Public Thugs Mug Facebook – Could Kill Jobs?

Russ Steele

I often read the Coyote Blog, Dispatches from a Small Business. Here is some interesting insight as to why job creation in CA is static.

Wow, I Wonder Why Job Creation Isn’t Occurring in California?

I wonder if its because companies have to beg for government permission, and then pay a hefty bribe, to get permission to hire more employees:

The city council in Menlo Park, Calif., is set to approve a deal that will let Facebook employ thousands more people at its headquarters there.

Mayor Kirsten Keith says officials are expected to green light the environmental impact report and the development agreement at a meeting Tuesday night. City staff has recommended the city approve the deal.

That means Facebook employees, currently numbering about 2,200 in Menlo Park, will soon be able to stretch out. If the deal is approved, Facebook will be able to employ about 6,600 workers in Menlo Park, up from its current limit of 3,600. That was the constraint on Sun Microsystems, which previously occupied the campus.

Facebook will pay Menlo Park an average of $850,000 a year over 10 years to compensate for the additional load on the city. It will also make a one-time payment of more than $1 million for capital improvements and set up community services such as high school internship and job training programs. Facebook is also creating a $500,000 local community fund that will dole out grants and charitable contributions to communities surrounding Facebook’s campus.

Facebook is making the payments because Menlo Park can’t collect sales taxes from Facebook.

The last is a dodge – this is a protection racket, pure and simple.  Presumably Facebook pays property taxes on its corporate offices, as do its employees who live nearby.  Also, these new employees will all spend money in the local economy that will generate sales taxes.  Facebook presumably pays for water, sewer, trash and other utilities, and their employees are paying gas taxes as they drive that pay for the roads.  Facebook pays California income taxes, as do their employees.  What are these mystery costs that are not getting covered?  The community services bit is a hint that this is a stick-up, with Menlo Park demanding its cut of the recent IPO.

The truth is that cities and counties in California see business expansion plans the same way that Tony Soprano looks at the Museum of Science and Trucking — as a way to maximize their skim.  I operate a campground in Ventura County that DOES pay sales taxes the County so far will not let me increase my live-in staff without making a big payment.  Even the remodeling of our store required 7 separate checks written to Ventura County agencies.

You can read the rest HERE. Reason Magazine has another story about killing jobs in Ventura County.

Another CA Business Escaping

Russ Steele

Just heard the news on Channel 13 KVOR, Verizon is moving its Rancho Cordova Call Center to Utah. The business exodus continues as the regulatory environment  continues to grow in California. Why wait for energy cost to go up, move before the California economic crash!

Wrangling for the AB-32 Cap and Trade Slush Fund

Russ Steele

As I have been reporting, AB-32 Cap and Trade was all about creating a tax payer supported slush fund, now our political leaders are trying to figure out how to take control of the AB-32 pig trough.

Details at KQEDz’ Climate Watch: The New Cap & Trade Battlefront: How to Spend the Revenues

AB 32 requires California’s largest emitters to meet carbon reduction targets. If a firm’s emissions are below state-mandated targets, it may auction off its remaining “allowances” to firms that exceeded their emissions targets.

Since the enactment of AB 32 in 2006, California’s greenhouse gas emissions reduction law, analysts have speculated about how to spend the money generated from the law’s cap-and-trade carbon allowance auctions, the first of which is set for this November.

On Tuesday, the State Assembly passed new legislation, AB 1532, that narrowed the options. The bill, which the California Chamber of Commerce has described as a “job killer” and an “illegal tax,” passed 47-26 and awaits action in the Senate. If ratified, it would establish a “Greenhouse Gas Reduction Account” within the state Air Pollution Control Fund and authorize spending auction proceeds on clean energy technology, low-carbon transportation, conservation and green energy research and development.

On Friday, the California Air Resources Board held a public hearing to discuss where auction funds might be spent, as a panel of speakers from across the state and country — representing a broad array of industries and interests — sounded off on where this sizable stream of new funding might be best directed.

Jim Earp, executive director of the California Alliance for Jobs, said that the funds should be spent on improvement of transit networks and infrastructure. Ellen Hanak, a fellow at the Public Policy Institute of California, suggested that a best fit is renewable energy and efficiency projects. Lester Snow, director of the California Water Foundation (and former head of Water Resources for the state), pointed to habitat restoration on the Delta and making California’s vast, energy-intensive water delivery systems more efficient.

