This one is also from Bustednuckles, so now I gotta go look up Belleau Wood. Wikipediahas long page about the WW1 battle that was fought there. History Net has a good summary of the issues raised by Germany against the U. S. Marines' use of shotguns. It points up the difference between combat and terrorism:
[Brigadier General Samuel T.] Ansell finally turned to Article 23(e) of the Hague Conventions, which prohibited the use of weapons or ammunition designed to cause “unnecessary suffering.” That article was not aimed at “efficiency in killing,” Ansell argued, but against “cruelty and terrorism.” Invoking the German word schrecklichkeit, which means frightfulness or horror, Ansell pointed to saw-toothed bayonets, flamethrowers, and chlorine gas as examples of German weapons that caused unnecessary suffering.
Funny how much difference a good nights sleep can make. Yesterday was a frickin' disaster, today I open up my browser and I'm chuckling like a fool. Here's some memes I stole from Bustednuckles:
Dirty Harry: Sudden Impact - .44 Auto Mag Scene (1080p)
Vee XXL
This film came out in 1983 and lord, how I drooled over this gun. I was actually making money by then, so it was possibility, but while it was cool I was busy and I never pursued it. But now it's back. Ian makes me glad I didn't buy one back then.
I'm glad to hear that the new company seems to have made it into a reliable weapon and might possibly stay in business. But I'm looking at it and I just don't like how complicated it is and how many small parts are there. I'm also a curmudgeon now, so I ain't spending $5,000 to buy anything, much less a gun.
A few years ago St. John bought a used electric pressure washer. It worked fine for a while but eventually gave up the ghost. Me being me, I decided to take a look and see if it could be saved. I opened the case and discovered that the motor was burnt to a crisp. Well, shoot, I've got this perfectly fine electric motor from a sump pump just sitting on the shelf. Can I marry these two? I'm looking at the mounting points for both devices and think what if I got a metal plate, a metal tube and a flange? That could work, couldn't it? Then I got to thinking how much a plain steel from Home Depot costs, and I wondered: how about Amazon? Surprise, they had everything I needed, and cheap to boot.
So $80 for everything I needed to turn this piece of junk back into a functioning machine. Well, maybe. Putting it together went pretty well. Had to drill and tap some holes in the plate to mount the flange. Cut down the pump shaft and drilled out one end of the coupling. Put it together and the motor wouldn't turn. Realized that the set screws on the coupling protruded just a smidgen above the surface. It was just enough that they hit the inside of the tube. Ground down the protruding corner and everything turns smoothly. Hooked it up this afternoon and tried it and I am not sure whether it is working or not. It's putting out a nice stream of water whether the motor is running or not. Didn't have the output hose connected and that may be the difference. I will have to try it again tomorrow. The little bit of work I did today wore me down. Maybe if I spent more time in my workshop and less time on my keyboard I would be a little tougher. Anyway, that was my solution to the problem. St. John went out and bought a new gas powered pressure washer. Kids these days.
This bike is so outlandish I suspect it might be AI generated, but with the amount of crazy running around loose in the world, maybe not. In any case, how glorious. I think I found this on Bustednuckles.
I like the graphs that show the evolution of steel making technology. Also interesting: the sheet metal is the most profitable steel product. Guess I shouldn't be surprised since that's what cars are made of. Used to be body panels but now it's the unibody structures since there is so much plastic on the outside.
P. S. Could you have a more attractive and wholesome video host?
Some random UPS package sorting facility I chose this picture because the ominous red lights remind me of the Terminator
A guy I know is back working at UPS, this time at the sorting facility out by PDX (the Portland airport). This place is maybe half the size of the dungeon (as it is commonly referred to) on Swan Island. At the dungeon they had maybe a dozen people scanning packages at key locations. At PDX, the scanning is done automatically, so they don't have people doing the scanning. Like all mechanical systems, occasionally things break and the system comes to a halt. At Swan Island when something broke, it only shut down a portion of the system. When something breaks at PDX, like a package jams a conveyor belt, the whole thing stops and all the package handlers get a break for an hour or two until they (whoever they are) get it fixed and it starts running again.
We would expect newer systems to have fewer breakdowns, which should result is less downtime over all. If breakdowns start happening too frequently, I expect they will just bulldoze the entire place and build a new one.
President George W. Bush once bewailed: “Rarely is the question asked: ‘Is our children learning?’” With radical ideas thrown around by Harris and Trump pre-election, economists are asking the same about presidents. However, presidents can rightly ask it about economists.
