(Roughly) Daily

Posts Tagged ‘California

“The combination of economic inequality and economic segregation is deadly”*…

When we think of a social safety net, we tend to think about things like health care and environmental protection, social security, child care; lately here’s been lots of talk of Universal Basic Income. All of them are surely part of an answer. But if we want a social infrastructure that not only protects against personal and family challenges, but also creates personal and family opportunities, we need to look further– we need to look to something we might call Universal Basic Assets. The always-illuminating Rana Foroohar explains…

If American states are, as former US Supreme Court Justice Louis Brandeis once put it, the “laboratories of democracy,” then it’s worth watching closely what’s happening in California right now.

The threat of rising taxes and a “soak the rich” political atmosphere has led some wealthy Golden State residents, including a number of technology entrepreneurs, to leave for cheaper pastures such as Austin or Miami. This has, in turn, prompted worries of a larger migration that would have an impact not only on the state’s tax base, but on the growth and innovation that have made California the world’s fifth-largest economy.

It is an exceptionally fraught situation. While nobody these days has much sympathy for wealthy individuals or companies (witness the recent justified fury about the ProPublica leaks showing how little tax the wealthiest Americans pay), or really believes in trickle-down economics, the threat of tax and regulatory arbitrage by other states is real.

The good news is that California is applying some typically creative thinking to the problem. What if there was another way to harness company and citizen wealth for the benefit of all?  

One such idea gaining popularity is what has been called “pre-distribution.” Unlike traditional methods of redistribution, in which the state taxes existing wealth and then uses it to bolster various projects and constituents, pre-distribution is all about harnessing capital the same way investors do, and then using the proceeds of the capital growth (which as we know far outpaces income growth) to fund the public sector…

It could help better align public and private incentives and rewards. The massive wealth accrued by leading companies is in part down to the strength of the public commons — good schools, decent infrastructure, basic research, and so on. As economists like Mariana Mazzucato frequently note, why should taxpayers pick up the bill for, say, laying high speed fibre without getting any of the commercial upside?

California Senate majority leader Robert Hertzberg, a Democrat… along with some very rich Californians like former Google chief executive Eric Schmidt and Snap founder Evan Spiegel, have proposed… something called “universal basic capital”. The idea is that seed contributions of equity from companies or philanthropists could be invested into a fund that would then be used by individual Californians for things like retirement security, healthcare and so on…

If pre-distribution works in the laboratory of California, I expect it will be adopted in some way at the federal level. The Obama administration actually tried to implement its own version of the CalSavers programme for the country as a whole, called myRA, but it failed in part because the funds were invested only in super safe low yielding Treasury bills at a time when the market as a whole was rising far faster. Even at this politically polarised moment, it’s an idea whose time may have come. Pre-distribution is supported by such unlikely bedfellows as hedge funder Ray Dalio and leftwing economist Joseph Stiglitz. Perhaps that’s because while it doesn’t fundamentally alter the market system, it does broaden share ownership: a mix of capitalism and socialism that is right for our time…

Capital for the people — an idea whose time has come“: @RanaForoohar explains how California’s nascent experiments in Universal Basic Assets could be a model for the nation.

In thinking about national possibilities, your correspondent’s favorite rationale/approach is Cornell economic historian Louis Hyman‘s formulation (toward the end of) this post.

* “The combination of economic inequality and economic segregation is deadly. It reinforces the advantages of those at the top while exacerbating and perpetuating the disadvantages of those at the bottom. Taken together, they shape not just inequality of economic resources, but also a more permanent and dysfunctional inequality of opportunity.” – Richard Florida

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As we share and share alike, we might send grateful birthday greetings to the Electronic Frontier Foundation; it was founded by John GilmoreJohn Perry Barlow, and Mitch Kapor on this date in 1990. Over the last 30 years, EFF has become the leading nonprofit defending digital privacy, free speech, and innovation.

Happy Birthday– and many more!