The governor’s 2012-13 budget [PDF] also lays out a general framework for where cap-and-trade auction funds might be allocated.

• Clean and efficient energy
• Low carbon transportation
• Natural resources protection
• Sustainable infrastructure development

“These are obviously broad categories,” said air board chair Mary Nichols of the governor’s proposals in her remarks. “No one has yet suggested any precise breakdown or amounts of money to go to specific programs.”

Decisions are being made piecemeal. For instance, revenues from utilities will be returned to electricity customers, though exactly how is still being worked out.

Perhaps it’s no surprise that no one yet knows how California’s auction funds will be spent. There is still debate over whether the funds should be considered a fee or a tax — a legal determination that, under Proposition 26, could potentially limit where money is directed.

And as Climate Watch senior editor Craig Miller reported earlier this month, no one can predict with any certainty at what price carbon will trade in the California market. Most estimates put the figure at between $15 and $30 per metric ton, which means that when the market is fully up to speed in 2015 it could pull in as much as $6 billion a year. (The governor’s budget stated the program could generate as much as $1 billion in its first year.)

As for how cap-and-trade might state boost the state’s economy, Nichols pointed to a recent analysis of the Regional Greenhouse Gas Initiative cap-and-trade system, which includes ten  states in the Northeast. That program has reportedly injected $1.6 billion into the regional economy through such measures as consumer bill reductions and sales of energy efficient equipment.

The period for public comment on carbon auction funds spending (click for online comment form) is open until June 22.

Let them know how you think they should spend the Cap  and Trade Slush Fund

I am shocked, I tell you, shocked

Russ Steele

Well not really, local bloggers  have been reporting for years the budgets coming out of Sacramento are bogus.  Now Katy Grimes writing at Cal Watchdog reports CA debt much larger than reported

“Reports of California’s debt usually just include the $17 billion budget deficit. But California also owes the federal government $14 billion, and public schools $10 billion.

While California sputters under the massive debt, legislators continue to take up ridiculous bills and resolutions, and ignore bills which would begin necessary reforms.”

You can read the whole sad story of inept political leadership HERE. Rather than attempt to solve the budget problems, the Legislature continues to bring forward bills that are strangle the California economy.  The only way out of this mess is to fire up our economy. We have huge fossil fuel deposits on and off shore, and our political leaders insist on promoting higher cost alternative energy, driving business and jobs out of the state to lower cost states and off shore. Time to clean house in Sacramento.

California on the Edge

Russ Steele

Mark Meckler writing on his blog Across the Fence – The Return to Self Governance has  an impassioned plea on need to save California:  Is California Near the Edge of the Cliff? The simple answer: “Yes.” And my heart is breaking.

My heart is breaking for my home state of California.  Rational people who are still working to earn a living and live in the once great state of California are leaving, and looking to leave, in record numbers.  I was born and raised here.  I love the state.  The climate, and the geographical diversity cannot be beat.  It’s a stunningly beautiful place that offers something for everyone.  In addition to being a happy home for those of us born here, it has been a magnet for immigrants for many decades, offering opportunity like nowhere else.  But today, things are different.  My family has been looking to leave, along with a tide of hundreds of thousands of other productive citizens of the once “Golden State.”

California government (at both the state and local level) has managed to brew the perfect storm of insanity, and is committing slow motion societal suicide.  The brain, business and capital drain from California is taking place at a stunning pace.  The numbers back this up, as does the anecdotal evidence.  Ask anyone you know in California if they or people they know have considered leaving (or have left already), and you’ll find virtually no one who is untouched by the out migration issue.   So what’s driving this flow of our best, most hard working and brightest citizens to other states?  Well here’s just a sampling:

 Mark’s long list of why people are leaving CAlifornia is HERE.

Prop 23 Update: EU Carbon Trading Is Over, CA Launching Carbon Trading

Russ Steele

While CARB plunges forward to implement cap and trade carbon trading in California the market for carbon in the EU has plunged to near zero due to the lack of demand.