Trump just underlined his protectionist plans for "ultra-low taxes and regulations" zones, appointing a "manufacturing ambassador” to persuade firms to relocate to the US, and that “American workers will no longer be worried about losing your jobs to foreign nations. Instead, foreign nations will be worried about losing their jobs to America.” Economists are appalled. Yet they have no problems when an emerging market sets up low-tax and regulation zones and lobbies Western firms to close factories and move production there, with a loss of jobs. This is celebrated as “FDI”. Of course, economists say one case involves higher prices, and the other lower prices. In short, the morality of targeting other states’ industries and jobs revolves around price, not value (or values). That’s cold, hard realpolitik logic for the liberal humanist West, which never applies it to how one treats one’s own family: politically, the issue is then how one defines ‘family’.
Yet protectionism was staggeringly successful for the US in the past; and Germany; and Europe; Japan; South Korea; and China - all of them used it to climb the development ladder. To presume all you get from tariffs is inflation is to argue the US should today be solely the seller of commodities it was in the 18th century; Europe should be buying British goods and selling them food as the UK industrialised first; and Japan, South Korea, and China should be specialists in rice, not tech. You can see how ridiculous these arguments are, and we are all better off that they aren’t, even if via protectionism. Yes, tariffs can be a “tax on consumers” if you assume nothing changes but price. However, if they generate higher or better-paid employment, and increase production to attain economies of scale, tariffs can be moderately inflationary and a major stimulus to industrial growth.
He used several terms I wasn't familiar with so I looked them up:
The Thaw (Odwilż) Season 2 - Special Shoot Teaser DC (Max Original)
Peter Varsics
Police detective partners Kasia (Katarzyna) and Trepa return. Trepa continues to go out of his way to support Kasia. This time they are investigating the murder of a young man that Kasia had pressured to become an informant. The bad guys, besides the usual drug dealing and gambling, are also smuggling underage girls in and turning them into whores. Kasia is still grieving over the loss of her husband who committed suicide. His suicide may have been caused by the moral conflicts he encountered in his undercover work for the police. Her father-in-law has a stroke and his vocabulary is reduced to the f-word.
This big round-about shows up in nighttime aerial shots on a regular basis. I always thought of Poland as being in eastern Europe and technically it is, but Szczecin is almost directly south of Copenhagen, Denmark:
Bloody, violent, grisly film about Koreans fighting against a Japanese invasion during the late 16th Century. If that's not enough, a rebellion blows up in the aftermath.
This movie is kind of confusing, partly because they jump back and forth in time and partly because several of the Koreans appear to be clones. You'd think, after watching as many Korean shows as I have, I would be able to easily distinguish them, but such is not the case.
The story focuses on a rich kid and a slave who are brought together as children and grow up in the same house / compound. The slave's initial job is to be the whipping boy for the rich kid who is learning to fight with a sword. Every time the rich kid makes a mistake with his sword, the slave gets a stroke from a cane. The slave soon tires of this so undertakes to teach the rich kid the techniques he needs so he won't make mistakes in training and so the slave doesn't get whipped anymore. The slave eventually graduates to becoming the rich kid's instructor.
When he comes of age, the rich kid goes to take an exam to enter the military, but he repeatedly fails. Eventually the slave takes the exam for him with the promise that he will be freed if he succeeds. He succeeds and the father reneges on his promise. The same thing happens later on with the king. All the peasants who volunteered to fight against the Japanese are promised freedom, but the king reneges on his promise. Slimy nobles.
There is a Japanese high-ranking soldier known for cutting off Korean noses. He has a bunch of treasure chests hidden in a cave. The rebels find the chests and are making off with them when they are ambushed by a group of soldiers. The group is actually two groups, one Japanese and one Korean, working together. Both the Koreans and the Japanese are armed with matchlock rifles. Through some careful choreography the Koreans manage to arrange themselves so they get the drop on their Japanese comrades. Their commander gives the order to fire and the Koreans do, but their guns blow up because the Japanese were in charge of maintaining the guns and had blocked the barrels. I suppose a double load would do the trick, i.e. load it with powder and ball once, and then load it again. They fall upon each other and everyone dies except the two leaders, so we get a swordfight. But wait! Our guy shows up and he can't wait to kill both of them so he jumps in and now we've got a three way sword fight.
Eventually the treasure chests get delivered to the king where upon they are opened and we find they are full of people's noses packed in salt.
The Japanese invasions of Korea, commonly known as the Imjin War, involved two separate yet linked invasions: an initial invasion in 1592, a brief truce in 1596, and a second invasion in 1597. The conflict ended in 1598 with the withdrawal of Japanese forces from the Korean Peninsula after a military stalemate in Korea's southern provinces.
The Japanese and Korean forces were roughly comparable. The Japanese lost roughly 100,000 troops but the Koreans lost a million people, mostly civilians.
I mentioned the other day that the Yankees and Dodgers hadn't met in the Fall Classic since 1981. That year the Yankees won the first two games before a twenty-year-old rookie phenom from Mexico pitched a W in a complete game, turning the series around.
