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Victor Davis Hanson: California, The Great Destroyer

Victor Davis Hanson: California, The Great Destroyer

Authored by Victor Davis Hanson via American Greatness,

In 1996, the California legislature…

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Victor Davis Hanson: California, The Great Destroyer

Authored by Victor Davis Hanson via American Greatness,

In 1996, the California legislature created the high speed rail authority.

In 2008, voters passed a $33 billion bond to build an envisioned 800 mile project eventually to link Sacramento with San Diego.

Fifteen years later, a scaled-down plan from Bakersfield to Merced remains not even half finished. Yet the envisioned costs will exceed that of the original estimate for the entire project.

The rail authority now estimates that just the modest 178 mile route—only about a fifth of the authorized distance—will not be completed at least until 2030. Past high speed estimates of both time and cost targets have been widely wrong and perhaps deliberately misleading.

Total costs for the entire project are now estimated at nearly $130 billion.

Many expect that figure to double in the next quarter-century.

Planners also concede there will likely not be much high speed rider demand from San Joaquin Valley residents willing to pay $86 to travel at a supposed 200 mph from Bakersfield to Merced.

Nine years ago voters amid drought and water shortages also passed a state water bond, authorizing $7.5 billion in new water projects and initiatives.

Some $2.7 billion was targeted for new dams and reservoirs. The current water storage system had not been enlarged since the early 1980s, when the state population was 15 million fewer residents.

So far not a single dam or new reservoir has been built.

And Californians expect more water rationing statewide anytime the state experiences a modest drought.

In 2017, a $15 billion bond authorized a complete remodeling of Los Angeles International Airport—recognized as one of the more congested, disorganized, and unpleasant airports in America.

Now the cost to complete the project has grown to an estimated $30 billion, with a proposed finish date of 2028—11 years after the project was authorized.

And the ongoing LAX remake is considered one of California’s more successful public construction projects.

In 2002, California began construction on the eastern span replacement of the iconic San Francisco–Oakland Bay Bridge—less than half of the bridge’s total length.

It was scheduled to be finished in five years at a cost of $250 million.

The job in fact took 11 years. And it cost $6.5 billion—a 2,500 percent increase over the estimate.

In contrast, original construction of the entire Bay Bridge began in 1933, at the height of the Great Depression. Yet the job was completed in a little  more than three years.

The list of such delayed, canceled, or prolonged projects could be expanded, from the proposed widening of the state’s overcrowded, antiquated, and dangerous north-to-south “freeways” to the now inert Peripheral Canal project that would have allowed the California aqueduct to transfer needed water southward by precluding the present inefficient pumping into and out of the San Francisco delta.

So what happened to the can-do California of former governors Pat Brown, Ronald Reagan, George Deukmejian, and Pete Wilson? They had bequeathed to the Baby Boomer generation a well-run state, renowned for its state-of-the-art infrastructure.

All four governors, a Democrat and Republicans, had ensured the nation’s most sophisticated higher education system, iconic freeways, and model water transference systems.

The current disaster has many parents.

A coastal culture of globally rich elites began passing some of the most stringent environmental and zoning regulations in the nation. Such Byzantine roadblocks deliberately stalled construction and skyrocketed costs—all of little concern to the “not-in-my-backyard” wealthy in their secluded coastal enclaves who had ensured the virtual end of infrastructure investments.

The state’s public unions and bloated bureaucracies guaranteed Soviet-style overhead, incompetence, and unaccountability. The more California raised its income taxes—currently the nation’s highest topping out at 13.3 percent—the more it borrowed, spent, and ran up huge annual budget deficits.

The nation’s highest gasoline taxes along with steep sales and property taxes—coupled with unaffordable fuel and housing, a homeless epidemic, dismal public schools, out-of-control crime, and mass, illegal immigration—soon all led to a bifurcated state of rich and poor.

The middle class either became poor or fled.

Indeed, businesses and millions of the middle class hightailed it out of California over the last three decades in one of the greatest state population exoduses in our nation’s history. But they also took with them the very prior experience, expertise, and capital that had once made California the nation’s envy.

In contrast, millions of impoverished illegal immigrants arrived over the last 30 years without legality, English, or high school diplomas.

And thus millions were immediately in dire need of costly state-supplied health, education, housing, and food subsidies. Currently well over half of all California births are paid for by Medi-Cal. Well over a third of the resident population depends on the state to provide all their health care needs.

Twenty-seven percent of California’s resident population was not born in the United States. That reality created a vast challenge of civic education to ensure assimilation and integration. Unfortunately, millions entered California at precisely the time of a new tribalism and racial essentialism that has taken hold of the state’s government, media, schools, and universities. Tribalism, not the melting-pot, is California’s paradigm.

California is a one-party state.

There are no statewide Republican elected officeholders. Progressive Democrats also enjoy a supermajority in both houses of the legislature. Only 12 of 52 congressional seats are held by Republicans. And almost all of California leftwing politicians are funded or influenced by Silicon Valley—the richest corridor in civilizational history, with $9 trillion in market capitalization.