Bavaria’s stock exchange will abandon its carbon emissions certificate trading operations in the EU-traded CO2 market on June 30 after volumes in Europe “plunged to practically zero” in recent months, it said on Tuesday. –Reuters, 22 May 2012

When the Chicago Carbon Exchanged closed, a BBQ briquet was worth more than a ton of carbon. How can CARB be selling carbon at $30 a ton when the world market has collapsed? Only in the land of fruits and nuts.

 

It is Part Time to Just Say NO!

Russ Steele

Ellen and I attended the CABPRO Defend Rural America Conference in Grass Valley last night with like minded friends the Rebane’s and Booth’s.  It was an eye-opening event for every one attending, though some of us were aware of the UN Agenda 21 tentacles. The incremental strangling of our individual freedoms by a collection of non-government agencies that are funded by State and Federal environmental agencies to incrementally implement Agenda 21.

We have an immediate example right here in Nevada County, which I wrote about HERE.

It would appear that Nevada County 2005 Community-Wide Greenhouse Gas Emissions Inventory Phase I was just a non-threatening effort to discover how much energy that Nevada County government uses and the CO2 that these agencies produced. Next it was Phase II to determine how much CO2 all activities in Nevada County generated.  Nothing to get concerned about — right?  Now the SBC, PG&E and ICLEI camel has its noses under the County BOS tent flap. They were being lulled into the acceptance of Phase III.

Phase III of the PG&E Green Communities Program is to develop local Climate Action Plans, including one for Nevada County.  The Phase III Action Plan will develop detailed emission reduction strategies to reduce the impact of global warming. The claim is improve the quality of services, reduce costs, stimulate the local economy and inspire local residence and businesses to redouble their efforts to combat climate change.

How is this going to be done?

According to the Phase II report. ICELI has created the tools for Nevada County to use to assist with future monitoring inventories. These tools are designed to work in conjunction with the IEAP, which is the primary reference documents for conducting an emissions inventory.

So Nevada County will be using a set of tool developed by an International NGO, funded by the UN to reduce CO2 emissions on Nevada County. Those are the emission created by our local economy; to reduce CO2 emissions is to reduce economic activity. It is all an effort to apply parts of Agenda 21 in our local community.  We are like the frog in a pan of water with the heat slowly being increased under the pan: Phase I, Phase II and then Phase III when the burner is turned up to maximum.

It is time to say no to Phase III It is time to tell PG&E, the Sierra Business Council and the International Council for Local Environmental Initiatives to go pound sand. We do not need any “stinking” Agenda 21 crap in Nevada County.

One interesting note: There were no Supervisors at the CABPRO Defend Rural America Conference, but Sue McGuire was there learning how to Defend Rural America. Where were the rest of the BOS? Are they not interested in preserving Rural America? You might want ask Nate Beason the next time you see him  hanging our in the liberal environs of Nevada City.

Prop 23 Update: A Lesson For California

Russ Steele

During the Prop 23 Campaign I warned readers about the negative economic impact of converting to alternative energy, that going green was going to destroy jobs, as companies left the state taking jobs with them. At that time I uses Spain as an example, who lost 2.4 industrial jobs for every green job created.  Now Spain’s unemployment rate is north of 23%, with the youth unemployment at about 50%. A dismal future for the country’s youth. Now this from Handelsblatt.

As a result of Germany’s green energy transition, electricity prices are exploding. Consumers and businesses are paying the price while Germany faces gradual de-industrialisation. Economists estimate that the cost of the green energy transition will total 170 billion Euros by 2020. This is more than double of what Germany would have to write off if Greece were to withdraw from the monetary union. “The de-industrialization has already begun,” the EU Energy Commissioner Guenther Oettinger has warned.

German corporations are moving energy consuming industries offshore, along with the core of the German economy. The same will happen in California as the cost of energy soars. While California is known for its innovations, those innovative companies are not building manufacturing plants in the state. They are moving manufacturing to low cost energy states and offshore.

Wake up Sacramento. Look at what where economic growth is taking place in the United States, the states that are revitalizing their energy sector. The markets are moving these state in the exact direction California should go — toward cheap, plentiful energy. We have the energy, in our shale gas formations and in offshore oil, yet our political leaders refuse to exploit it. Without learning the positive lessons of North Dakota, Pennsylvania, Wyoming and the negative lesson of Germany and Spain, California’s de-industrialisation and resulting job loss will continue. The lessons are there, it is time for our political leaders to stop ignoring them.