The Dodgers won four in a row and the Series, the pitcher won the NL Rookie of the Year and the Cy Young, the first and only time a player has taken both awards in the same season.
That pitcher, Fernando Valenzuela, has left the building.
I like this excerpt. Al Jazeera is usually all Israel-bad all the time.
The strike on Tuesday came roughly 40 minutes after an Israeli military spokesperson posted a warning in Arabic on social media, notifying people in and around a pair of buildings in the southern suburbs of the Lebanese capital that they should evacuate the area.
He did not explain why the buildings were being targeted, other than to say they were near “interests and facilities” associated with the Hezbollah group.
The warning prompted many people to flee the busy, densely populated neighbourhood, even as others, including a few journalists, kept watch. By the time of the attack, the building had been evacuated and there were no reports of casualties.
Minutes before the missile brought down the building, two smaller projectiles were fired at the roof in what Israel’s military often refers to as warning strikes, according to the AP journalists at the scene. It is a practice Israel has followed in strikes in the Gaza Strip.
We looked at several shows this evening before we found one we liked. These are the rejects:
Strong Girl Nam-soon - Series - Litte girl in Mongolia throws 200 pound man across the arena.
Warrior - Series - Reminds me of Kung Fu. Tall, white looking Chinese guy arrives in San Francisco in 1870 and falls in with a Chinese Tong (gangsters). Lots of people being belligerent, lots of fighting. Pretty good production values, but cardboard characters and not much substance to the story. Also everybody speaks English. The Chinese characters start with speaking Chinese so you know that's what they are speaking, but then they switch to English, possibly because most Netflix consumers don't like subtitles. I like to hear foreigners speaking furrin. I don't quite understand why that is. Makes it more authentic, maybe?
Warrior Nun - Series - Some kind of grisly, mystical, sci-fi war story.
The Shadow Strays - Movie - Female John Wick killing all the bad guys.
Set in Poland in the mid 1990's, it's the story of a nasty multiple murder & bank robbery by three good, but not too bright, friends. One of them is some kind of math whiz, but he lacks real-world skills. Supposedly based on an actual crime, but I didn't find any more than that.
Old retired cop is brought back to solve the case. He used to be on the police back when the commies ran the place and there are some old resentments hanging around. Some of those resentments work against him, and some work for him. Halfway through we already know who the culprits are, but the cops are looking for evidence and so far it's pretty thin.
There is one scene, it's just a few seconds long, where the old cop is watching TV and a news broadcast comes on telling us the Marek Kamiński has reached the South Pole. Marek is a real person and he actually reached the South Pole on December 27, 1995. It's got nothing to do with the story, it's just a little gem that got dropped into the script. Also tells us the date.
I've been seeing a bunch of gun misfires recently in TV shows. (A misfire is when gun fails to fire when the trigger is pulled.) Sometimes it's a flintlock, which is par for the course, but there's really no excuse if it's a modern weapon. What this tells me is that the characters with the malfunctioning guns have not been properly indoctrinated in the care and feeding of firearms. Or they are infected with group-think that doesn't value such behavior, i.e. 'It's a modern firearm. Just because it's been dragged around in the bottom of a bag full of junk for six months is no reason for concern." Occasionally a guy will find himself in a desperate situation and the only weapon he has is of unknown provenance. In that case a misfire is at least plausible, but when six out of seven thugs all have misfires you know that they have been infected with stupidity.
Looks like a very fancy gizmo for a very mundane task. And it is, until you realize how many zillions of miles of roads are out there and how little distance one guy could cover if he was having to make note all the defects in a road surface by hand.
I mentioned this video I came across recently. Jack thinks the Federal Reserve Bank in New York's gold bullion hoard is worth more. Let's see:
Gold on hand
6,331
tons
times
2,000
pounds per ton
times
12
ounces per pound
times
2,600
dollars per ounce
equals
395,054,400,000
dollars
Jack is right, 400 billion is more than 10 billion. Of course this depends on the Federal Reserve telling us the truth about how much gold they have and I am not sure I trust them any more than I trust the Federal Government.
In the Netflix series Black Sails, the pirates recover many tons of gold from a wrecked Spanish treasure ship. Gold is heavy, so they convert a portion of it to gemstones which evidently have a higher value to density ration. This seems to like a risky proposition to me. Gold can easily be measured, gemstones need an appraiser both when you buy them and again when you sell them, which means you are at their mercy, that is, if you can even find one. A couple of pounds of gemstones could be worth as much as a ton of gold, so if portability is an issue, then the risk entailed might be worth it. Gemstones have no particular attraction for me. Oh, they are pretty enough, but not they are not pretty enough that I am going to spend a pile of loot to acquire one just so I can look at it. If one did fall into my hands I would probably hang onto it because it is more likely to hold onto its value than anything else. Some people like to have them so they can show them off. I am not one of those people. My wife has to remind me to shave when we are going out.
