Sunday Reading 01/07/18


The following links are just news items and opinions that pass my desk throughout the week. I don’t necessarily support or advocate any of the items, they are just interesting reads.

Why You Should Hope That Amazon Really Does Buy Target – The notion of Amazon buying Target was raised earlier this week by influential tech investor Gene Munster, who predicted in an online post that Amazon would pay $41 billion to purchase Target in the next 12 months.

This makes Target the latest company that’s supposedly on Amazon’s shopping list, joining other recent names like Abercrombie & Fitch, Bed, Bath & Beyond or potentially even the department store, Kohl’s.

But Target in particular could be the real deal for Amazon consumers.

For starters, “Target is the ideal offline partner for Amazon for two reasons, shared demographic and manageable but comprehensive store count,” wrote Munster, co-founder of the research firm Loup Venture. “As for the demographic, Target’s focus on mom’s is central to Amazon’s approach to win wallet share.”

Also, keep in mind that Amazon has a massive market capitalization of $572 billion, and its only true competitor is Walmart.

Any acquisition Amazon makes will have to be a large one (larger than, say, Abercrombie & Fitch) to both move the needle and compete with the bricks-and-mortar behemoth Walmart.

If such an acquisition were to go through, it could create drastic changes to the way we shop. That’s worth imagining.

Last year, when Amazon purchased Whole Foods for nearly $14 billion in order to gain access to groceries, this led to a massive price cut at the organic grocer.

These price cuts had a greater effect on stand-alone grocers such Kroger and Sprouts than Walmart.

However, Walmart might start to feel broad pricing pressure if Amazon could supply more of its online booty in stores. That would cut into Walmart’s advantage of allowing customers to buy online and return in-store, if needed. Even without such a real-world presence from Amazon, Walmart reportedly required many of its wholesalers to cut prices by 15% last year. Read More > at Money

Driven to sickness – The age of autonomous vehicles will render the role of the driver obsolete. For sufferers of motion sickness, not being in control of the vehicle could have serious consequences.

Beyond all of the investigative work being undertaken into autonomous vehicles themselves, there is a world dedicated to external factors that will become very relevant in the age of driverless cars. Countless hours are being spent at universities, research institutes, and automotive manufacturers and suppliers into investigating how the infrastructure will change, but there is also work being done to support the wellbeing of passengers, including the driver.

UK-based Ansible Motion has been involved in driver-in-the-loop (DIL) analysis for many years, predominantly though its simulator work.

…Cammaerts admitted that much of the work so far with CAVs (connected autonomous vehicles) has been focused on accident avoidance and safety, but adds that the quality of the “driving” experience will come into play soon. “As soon as Tier 1s can supply sensor clusters and autonomous driving algorithms in boxes—to mainly benefit prospective OEMs in developing markets—manufacturers will have to have something in the pipeline for the quality of this experience,” said Cammaerts.

For the reduction of motion sickness itself, from a passenger point of view, Cammaerts suggests changing the interior architecture. Based on the fact that a front windshield will no longer be needed, he argues, what about a large screen that could take the form of a large tablet? “The car of the future doesn’t have to have the same cabin architecture and will be very different if it is used as a working environment.” Read More > at Autonomous Vehicle Technology

Silicon Valley reels after two chip flaws puts world’s computers, smartphones at risk – Tech companies around the world are reeling and rushing to provide fixes for two microprocessor flaws that have put nearly all the computing devices in the world at risk from hackers.

The flaws — dubbed Meltdown and Spectre — are in chips made by Intel and other major suppliers. They can allow hackers to steal data from the memory of running apps, including password managers, browsers and emails. The flaws were first disclosed by British technology news site the Register on Tuesday and made public Wednesday by the researchers who discovered them.

Because the flaws date back more than two decades and Intel chips are ubiquitous among computers, cloud servers and mobile devices, they affect nearly all computing devices in operation and servers that store memories in the cloud.

Users have little choice but to wait for new software patches from makers of their devices, the researchers said. Technology companies quickly began issuing fixes for the flaws this week, or notifying consumers about their timelines for doing so. Read More > in The Mercury News

The Iranian rebellion the world wants to ignore – If there is one lesson the world should have learned from Iran’s ‘Green Revolution’ of 2009 and the so-called Arab Spring that followed, it is this: the worst regimes stay. Rulers who are only averagely appalling (Tunisia’s Zine el-Abidine Ben Ali, Egypt’s Hosni Mubarak) can be toppled by uprisings. Those who are willing to kill every one of their countrymen stay. So it is that after almost half a million dead we enter 2018 with Bashar al-Assad still President of Syria and with Iran’s mullahs approaching the 40th anniversary of their seizure of power in 1979.

