of the housing market,” he said. “Some people will definitely hold off on making major financial decisions until the situation is resolved.”

Regionally, new-home sales numbers were mixed in November. Rebounding from declines the previous month, both the South and the Northeast showed improvement, with respective increases of 21.1 percent and 12.5 percent. New-home sales in the Midwest dropped by 12.5 percent, and the West posted a decline of 17.8 percent.

U.S. Census Bureau: Quick Facts Portal Makes Finding Demographic Data Easy

  • By David M. Kinchen 
U.S. Census Bureau: Quick Facts Portal Makes Finding Demographic Data Easy
When it comes to finding data, there’s not a more user friendly site — private or government —  than the U.S. Census Bureau’s Quick Facts one (link:http://quickfacts.census.gov/qfd/states/06/0644000.html). All you have to do is call up the site, follow the directions and begin looking. If you want population figures and demographics of all kinds, including ethnic makeup of a city, county or state; homeownership rates, and a wide variety of other data, Quick Facts is your best bet.

I use this site all the time and recommend it to all the readers of this site when they need accurate information quickly.

S&P/Case-Shiller: Home Prices Rose 4.3% in 12 Months Ending in October in 20-City Composite; U.S. Home Prices Back to Autumn 2003 Levels

  • By David M. Kinchen 
S&P/Case-Shiller: Home Prices Rose 4.3% in  12 Months Ending in October in 20-City Composite; U.S. Home Prices Back to Autumn 2003 Levels

Data through October 2012, released Wednesday, Dec. 26, 2012 by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed home prices rose 4.3 percent in the 12 months ending in October in the 20-City Composite, out-distancing analysts’ forecasts. Anticipated seasonal weakness appeared as twelve of the 20 cities and both Composites posted monthly declines in home prices in October.

 

As of October 2012, average home prices across the United States are back to their autumn 2003 levels for both the 10-City and 20-City Composites. Measured from their June/July 2006 peaks, the decline for both Composites is approximately 30% through October 2012 and approximately 35% from the June/July 2006 peak values to their recent lows in early 2012. The October 2012 levels for both Composites are about 8.4 to 9% above their early 2012 lows.

 

The 10- and 20-City Composites recorded respective annual returns of +3.4% and +4.3% in October 2012 – larger than the +2.1% and +3.0% annual rates posted for September 2012. In nineteen of the 20 cities, annual returns in October were higher than September. Chicago and New York were the only two cities with negative annual returns in October. Phoenix home prices rose for the 13th month in a row. San Diego was second best with nine consecutive monthly gains.

“The October monthly numbers were weaker than September as 12 cities saw prices drop compared to seven the month before.” said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The five which turned down in October but not in September, were Atlanta, Dallas, Miami, Minneapolis and Seattle. Among all 20 cities, Chicago was the weakest with prices dropping 1.5%, followed by Boston where prices fell 1.4%. Las Vegas saw the strongest one-month gain with prices up 2.8%.

“Annual rates of change in home prices are a better indicator of the performance of the housing market than the month-over-month changes because home prices tend to be lower in fall and winter than in spring and summer,” Blitzer added. “Both the 10- and 20-City Composites and 19 of 20 cities recorded higher annual returns in October 2012 than in September. The impact of the seasons can also be seen in the seasonally adjusted data where only three cities declined month-to-month. The 10-City Composite annual rate of +3.4% in October was lower than the 20-City Composite annual figure of +4.3% because the two weaker cities – Chicago and New York – have higher weights in the 10-City Composite.”

“Looking over this report, and considering other data on housing starts and sales, it is clear that the housing recovery is gathering strength,” Blitzer said. “Higher year-over-year price gains plus strong performances in the southwest and California, regions that suffered during the housing bust, confirm that housing is now contributing to the economy. Last week’s final revision to third quarter GDP growth showed that housing represented 10% of the growth while accounting for less than 3% of GDP.