Jack's sister recently sold a pile of silver coins she inherited from her father. A lump of silver the size of a pack of cigarettes is worth about $1,400. The coin man used the ping test on her coins.
Ping test is a good thing to have in your pocket if you are dealing in silver. There are any number of videos talking about the ping test and they are a real grab bag. First problem is that the ping test is not definitive. The second is it can be very hard to tell the difference between a real coin and a fake, especially if you don't have anything to compare it to. Third is that some real coins will fail the test. I picked this one because it's not too long and he just balances the coins on his finger.
Update the next day: changed ounces per pound from 16 to 12 per Stu's comment.
"The bunker was deliberately placed under a hospital"
By Daily Wire News
The Israel Defense Forces declassified information on Monday giving up a location where the Iranian-backed Hezbollah terrorist organization is allegedly storing $500 million in cash and gold.
Israel Defense Forces (IDF) spokesman Rear Adm. Daniel Hagari said in a video that the money was being stored in a secret bunker that belonged to the group’s former leader, Hassan Nasrallah.
The IDF had no plans of hitting the bunker, which is located under the al-Sahel hospital, he said.
“The bunker was deliberately placed under a hospital, and it holds more than half a billion dollars in cash and gold,” Hagari said. “That money could have been used to rehabilitate Lebanon, but it went to rehabilitate Hezbollah.”
He said that Hezbollah’s financial network relies on getting direct payments from Iran and factories that it has built in Syria, Lebanon, Yemen, and Turkey.
Hezbollah also relies on criminal activity around the world, including hubs in Africa and Latin America.
A 2022 Europol report stated, “The network of collaborators built by Hezbollah in the EU is suspected of managing the transportation and distribution of illegal drugs into the EU, dealing with firearms trafficking and running professional money laundering operations.”
Hezbollah propagandists working in the media went to the hospital and claimed that there was no money there as they showed images of hospital beds and other medical equipment.
IDF spokesman Lieutenant Colonel Nadav Shoshani released a statement on Tuesday providing instructions to the journalists on how to get to the bunker.
“One of the entrances to the bunker, containing more than half a billion dollars in gold and dollars, is on the eastern side of the basement of the Al-Ahmedi building, located south of the Al-Sahel hospital,” he posted on X. “The basement is on the second floor down (level -2).”
“It is important to note that it is possible the entrance is hidden by various means in order to make it difficult to find,” he added.
How long will it be before treasure hunters locate and loot Hezbollah's treasure vault?
I guess we should have seen this coming. Silicon chip technology is down to 2 nanometers. Amino acids measure between 0.4 and 1 nanometers in length. Some people like to measure these things using Ångströms, which are one-tenth of a nanometer. That is, there are ten Ångströms in a nanometer.
Color laser engraving technology utilizes high-powered lasers to etch intricate designs and patterns onto metal surfaces. Unlike traditional engraving methods, color laser engraving offers the ability to create vibrant and multi-colored designs with precision and accuracy. This is achieved through the modulation of laser pulses to control the depth and intensity of the engraving, resulting in stunning visual effects on metal substrates.
In the first method, the surface of the metal is turned into a molten form using a very powerful laser. During the melting process, oxidation also occurs. The surface of the metal oxidizes due to the high temperature and reaction with oxygen.
The melted material solidifies again, but due to oxidation, a special-colored layer is created on the metal, which looks like colored engraving. Therefore, you see vivid colors on the engraved surface rather than the normal engraving color.
Master of the House | Official Trailer | Netflix
Netflix Asia
We're in Thailand. An old man has built up large company that deals in gemstones. He has a large, fancy house that houses himself, his extended family and at least a dozen servants. Butterflies, live and mounted, are his hobby. His family all seem to be vile shitheads, some worse than others. His wife died some time ago and he has become enamored of Kaimook, one of the servant girls, to the point that she is even working with him on his butterflies. It's no surprise to us when he marries her.
The old man dies in a fall from his balcony. Was it an accident or was he pushed? The police rule it an accident.
The family bullies, insults and treats Kaimook very poorly. We've watched four episodes so far, so we are just waiting for the moment when Kaimook takes revenge on this collection of twerps. It's going to be glorious. Or maybe not. The way things are going they are liable to destroy each other leaving Kaimook the last one standing.
The house is run like an old time English manor house. It could have been set in England except, of course, all the people are Thai. Funny how much impact the English had on "polite society" the world over.
