[EconProf]

Tony: Yup, I know. Same with the more common problem of roaches.
Update on my situation. Pest control company has treated apt. and tenant’s belongings twice, two weeks apart. No further infestation or biting observed. Will treat one more time in couple of weeks as insurance, when pest control company promises a written guarantee, but with a $45/month continuing monthly service. I’ll opt for that, at least for a few months, just to keep the tenant happy. The first 3 treatments are $95 per treatment, which were pretty thorough.
All in all, I am getting off cheaper than I had feared, and tenant is likely to stay.

[EconProf]

The NET migration out of CA has been going on for years, and the evidence is pretty well established. U-Haul rates for bringing in a trailer to CA vs. taking one out of CA have long shown this, and are now just as convincing as ever. As has been suggested, United Van Lines may zero in on a wealthier demographic than U-Haul. I suspect, but cannot prove, that a lot more people move using U-Haul than an expensive mover like United.
Actually, we won’t know for many months the impact of the sharp raise in CA income tax rates on people moving into or out of CA. Unlike us Piggs, many people don’t focus on news and tax issues, and will only learn about our new tax regime when they sit down this winter to do their taxes. Then they will also get the rude awakening that the jump in rates applies to all of their 2012 income.
The recent jump in CA home values may turn out to be another motivator to move, in that people will realize that they have home equity after all and can now cash out to finance a move and a purchase of reasonably-priced housing elsewhere.
What counts in people’s decision-making is not just their current situation, but their expectations of the future. As they look at the direction of CA’s taxes and government vs that of other states, the exodus may well accelerate. But the numbers to prove that will only be evident in the months and years to come.

[EconProf]

If you were considering taking a cruise, now would be a good time.
They will probably go on sale because of the bad publicity and Americans’ tendency to overreact to bad news that is dramatic.
What are the odds of it happening to you? Since the last such event–also on Carnival–thousands of ships have had their uneventful, presumably happy cruises. Probably all cruise lines have tightened up on their safety standards, fearing the expensive bad publicity of such an event, making them even safer now.
So ignor the dramatic headlines, weigh the real probablilities, and take your reduced-price cruise!

[EconProf]

Flyer, you bring up a good point–that any move should consider what the future holds for each state, not just what conditions are now. At the rate California is going, what is its future compared to Phoenix? Which is a better place to put one’s growing family?
Case-Schiller just announced the home value changes for the last one year for the largest 20 cities. Phoenix house prices (sold) in December were 26% higher year over year, fastest climb in the nation. Granted, most of that was clearing out the debris of foreclosures and the snapping up of rental houses and flips since Phoenix was the epicenter of the housing bubble. But the strong rebound is undeniable, and days-on-market are way down and supply going forward promomises more of the same.
More fundamentally, what do current trends suggest for Phoenix vs. San Diego? A comparison of their utility costs should include water and sewer as well as electricity. San Diego’s are soaring. Out el. costs are about 30% higher and guaranteed to climb rapidly as our Global Warming Solutions Law now kicks in. Same trend is locked in with our water and sewer rates. Our income taxes are far higher than Arizona’s for families in this income range, and our property taxes likely to rise as Prop 13 is gutted by the even more tax-and-spend legislature.
All this will continue to fuel the exodus of middle and upper income taxpayers out of CA to friendler tax and regulation states. AZ has a conservative, business-friendly government while Sacramento has seemingly declared war against the job-creators. As a result AZ’s future looks brighter as CA’s looks bleaker.
Bottom line, what counts is not just current conditions, but where trends are heading.

[EconProf]

This suit has the potential to destroy S & P, because the government wants to have them admit guilt, not just cough up a big fine. They would then be exposed to civil suits from people who relied upon their advice.
Too bad. Capitalism should get back to punishing bad behavior, and the ratings agencies simply did not do their job. Piggs and others of our ilk were screaming for them to see the obvious bubble that was forming at the time. They reacted way too little and way too late, and thus contributed to the excess.
I wonder why it took so many years for this administration to act.

[EconProf]

I just now viewed that Frontline PBS program and it was terrific.
Got it by going to PBS.org, click onto Frontline series, and last night’s program entitled “The Untouchables”.