“One indication of the rebound is the gains from the bottom. The largest rebound is 24.2% in Detroit even though prices there are still about 20% lower than 12 years ago. San Francisco and Phoenix have also rebounded from recent lows by 22.5% and 22.1% with prices comfortably higher than 12 years ago. The smallest recoveries are seen in Boston and New York, two cities in the northeast which suffered smaller losses in the housing bust than the Sunbelt or California.”

In October 2012, 12 MSAs and both Composites posted negative month-over-month returns. Detroit, Las Vegas, Los Angeles, Phoenix, Portland, San Diego and San Francisco were the only seven cities that recorded positive monthly returns. Denver remained flat.

After 22 consecutive months, the Las Vegas index, at 100.14, finally recovered to a level above its January 2000 figure. Atlanta and Detroit remain the only two cities with average home prices below their January 2000 levels.

More than 25 years of history for these data series are available, and can be accessed in full by going towww.homeprice.standardandpoors.com. Additional content on the housing market may also be found on S&P Dow Jones Indices’ housing blog: www.housingviews.com.

PARALLEL UNIVERSE: Ron Paul Slams Use of More Government to Protect School Children

 

Ron PaulPhoto: David M. Kinchen

Ron Paul
Photo: David M. Kinchen


By David M. Kinchen

It came as no surprise to me that my congressman, Ron Paul, R-TX 14, would oppose  the National Rifle Association’s suggestion that armed guards be placed in every school in the nation to prevent school shootings like the most recent one — the one that took place on Dec.14, 2012 at Sandy Hook Elementary School in Newtown, CT. with the loss of 20 children and 6 adults.

The statement that I’m reprinting below, from Congressman Paul’s website, is consistent with his libertarian philosophy and what I consider to be his courage to speak out on what is right and wrong, as he sees it. I’ve been blessed to live in Texas 14 for four and a half years now and will miss the leadership he has given to more than a half million Texans from Galveston to Corpus Christi — including my current hometown of Port Lavaca.
Dr. Paul: We will miss you! The photograph of Congressman Paul, an Air Force veteran and physician and 1988 Libertarian Party presidential candidate (I voted for him when we lived in California) was taken by me a few years ago in Port O’Connor,  Texas, during  the observance of the town’s centennial.
Here’s Ron Paul’s statement in its unedited entirety, from http://paul.house.gov/:

Government Security is Just Another Kind of Violence

The senseless and horrific killings last week in Newtown, Connecticut reminded us that a determined individual or group of individuals can cause great harm no matter what laws are in place.  Connecticut already has restrictive gun laws relative to other states, including restrictions on fully automatic, so-called “assault” rifles and gun-free zones.

Predictably, the political left responded to the tragedy with emotional calls for increased gun control.  This is understandable, but misguided. The impulse to have government “do something” to protect us in the wake national tragedies is reflexive and often well intentioned.  Many Americans believe that if we simply pass the right laws, future horrors like the Sandy Hook Elementary shooting can be prevented.  But this impulse ignores the self evident truth that criminals don’t obey laws.

The political right, unfortunately, has fallen into the same trap in its calls for quick legislative solutions to gun violence.  If only we put armed police or armed teachers in schools, we’re told, would-be school shooters will be dissuaded or stopped.

While I certainly agree that more guns equals less crime and that private gun ownership prevents many shootings, I don’t agree that conservatives and libertarians should view government legislation, especially at the federal level, as the solution to violence.  Real change can happen only when we commit ourselves to rebuilding civil society in America, meaning a society based on family, religion, civic and social institutions, and peaceful cooperation through markets.  We cannot reverse decades of moral and intellectual decline by snapping our fingers and passing laws.

Let’s not forget that our own government policies often undermine civil society, cheapen life, and encourage immorality.  The president and other government officials denounce school violence, yet still advocate for endless undeclared wars abroad and easy abortion at home.  U.S. drone strikes kill thousands, but nobody in America holds vigils or devotes much news coverage to those victims, many of which are children, albeit, of a different color.