The Lincoln Lawyer: Season 3 | Official Trailer | Netflix
Netflix
Goes down smooth, just like a Hollywood courtroom drama is supposed to go. It's got all the requisite parts: courtroom arguments, personal problems, romance, a little bit of violence, and they are all very skillfully blended. Everything is reduced to pleasant, ideal first world standards. i.e. it's a fantasy. I mean even the gangster with the face tattoos is clean cut and well dressed.
Mickey Haller is called the Lincoln Lawyer because he conducts business out of the back seat of his Lincoln. He started with a blue 1963 four-door convertible Continental which is same model JFK's limo was derived from. But that car is 60 years old. He still keeps it around, but now he rides around in a Lincoln Navigator.
In episode 5, while returning from the Federal prison in Victorville, he gets run off the road by a tow truck. His driver was alert enough to realize the tow truck was gunning for them, but somehow the Lincoln was not able to outrun the tow truck. Okay, it's TV. His driver is killed in the accident and the Navigator is destroyed.
In episode 6, Mickey comes out of his house in the morning and finds this beast in his driveway:
Armored Navigator
It only shows up on the screen intermittently and then only for a couple of seconds. Also, the Print Screen Key on Windows requires that you also press the Windows Key and as soon as you do that the red timeline pops up on the bottom of the screen and cuts off the bottom half of the wheels. Stupid Windows.
While the stock Navigator is a big car, the armored version appears beefier, more muscular. I don't quite understand that. Did they make some changes to the body or is it just cosmetics? That weird, semi-flat paint might have something to do with that. There seem to be several companies building armored Navigators, but I did not find anyone claiming to have built this one, which I find a bit odd.
The Navigator is a present from the drug cartel boss that Mickey went to see in Victorville. Nice to have powerful friends in low places.
The video starts with laying out the groundwork and that part is pretty good, but then he gets into the nuts and bolts of the problems and my brain started going numb, so I copied the transcript and pasted it here. It came out as one big block of text, so I spent some time cutting it up into paragraphs.
Transcript:
California has the largest economy in the United States with a Gross State Product of over four trillion dollars. If it was its own country, it would have the world's fifth largest economy, behind Japan and ahead of India. California is home to some of the world's most valuable technology companies, it’s the center of the global entertainment industry and its farms are amongst the most productive in the world, growing over half of Americas vegetables, fruits, and nuts.
California’s workers are hugely productive too, the state has a GDP per capita of $104 thousand dollars which would rank it as number six in the world – if it was a country. Tax havens (which California definitely is not) often have distorted GDP as multinational companies frequently transfer intellectual property assets to tax havens – like Ireland - which get counted as that countries GDP. Income on foreign owned capital held in a tax haven also gets counted as GDP because the income originates in that country – even if the financial firm has nothing but a PO Box to show for it.
If we exclude tax havens from the list – to remove these distortions - California really stands out as the most productive place in the world. Unfortunately, some of the shine has started to come off of the Golden State in recent years as companies and workers have been leaving. Elon Musk famously announced this summer that he would move the headquarters of his companies from California to Texas. He has long complained about overregulation and excessive taxation in California but said that the final straw was a new law relating to parental rights.
Critics argued that Musk was attacking the state after years of benefiting from its abundant government support – which was of course paid for by the high taxes. The president of the California Labor Federation told the LA Times that “California, through tax credits, electric vehicle subsidies and training grants made Elon successful.” It’s not just Elon Musk however, companies like Chevron, Hewlett-Packard, Palantir, and Charles Schwab have all left the state in recent years.
According to the Financial Times, over 200 companies have left California since 2019 with very few companies moving there to replace them. This contrasts with states like Texas and Florida where the exact opposite is happening. This isn’t all that new either, research from the Hoover Institution shows that this trend began well before the pandemic and has been slowly picking up pace. They point out that corporate relocation planning takes years, giving the example of the NHRA who left California in 2021 after a twelve-year study.
According to Joseph Politano at the Bureau of Labor Statistics, the biggest beneficiaries of the post pandemic move have been States like Texas and Florida, whose economic growth has outstripped most emerging markets in recent years with huge jobs growth too. Now, it’s worth noting that despite all of this negativity, California has been growing faster than the United States overall, and the United States has experienced great economic growth in recent years, but as Texas and Florida have grown, so have jobs, but in California there has been economic growth paired with very weak jobs growth – which is a problem.
The US unemployment rate sits at 4.1%, which is not far off its low, but in California, the unemployment rate has risen to 5.3%, the highest of any US state. The recent tech and AI boom has been good for California, but not for Californians. According to the LA Times, California’s homelessness problem – which has always been an issue has grown by 40% over the last five years and half of all homeless people in the United States live in California.
So, how is California different from the rest of the United States, how did they go from a hundred-billion-dollar budget surplus two years ago to a budget crisis with a $73 billion dollar deficit today? And what explains the Californian exodus, and lack of new arrivals?