[EconProf]

LivininCali you are sooo spot on.
HS grads are rapidly waking up to the misrepresentations of the entrenched interests, AKA the education industrial complex, lenders, guidance counselors, tenured professors, etc. They know that many of the titans of high tech did not have time for college. They know of too many college grads working as barristas and waiters living in their parents’ basements and contemplating their $100,000 debt. And when they throw in lost income from four years (or five, or six) when they could have been learning a trade or building a business, they are rapidly changing their minds.
The employers too are learning that the college degree is devalued and proves little in terms of their productivity. Too many high school grads go reflexivly to college that do not have the aptitude, interest, or finances for it. They go for the social life, or their parents’prestige.
On-line education promises to cheaply and effficiently teach specific courses and skills, and then award certificates after testing and proof of mastery of that particular subject. Job seekers in the future will have to prove certain competencies in line with the employer’s needs in order to be hired. No more using a mere college degree as a “signaling system” to hire a dozen college grads and hope that a few turn into long-term employees.
Many of today’s colleges and universities will be gone in ten years, and the survivors will be vastly restructured. Learning will be vastly cheaper and more accessible to the poor (esp. in the third world), and the anachronism of tenure will be on the way out. It’s all good.

[EconProf]

We economists look at incentives resulting from public policies, and there are plenty of harmful incentives built into the emerging college debt bubble. Many have already been described in this thread.
1. Easy credit lures borrowers into too much debt, saddling them forever with non-dischargable loans after gaining non-marketable majors.
2. Colleges and universities budgets are bloated with resort-style facilities (the better to lure prospective students), overpaid and underworked administrators (faculty are now outnumbered by non-teaching staff), and reduced class teaching loads. The easy student loans enabled and incentivized this bloat.
3. Easy majors allow weaker students to coast through college in order for the students (and clueless parents) to brag about their degree. Professors in those weak majors have no incentive to warn their prospective majors about the realities of the job market.
4. Since the college experience indoctrinates students to more liberal viewpoints, the current administration has little incentive to put a stop to the abuse of credit.
There are other negative incentives, and sadly, they were all predictable.

[EconProf]

[quote=SK in CV][quote=EconProf]Yes, if you could show I am hugely wrong.
But if your evidence only moves the needle a little, then no.
For example, CA teachers are not literally the highest paid if you count D.C. And maybe another state or two…but if our teachers are the second highest paid, or third, or fifth…
(Google Teacher Pay by State, or some similar label to see details of many studies. All show our teachers to be very highly compensated. Don’t forget to add retirement benefits, medical, other fringe benefits in to get total compensation.)
As to educaton results…another slippery item to measure. So feel free to cherry pick your study. But you have no case unless you discover our expensive schools give us remotely commensurate results.[/quote]

California per student spending is among the lowest in the country, despite the teacher salaries being among the highest. Class size is among the largest. (some justfication for higher teacher salaries?)

I cherry picked the most recent study I could find. Maybe I’m biased because I think my kids got a great education in public schools in CA. I got my money’s worth.

http://www.edweek.org/ew/qc/2012/16src.h31.html%5B/quote%5D
The chart you show put CA about in the middle compared to other states, but I could not tell what it was measuring/comparing. Maybe you can explain it to us, although I tend to distrust studies from the education establishment.
But yes, it showed CA to be far from the worst in the nation. I still maintain that we are not getting our money’s worth, and your comment about per pupil spending being low for CA is indeed colaborated by other studies. So how can CA teachers be highest paid (or nearly so), while per pupil spending is far from highest? Big classes are one answer (as you point out), but also wasteful layers of bureaucracy in school administrators, nonsensical rules, high building costs (unionized labor), and countless other inefficiencies unique to California.
Administrative bloat is a valid complaint of teachers. Administrators are wildly overpaid, and have their own unions to fight for their piece of the pie.

[EconProf]

Yes, if you could show I am hugely wrong.
But if your evidence only moves the needle a little, then no.
For example, CA teachers are not literally the highest paid if you count D.C. And maybe another state or two…but if our teachers are the second highest paid, or third, or fifth…
(Google Teacher Pay by State, or some similar label to see details of many studies. All show our teachers to be very highly compensated. Don’t forget to add retirement benefits, medical, other fringe benefits in to get total compensation.)
As to educaton results…another slippery item to measure. So feel free to cherry pick your study. But you have no case unless you discover our expensive schools give us remotely commensurate results.