Last week this lesson got a chance to be learned again when protests broke out on streets across Iran, and the world wondered which date this one might echo. A revolution finally to counter 1979? Or just another replay of the brutally suppressed protests of 2009?

The origins and cause of these latest protests are already contested. The regime claims foreign interference. Others warn of clerics even more hardline than the regime. But most early reports indicate that protesters began by highlighting the country’s living standards. Specifically, they complained about the government’s use of its recent economic bonus (from the lifting of sanctions) not to help the Iranian people, but to pursue wider regional ambitions. Iranian forces are currently fighting in Yemen, Iraq, Syria and Lebanon. This from a power whose defenders still claim is not expansionist.

Iran is experiencing low growth, high unemployment and inflation (10 per cent) and the increasing unaffordability of necessities such as eggs and milk. But the most striking factor is how swiftly the protests became not just critical of the government, but openly anti-regime. Outside the gates of Tehran University a crowd chanted slogans against the nation’s Supreme Leader, Ayatollah Khamenei, including ‘Death to the dictator’. The nationwide demonstrations, which have not been led by any single demographic, class, or group, have included cries of ‘Leave Gaza, leave Lebanon, my life (only) for Iran’. Chants of ‘Death to Hezbollah’ (Iran’s terrorist proxy currently fighting in Lebanon, Iraq and Syria) have also been heard from Mashhad to Kermanshah. After several days, Ayatollah Khamenei tried to dampen this motif by appealing (unsuitably for a cleric who claims to be devoted solely to Allah and the Imam) to the patriotism of all Iranians. The regime may be worrying. Whereas 2009’s protests centred on Tehran, these are rural as well as urban, and remarkably widespread. Read More > in The Spectator

Ballot Breakdown: These initiative ideas are headed your way – Direct democracy can be an exhausting business.

This year civically engaged Californians will be expected to have informed opinions about affordable housing and park funding, how best to divvy up cap-and-trade money, how to spend the state’s new gas tax money, and when new voter-approved laws ought to be enacted.

And those are just the measures on the ballot so far.

Joining those five—all of which come referred from the Legislature and most of which are destined for the June ballot—are the citizen-backed proposals, which must compete for spots on the November ballot. More than 40 have already been cleared to be passed around the state gathering signatures, while another dozen await the go-ahead from the state attorney general.

What’s on the menu this year? It’s still too soon to say for sure, but here are some major themes and a few examples of what you can expect to see:

California pioneered fiscal populism with voter-approved constitutional amendments like Prop. 13. So it wouldn’t be a California election without at least a few voter-backed proposals that take a blow torch to the state tax code.

Last year, the Democrats kicked off the legislative session by passing a $5 billion-plus transportation plan, funded with new fuel and vehicle fees. There’s a reason they chose to raise the gas tax as far from election day as possible.

…For those who believe our politics are dysfunctional, and compromised beyond repair, these initiatives propose a new start for California.

Republican gubernatorial candidate John Cox has a vision to blow up the Legislature. That is, he wants to increase the number of legislators from its current 120 to roughly 12,000 with each lawmaker representing 5,000 to 10,000 Californians. Cox, who has already submitted the required number of signatures for the measure, believes the “neighborhood legislature” would make representatives more accountable and less beholden to outside campaign cash. Read More > at CALmatters

Manufacturing in the U.S. Just Accelerated to Its Best Year Since 2004 – U.S. manufacturing expanded in December at the fastest pace in three months, as gains in orders and production capped the strongest year for factories since 2004, the Institute for Supply Management said Wednesday.

The survey-based measure of factory activity — the year’s second-highest behind September, when storm-related supply delays boosted the index — brings the 2017 average to 57.6, the best in 13 years. The latest gain extends a string of strong readings that’s been fueled by more domestic business investment, improving global economies and steady spending by American households.

A common refrain from companies surveyed, though, was difficulty finding highly-skilled labor, and some firms are paying higher wages to attract the workforce needed, ISM manufacturing survey committee chairman Timothy Fiore said on a conference call with reporters. Read More > at Bloomberg

Here’s a map of where Sears’ and Macy’s stores are going dark – With the 2017 holiday season behind it, two of America’s biggest department store chains, Macy’s and Sears Holdings, unveiled which locations they will be closing next — adding up to more than 100.