In sum, a now broke California became a medieval society of Leftwing ultra-rich and Leftwing ultra-poor.

On one end, there was no longer the skill or expertise to modernize the state.

And on the other, an elite became more interested in dreaming of heaven on earth for itself as it ensured a veritable hell for others.

There is one thing, however, that California does quite well: demolition.

Currently it is destroying four dams on the Klamath River that had provided clean hydroelectrical power, water storage, flood control, and recreation. The media, the bureaucracy, and the politicians acted with unaccustomed dispatch to obliterate the dams and thus supposedly to liberate salmon to swim better upstream.

And the state is blowing up these dams partly by directing hundreds of millions of dollars voters had allotted for reservoir construction—adding insult to the injury of state voters.

A haughty green California also regulated timber companies out of business. It ceased traditional selective logging and clearing of brush from its forests.

It also limited cattle grazing of grasses and shrubs. And it embraced  new “natural” forestry initiatives that postulated that rotting dead trees, dense brush, and tall summer grasses—dry kindling for devastating forest fires—created a rich “sustainable” ecosystem for wildlife. Letting nature be would prompt occasional “natural” corrective fires as in the nineteenth-century past.

The predictable results were massive, destructive—and once preventable—forest fires in the Sierra Nevada mountains and foothills. During California summers, their vast plumes of soot and smoke have polluted the skies for months and sickened residents, destroyed hundreds of homes and businesses, and wiped out billions of dollars in valuable timber even as lumber prices soared.

And California’s lesson for the nation?

If you want to topple a statue, re-label an historically named street, burn up millions of pine and fir trees, blow up a dam, turn parks and the public square into dangerous and toxic squatter cities, then the state can do all of that and in record time.

But try building something to ensure Californians can travel quickly and in safety, or have affordable power, homes, and fuel, and assured water?

All that is simply beyond the current state’s comprehension, ability, and desire. So like modern Vandals or Goths, contemporary Californians are far better destroying the work of others than creating anything of their own.

And what is next? We await the 2024 national elections, when a few California politicians may run for our highest offices, no doubt with the campaign promise, “I can do to America what I did to California.”

Tyler Durden Mon, 10/02/2023 - 20:20

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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Mortgage rates fall as labor market normalizes

Jobless claims show an expanding economy. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

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Everyone was waiting to see if this week’s jobs report would send mortgage rates higher, which is what happened last month. Instead, the 10-year yield had a muted response after the headline number beat estimates, but we have negative job revisions from previous months. The Federal Reserve’s fear of wage growth spiraling out of control hasn’t materialized for over two years now and the unemployment rate ticked up to 3.9%. For now, we can say the labor market isn’t tight anymore, but it’s also not breaking.

The key labor data line in this expansion is the weekly jobless claims report. Jobless claims show an expanding economy that has not lost jobs yet. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

From the Fed: In the week ended March 2, initial claims for unemployment insurance benefits were flat, at 217,000. The four-week moving average declined slightly by 750, to 212,250


Below is an explanation of how we got here with the labor market, which all started during COVID-19.

1. I wrote the COVID-19 recovery model on April 7, 2020, and retired it on Dec. 9, 2020. By that time, the upfront recovery phase was done, and I needed to model out when we would get the jobs lost back.

2. Early in the labor market recovery, when we saw weaker job reports, I doubled and tripled down on my assertion that job openings would get to 10 million in this recovery. Job openings rose as high as to 12 million and are currently over 9 million. Even with the massive miss on a job report in May 2021, I didn’t waver.

Currently, the jobs openings, quit percentage and hires data are below pre-COVID-19 levels, which means the labor market isn’t as tight as it once was, and this is why the employment cost index has been slowing data to move along the quits percentage.  

2-US_Job_Quits_Rate-1-2

3. I wrote that we should get back all the jobs lost to COVID-19 by September of 2022. At the time this would be a speedy labor market recovery, and it happened on schedule, too

Total employment data

4. This is the key one for right now: If COVID-19 hadn’t happened, we would have between 157 million and 159 million jobs today, which would have been in line with the job growth rate in February 2020. Today, we are at 157,808,000. This is important because job growth should be cooling down now. We are more in line with where the labor market should be when averaging 140K-165K monthly. So for now, the fact that we aren’t trending between 140K-165K means we still have a bit more recovery kick left before we get down to those levels. 




From BLS: Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing.

Here are the jobs that were created and lost in the previous month:

IMG_5092

In this jobs report, the unemployment rate for education levels looks like this:

  • Less than a high school diploma: 6.1%
  • High school graduate and no college: 4.2%
  • Some college or associate degree: 3.1%
  • Bachelor’s degree or higher: 2.2%
IMG_5093_320f22

Today’s report has continued the trend of the labor data beating my expectations, only because I am looking for the jobs data to slow down to a level of 140K-165K, which hasn’t happened yet. I wouldn’t categorize the labor market as being tight anymore because of the quits ratio and the hires data in the job openings report. This also shows itself in the employment cost index as well. These are key data lines for the Fed and the reason we are going to see three rate cuts this year.