[EconProf]

As we debate whether high CA income taxes do or do not explain the current net outflow of Californians to other states, let’s keep the bigger picture in mind.
What we conservatives resent more is that our high taxes don’t buy us much. We have about the worst education results in the nation–generally tied with Mississippi or Louisiana on performance tests and graduation rates–yet we have the highest paid teachers in the nation. Our prison costs per prisoner per year are twice as high as Texas and three times as high as Montana. Yet Texas has a far lower recidivism rate. In short, taxpayers don’t get much for their money in this state.
Those high taxes in turn push up the cost of living here. Businesses HAVE to charge us more here in order to pay their heavily taxed workers more and deal with the regulations, 50% higher utility rates, and business taxes.
One would think that with all this big spending and liberal policies we would be helping the poor. Yet days ago a new Census Bureau study showed CA to have the biggest divergence between poor and rich when cost of living is included.
Some earler posts claim that CA’s high cost of living is a bigger factor in prompting the move-outs than taxes. My point here is that the high taxes and what little we get from them drive up our cost of living, thus providing another motivation to move.

[EconProf]

I have also made some of these loans and partnerships with friends and relatives. Most worked out well–some did not.
The key to making these arrangements work is to write down the agreement in great detail beforehand. Invariably the future will intrude, things will change, and different interpretations of “what we agreed to…” will pop up, often ruining the relationship.
When a loan or partnership is being discussed, there is a glow of optimism by all sides about how things will work out. By writing down all the assumptions and terms, both parties will be on the same page, and neither can later twist history to suit their side. It also remind everyone involved that this is a business transaction and a “contract” is present that binds both sides–a good lesson for your offspring.

[EconProf]

The study you cite came in for tons of criticism as soon as it came out, and has largely disappeared from view as a result. It was biased in who initiated it (State Franchise Tax Board), and who researched it.
Its main flaw was to draw a sweeping conclusion from too little data. To change the tax rate by 1% and then ascribe millionaires’ moving pattern changes, or lack thereof, to the tax change is quite a leap. Many other factors weigh far more in the decision, particularly where we are in the business cycle. The dot-com boom of the 1990s and the RE boom and bust of the middle of the last decade affect moving decisions into or out of the state by the wealthy far more than tiny changes in taxes.
And the last change in marginal tax rates from about 10% to about 13% wasn’t so tiny. It will likely be the last straw for many wealthy Californians. It will be interesting to see the results, which should be apparent in the very near future.

[EconProf]

You and a lot of others are leaving CA, ctr70. The sad thing is we are losing the middle class taxpayers, the wealthy taxpayers now subject to a 13% state tax rate (even on their 2012 income), and attracting the tax users. CA has 33% of the nation’s welfare recipients, yet only 12% of the population.
Keep us in touch with what you experience in WA as you settle in there.

[EconProf]

Sorry to veer way off topic here, but I differ with flu’s approach to money entanglements with one’s offspring–or any relatives or friends for that matter. He described a scenario that may be economically optimal or tax-wise, but that interferes with the kids’ taking full control and responsibility for their own financial affairs. If the parents have taught deferred gratification lessons, required budgeting of their children, and not bought their affection with material goods, the kids will do just fine once on their own. And if they go through lean times in the process, all the better to learn from. Above all, they need the pride of accomplishment that comes from earning their way on their own. Parental help can rob them of that experience.
I admit I have been overly generous at times with my own kids, so I don’t always practice what I preach.
The financial advisor Dave Ramsey points out that once you loan money, give money, or form a partnership with a friend or relative, you change that relationship forever. At the outset, everything seems fine…but then things change, events intrude, outlooks start to differ as the future unfolds. Partnerships are especially treacherous, and are notorious for ending friendships and gaining an enemy.
In sum, give them the right financial tools while they are growing up, then get them out of the nest. If they come back, charge them rent, even if only a token amount.

[Author]

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