SoCal Minds

They're following the money at 'state of state' program

From the Milken Institute

The folks over at the Beverly Hills think tank take their annual big, welcome scrutiny this week of what's working and what isn't in the Golden State, inviting in a blue-chip crowd of politicians, policy-makers, academics, business leaders and others to join in the civic-minded conversation. An array of topics gets dissected by an array of credentialed and eminently qualified speakers, panelists and experts of varied stripe. And think tank staffers do an excellent job of posting about it all, asap. The sessions started, of course, with an institute salvo about the skyrocketing costs of public pensions and what might be done about this giant, looming public finance nightmare. As the day wore on, those assembled also examined: what's the big picture with California's overall economy;  how to heal the horribly wounded state housing market; what's really going on in Golden State politics (hint: it's Jerry's race ...); and how CEOs might 'fix' this state. There's a page directory of the videos already available from many of the Tuesday sessions, which also covered small business lending and encouraging business innovation.

 

On eve of 'state of state' conference, questions on prisons

From the Milken Institute

Even as the folks at the Beverly Hills think tank turn their attention in a major way to their annual 'state of the state' program, bringing together an array of politicians, policy-makers, business executives and other influential individuals this week, the authors of the institute's excellent and expanding blog point to a huge, painful problem in California and nationwide: the criminal underclass incarcerated in our prisons. Yes, as they write, the wicked deserve punishment. But that righteous discipline has spiraled into a $50 billion, budget-busting societal challenge, especially as new data put in one place by thinkers from the Pew Charitable Trusts underscores how burgeoning imprisonment leads not only to long, maybe lifelong downward mobility for criminals but has broad effects on their spouses and children, too. The picture could not be more stark and grim for African Americans: 1 in 12 black men is imprisoned; more black men ages 20 to 34 without high school degrees are behind bars than in the workforce; and 1 in 9 black kids has a parent incarcerated. Combined with data that shows that serving time reduces annual wages by 40%, that imprisonment over time depresses black men's earnings by 9% and that African Americans who are incarcerated largely came from the ranks of the poor -- and that, statistically speaking, they are likely to stay there -- the picture for criminals' families is just rotten. It's only slightly better for Latinos. How long can California and the nation keep this up?

What to make of grim data on downward mobility of incarcerated underclass?

 

How thick can the fog get about economy, government?

From the Milken Institute

It's not just that the coastal eddy and a collapsing Western high has sent piles of thick overcast across Southern California this morning. It's simply that reading about anything economic these days seems guaranteed to envelop the brain with a fog to rival anything to be found in San Francisco or Santa Monica. Is the government, in fact, spending too little, as a Nobel Laureate and New York Times columnist argues, adding that a great media machine is creating a false myth about government growth, too? Or is the government profligate and setting new spending records, as the voice of conservative Wall Street decries on some other pages? Interesting to dig deeper and to hear yet another view, with the think tankers in Beverly Hills decrying an unended 'Great Recession' for state and local government employees, issuing a new call for how the nation must act so as to be 'Ensuring State and Municipal Solvency' and even chiding partisans of all stripe with a post on 'Economics for Grownups.' Does anyone have sound Cliff's Notes for this economy?

 

Look at all the stuff they're chattering about now ...

From UCLA, ALOUD, Zocalo, Southwestern Law School, USC & the Milken Institute

Here's hoping there are madding crowds around town with noble striving to learn lots more this week about international criminal courts, Islam, Christianity, mammon-like matters, defamation, unemployment and happiness. Those are among the topics that will be or have been taken up in salon-like, free, open and public conversations across the area that also may require RSVPs or online patience.

• On the Westside this afternoon, for example, Gen. Wesley Clark, the one-time NATO supreme allied commander, and David Scheffer, the first U.S. ambassador at-large for war crime issues, will address whether aggressive war constitutes a crime and what the proper role might be for an international criminal court in the future of international justice.

• In downtown, Graham E. Fuller, a former vice chair of the CIA's national intelligence council, will join Tuesday night with Maher Hathout, an oft-quoted figure in the U.S. Muslim community, and Rabbi Reuven Firestone to ponder scenarios in which there might be a world without Islam? That session will be twinned with a Thursday night program with Eliza Griswold, a poet and prize winning journalist (shown at left), and Amir Hussain, a theological studies prof from Westchester, examining life along the 10th parallel, near which half the world's 1.3 billion Muslims dwell, as do 60% or so of the planet's 2 billion Christians.

•  In downtown, too, but on Wednesday night, Sebastian Mallaby -- a noted journalist and fellow at the Council on Foreign Relations -- will detail the rise and seek to explain the unprecedented position that hedge funds now occupy in global finance. 

