The next BLS release of unemployment data for California comes this Friday, and its bracing to think what the numbers might be. Currently, the broad measure of unemployment for California–or U6- is running at 19.9% and the more conservative measure, which will be updated this this week, is at 12.2%. I’ve written quite alot on the subject of California this year. So, I watch the macroeconomic newsflow that emerges from the state each week, and most of it is pretty awful.
This Summer I spent a little time on television making the case to both MSNBC and BNN in Toronto that California was extremely overleveraged to the automobile, and should probably think seriously about building out it’s rail system. At that time the machinations over California’s budget were in full swing, and a number of observers thought the budget agreement would put the state on the right path for at least another year. I was doubtful, and said so at the time. Moreover, I tried to draw the two points together: California was now suffering diminishing returns from its vast automobile and highway system, and it was unlikely to crawl forward again as an economy unless petrol became very cheap again (unlikely), or got serious about transition.
This month’s Gregor.us Monthly, published 31 October, is titled Solve for California, and it attempts to lay out the backstory to the Golden State’s current predicament. Meanwhile, I see that Sacramento via the Strategic Growth Council has comissioned a new study, Vision California, and hired Calthorpe Associates of Berkeley to come up with reference scenarios to both spur and define future economic growth in California. Sounds good. But one question I have is as follows: of all the consultancies hired both in the past, and now, do any attempt to quantify for Sacramento the cost of maintaining the automobile system in an era of structurally higher oil prices?
http://www.businessinsider.com/california-leaders-havent-begun-to-think-about-how-screwed-they-are-with-higher-oil-2009-11