“The loudest of doomsayers, so often, carry the weightiest of sin”*…

A quick look at how some of the grimmest prognoses for the pandemic’s effect have turned out…

When misfortunes multiplied during the coronavirus pandemic, observers seized on a four-letter word signaling end of days for the largest state with one-eighth the U.S. population and 14% of its gross domestic product. “California doom: Staggering $54 billion deficit looms,” the Associated Press concluded a year ago in May. “California Is Doomed,” declared Business Insider two months earlier. “Is California doomed to keep burning?” queried the New Republic in October. California is “Doomed” because of rising sea levels, according to an April EcoNews Report. Bulletins of people leaving the world’s fifth-biggest economy for lower-cost states because of high taxes and too much regulation stifling business continue unabated.

No one anticipated the latest data readout showing the Golden State has no peers among developed economies for expanding GDP, creating jobs, raising household income, manufacturing growth, investment in innovation, producing clean energy and unprecedented wealth through its stocks and bonds. All of which underlines Governor Gavin Newsom’s announcement last month of the biggest state tax rebate in American history.

By adding 1.3 million people to its non-farm payrolls since April last year — equal to the entire workforce of Nevada — California easily surpassed also-rans Texas and New York. At the same time, California household income increased $164 billion, almost as much as Texas, Florida and Pennsylvania combined, according to data compiled by Bloomberg. No wonder California’s operating budget surplus, fueled by its surging economy and capital gains taxes, swelled to a record $75 billion

If anything, Covid-19 accelerated California’s record productivity. Quarterly revenue per employee of the publicly traded companies based in the state climbed to an all-time high of $1.5 million in May, 63% greater than its similar milestone a decade ago, according to data compiled by Bloomberg. The rest of the U.S. was nothing special, with productivity among those members of the Russell 3000 Index, which is made up of both large and small companies, little changed during the past 10 years.

While pundits have long insisted California policies are bad for business, reality belies them. In a sign of investor demand, the weight of California companies in the benchmark S&P 500 Index increased 3 percentage points since a year ago, the most among all states, according to data compiled by Bloomberg. Faith in California credit was similarly superlative, with the weight of corporate bonds sold by companies based in the state rising the most among all states, to 12.5 percentage points from 11.7 percentage points, according to the Bloomberg Barclays U.S. Corporate Bond Index. Translation: Investors had the greatest confidence in California companies during the pandemic.

The most trusted measure of economic strength says California is the world-beater among democracies. The state’s gross domestic product increased 21% during the past five years, dwarfing No. 2 New York (14%) and No. 3 Texas (12%), according to data compiled by Bloomberg. The gains added $530 billion to the Golden State, 30% more than the increase for New York and Texas combined and equivalent to the entire economy of Sweden. Among the five largest economies, California outperforms the U.S., Japan and Germany with a growth rate exceeded only by China.

Even with the economic disruptions caused by the pandemic, California cemented its position as the No. 1 state for global trade, with its Los Angeles and Long Beach ports seeing growth that led all U.S. rivals for the first time in nine years in 2020. Much has been made of the state reporting its first yearly loss in population, or 182,000 last year. Had it not been for the Trump administration preventing new visas, depriving as many as 150,000 people from moving to California from other countries annually, the 2020 outcome would have been more favorable.

Even so, Republicans, opposed to Newsom’s policies favoring immigration, criminal justice reform and greater benefits for housing, health and child care, want voters to decide whether he should be replaced in a potential recall election later this year. Former San Diego Mayor Kevin Faulconer, a Republican who is among those running to succeed him, said Newsom, a Democrat, hurt the state’s small businesses.

That’s not what the data shows. The 373 California-based companies in the Russell 2000 Index, which includes small-cap companies across the U.S., appreciated 39% the past two years and 85% since 2016, beating the benchmark’s 34% and 67%, respectively. The same California companies reported revenue growth of 56% the past five years, dwarfing the benchmark’s 34%, according to data compiled by Bloomberg. More important, California companies invested 16% of their revenues in R&D, or their future, when the rest of the U.S. put aside just 1%. 

Investing in the future is California’s way, the opposite of doom.