These companies have had an especially rough ride in recent months, as they work to right-size their overwhelming real estate footprints against a backdrop of Amazon stealing market share and more brands marketing themselves directly to consumers, bypassing department stores altogether.

To start the year and building on previous announcements, Sears will be closing 64 Kmart stores and 39 Sears stores, all of which are expected to shut between early March and April.

Macy’s has revealed 11 locations (as part of a previously announced plan to close 100 stores, beginning in 2017) that will also shut in early 2018, with liquidation sales beginning as soon as next week. Read More > at CNBC

This Small Device Could Silence the Maddening Symptoms of Tinnitus – Millions of Americans suffer from a medical condition known as tinnitus, a disorder so tormenting that it makes Edgar Allen Poe’s talking, taunting raven sound charming. People with tinnitus are plagued by phantom noises, usually ringing or buzzing, sometimes to the point where they can no longer work or function. Worse still, cases are often chronic and incurable: Current treatments include cognitive behavioral therapy to help people manage the distress it causes, using actual sounds to mask the ringing, or invasive brain surgery that often doesn’t work. But the findings of a new study, published today in Science Translational Medicine, seem to offer something much more promising—a noninvasive treatment that attacks the root source of tinnitus while making life noticeably easier for its sufferers.

One of the leading theories behind what causes most cases of chronic tinnitus is that it begins with misfiring neurons in the dorsal cochlear nucleus—one of the two regions of the brainstem where auditory information is first processed. These neurons, called fusiform cells, are meant to fire when the brain receives input from the outside world, which is one of the first links in an almost simultaneous chain of events that leads to us correctly “hearing” the sound something makes. In people with tinnitus, this synchrony is thrown off-kilter and the fusiform cells fire whenever they please, leading to people hearing sounds that aren’t there. This initial imbalance can be caused by anything from damaging loud noises to ear infections, it’s thought, and often accompanies hearing loss.

The University of Michigan team, based on research they had done with guinea pigs, created (and patented) a device they think can retrain the brain circuitry involved in causing at least some cases of tinnitus. Read More > at Gizmodo

CalPERS leader will get 18 months of salary to decide what he wants to do next – Instead of retiring, a two-term CalPERS member will go on vacation, collect his $122,000 salary and get a raise while he figures out what to do next.

J.J. Jelincic accumulated 18 months worth of paid time off over his 31-year career at the California Public Employees’ Retirement System, he said.

It’s a perquisite he’ll gradually draw down as he considers whether he’d like to run again for election to the CalPERS Board of Administration or return to his staff job there as an investment officer.

Another year on the payroll combined with the raises that investment officers received last year through the latest SEIU Local 1000 contract mean that Jelincic’s pension will increase while he delays a decision on retiring. He said the difference would be about 6 percent. Read More > in The Sacramento Bee

City Sues to Void Election Results Tipped by Felons – In November 2017, a group of felons at the Coalinga State Hospital helped tilt the outcome of a campaign to increase the city’s sales tax. Now, the city is suing to void the results of the election, which it says resulted in dozens of Coalinga employees losing their jobs.

The city filed suit against Fresno County on Dec. 14. It claims patients of the facility, who organized a successful lobbying effort against the one-cent sales tax measure, were not legally allowed to vote in the election.

According to the suit, Coalinga’s patients are technically residents of the counties they lived in prior to their incarceration. This would make them ineligible to vote in Coalinga. But Coalinga annexed the hospital years ago, which allowed it to increase its population. For this reason, the inmates — many of them violent sexual offenders — were considered residents of the city.

The issue will now have to be determined by the courts. A hearing is scheduled for April 16. It is coming up for the first time now because of a bill signed into law in 2016 that restored voting rights to thousands of felons. Read More > at California City News

US construction spending hit record high in November – U.S. builders spent 0.8 percent more on construction projects in November, the fourth consecutive monthly gain.

November advance follows October’s revised 0.9 percent gain, the Commerce Department said Wednesday. The increase brought total construction spending for the month to a seasonally-adjusted annual rate of $1.26 trillion, an all-time high.

Private construction spending, which was up 1 percent from last month, also hit an all-time high.

The increase in spending by builders, along with a robust manufacturing report released separately Wednesday, underscores the solid momentum of the U.S. economy heading into the new year.