Just Say No to Phase III.(Updated)

Russ Steele

Some insights from the Board of Supervisors Meeting this morning and their response to the Nevada County 2005 Community-Wide Greenhouse Gas Emissions Inventory, which was conducted by the Sierra Business Council. The presentation was made by Nicholas Martin and B.J. Schmitt from the SBC.  This was a report on Phase II, establishing the base line for reducing CO2 emissions to the 1990 levels as mandated by AB-32. The survey team used 2005 as the base line year, because the data was not available for 1990.

Now let me ask you, how can we return to the 1990 emission levels if we do not know what those levels were? By their own admission Martin and Schmitt said it was “too hard to collect the data on 1990.” So, now can we return to a place we cannot identify?  It was a wonderful opportunity for one of the Supervisors to shine by asking the question.

The SBC Team collected information on the Carbon Dioxide, Methane and Nitrous Oxide emissions.  They collected information on emissions from gas and diesel emissions, but not propane.  Why not propane?  By their own admission it was not a regulated source and the data was too hard to collect.   Must not be important if it was “too hard to collect”.

Never mind, the SBC will soon be moving on to Phase III to develop Climate Action Plans to reduce County CO2 emission to the mandated 1990 levels. However they have no idea what those level were. You cannot get to there,  from here if you have no idea where there is?

The questions asked by the Supervisors were interesting, well some were.

Lamphier:   His focused his comments on how to implement a future AB-1900 Bio Gas regulation, on how methane emitted by the Landfill and Waste Water Plants could used to generate electricity.  The SBC team had no idea.

Weston: Wanted to know what ICLEI meant and what was their role in the evaluation process. The SBC Team did not know what ICLEI stood for. They just used the ICLEI Tools to make the emission calculations.   [International Council  for Local Environmental Initiatives.]  The County is not a member of the ICLEI but Nevada City is.

Beason: He asked if the Inventory was being driven by AB-32, which the SBC Team responded that it was. He also made the point the county was reducing energy use as an economic measure with out regard to air quality. He wanted to know if the inventory considered Ozone, since it was a bigger problem for citizens.

Scofield: He ask George Rebane to tell everyone what ICLEI means and what the organization does.  Ed also have very insightful comment: A Climate Action Plan will only result in more regulations.

Owens: He asked the most probing question. If the SBC Team was using software provided by the ICLEI what action has been take to valid the programs to insure they were accurate models of the real world.  The SBC Team proclaimed they had no knowledge of software validity. They just used the protocol and calculation tools without question.

Weston: Hank had a follow up question. What is the IEAP reference in the report?   According the the SBC Team it was the model used to make the calculations. They did not offer anymore information on the models or it’s heritage.  According to the ICLEI web site:

Building on 17 years of experience through the CCP Campaign, ICLEI has developed the first version of the International Local Government GHG Emissions Analysis Protocol (IEAP) that follows principles of the GHG Protocol.

The IEAP consists of the general principles and philosophy that any local government, regardless of location, should adhere to when inventorying GHGs from its government operations and community as a whole.

The emission sources that should be included in a GHG inventory and the methods used to quantify theses sources are generally consistent between local governments, but are unique when compared with any other type of entity.

The International Protocol is informed by developments such as:

• IPCC 2006 methodological changes;
• GHG Protocol by WRI */ WBCSD**;
• ISO 14064 Greenhouse Gases series of standards;
• GRI Public Sector Agency Supplement.

Since November 2007 key peer organizations around the world – including United Nations Environment Program, World Resources Institute, International Energy Agency, California Climate Action Registry, Federation of Canadian Municipalities and Center for Neighborhood Technologies – have reviewed the International Protocol. It has also been reviewed by ICLEI member cities and stakeholders during a public comment period.

A US national supplement of the IEAP, Local Government Operations Protocol (LGOP) was further developed as a collaborative effort of The California Air Resources Board, The California Climate Action Registry, The Climate Registry and ICLEI. The Climate Registry adopted LGOP in 2009 for use by local government reporters, including from Canada and Mexico with country-appropriate supplements.