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Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January…

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Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January jobs report was the "most ridiculous in recent history" but, boy, were we wrong because this morning the Biden department of goalseeked propaganda (aka BLS) published the February jobs report, and holy crap was that something else. Even Goebbels would blush. 

What happened? Let's take a closer look.

On the surface, it was (almost) another blockbuster jobs report, certainly one which nobody expected, or rather just one bank out of 76 expected. Starting at the top, the BLS reported that in February the US unexpectedly added 275K jobs, with just one research analyst (from Dai-Ichi Research) expecting a higher number.

Some context: after last month's record 4-sigma beat, today's print was "only" 3 sigma higher than estimates. Needless to say, two multiple sigma beats in a row used to only happen in the USSR... and now in the US, apparently.

Before we go any further, a quick note on what last month we said was "the most ridiculous jobs report in recent history": it appears the BLS read our comments and decided to stop beclowing itself. It did that by slashing last month's ridiculous print by over a third, and revising what was originally reported as a massive 353K beat to just 229K,  a 124K revision, which was the biggest one-month negative revision in two years!

Of course, that does not mean that this month's jobs print won't be revised lower: it will be, and not just that month but every other month until the November election because that's the only tool left in the Biden admin's box: pretend the economic and jobs are strong, then revise them sharply lower the next month, something we pointed out first last summer and which has not failed to disappoint once.

To be fair, not every aspect of the jobs report was stellar (after all, the BLS had to give it some vague credibility). Take the unemployment rate, after flatlining between 3.4% and 3.8% for two years - and thus denying expectations from Sahm's Rule that a recession may have already started - in February the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%, an indicator which the Biden admin will quickly slam as widespread economic racism or something).

And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years...

... for one simple reason: last month's average wage surge had nothing to do with actual wages, and everything to do with the BLS estimate of hours worked (which is the denominator in the average wage calculation) which last month tumbled to just 34.1 (we were led to believe) the lowest since the covid pandemic...

... but has since been revised higher while the February print rose even more, to 34.3, hence why the latest average wage data was once again a product not of wages going up, but of how long Americans worked in any weekly period, in this case higher from 34.1 to 34.3, an increase which has a major impact on the average calculation.

While the above data points were examples of some latent weakness in the latest report, perhaps meant to give it a sheen of veracity, it was everything else in the report that was a problem starting with the BLS's latest choice of seasonal adjustments (after last month's wholesale revision), which have gone from merely laughable to full clownshow, as the following comparison between the monthly change in BLS and ADP payrolls shows. The trend is clear: the Biden admin numbers are now clearly rising even as the impartial ADP (which directly logs employment numbers at the company level and is far more accurate), shows an accelerating slowdown.

But it's more than just the Biden admin hanging its "success" on seasonal adjustments: when one digs deeper inside the jobs report, all sorts of ugly things emerge... such as the growing unprecedented divergence between the Establishment (payrolls) survey and much more accurate Household (actual employment) survey. To wit, while in January the BLS claims 275K payrolls were added, the Household survey found that the number of actually employed workers dropped for the third straight month (and 4 in the past 5), this time by 184K (from 161.152K to 160.968K).

This means that while the Payrolls series hits new all time highs every month since December 2020 (when according to the BLS the US had its last month of payrolls losses), the level of Employment has not budged in the past year. Worse, as shown in the chart below, such a gaping divergence has opened between the two series in the past 4 years, that the number of Employed workers would need to soar by 9 million (!) to catch up to what Payrolls claims is the employment situation.

There's more: shifting from a quantitative to a qualitative assessment, reveals just how ugly the composition of "new jobs" has been. Consider this: the BLS reports that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Well, that's great... until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).

Here is a summary of the labor composition in the past year: all the new jobs have been part-time jobs!

But wait there's even more, because now that the primary season is over and we enter the heart of election season and political talking points will be thrown around left and right, especially in the context of the immigration crisis created intentionally by the Biden administration which is hoping to import millions of new Democratic voters (maybe the US can hold the presidential election in Honduras or Guatemala, after all it is their citizens that will be illegally casting the key votes in November), what we find is that in February, the number of native-born workers tumbled again, sliding by a massive 560K to just 129.807 million. Add to this the December data, and we get a near-record 2.4 million plunge in native-born workers in just the past 3 months (only the covid crash was worse)!

The offset? A record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February!

Said otherwise, not only has all job creation in the past 6 years has been exclusively for foreign-born workers...

Source: St Louis Fed FRED Native Born and Foreign Born

... but there has been zero job-creation for native born workers since June 2018!

This is a huge issue - especially at a time of an illegal alien flood at the southwest border...

... and is about to become a huge political scandal, because once the inevitable recession finally hits, there will be millions of furious unemployed Americans demanding a more accurate explanation for what happened - i.e., the illegal immigration floodgates that were opened by the Biden admin.

Which is also why Biden's handlers will do everything in their power to insure there is no official recession before November... and why after the election is over, all economic hell will finally break loose. Until then, however, expect the jobs numbers to get even more ridiculous.

Tyler Durden Fri, 03/08/2024 - 13:30

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