Obviously I don’t want to conflate complex issues of foreign policy and war with the Sandy Hook shooting, but it is important to make the broader point that our federal government has zero moral authority to legislate against violence.

Furthermore, do we really want to live in a world of police checkpoints, surveillance cameras, metal detectors, X-ray scanners, and warrantless physical searches?  We see this culture in our airports: witness the shabby spectacle of once proud, happy Americans shuffling through long lines while uniformed TSA agents bark orders.  This is the world of government provided “security,” a world far too many Americans now seem to accept or even endorse.  School shootings, no matter how horrific, do not justify creating an Orwellian surveillance state in America.

Do we really believe government can provide total security?  Do we want to involuntarily commit every disaffected, disturbed, or alienated person who fantasizes about violence?  Or can we accept that liberty is more important than the illusion of state-provided security? Government cannot create a world without risks, nor would we really wish to live in such a fictional place.  Only a totalitarian society would even claim absolute safety as a worthy ideal, because it would require total state control over its citizens’ lives.  We shouldn’t settle for substituting one type of violence for another. Government role is to protect liberty, not to pursue unobtainable safety.

Our freedoms as Americans preceded gun control laws, the TSA, or the Department of Homeland Security.  Freedom is defined by the ability of citizens to live without government interference, not by safety. It is easy to clamor for government security when terrible things happen; but liberty is given true meaning when we support it without exception, and we will be safer for it.

NEWS ANALYSIS: California in the Rear View Mirror: Manhattan Institute Study Provides a More Comprehensive Look at Exodus from Golden State

  • By David M. Kinchen 
NEWS ANALYSIS: California in the Rear View Mirror: Manhattan Institute Study Provides a More Comprehensive Look at Exodus from Golden State

On Dec. 11, I did a story about the population exodus from high tax states like California and New York to more business friendly, lower tax ones like Texas and Florida. Link:http://www.huntingtonnews.net/51370.

The story was based on the Census Bureau’s mover survey and left me wondering if there was more to this major change in population that began a decade or so ago.

When I heard that the Manhattan Institute had done a similar survey, “The Great California Exodus: A Closer Look” (link:http://www.manhattan-institute.org/html/cr_71.htm#.UNh3uY6EzzJ I discovered that yes, there was more to the story. The Manhattan Institute story, by Tom Gray and Robert Scardamalia, was based on more than just Census Data, although that was essential. 

 

From the report’s Executive Summary:

 

For decades after World War II, California was a destination for Americans in search of a better life. In many people’s minds, it was the state with more jobs, more space, more sunlight, and more opportunity. They voted with their feet, and California grew spectacularly (its population increased by 137 percent between 1960 and 2010). However, this golden age of migration into the state is over. For the past two decades, California has been sending more people to other American states than it receives from them. Since 1990, the state has lost nearly 3.4 million residents through this migration.

NEWS ANALYSIS: California in the Rear View Mirror: Manhattan Institute Study Provides a More Comprehensive Look at Exodus from Golden State


This study describes the great ongoing California exodus, using data from the Census, the Internal Revenue Service, the state’s Department of Finance, the Bureau of Labor Statistics, the Federal Housing Finance Agency, and other sources. We map in detail where in California the migrants come from, and where they go when they leave the state. We then analyze the data to determine the likely causes of California’s decline and the lessons that its decline holds for other states.

The data show a pattern of movement over the past decade from California mainly to states in the western and southern U.S.: Texas, Nevada, and Arizona, in that order, are the top magnet states. Oregon, Washington, Colorado, Idaho, and Utah follow. Rounding out the top ten are two southern states: Georgia and South Carolina.

A finer-grained regional analysis reveals that the main current of migration out of California in the past decade has flowed eastward across the Colorado River, reversing the storied passages of the Dust Bowl era. Southern California had about 55 percent of the state’s population in 2000 but accounted for about 65 percent of the net out-migration in the decade that followed. More than 70 percent of the state’s net migration to Texas came from California’s south.