The Golden State has no peers when it comes to expanding GDP, raising household income, investing in innovation, and a host of other key metrics: “California Defies Doom With No. 1 U.S. Economy.” From Matthew Winkler (@Matthew_Winkler).

Someone ought to publish a book about the doomsayers who keep publishing books about the end of publishing

Evgeny Morozov

* Ta-Nehisi Coates

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As we check the facts, we might recall that it was on this date in 1978 that the Rainbow Flag was flown for the first time during the San Francisco Gay Freedom Day Parade. Created by Gilbert Baker, it has become a sign of LGBTQ pride worldwide.

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Written by (Roughly) Daily

June 25, 2021 at 1:00 am

“Well, that is California all over”*…

Half of Californians live below this red line. ☝️

That may be hard to believe, but it’s more or less accurate, demographers say: Roughly 20 million people reside north of a line running through Los Angeles, and the other 20 million are squished underneath it.

n the second half of the 19th century, the majority of the state’s residents lived in Northern California, where the Gold Rush city of San Francisco hosted the largest urban population on the West Coast. So what happened?

The shift began with the oil and citrus booms of the 1890s. “Los Angeles and Southern California have one of the largest oil reserves of any region in the country. And agriculture made it an attractive place for land speculators, especially as major aqueduct projects brought water to the region,” said Justin Levitt, an adjunct political science professor at Cal State Long Beach.

Then came Hollywood’s entertainment boom in the 1920s, the WWII defense boom that sprouted industrial factories as well as a sizable military presence in San Diego, and the Southern California aerospace boom of the 1940s and ’50s. The population exploded, with Los Angeles County growing from about 170,000 in 1900 to 10 million today, a full quarter of California’s people.

The San Francisco Bay was once considered the state’s most important harbor, but Southern California stole that distinction away too. The ports at Long Beach and Los Angeles are now the busiest in the United States…

There are signs that California’s slackening growth in recent years — a consequence of curtailed immigration, housing shortages, and high cost of living — might be nudging the dividing line back north, said Dowell Myers, a demographer at USC.

At last check, about five years ago, the halfway mark was near Hollywood Burbank Airport, he said. “But since then population growth has really stalled in the state. If anything, growth is shrinking in the southern counties. This weak growth must be moving the halfway line slightly upward geographically.”

The unevenly-distributed population of the Golden State: “California’s lopsided population,” from the eminently-informative California Sun.

* Mark Twain, Roughing It

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As we dwell on demographics, we might recall that it was on this date in 1911 that Willis S. Farnsworth– of Petaluma, in Sonoma County, California– was granted a patent for the first coin-operated locker.

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Written by (Roughly) Daily

March 7, 2021 at 1:01 am

“What wouldn’t I give now for a never-changing map of the ever-constant ineffable?”*…

 

Atlas

 

Now that we’re corralled into our homes and apartments, something seems pre-modern in how our worlds have shrunk. Unlike past quarantines, we’re also connected by digital technology to the rest of the globe, calling to mind poet John Donne’s line from a 1633 poem about making “one little room an everywhere.” Donne came of age able to envision a mental map of the globe based on new and detailed evidence about a dizzying array of locations. His poetry is replete with globes, maps, and atlases. What’s considered to be the first atlas was first available in an Antwerp print shop 450 years ago [see here] only two years before Donne was born. It was large, handsome, and expensive, with the grandiose title of Theatrum Orbis Terrarum, or in English Theater of the Orb of the World. Donne was undoubtedly familiar with it. Produced by the cartographer Abraham Ortelius, it was one of the most popular books of the era. Ortelius had invented the world.

403px-Bodleian_Libraries,_Ortelius,_Theatrum_Orbis_Terrarum_Titlepage_with_four_figures_which_embody_the_four_known_continents

Never before had all cartographic knowledge been compiled together; never before could a reader imagine the totality of the Earth so completely…

Ortelius wasn’t the first mapmaker to be concerned with what the coastlines actually looked like, or with making sure that islands were in the right location. But he was the first to gather all of that detailed material in a single place. Those who purchased the Theatrum were not unlike those first seeing The Blue Marble, a photograph of Earth the members of the 1972 Apollo 17 mission took from space.