The November increase was led by a solid advance in homebuilding, which rose 1 percent from October as strength in single-family construction offset weakness in apartment building. Construction of single-family homes rose 1.9 percent in November, offsetting a 1.3 percent drop in apartment building. Read More > from the Associated Press

Food Retailing Is Preparing For Another Tech Revolution – Roughly twenty years ago online grocers were part of the great internet dot-com bubble with a host of companies promising to deliver groceries to your home affordably and conveniently. Venture capital poured into these companies which promised to leverage the wonders of technology to revolutionize the food retail industry. Several even had successful IPOs before the entire industry more or less went bankrupt and disappeared. Yet as clear as the lesson of this first attempted tech revolution in the food retailing sector was, firms have continued to make forays into that space, creating a stream of failures. Yet now traditional grocers are preparing to harness technology in new ways, ready to unleash a new, more likely to succeed, tech revolution in food retailing.

Technology has long been a crucial part of food retailing. Barcodes (UPC codes) were first applied at scale in supermarkets, as were scanners that are now used at checkout in all sorts of retail outlets. These technologies saved labor, lowered costs, and allowed for large improvements in inventory control, supply chain management, and even dynamic pricing. Food retailers know exactly what is on the shelves, what’s on the way, and can adjust prices without having to relabel every box, can, or bottle. All this information is available at the store level and at headquarters.

Even though online food retailing has failed repeatedly, losing several billion dollars of venture capital, a second-generation revolution in underway in online food retailing. This revolution promises even more technology, more online shopping, and new, hybrid models of food retailing. This revolution, unlike the first one spearheaded by new entrants, is being led by existing industry leaders. For this reason, plus what has been learned from the many failures so far, this second-generation revolution is likely to succeed.

The new technology applications coming our way are perfectly represented by Kroger’s new, wider rollout of personal scanners. Shoppers will be able to scan items as they place them in their shopping cart, either with their own scanner (provided by Kroger) or with a smartphone app. The shopper can see what each item costs and their running total. When they leave the store, their groceries are automatically charged to whatever credit or debit card they chose to link to their account. Smartphone apps that turn your shopping list into the most efficient map through the store, directing and alerting you to each item on your list utilizing the GPS in your phone exist and have been tested by a number of supermarket chains. Read More > at Forbes

Don’t Fear the Self-Driving Car – …We should learn from this past as we look now to the uncertain future of American transportation. However easy it is to forecast a self-driving dystopia, it would be deeply unwise to dismiss the unknown and unknowable benefits of new automotive technologies. After all, with technological advancement can come new liberties, like the efficient freedom of movement we enjoy today as a result of human-driven cars.

In the case of a highly automated technology like the self-driving car, we should absolutely expect to maintain our freedom to go “wherever whenever,” and, should we so choose, to own vehicles of our own (regardless of the economic wisdom of such a choice). But we stand to gain so much from this technology that it would be foolish to dismiss it from the start on the theory that it will inevitably erode our core freedoms. It promises not only the individual flourishing and growth that will flow naturally from greater operational efficiencies like “platooning,” coordinated traffic management, and remote fueling and storage, but also the re-engagement and meaningful re-emergence of tens of millions of Americans — such as the blind, the elderly, the infirm, and some minors — who aren’t able to operate vehicles as they exist today.

The use of previously untapped human capital made possible by self-driving cars will free Americans from burdens not unlike those that were lifted by the mass production of our “metal shoes” at the turn of the 20th century. Embracing this technology with a keen understanding of the ways in which it will impact traditional notions of privacy will be vital if it is to be deployed successfully. Read More > at National Review

California DUI arrests soared during 2017 holiday season – California Highway Patrol arrests for driving under the influence spiked dramatically during the 2017 holiday season compared to 2016. More people were arrested in California for DUIs over the Thanksgiving and Christmas weekends this year, and the trend continued over New Year’s weekend.

Statewide, the CHP arrested 936 people for allegedly driving under the influence between the evening of Dec. 29 and Jan. 1. That was a 22 percent increase over last year during that same period, when the CHP arrested 767 people.

The CHP’s Golden Gate Division, which serves the Bay Area, arrested 157 people for allegedly driving under the influence, nearly double the number in 2016. Read More > in the San Francisco Chronicle

Companies in U.S. Added 250,000 Jobs in December, ADP Says – Payrolls at U.S. companies increased in December by the most in nine months, consistent with further progress in the labor market, according to data released Thursday from the ADP Research Institute in Roseland, New Jersey.