 * WRI: World Resources Institute

** WBCSD: World Business Council for Sustainable Development

More about ICLEI HERE. Though not much mention that there goal is implementation of UN Agenda 21. This was explained in the public comment by George Rebane and Judi Caler. More on Agenda 21 HERE, HERE and HERE.

What did we learn?  We leaned the the software tools and evaluation protocols used by SBC, without any validation and verification, was developed by International Environmental organizations and then modified by the California Air Resources Board and the California Climate Action Registry.  If you go on the CARB web site you soon learn that Phase III may required mandated greenhouse gas reporting. Under Phase III instead of just using modeling and estimation tool, local government will have to measure and report green house emissions like the power companies and other large energy users in CA have to do now.

What troubled me the most was that none of our Supervisors even questioned the need for an inventory.  They just accepting the AB-32 mandated requirements without questioning that  human generate greenhouse gases cause global warming.  See my post on that issue HERE. Scientific calculation have demonstrated that AB-32 will not have any measurable impact on global temperatures. The idea that reducing carbon dioxide emissions in California will affect the climate of the entire planet is totally absurd.

However, implementing AB-32 will have a huge economic impact when cap and trade sucks millions of dollars out of the economy.  And Phase III Climate Action Plans will create more regulation and increase government operating costs, collecting emissions data can be expensive. Who will buy the instruments and pay the staff to collect and report the data?   Costs that we tax payers may have to shoulder.

We need a Board of Supervisors that will just day NO to Phase III!  We cannot afford anymore regulations! Tell SBC when they come calling  for Phase III to just pound sand! 

I will have more on the young Forest Service Scientist, on his own time, who claimed that I was wrong when I spoke, and later accused George and I of lying, and being lied to, when we say the CO2 emissions were not a danger to the planet.

Update (05-22-12: 1700) George Rebane at Ruminations has some more comments on our encounter with the “young scientist” and Agenda 21. 

The Economist Shares My Economic Ignorance.

Russ Steele

Our local lefty blogger writes:

BTW, longtime hard-right blogger Russ Steele is showing his ignorance about financial matters here:

http://2012nevadacounty.wordpress.com/2012/05/21/gov-brown-call-your-office-facebook-shares-plunging/

Russ doesn’t seem to understand that Facebook rank-and-file and “insiders” — California residents — sold their shares before the public IPO and that capital gains taxes and sales taxes will be recorded regardless of what is happening in the “retail” market.

ooo

This is all good news. Nobody ever said the Facebook IPO would bail out California.

Having never been and “insider” like our lefty blog has been when C/Net went public, I would not know how those “insiders” make out while the rest of of 99% wish we were one. That said,  this is what the Economist said about the Facebook IPO and CA budget bailout.  The basis for my comment about the economic impact on California if the Facebook stock fails to soar after the IPO.

The Facebook Effect

A single IPO may have a big effect on the world’s ninth-largest economy

AMONG those in suspense as Facebook prepares for its initial public offering (IPO) of shares later this month are the bean-counters of California. After all, Facebook, which could be worth as much as $100 billion, is a Californian company and many of its employees, including its founder, Mark Zuckerberg, live there. That means they may soon be paying lots of tax.

The IPO’s timing fortuitously coincides with the beginning of California’s annual budget “kabuki”, as a former governor, Arnold Schwarzenegger, called the process. This kicks off with the official revision, on May 14th, by the current governor, Jerry Brown, of estimated incomings and outgoings. It drags on through June in the legislature and then, if all goes well, the governor signs something resembling a balanced budget by July 1st, the start of the new fiscal year.

Last year Mr Brown proposed spending $89 billion for the current fiscal year, which began on July 1st. As in recent years, however, revenues are falling short of official projections. Jason Sisney of the non-partisan Legislative Analyst’s Office says that the state seems to be facing an overall budget “problem” of more than $9 billion this year and next.

Enter Facebook (see article). The details are not yet known—at what price the shares list, how many Facebookers cash out, and so forth. But back-of-the-envelope calculations by Mr Sisney suggest that California might get a windfall of $2 billion over the current and coming fiscal years, and possibly billions more if the shares trade well.