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Early settlers mistakenly believed that California was an island – entirely separated from the United States by the Gulf of California. In many ways it developed like an island too with its major population centers all on the coast - as it was cut off from the rest of the United States by huge mountain ranges and hard to cross deserts. Before rail and good roads were laid the easiest route from the East Coast to California was by sea.
The state’s modern economic history began with the Gold Rush in 1848, which attracted over 300,000 settlers, boosting the population and infrastructure which led to statehood two years later in 1850. The oil industry played a significant role in the state’s early economic development too, after oil was discovered in Los Angeles in 1895. California quickly became the biggest oil producing state up until 1936 after which reserves became depleted. Today oil and natural gas are mostly imported into California from abroad – which partially explains the States high energy costs.
Agriculture has been a huge industry in the state too, with Californian farmers focusing on the production of the highest margin produce. The film industry is possibly what California has been most famous for around the world, and along with the tech sector, it contributes significantly to California's global cultural influence – which has been huge. The development of Silicon Valley in the late 1970s transformed California into the global leader in technology and innovation – which it remains to this day.
Given the size of the State economy, it is no surprise that there is also a vibrant financial sector too. California’s public universities are ranked amongst the best in the world for academic excellence, research and innovation. They attract top-tier faculty and focus on research and development which has driven advancements in technology, medicine, and the arts.
The top Californian universities have policies in place that encourage students to take ownership of their research. Students are often given the opportunity to be named on patents they developed and are supported by the universities in commercializing their work. The UC system has resources like technology transfer offices and entrepreneurship programs to help students navigate intellectual property rights and develop their research into marketable products or services.
At other universities, the ownership of research and IP might be more strictly controlled by the institution itself, many universities retain ownership of all IP created by students, faculty, and staff. The UC system's policies have fostered a sense of ownership, empowerment and entrepreneurship among students and can be given credit for a lot of the innovation and business success that has come out of the state.
California is famously America’s most left leaning state, earning it the nickname “The Peoples Republic of California” – and making it the whipping boy of conservatives, for whom California has long been shorthand for everything wrong in the country.
The State is home to many of America’s most progressive policies, it has the heaviest tax load in the country. Criminal justice policies like de-carceration, de-prosecution, and de-policing (these are all new words to me) have led to a crime problem that has damaged the state’s image along with residents feeling of safety.
Energy prices which are high to begin with in California are likely to only rise higher as the state mandated transition to a zero-carbon grid takes conventional power offline and replaces it with more expensive green sources.
According to research from George Mason University, California is the most regulated state in the US with more than 419 thousand restrictions in place, the majority of which cover “industry, commerce and development”. This overall combination of high taxes, high regulation, high crime and an extreme homelessness problem makes California an easy target for right-wing politicians, and as the situation gets worse – outsiders rush to declare it a “failed state”, or announce that “the California dream is turning into a nightmare”. – I should probably use one of those as a video title… - or something about – checking out of the Hotel California – you guys will click on that… hopefully… The cost of housing and energy are so high in California – when compared with the rest of the United States that even high incomes look a lot less impressive once adjusted taxes and the overall higher cost of living.
The price-to-income ratio for buying homes is twenty-five times median income in Newport Beach, nineteen times median income in Palo Alto, twelve times in San Jose and 11 times in San Francisco, this compares to a national average of 5.6 times for the overall United States, according to researchers from Harvard. According to The Hoover Institution, headquarters migrations out of Santa Clara, Alameda and San Mateo counties reflect high-tech companies in the digital and social media world opting for less expensive locations not only to control business costs but so they can recruit workers who will benefit from lower housing costs in other States.
California’s three greatest challenges today are rising unemployment, growing fiscal strains and population outflows, all of which relate to each other and don’t have easy solutions. In the United States overall the unemployment situation is quite good, with an unemployment rate near its long-term lows and with 1.6 job openings per unemployed person.
In California, the situation is a lot worse, unemployment rose more than in any other state since interest rates were hiked in 2022 and there are just 0.8 job openings per unemployed person—the worst ratio in the country. Big Tech, which had hired aggressively during the zero-interest rate environment, began laying off staff a few years ago as soon as they experienced a slowdown. These layoffs affected the overall Californian economy – not just tech, as when laid off tech workers stopped spending it affected retailers, restaurants, transport and service workers too.
With the slowdown, California’s income-tax collection fell by 25% last year, a drop equivalent to the decline that happened during the bursting of the dot com bubble in 2000 and the global financial crisis in 2008. California’s State Constitution requires a balanced budget in that, if proposed spending exceeds estimated revenues, the Governor has to recommend the sources to make up the budget shortfall.