As with that image, Ortelius’ atlas birthed a new mental geography, a new imagined space. If Medieval thinkers saw themselves as living in a symbolic and allegorical geographic order, then the Theatrum presented the physical world in its totality. The cartographer didn’t prove that the world was round (people already knew that) or that the world was large (they knew that too) but he gave people the mental images necessary to imagine themselves on that large, round globe. Ortelius gave us not disenchantment, but a differing enchantment—a sense of the sheer magnitude of the planet.

It was the most expensive book ever published (up to then), and one of the most impactful: “The Book That Invented the World.”

* David Mitchell, Cloud Atlas

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As we find our places, we might recall that it was on this date in 1790 that Peruvian-Spanish explorer and cartographer Manuel Quimper began his exploration and mapping of The Strait of Juan de Fuqua (known until a few years earlier as The North Straits).  Running into the Pacific at the northern extreme of what is now Washington State, the center of the Strait defines the international boundary between Canada and the United States (and in earlier maps, per the link in the quote above, contributed incorrectly to defining California as an island).

Manuel_Quimper source

 

“I have long, indeed for years, played with the idea of setting out the sphere of life—bios—graphically on a map”*…

 

Carmel

A Jo Mora carte of Carmel-By-The-Sea, made in 1942. Larger image at David Rumsey Map Collection

 

Joseph Jacinto Mora knew all the dogs in Carmel-By-The-Sea, California. He knew Bess, a friendly brown mutt who hung out at the livery stables. He knew Bobby Durham, a pointy-eared rascal who, as Mora put it, “had a charge [account] and did his own shopping at the butcher’s.” He knew Captain Grizzly, an Irish terrier who went to town with his muzzle on and invariably came back carrying it, having charmed a kind stranger into taking it off.

If you spend time with Mora’s map of the town—which was first printed in 1942—you’ll know the town dogs of that era, too. They’re all stacked in a column on the right side, lovingly described and illustrated, and looking as natural as those items you’d be more inclined to expect on a map: streets, land masses, the compass rose. On this particular map, those elements aren’t so typical either: the streets are strewn with tiny houses, and both the land and sea are peppered with busy people. The compass rose is rotated 90 degrees counterclockwise, and—as befits an artist’s town—is helmed by a painter, a performer, a writer, and a musician.

Such is the way of a Jo Mora map. Over the course of his life, the “Renaissance Man of the West,” as some have called him, packed history, geography, and personal details into a series of maps of different parts of California. Although well-known in his time—“Mora has produced works of art which have told their story to more persons, probably, than have the works of any other Californian,” columnist Lee Shippey wrote in the Los Angeles Times in 1942—he has largely fallen out of the public consciousness. But a few minutes with one of his maps plunges you back into his era, and his own worldview…

Jo Mora poured the state’s whole history—and his own life—into his incredibly detailed, whimsical maps.  More of his own extraordinary story at “The Cowboy Cartographer Who Loved California.”  Browse a wonderful selection of his works at the glorious David Rumsey Map Collection.

* Walter Benjamin

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As we find our place, we might send delightfully drawn birthday greetings to Ben Shahn; he was born on this date in 1898.  A photographer and artist, known for his social realism, he earned acclaim in a variety of fields:  Edward Steichen selected Shahn’s work, including his October 1935 photograph The family of a Resettlement Administration client in the doorway of their home, Boone County, Arkansas, for MoMA’s world-touring The Family of Man which was seen by 9 million visitors; he was selected as a painter to join Willem de Kooning in representing the United States at the 1954 Venice Biennale; and his commercial illustration (like his well-known 1965 portrait of Martin Luther King, Jr. on the cover of Time) earned him membership in the Art Director’s Club Hall of Fame.  His published writings, including The Biography of Painting and The Shape of Content, have ben enormously influential in the art world.

220px-Ben_Shahn_artist source

 

Written by (Roughly) Daily

September 12, 2018 at 1:01 am

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