What has caused California’s transformation from a “pull in” to a “push out” state? The data have revealed several crucial drivers. One is chronic economic adversity (in most years, California unemployment is above the national average). Another is density: the Los Angeles and Orange County region now has a population density of 6,999.3 per square mile—well ahead of New York or Chicago. Dense coastal areas are a source of internal migration, as people seek more space in California’s interior, as well as migration to other states. A third factor is state and local governments’ constant fiscal instability, which sends at least two discouraging messages to businesses and individuals. One is that they cannot count on state and local governments to provide essential services—much less, tax breaks or other incentives. Second, chronically out-of-balance budgets can be seen as tax hikes waiting to happen.

The data also reveal the motives that drive individuals and businesses to leave California. One of these, of course, is work. States with low unemployment rates, such as Texas, are drawing people from California, whose rate is above the national average. Taxation also appears to be a factor, especially as it contributes to the business climate and, in turn, jobs. Most of the destination states favored by Californians have lower taxes. States that have gained the most at California’s expense are rated as having better business climates. The data suggest that many cost drivers—taxes, regulations, the high price of housing and commercial real estate, costly electricity, union power, and high labor costs—are prompting businesses to locate outside California, thus helping to drive the exodus.

Population change, along with the migration patterns that shape it, are important indicators of fiscal and political health. Migration choices reveal an important truth: some states understand how to get richer, while others seem to have lost the touch. California is a state in the latter group, but it can be put back on track. All it takes is the political will. 

* * *

One question that wasn’t completely answered in the Census Bureau report cited in my Dec. 11 story: Why Texas? Gray and Scardamalia note in the report that “at the turn of the [21st] century, Texas lagged behind Nevada, Arizona, and Oregon as a destination for Californians.” By 2010, Texas had moved to the top of the list: “Why did that happen? Unlike nearby states, Texas is not an obvious destination for Californian migrants,” they wrote.

“Most of its population centers are some 1,000 miles away from the big California metro areas.
“What it has had, for the past few years, is an economy that, compared with California’s, is booming. This is a quite recent development. In fact, California and Texas had comparable unemployment rates through 2006 (in the summer and fall of that year, both rates bottomed, at just under 5 percent). But starting in 2007—well before the recession—California’s jobless rate started climbing and eventually left Texas far behind. By July 2010, the gap was 4.3 percentage points: 8.1 percent for Texas and 12.4 percent for California. (Recent data shows California’s November jobless rate in the single digits, at 9.8 percent, but the comparable number for Texas is 6.2 percent). It is not surprising, then, that Texas kept pulling Californians by the tens of thousands as the decade waned, while nearer destination states saw the earlier wave of Californians slow to a trickle.

“Texas is not the only east-of-the-divide state to attract more Californians as the decade wore on. Its smaller neighbor Oklahoma was a minor target state in 2000–01, with net migration from California totaling only 775. Ten years later, it was the sixth-most popular target. It netted 2,152 from California in 2009–10, amid the sluggish migration of the recession. Oklahoma’s job market was stronger than California’s throughout the decade, but the jobless gap between the two states was much wider in 2010 (5.5 percent) than it had been ten years earlier (1.9 percent).

About the Report’s Authors

TOM GRAY is an award-winning editor, writer, and communications consultant whose work has covered a wide range of fields, including investor relations, personal finance, health care, engineering, leading-edge scientific research, and local, state, and national politics. In a career spanning four decades, he has written for publications such as the Los Angeles Times, City Journal, and Investor’s Business Daily (where he also served as senior editor), and has authored three books on online investing published by John Wiley & Sons. As editorial-page editor of the Los Angeles Daily News, Gray won a number of awards for writing and editing including first place awards for editorial writing from the California Newspaper Publishers Association and the Inland Daily Press Association. He also has provided marketing and communications services for business and not-for-profit clients including Deloitte & Touche, ValueOptions Inc., the Kavli Foundation, the Synthetic Biology Institute at the University of California, Berkeley, and the University of California, Santa Barbara. A graduate with distinction from Stanford University, Gray also has master’s degrees in English and business administration. He lives in Cambria, California.