Governor Newsom projected a deficit of $38 billion dollars for this fiscal year but the Legislative Analyst’s Office, a nonpartisan fiscal adviser for California’s legislature has estimated that the state is on track to spend 73 billion dollars more than it brings in in taxes. This is quite an about turn as just two years ago the state had a 100 billion dollar budget surplus.
The reason California’s budget fluctuates so wildly is that California has a very progressive tax structure, where higher earners pay a much larger share of taxes. When the state’s highest earners do well, the state budget does well – like in 2022, but during business slowdowns tax revenues dry right up. This volatility in tax collections explains why every few years California has a major fiscal crisis.
Governor Newsom defends this setup, saying that it creates a lower tax burden on low- and middle-income workers, but the problem is that the policies are pro cyclical, meaning that when the state needs to spend money – during a slowdown – it has no money to spend and instead needs to cut back.
It’s not obvious that cutbacks on government programs – that are most relied on by low income workers during downturns benefits them. Solutions that have been put forth for dealing with the current budget deficit include deferring promised funding—for universities, the homeless and the disabled. In prior budget crises Californian politicians have played games like pushing payments out an extra day so that they come out of the next years budget or paying IOUs to businesses, students and taxpayers to whom it owed money. None of this fixes the core problem.
The LA Times writes that despite what people believe, overspending is only a small part of California’s problem, they say that the state’s fiscal headache is largely the result of an unstable state tax system that relies too heavily on the rich. For decades, California’s revenues have been heavily dependent on capital gains taxes on the richest residents. Thus, revenues spike in years when the stock market booms as a lot of IPO’s occur and investors sell stocks and other assets.
For example Facebook’s IPO in 2012 brought in an extra 1.3 billion dollars in state taxes. The problem is that in years with an IPO drought, insufficient taxes are collected to keep government programs running As an example, in 2021, the top one tenth of one percent of Californians paid almost thirty percent of all state income tax.
The problem with relying on such a small number of people for such a large percentage of state taxes is that if they choose to leave the state, the tax revenue dries right up. A famous example of overreliance on top earners was in 2016 when New Jersey’s wealthiest resident moved to Florida, throwing the New Jersey State budget into chaos as hundreds of millions of expected revenues evaporated. This is already a problem in California, the State has been losing a growing number of high-earning residents, with the trend picking up pace during the pandemic. In 2021 – according to The Economist - the state lost almost $30 billion dollars in net taxpayer income to other states – as wealthy taxpayers relocated.
California was not always set up like this. In the 1950’s income tax made up only 10% of California’s general fund and sales tax – which is much more stable - was the main revenue source. Since then, California has become much more of a services-based economy and is one of the few states that doesn’t tax services.
Tim Hartford wrote an article this week on some of the strange taxes that have been introduced throughout history like Peter the Great’s beard tax, whose aim was to encourage Russian nobles to shave or Argentina’s bachelor tax which brought about a new profession “the lady rejecter” where women would charge men a fee to write a letter stating that the man had proposed marriage to her and that she had declined the offer. The fact that the man had tried but failed made him exempt from the tax.
Hartford – who was writing about the UK and not California argued that it often works better – when a government needs to raise revenue - to broaden the tax base - while lowering the tax rate at the same time rather than to single out small groups to tax. This is possibly more the case for a state than a country – as it is easier to move to a neighboring state in the United States than it is to move country.
The Economist points out that there is nothing new about more Americans leaving California than move there – they say that this has been going on for over thirty years, but they point out that something else has changed. California’s population still grew over that period because of foreign immigrants arriving there to work. A slowdown in immigration to California from abroad that started during the pandemic has sustained and California has now seen an outright decline in its population for three straight years, the first sustained drop since becoming a state in 1850.
California’s reliance on capital-gains taxes limits the state’s flexibility to fix its budget crisis as hiking taxes further could just drive more rich Californians to leave, exacerbating the problem. According to the Hoover Institute California has hit a wall where the State can’t bring in any more tax revenue without significantly damaging the economy. California’s state income tax rate is amongst the steepest for wealthier people in the United States, topping out at 13.3% for millionaires, and its gasoline tax of almost sixty cents per gallon is the nation’s highest.
While California’s taxes are very progressive, hitting the wealthiest the hardest, the public policy institute of California reports that seventy percent of Californians still feel that they are paying more than they should in state and local taxes. Most taxpayers weigh up what they get in terms of public services for their tax money, and with high crime and extreme levels of homelessness many Californians don’t feel they get any additional public services that are not available in low tax states. They simply feel that they are not getting value for their money.
The one area where the state’s tax collections are lower than in other states is property tax. Proposition 13, which was adopted by California voters in 1978, requires that properties be assessed at market value at the time of their sale, and after that assessments can’t rise by more than 2 percent per year until the house is sold again.