• With the appropriate caveat about a possible conflict of interest (since the home institution of the event mentioned next also happens to write a paycheck or two to the author of this post), it's worth taking note for the legal crowd that on Wednesday afternoon a group of international scholars and experts, as part of a symposium put on by a specialty law journal at the school, will detail and discuss emerging global issues in defamation law. In Exposition Park, of course, a similar symposium sponsored by another campus law journal recently considered the special ravages inflicted by the nation's soaring unemployment on minority groups that already were ignored or shunned.

• And, finally, for those who might wonder just what sort of program the smart set gets to see at the sessions detailed here, well, here's an online posting and a video from a recent Los Angeles appearance at a Bevery Hills think tank by Tony Hsieh, a corporate CEO (shown at right) whose company, Zappos.com, came to represent not only top notch customer service but also highly successful and profitable online innovation, which, incidentally and arguably, also brought considerable happiness to investors, employees and customers alike. 

 

New thoughts on generosity, abundance and recovery

From UCR, UCSB, & the Milken Institute

It's a late summer Monday and a perfect time for big concept discussions on generosity, abundance, recovery and fairness. Here's the drill:

In Riverside, scholars say they will employ a $150,000 grant to learn whether generosity can be contagious and whether the undertaking acts of kindness can inspire and motivate others to Good Samaritan behavior, especially toward others they never may even know. They hope to probe whether it is true that it is better to give than receive. They'll base their work on a Japanese company with 300 employees and a device that tracks individuals' movements and social interactions. They theorize that acts of kindness toward others create greater happiness for us, with demonstrable benefits to us as well as to society at large. An initiative on the 'Science of Generosity' at Notre Dame will underwrite the two-year scrunity of the ripple effects of being nice.

$150,000 grant will help determine whether generosity can be contagious

In Santa Barbara, the university reports that federal and state agencies, corporations and nonprofit organizations provided an unprecedented $222 million in the 2009-2010 fiscal year to support a myriad of research projects at the school. That's a 28% increase over the previous year in external support for the institution's studies and it shatters any previous year's such sums, the school says. The feds, particularly through the Obama Administration, provided the biggest boost in research aid, particularly backing work in the fields of energy, the environment and computer sciences. A $15.7 million U.S. grant was the year's biggest and created the Center for Energy-Efficient Materials, furthering its key labors in photovoltaics, thermo-electrics and solid-state lighting. Even the usually shut-out humanities saw grant money pop up, with $350,000 going to an archive of English broadside ballads.

In Santa Barbara, a record-setting bounty of support for research

In Beverly Hills, there's a pleasant projection out of the usually cautious and not always sunny economists at the institute, who see 'tangible' signs of a turnaround and perhaps even a recovery under way. While reports last week of a stalling and only faintly growing economy turned hearts cold on Wall Street and in many corporate boardrooms, the institute's director of economic research sees real GDP growth of 3.5% this year, 3.7% in 2011 and 3.8% in 2012, with the nation adding 1.8 million jobs this year, 3.1 million in 2011,  and 2.6 million in 2012. The forecast doesn't call for any boost from housing construction, which is estimated to stay in the dumps this year and next, though residential fixed investments are seen to rise 26% in 2011 and 25.7% in 2012. The institute's somewhat sunny economic forecasts came out last week just before the feds issued their first crack at figuring GDP for the April-June quarter, a 2.4% growth that has caused many to fret because there are no immediate, apparent bolsters for the flagging economy that number signifies.

Despite enfeebled quarterly showing, a positive forecast for GDP growth

Click here to obtain full institute report on economic outlook

Click here for a PowerPoint deck on economic predictions  

How the U.S. could boost investment in biofuels

From Milken Institute

Given the situation with BP, deep water drilling and the giant Gulf spill and how this catastrophe has pushed the nation to obsess anew over developing alternatives to oil, why are potentially greener biofuels failing to find more investors? Set aside the current economic crisis and its accompanying credit crunch, of course. But a big block to further growth of the biofuel industry, despite improvements in corn-based ethanol and development of biomass waste- and algae-based biodiesel, can be traced to a lack of supportive policies and incentives, regulatory uncertainty and changing agricultural prices, researchers in Beverly Hills say. The pro-market folks argue that private biofuel entrepreneurs are struggling to get government-backed assurances to hedge their risk, even as agencies like the Energy Department demand proof positive of private sector interest before handing out money, such as grants. The researchers call for  boosts to biofuel investment by expanding a government interagency working group and employing policy and financial innovations. These would include plans for biofuel producers to receive public funding in exchange for pledges to plow part of their profits back into their plants. Global ethanol and biodiesel production revenues reached $34.8 billion in 2008. The world’s top five oil companies had revenues of $1.76 trillion.