In California such mathematical games bring giddy memories of the dotcom boom in the 1990s, and of the previous big listing, by Google, in 2004. That particular IPO [Goodgle] led to $7 billion in windfall tax revenues over the subsequent three years, by minting a new batch of millionaires with income and capital gains to declare. [Emphasis is editors]

If I understand what the Economist said, Governor Brown’s budget could see a big upside if Facebook stocks failed to soar.  The stock was sliding down hill when I posted and it is still down at the end of the day.  The shares dropped below their offering price in their first full day of trading Monday, wiping $11.5 billion off the social network’s market value.

That was the basis of my “ignorant”comment, which was a little in jest.   It is nice to have the company The Economist in my ignorance. They seem to think a soaring FB stock would have an economic impact on CA.

If I has been an “insider” cashing out would be the right thing to do.  Three years after IPO 2/3s of all  stocks had negative returns. Since 2010 60% of all IPOs have negative returns so far. Stay tuned for more ignorance.

Gov Brown, Call Your Office — Facebook Shares Plunging

Russ Steele

Governor Brown was expecting $2 billion in tax revenue from the Facebook IPO.   Facebook prices are falling below the IPO opening.

Update (05-21-12, 10:50) From the WSJ some more insight:

NEW YORK—Facebook Inc. FB -9.34% shares plunged on their second day on the stock market, a black eye for all those involved with the social networking company going public.

The shares fell 13.7% early Monday to well below the $38 price for the initial public offering, before pulling off the low.

“The underwriters completely screwed this up,” said Michael Pachter, analyst at Wedbush Securities. “This thing should have been half as big as it was, and it would have closed at $45.”

A spokesman for Morgan Stanley, the IPO’s lead underwriter, didn’t immediately respond to a request for comment.

Falling below the offer price so quickly is considered disappointing for a new stock, especially in the case of the most heavily traded IPO of all time. The reasons cited for the decline include an overly aggressive IPO price, the increased number of shares offered and concerns about Facebook’s slowing revenue growth.

While investor enthusiasm early on was high for Facebook shares and while bankers on the deal increased the stock price and number of shares ahead of the offering, many observers questioned the valuation of more than $100 billion that was placed on the social network, where revenue and earnings growth were already beginning to slow.

“Facebook’s IPO priced at a level well above where we foresaw compelling 12-month returns,” BTIG analyst Richard Greenfield said in a research note Monday. With revenue and earnings growth decelerating in 2012, “we find Facebook’s current valuation unappealing.”

The drop Monday has dealt Facebook Chairman and Chief Executive Mark Zuckerberg about $2.2 billion of paper losses, though his stake was still worth more than $17 billion Monday morning. The social network’s founder also retains almost 56% of Facebook’s voting power.

CARB Makes Rules, Companies Game Rules for Profit

Russ Steele

The Legislature and former a Gov made the rules when they passed AB-32, and CARB established  the mandated Cap and Trade program. One to the four cap and trade offset protocols established by CARB was  Improving Forest Management.

Now the environmentalist have discovered that Sierra Pacific Industries is going to make millions of dollars by gaming the system and they are upset.  SPI is going to log the forest and then plant replacement trees. They do this as a normal business practice in the timber industry, however now they are going to collect offset credits from CARB for the plant of those trees.

This gaming of the system by timber companines has been discovered by NBC’s Bay Area Investigation Team. Details HERE.  Here is the part of the story that warms my heart.

Companies that harvest timber like Sierra Pacific Industries, also known as SPI, admit they stand to gain tens or even hundreds of millions of dollars through carbon offsets.

“You’re not doing this out of the goodness of your heart,” Stock said to Ed Murphy, SPI’s manager of Resource Information Systems. “Of course not,” replied Murphy.

Murphy further explained his position on the issue raised by The Center for Biological Diversity: Additionality (or adding more things such as trees to reduce carbon further than what would be expected under normal or ‘business as usual’ conditions.

“Under the definition of additionality, there’s a process called common practice,” said Murphy. “We can show we’re well above common practice in terms of total carbon stored. But more importantly, the change in business practices comes when once we move into the offset market, we can no longer cut the forest down.”

Awesome, SPI gets the offset credits with a promised not to cut down the newly planted trees for a 100 years.  It takes about 90 years to grow a good sized tree. Better yet in 20 years CARB’s and Cap and Trade will be nothing more that a economic foot note in the collapse of the California economy following the Next Grand Minimum. Go SPI, take the money and run!   Future generations will cut the trees to stay warm!