This means that in a situation where property values increase by more than 2 percent per year (which they have in California), homeowners are incentivized to stay in their original home rather than move as their taxes are lower than they would be in a different house of the exact same value. This distorts the Californian real estate market and the data shows that Californians tend move house a lot less than Americans in other States.
This rule benefits wealthier older residents at the expense of new home buyers. The people who have left California cite high taxes, expensive real estate, crime, homelessness and overregulation as the reasons they decided to move to other states. So, how bad is the regulatory environment in California? We saw earlier that California has the most regulation of any state in the US by a significant margin, but the same report showed that Texas – a state that people are leaving California for is number five on that list – which doesn’t seem a whole lot better.
According to The Pacific Research Institute, California doesn’t just have more regulations than other states, but the regulations are more restrictive than in other states too. The report argues that California’s regulatory environment is particularly difficult for small businesses that lack the scale to efficiently manage the administrative burdens and finance the higher costs created by onerous regulations.
According to the Bureau of Labor Statistics – a big reason for the migrations we have seen out of states like New York and California to states like Florida and Texas is that the pandemic weakened the economic clusters that dominated pre pandemic America. Pre pandemic, 19% of all tech jobs were based in California, today only 16.5% are.
It’s not just tech jobs that are moving out of state either, according to The LA Times, film and TV workers are leaving too. During the pandemic when work could be done remotely people moved to more affordable locations. This happened right as the tech industry was booming, which just meant that California had a smaller slice of a growing pie – everything seemed fine. Once the tech recession occurred as interest rates rose, California was just losing outright – with a smaller slice of a smaller pie.
Technology stocks today make up just under one third of the value of the S&P 500 Index. If you add in communications services stocks, many of which connect with the technology arena, the group represents more than 40% of the overall stock market. On top of this there are lots of huge privately owned tech firms too.
The growth of the tech sector has been a huge contributor to Californian growth over the last sixty years, but people are starting to question if these companies can continue to grow – from their already massive size - going forward. The tech sector is well suited to California – as it relies on small numbers of highly paid workers to design products or software that are really scalable.
Unfortunately for the state – you wouldn’t really manufacture physical products there due to the expensive real estate, high regulation and high taxes. There is a reason that every Apple product says Designed in California, Made in China and Taxed in Ireland on the back of it… If the tech industry stops growing – the state might struggle.
Tech layoffs have been hitting California quite hard over the last two years – I made a whole video about this a few months ago, and while Californian tech workers receive the highest average tech pay of any US state they have not only been hit the hardest with layoffs but also withstood the largest year-over-year pay drop when they find new jobs, as demand for their skills has dried up.
Since the gold rush, California’s economy has been built on ready access to fresh water. The state’s agriculture sector faces significant water challenges today due to prolonged droughts and over-reliance on groundwater. California's water reservoirs are often well below average capacity today, leading to stringent water use restrictions. This puts a lot of strain on the agricultural sector, which is vital to California's economy, and once again, there is no obvious solution to this problem.
California clearly faces a number of challenges, and its economy today is suffering in ways that the overall US economy is not, but California has had rough patches in the past, like in the early 2000’s and in the wake of the Credit Crunch, but its innovation-led growth model has managed to stand the test of time. The state made up 14% of America’s total output last year, up from 12.5% in the late 1990s – there is no need to count the state out yet…
The biggest problems appear to be unaffordable housing, excess regulation and a procyclical tax system that finds itself in crisis every few years. The unaffordable housing problem is driven by a combination of excessive regulation and Nimbyism which combined make California the most difficult part of the United States to build new housing in.
Fixing this problem – would likely fix a lot of California’s other problems. It is worth noting that the states that people have been moving to – the ones experiencing the fastest growth are also the states with affordable housing where it is easy to build. Workers like living in places where they can afford a comfortable home, and employers like hiring in these places as workers with affordable homes are willing to accept lower pay. You don’t really benefit from high pay – if it all goes out the door in housing costs.
So, can all of California’s problems be blamed on progressivism? After all Californian refugees have been moving to states where there are no state income taxes, to states with lower regulation where it is easier to build or to places where crime rates are lower than in the Golden State.
Janen Ganesh made an interesting point in a recent FT article on the balance between the right and left arguing that the governing climate in which urban life flourishes is a blend of progressive ideas (such as liberal immigration rules and infrastructure spending) with conservative ideas (like market incentives and toughness on crime). He argues that while cities might benefit most from low taxes, less burdensome regulation and a business-friendly atmosphere, they often vote for policies that would harm them.
California has been a hugely successful economy because of its ability to attract in the best and brightest, and if these people are starting to move away for greener pastures, it might be worthwhile mimicking some of the qualities of the states that are attracting them away. If you found this video interesting, you should watch my video on what’s driving tech layoffs next.
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