The increase in hiring remains consistent with a tight job market that has challenged companies’ ability to attract skilled and experienced workers. Steady employment growth also reflects more optimism among businesses that is starting to fuel capital investment and underscores an improving economy. The ADP figure compares with the Bloomberg survey median for a 185,000 advance in private payrolls when the government issues its jobs report on Friday.

A separate report on Thursday showed initial unemployment claims unexpectedly rose by 3,000 to 250,000 in the week ended Dec. 30. Claims tend to be volatile around the holidays, and figures were estimated for a dozen states and territories, more than usual. Read More > at Bloomberg

Bob Lutz: Kiss the good times goodbye – It saddens me to say it, but we are approaching the end of the automotive era.

The auto industry is on an accelerating change curve. For hundreds of years, the horse was the prime mover of humans and for the past 120 years it has been the automobile.

Now we are approaching the end of the line for the automobile because travel will be in standardized modules.

The end state will be the fully autonomous module with no capability for the driver to exercise command. You will call for it, it will arrive at your location, you’ll get in, input your destination and go to the freeway.

On the freeway, it will merge seamlessly into a stream of other modules traveling at 120, 150 mph. The speed doesn’t matter. You have a blending of rail-type with individual transportation.

…The vehicles, however, will no longer be driven by humans because in 15 to 20 years — at the latest — human-driven vehicles will be legislated off the highways.

The tipping point will come when 20 to 30 percent of vehicles are fully autonomous. Countries will look at the accident statistics and figure out that human drivers are causing 99.9 percent of the accidents.

Of course, there will be a transition period. Everyone will have five years to get their car off the road or sell it for scrap or trade it on a module.

CNBC recently asked me to comment on a study showing that people don’t want to buy an autonomous car because they would be scared of it. They don’t trust traditional automakers, so the only autonomous car they’d buy would have to come from Apple or Google. Only then would they trust it.

My reply was that we don’t need public acceptance of autonomous vehicles at first. All we need is acceptance by the big fleets: Uber, Lyft, FedEx, UPS, the U.S. Postal Service, utility companies, delivery services. Amazon will probably buy a slew of them. These fleet owners will account for several million vehicles a year. Every few months they will order 100,000 low-end modules, 100,000 medium and 100,000 high-end. The low-cost provider that delivers the specification will get the business. Read More > at Automotive News

People in Oregon Are Freaking Out About the Thought of Pumping Their Own Gas Under a New Law – The new year is but two days old, and already we’ve got a nasty online debate on our hands. But don’t worry, this isn’t about politics. No, follow along to the Pacific Northwest, where the fine people of Oregon are having themselves an internet freak-out for the ages over the prospect of having to pump their own gas. The horror.

Up until January 1, 2018, Oregon was one of two states—the other being good old New Jersey—that required every filling station be staffed by attendants who pump your gas for you. But last spring, the state legislature passed a law allowing gas stations in rural counties with less than 40,000 residents to abandon the full-service model and let customers man the pumps themselves.
The new law went into effect on Monday.

We should stop here to point out a key word above: Allowing. Station owners are under no obligation to ditch their attendants, nor are they required to let drivers pump their own gas. It’s just an option. The full-service gas station seems to be a surprisingly strong part of the Oregonian identity, and the Associated Press could only find a “handful” of stations who were planning on making the switch to self-serve.

But that’s not enough for the angry online hordes, who can smell a slippery slope from a mile away. When local CBS affiliate KTVL posted an online poll asking residents if they thought the law should be expanded statewide, the comments blew up with Oregonians aghast at the thought of having to dirty their hands with the dangerous work of pumping gas. Read More > in The Drive

$1.6 Billion in Unemployment Insurance Benefits Paid to Individuals Who Did Not Seek Work – More than $1.6 billion in unemployment insurance benefits was paid to individuals who did not seek work in fiscal year 2016, according to an audit from the Government Accountability Office.

Unemployment insurance is paid to individuals if they lose employment with the general requirement that they actively search for work. For some states, this active search may require a minimum number of contacts a beneficiary must have with potential employers, submission of job applications, creating a LinkedIn account, going to a networking event, or visiting a job center.

The audit was conducted to see whether or not unemployment insurance beneficiaries who did not actively search for work affected the program’s level of improper payments. In fiscal year 2016, the Department of Labor’s unemployment insurance program was the seventh-highest for improper payments among all federal programs. The biggest cause was beneficiaries not meeting work requirements. Read More > in the Washington Free Beacon

Is Manufacturing’s Future All Used Up? – Though the efforts to revive our much shrunken industrial sector may seem quixotic, manufacturing still matters to the nation’s economy—and its psyche.