ROBERT SCARDAMALIA is president of RLS Demographics, Inc., a firm specializing in the use and analysis of economic and demographic data for private and public applications, and a data consultant for the Manhattan Institute’s Empire Center for New York State Policy. He was formerly director of the Center for Research and Information Analysis in the New York State Department of Economic Development and served as chief demographer of the State of New York and director of the State Data Center. Scardamalia is a professional demographer and has more than 30 years of experience using Census and related data for marketing, business attraction, and public sector program management. He holds a bachelor’s degree in sociology from Penn State University and a master’s degree in demography from Georgetown University.

NEWS ANALYSIS: California in the Rear View Mirror: Manhattan Institute Study Provides a More Comprehensive Look at Exodus from Golden State

  • By David M. Kinchen 
NEWS ANALYSIS: California in the Rear View Mirror: Manhattan Institute Study Provides a More Comprehensive Look at Exodus from Golden State

On Dec. 11, I did a story about the population exodus from high tax states like California and New York to more business friendly, lower tax ones like Texas and Florida. Link:http://www.huntingtonnews.net/51370.

The story was based on the Census Bureau’s mover survey and left me wondering if there was more to this major change in population that began a decade or so ago.

When I heard that the Manhattan Institute had done a similar survey, “The Great California Exodus: A Closer Look” (link:http://www.manhattan-institute.org/html/cr_71.htm#.UNh3uY6EzzJ I discovered that yes, there was more to the story. The Manhattan Institute story, by Tom Gray and Robert Scardamalia, was based on more than just Census Data, although that was essential. 

From the report’s Executive Summary:

 

For decades after World War II, California was a destination for Americans in search of a better life. In many people’s minds, it was the state with more jobs, more space, more sunlight, and more opportunity. They voted with their feet, and California grew spectacularly (its population increased by 137 percent between 1960 and 2010). However, this golden age of migration into the state is over. For the past two decades, California has been sending more people to other American states than it receives from them. Since 1990, the state has lost nearly 3.4 million residents through this migration.

NEWS ANALYSIS: California in the Rear View Mirror: Manhattan Institute Study Provides a More Comprehensive Look at Exodus from Golden State


This study describes the great ongoing California exodus, using data from the Census, the Internal Revenue Service, the state’s Department of Finance, the Bureau of Labor Statistics, the Federal Housing Finance Agency, and other sources. We map in detail where in California the migrants come from, and where they go when they leave the state. We then analyze the data to determine the likely causes of California’s decline and the lessons that its decline holds for other states.

The data show a pattern of movement over the past decade from California mainly to states in the western and southern U.S.: Texas, Nevada, and Arizona, in that order, are the top magnet states. Oregon, Washington, Colorado, Idaho, and Utah follow. Rounding out the top ten are two southern states: Georgia and South Carolina.

A finer-grained regional analysis reveals that the main current of migration out of California in the past decade has flowed eastward across the Colorado River, reversing the storied passages of the Dust Bowl era. Southern California had about 55 percent of the state’s population in 2000 but accounted for about 65 percent of the net out-migration in the decade that followed. More than 70 percent of the state’s net migration to Texas came from California’s south.

What has caused California’s transformation from a “pull in” to a “push out” state? The data have revealed several crucial drivers. One is chronic economic adversity (in most years, California unemployment is above the national average). Another is density: the Los Angeles and Orange County region now has a population density of 6,999.3 per square mile—well ahead of New York or Chicago. Dense coastal areas are a source of internal migration, as people seek more space in California’s interior, as well as migration to other states. A third factor is state and local governments’ constant fiscal instability, which sends at least two discouraging messages to businesses and individuals. One is that they cannot count on state and local governments to provide essential services—much less, tax breaks or other incentives. Second, chronically out-of-balance budgets can be seen as tax hikes waiting to happen.

