News

It may turn out that the widespread belief that most Americans’ incomes have stagnated for years is, well, false or at least overstated. . . In a provocative new study, economist Bruce Sacerdote of Dartmouth College reviewed the material well-being of the poorest 50% and 25% of Americans. What he concluded was that even these families had achieved a “meaningful growth in consumption … (despite) a prolonged period of increasing income inequality … and a decreasing share of national income accruing to labor.”

The unaffordability problem affecting the Bay Area-Silicon Valley region of California is a serious statewide crisis that Sacramento isn’t taking seriously.  But this problem isn’t the Bay Area’s alone.  California’s most populous region – Greater Los Angeles – is also plagued with unaffordable homes and rentals. And March 2017’s consolidated Los Angeles election has housing affordability front and center.

But Brown’s fiscal restraint posturing is more talk than action. His first enacted budget since re-election in 2010 totaled $128.3 billion (June 2016 dollars) in General and Special Fund expenditures. By 2016-2017, the budget had ballooned 30 percent to $167.1 billion. Overall, Brown has increased real General and Special Fund spending by an average of 5 percent per year.

The federal government subsidizes the fossil-fuel industry to the tune of about $3 to $5 billion dollars per year (the exact amount depends on whose numbers you believe). . . According to the apolitical U.S. Energy Information Agency, the federal government spends about $3.5 billion per year subsidizing the coal, petroleum and natural gas industries. By contrast, the Feds dole out about $15 billion every year in subsidies to the renewable energy industry (mainly to support new wind and solar projects) and $20 billion per year for agricultural subsidies and insurance.

It’s simple arithmetic, writes Mark Warshawsky of the Mercatus Center at George Mason University, author of the study. Paying for expensive health insurance squeezes what’s left for wage and salary raises. Economic inequality increases, because health insurance typically represents a larger share of total compensation for lower-paid than higher-paid workers. Their wages are squeezed the most.

The USA Today editors hit the nail on the head in their assessment that, “The best way to deal with inversions and other tax-avoidance games is to cut the high corporate tax rates that are prompting corporate leaders to seek relief in gimmicks. Like so much else in Washington, however, efforts to fix corporate taxes are going nowhere fast. Congress is loath to take on a tough issue. And the Obama administration continues to push Band-Aid efforts.”

Close to 500 company leaders-from family-owned small businesses to world-recognized brands-are on Capitol Hill as part of the NAM’s 2016 Manufacturing Summit. We are making one request of policymakers: Unleash our power to compete and win globally, with a focus on three key legislative issues: the Trans-Pacific Partnership (TPP), a fully functioning Export-Import (Ex-Im) Bank Board and comprehensive business tax reform.

A new study from the Federal Reserve Bank of San Francisco . . . concludes that widely cited figures showing stagnation are mostly a statistical fluke. Workers continuously employed in full-time jobs received wage increases higher than inflation from 2002 to 2015. Last year, the gain was a 3.5 percent increase after inflation, up from 1.2 percent in 2010.

It is now certain that President Obama will be the only U.S. president in history that did not deliver a single calendar year of 3.0%+ economic growth, and the fourth-worst in history in terms of average RGDP growth while in office.

To assess AB 32’s primary goal of reducing California’s emissions, we need to assess the Golden State’s emission reduction relative to the other 49 states, which have been slow to implement anti-climate change actions. Over the course of the last decade, California hasn’t done much better at reducing emissions, but this data only incorporates two years of AB 32 being truly in action. But even looking at just 2012 and 2013, California still isn’t performing much better than the rest of the country. In absolute terms, CO2 emissions increased in California by an average of 1.2% while they dropped by an average of 0.8% per year in the rest of the nation.

A more accurate ratio, after adjusting for differences in gender employment patterns, is closer to 92%. Even the remaining gap of eight percentage points may not stem fully from discrimination.

The trouble with my view is that the White House and Congress want to use the tax code to reward and punish. This enhances their power; relinquishing it reduces their power. We know this from history. The Tax Reform Act of 1986 followed the dictum of lowering rates by broadening the tax base. It was a commendable achievement, a rare example of bipartisanship. President Reagan supported it, as did many Democratic and Republican congressional leaders. It might have, if followed by similar laws, transformed the tax code.

Second, there are many union contracts which include automatic pay increases tied to changes in the minimum wage. Thus, many workers who already earn more than $15 per hour will still get raises thanks to these laws. For example, California teachers have a contract that ties starting pay to twice the minimum wage, meaning that once the new California law is fully effective in 2022 all public school teachers in the state will earn over $30 per hour.

Consider Tesla Motors, which arguably wouldn’t exist but for environmental regulations. It also benefits from government subsidies of its “green” technology and tax credits for its customers – and loses money anyway. As if the need for such “incentives” weren’t proof enough that no real demand for electric cars exists, the company has been lobbying for tougher Corporate Average Fuel Efficiency (CAFE) standards even as traditional automakers seek relief from the onerous 54.5 mpg 2025 target. Setting aside Tesla’s blatant rent-seeking — a problem in itself — one can only imagine what their engineers might have achieved had the government not crafted a regulatory sandbox to confine their efforts.

Knowing that net out-migrants are more likely to be middle-class working young professional families provides some hints as to why people are leaving California for greener pastures. For one, California is an extraordinarily high cost-of-living state. Whether it is the state’s housing affordability crisis – California’s median home value per square foot is, on average, 2.1 times higher than Arizona, Texas, Nevada, Oregon, and Washington’s – California’s very expensive energy costs – the state’s residential electric price is about 1.5 times higher than the competing states – or the Golden State’s oppressive tax burden – California ranks 6th, nationally, in state-local tax burdens – those living in California are hit with a variety of higher bills, which cuts into their bottom line.