You Thought the CA Economy Could Not Get Any Worse – Really?

Russ Steele

Governor Brown will have his tax initiative on the ballots and the Milken Institute reports that operating a business in California is 23 percent higher than the national average.

This is not lost on CA business. In 2011, 254 California companies moved all or some of their work and the associated jobs out of state, according to Irvine business consultant Joe Vranich,  who has been tracking these departures since 2009.

The pace is accelerating according to Vranich.  An average of 4.9 businesses left California each week of 2011, compared to 3.9 per week (202 total) in 2010 and one a week (51 total) in 2009.

With the implementation of AB-32’s Cap and Trade program this fall, business and home owner can expect electrical rates to jump as utility companies are forced to load up on renewable energy, some that cost 50 percent more than plentiful natural gas.  Details in the graphic below:

I have written about the PG&E program to institute the time of day rate increases that smart meters alls them to do HERE.  Those costs are not figured in the Cap and Trade rate increases out lined above. Running a energy intense business during the day in the summer will be very costly.

Governor Brown cannot collect taxes on business that have left the state, though some legislators are trying to figure out ways do that.  I predict that with the increase in energy costs and more business taxes, that the number of jobs leaving the state will continue to accelerate.  The CA economy will feel the impact. Yes, the economy is going to get worse.

More Green Fail: A123 Down the Slipper Slope to Bankruptcy

Russ Steele

Remember all those hybrids on the way to a spontaneous road side or a garage fire?  It appears some may of had some bad batteries. The MIT Technology Review has some of the details:

The financial numbers are pointing in the wrong direction for lithium-ion battery maker A123 Systems, a company founded 10 years ago based on technology developed at an MIT lab. 

In its most recent quarter, A123 posted a net loss of $125 million, $40 million more than it lost in the previous quarter. It only brought in $11 million in revenue, down from $40 million in the previous quarter and $18 million a year ago. Meanwhile, its cash is dwindling, down from $187 million at the end of last year to $113 million at the end of the first quarter of this year. The situation is so bad that A123′s auditors have expressed doubt about the company’s ability to stay afloat as a “going concern.”

A123′s poor performance is due largely to the fact that it has to replace a large number of defective battery packs it sold to customers last year. Although these costs will be incurred over a few quarters, A123′s accountants lumped all the battery replacement costs together in this earnings statement. Even without its warranty issues, however, A123 might still be struggling. Its manufacturing costs are high, so the company loses money on every battery it sells. It loses as much as 57 cents per dollar of revenue from its sales to one customer, estimates Andrea James, an analyst for Dougherty.

You can read the rest of the story HERE.

Another green company that cannot survive without government subsidies to pick up the tab and the government is broke.  What next? Wind powered cars?

Sacramento Cannot Stop Spending Even When the Wallet is Empty

Russ Steele

California is $16 billion in the hole, but our spendthrift political leaders want to waste $3.5 million a day building a high speed rail that no one will ride, and is really not high speed over 1/4 of the route. It will cost less in time and money to fly.  The LA Times has the construction story:

If California starts building a 130-mile segment of high-speed rail late this year as planned, it will enter into a risky race against a deadline set up under federal law.

The bullet train track through the Central Valley would cost $6 billion and have to be completed by September 2017, or else potentially lose some of its federal funding. It would mean spending as much as $3.5 million every calendar day, holidays and weekends included — the fastest rate of transportation construction known in U.S. history, according to industry and academic experts.

Over four years, the California High-Speed Rail Authority would need as many as 120 permits, mostly from a tangle of government regulatory agencies not known to rush their business. It would need to acquire about 1,100 parcels of land, many from powerful agriculture interests that have already threatened to sue. And it would need to assemble five teams of contractors with giant workforces positioned from Fresno to Bakersfield, moving millions of tons of gravel, steel rail and heavy equipment across the valley.

What could possibly go wrong with this massively expensive boondoggle?  This is exactly the sort of thing that will insure we become a bankrupt ward of the Federal government.  The eventual cost of the project will be $98 billion!  We cannot afford a crippled high speed rail that no one will ride?  Time to throw out the big spenders!