Leaving California

It’s been two-and-a-half years since we left California (though the two years we spent in the Sierra Nevada Mountains felt like we were living in another state, that is, until we drove 90 miles down to the flatlands to go to the Costco only to be reminded that the state has nearly 40 million people) and it looks like the net migration from California to other states that began a half-decade ago is continuing, as detailed in this story at the LA Times.

The demographics of California today more closely resemble those of 1900 than of 1950: It is a mostly home-grown population, whose future depends on the children of immigrants and their children, said William Frey, a demographer and senior fellow at the Brookings Institution.

“We used to say California, here we come,” said Frey. “That now has flipped.”

It was a different world in the 1950s and ’60s, when roughly half of Californians were drawn from other states by jobs and by visions of crystalline blue skies in January and beach parties in September. The state’s shining image was burnished by a public relations machine that pushed attractive suburban real estate and a wide-open field for business.

As domestic immigration slowed between 1970 and 2000, foreign immigration filled in the gap. But since 2000, even the state’s once-growing immigrant population has been frozen at 27% of total residents. Since at least 2005, more residents have left California than arrived here from other states.

What they don’t say here is that, with little net inflows, the state’s demographics continue to be transformed by the relative birthrates of its citizens and one can only imagine what the place will look like when that process goes on for another 10, 20 or 30 years.

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It would appear that we’ve entered a holiday holding pattern for consumer sentiment and the stock market, that is, until something really bad happens either in Europe or in the U.S.

The latest take on the mood of the American consumer from Reuters and the University of Michigan shows that attitudes were virtually unchanged, the sentiment index falling from 64.2 in October to 64.1 in November. One-year inflation expectations were steady at 3.2 percent with the five-year inflation outlook rising one-tenth to 2.7 percent.

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Q3 GDP Revised Downward to 2.0% Rate

The Commerce Department reported that real economic growth in the third quarter was revised downward, from an annualized rate of 2.5 percent as reported a month ago to a rate of 2.0 percent. This was the second of three estimates for economic activity during the July-to-September period with the final reading to be provided at the end of December.

The overall revision was primarily due to a large drop in business inventories, from an advance estimate of +$5.4 billion last month to this month’s estimate of -$8.5 billion. The replacement of estimated inventory data with actual data during the second reading on GDP is often the cause for large revisions to the overall growth figure. In this case, inventories accounted for a change of -0.43 percentage points to GDP growth, nearly the entire revision.

Exports were revised upward and consumer spending was lower than previously reported as health care and housing/utility spending accounted for nearly half of real economic growth in Q3, contributing 0.61 percentage points and 0.38 percentage points, respectively.

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Magic Sauce, Magic Sketching

What is it about fast sketching that makes it impossible to look away? The mesmerizing speed? Not wanting to miss something? Here’s one from the Kauffman Foundation about business start ups and how they are a key element of a growing economy.

I wonder how long it takes to make one of these. Obviously, things are sped up, but it probably helps if you can draw really fast to begin with…

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Latest U.S. Growth Sector – Poverty

The staff of GOP Presidential hopeful Herman Cain must be having a hard time shielding him from all the tales of woe here in the U.S. this week, what with reports of increasing poverty on the part of those who, somehow, haven’t been able to work hard enough and grow rich enough as every American should.

A Gallup poll showing that, as a percentage of the population, families in the U.S. are having more trouble putting food on the table than in China tops this week’s list of stories on the latest U.S. growth sector – poverty. Details are provide in this story at the Huffington Post.

Millions of Americans are currently weathering the effects of a slow economic recovery. Many Chinese, meanwhile, find themselves struggling less to keep their families fed, according to a recent Gallup report.

Nearly 20 percent of Americans say they’ve had trouble putting food on the table in the past 12 months, up from nine percent in 2008, the Gallup report found. That’s compared to six percent of Chinese respondents, down from 16 percent in 2008.

And while the Chinese middle class is growing, the ranks of the U.S. poor are swelling. The nation’s poverty rate jumped to 15.1 percent in 2010, the Cenus Bureau announced last month, as the total number of Americans in poverty grew to 46.2 million.

This similar report has been atop the main page at Yahoo! for the last hour or so, one more in a series of stories on this subject that make it hard for anyone to avoid.

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Whatever Happened to the Bernanke Put?

It would appear that Federal Reserve Chairman Ben Bernanke is doing all that he can to ensure that conditions for both the U.S. economy and financial markets get worse not better. At least, that’s the conclusion that can be drawn from his statement before the Joint Economic Committee today in Washington on the central bank’s outlook for the economy.

Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the U.S. economy. Fostering healthy growth and job creation is a shared responsibility of all economic policymakers, in close cooperation with the private sector. Fiscal policy is of critical importance, as I have noted today, but a wide range of other policies–pertaining to labor markets, housing, trade, taxation, and regulation, for example–also have important roles to play. For our part, we at the Federal Reserve will continue to work to help create an environment that provides the greatest possible economic opportunity for all Americans.

Unless he says something in the Question & Answer session to contradict this dismal view of our current condition and an expressed  unwillingness for the Fed to act, it would seem that the helicopter fleet is permanently grounded and markets shouldn’t expect the printing press to again be summoned for the greater good.

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