A call for policy, financial innovations to spur growth of potential greener energy source

A nifty idea to get Wall Street to heed market risk

From the Milken Institute

While the 'Let Big Business Alone' crowd can sound more than a little discredited with their post-economic collapse yak, the folks in Beverly Hills recently brought to town a young economist who was notable for predicting the crash and is winning notice for his ideas on how the free market could avert government regulation with key restructuring steps in the financial services industry. Like what? Well, if Wall Street can turn itself mathematically inside out creating giant, worrisome shadow trading in areas more arcane than belly lint, why couldn't it, for example, readjust the way financial types get paid so they take on some of the pain as well as the gain from market risks? Translation: Rather than immediately forking over billions in compensation to the pin-striped set, companies could put their pay into escrow accounts; if they make smart big-money decisions, they would get their fat checks. But if their risky deals go south, the money could be drained and used by firms to cover losses so ordinary taxpayers don't have to bail-out the street anew. There's a video at the link below with the full talk by economist Raghuram Rajan (shown at right). 

Why not create escrow accounts, pay pin-striped crowd big only if risky deals prove out? 

Ideas on finding the green to pay for green home retrofits

From the Milken Institute

They generate 20% of U.S. greenhouse gases and getting them more efficient could reduce their energy usage by as much as 40% while generating many needed jobs and boosting the economy, researchers in Beverly Hills agree. But a big hurdle for homeowners who might hope to undertake environmentally conscious home retrofits remains the same: how to pay for the work. The folks at the Beverly Hills think tank have some proposals for public and private financial support of home retrofitting, an energy-saving, climate change reducing step that just recently was endorsed by researchers from the law schools in Westwood and Berkeley. Could there be government (federal, state and local) support in new mortgages that would finance retrofitting? Might there be assistance for low-cost loan pool programs, run, perhaps with contractors who would do the work? Maybe retrofit financing could be programmed into the property tax or utility billing systems? Besides ideas on finance, the researchers say that consumers, fretting mightily these days about a bad economy and their household debt, need to get convincing information to persuade them to participate in retrofits, particularly when they need to replace energy-guzzling appliances.

Public, private aid urged to boost eco 'revolution' that starts at home 

In mean global times, capital flows to key spots

From the Milken Institute

Think Canada, Hong Kong and the U.K. For what? During one of the greatest economic collapses since the Great Depression, credit evaporated globally for businesses in unimagined, dramatic fashion, though a select few spots fared better than others, according to researchers from the Beverly Hills think tank. They say that our neighbors to the north for a second year led their capital access index, which aims to tell businesses and entrepreneurs which countries' capital markets have the 'most breadth, depth and vitality.' Singapore slung its way to No. 4 and the U.S. actually rose one spot in the index to No. 5 in the latest year measured, 2008, which saw corporate bond issuance plummet and world equity markets crash by half. As would be expected in grisly economic times, the index reflects the chasm between industrialized nations, which continued to hold the top two dozen or more slots on the capital access index, and the 61 undeveloped countries, 30 of them African, that fell to the bottom of the tallies. In the upper middle was China, which rose 13 spots to No. 32, and Brazil (51), Russia (54) and India (44). 

Capital index traces money to markets with greatest 'breadth, depth and vitality'

What to do on Fed, financial reform, economy?

From the Milken Institute & UCLA

Fascinated or flummoxed by the push for financial reform, the still-faltering U.S. economy and the ins-and-outs of national and international economic policies and practices? Well, there's still lots of intellectual feasting for foragers of the considerable output of the now concluded, three-day Beverly Hills gathering of bigs from business, finance, politics, policy-making, the arts and more. Among the materials worth a read is a summary of the session with institute's founder and patron and Nouriel Roubini, the economist who gained much national attention for his calls about the economic crash and what he sees as its causes. And, if financial reform, the Washington cause for the clamor of the moment, doesn't have enough heft and chew in it already, Roger Farmer, the head of the Bruin economics department advocates adding a new layer of complexity: He says the Fed should create its own super index fund akin to the Russell 5000 as a means to better put a regulatory paw on the stock market (as opposed to what he calls the 'palsied' hand the monetary regulators now possess). Details? Yup, he's got a book full of 'em.

Click here for more info, videos from Global Conference

Why a Bruin economist wants a Fed-run stock index fund