The data also reveal the motives that drive individuals and businesses to leave California. One of these, of course, is work. States with low unemployment rates, such as Texas, are drawing people from California, whose rate is above the national average. Taxation also appears to be a factor, especially as it contributes to the business climate and, in turn, jobs. Most of the destination states favored by Californians have lower taxes. States that have gained the most at California’s expense are rated as having better business climates. The data suggest that many cost drivers—taxes, regulations, the high price of housing and commercial real estate, costly electricity, union power, and high labor costs—are prompting businesses to locate outside California, thus helping to drive the exodus.

Population change, along with the migration patterns that shape it, are important indicators of fiscal and political health. Migration choices reveal an important truth: some states understand how to get richer, while others seem to have lost the touch. California is a state in the latter group, but it can be put back on track. All it takes is the political will. 

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One question that wasn’t completely answered in the Census Bureau report cited in my Dec. 11 story: Why Texas? Gray and Scardamalia note in the report that “at the turn of the [21st] century, Texas lagged behind Nevada, Arizona, and Oregon as a destination for Californians.” By 2010, Texas had moved to the top of the list: “Why did that happen? Unlike nearby states, Texas is not an obvious destination for Californian migrants,” they wrote.

 

“Most of its population centers are some 1,000 miles away from the big California metro areas.
“What it has had, for the past few years, is an economy that, compared with California’s, is booming. This is a quite recent development. In fact, California and Texas had comparable unemployment rates through 2006 (in the summer and fall of that year, both rates bottomed, at just under 5 percent). But starting in 2007—well before the recession—California’s jobless rate started climbing and eventually left Texas far behind. By July 2010, the gap was 4.3 percentage points: 8.1 percent for Texas and 12.4 percent for California. (Recent data shows California’s November jobless rate in the single digits, at 9.8 percent, but the comparable number for Texas is 6.2 percent). It is not surprising, then, that Texas kept pulling Californians by the tens of thousands as the decade waned, while nearer destination states saw the earlier wave of Californians slow to a trickle.

“Texas is not the only east-of-the-divide state to attract more Californians as the decade wore on. Its smaller neighbor Oklahoma was a minor target state in 2000–01, with net migration from California totaling only 775. Ten years later, it was the sixth-most popular target. It netted 2,152 from California in 2009–10, amid the sluggish migration of the recession. Oklahoma’s job market was stronger than California’s throughout the decade, but the jobless gap between the two states was much wider in 2010 (5.5 percent) than it had been ten years earlier (1.9 percent).

About the Report’s Authors

TOM GRAY is an award-winning editor, writer, and communications consultant whose work has covered a wide range of fields, including investor relations, personal finance, health care, engineering, leading-edge scientific research, and local, state, and national politics. In a career spanning four decades, he has written for publications such as the Los Angeles Times, City Journal, and Investor’s Business Daily (where he also served as senior editor), and has authored three books on online investing published by John Wiley & Sons. As editorial-page editor of the Los Angeles Daily News, Gray won a number of awards for writing and editing including first place awards for editorial writing from the California Newspaper Publishers Association and the Inland Daily Press Association. He also has provided marketing and communications services for business and not-for-profit clients including Deloitte & Touche, ValueOptions Inc., the Kavli Foundation, the Synthetic Biology Institute at the University of California, Berkeley, and the University of California, Santa Barbara. A graduate with distinction from Stanford University, Gray also has master’s degrees in English and business administration. He lives in Cambria, California.

ROBERT SCARDAMALIA is president of RLS Demographics, Inc., a firm specializing in the use and analysis of economic and demographic data for private and public applications, and a data consultant for the Manhattan Institute’s Empire Center for New York State Policy. He was formerly director of the Center for Research and Information Analysis in the New York State Department of Economic Development and served as chief demographer of the State of New York and director of the State Data Center. Scardamalia is a professional demographer and has more than 30 years of experience using Census and related data for marketing, business attraction, and public sector program management. He holds a bachelor’s degree in sociology from Penn State University and a master’s degree in demography from Georgetown University.