…In the past couple of years, analyses of deindustrialization (such as the work of the Economic Innovation Group) have focused on the devastation wrought by factory closures in disproportionately white small cities and towns across the once-industrial Midwest. Uchitelle focuses on an earlier economic catastrophe, whose consequences are still very much with us: the plant closures in major Eastern and Midwestern cities that short-circuited the economic advancement of working-class African Americans. Citing numbers from sociologist William Julius Wilson’s seminal study of inner-city decay, When Work Disappears, Uchitelle notes that between 1967 and 1987, Philadelphia lost 64 percent of its manufacturing jobs; Chicago, 60 percent; New York, 58 percent; and Detroit, 51 percent. Many of the jobs lost were unionized, with good pay and benefits, offering a path to economic stability for working-class blacks. No comparable working-class path exists today.

Nor is it only black and white non-college graduates who’ve lost this once-common opportunity for economic advancement. Deindustrialization has also locked many of the millions of Latino immigrants who’ve come here since 1980 into low-paying service-sector jobs. In the 1970s, when California had more automobile factories than any state but Michigan, and when huge Los Angeles aircraft factories were the state’s largest employers, their workforces were becoming increasingly Latino, and Latinos headed the United Auto Worker locals at several of those plants. But the auto plants were all shuttered by the mid-1980s, and aerospace production was decimated by the end of the Cold War, just as millions of immigrants were streaming into California. The traditional mode of upward mobility for working-class immigrants—factory work—contracted catastrophically in the last two decades of the century, and has continued to dwindle since (California has lost an additional 585,000 manufacturing jobs since the turn of the century, according to a Century Foundation study). That California has a higher rate of poverty, when the cost of living is factored in, than any other state is in large part the result of its deindustrialization—though the levels of poverty are more commonly blamed on “low-skilled” immigrants.

…Perhaps it’s because these memories of mid–20th century Eastern and Midwestern cities and their vibrant working classes are so deeply felt that Uchitelle’s proposals for boosting manufacturing seem at times intended to resurrect a now largely vanished urban manufacturing world. The government, he writes, must enact laws that require manufacturing’s share of the GDP to rise from its current 12.5 percent to something closer to the norm for OECD nations—somewhere between 17 percent and 19 percent. Such laws, he writes, would correspondingly grow the share of manufacturing workers well above its current 8.5 percent (it hit an all-time low of 8.47 percent this past summer).

Such a changeover, Uchitelle acknowledges, would require the enactment of steep tariffs, of domestic content standards far stricter than any now on the books, and perhaps a trade war with China and other nations. It would require treating manufacturing as we’ve treated agriculture since the 1930s. “The political maneuvering involved in authorizing the annual farm subsidy once drew headlines and controversy, but now rarely does.” (Of course, that’s partly because the handful of agribusiness giants can lobby behind closed doors.) “We accept that farming is a federally subsidized market activity,” he continues. “Manufacturing must proceed along a similar path.” Read More > at The American Prospect

5 things a Californian should know now about rent control – …Next week state lawmakers will hear a proposal from Assemblyman Richard Bloom, Democrat from Santa Monica, that would allow cities to dramatically restrict what landlords can charge tenants year-over-year. The bill couldn’t even get a hearing last year amid intense opposition from landlords.

But looming over legislators’ heads this time around is a potential ballot initiative supported by tenants’ rights groups that would do much of the same. If the bill stalls, experts say there’s a good chance you’ll see rent control on your November ballot.

What should your average Californian know about a rent control debate poised to gobble up so much political oxygen? Here are five key points:

1. Under current state law, a wide swath of California’s housing stock can’t be placed under rent control.
Rent control or rent stabilization policies come in different shapes and sizes depending on the city you may find them in. Some place a hard cap on how much a landlord can raise rents year over year, others may be indexed to inflation. Currently 15 California cities have some form of rent control on the books, including major population centers like San Francisco, Los Angeles and Oakland.

But current state law prohibits any locality in California from imposing rent control on properties built after 1995. That’s the year the state passed the Costa-Hawkins Act, which also prohibited cities that already had rent control laws on their books from updating them for new properties. Thus in Los Angeles. rent control only applies to buildings constructed before 1978, and in San Francisco, rent control only applies to buildings built before 1980.

2. Most economists—left or right—think rent control is bad
Economists have a hard time agreeing on most things. But regardless of partisan leaning, most economists would say rent control is not great policy. Even prominent progressives like Paul Krugman have expressed opposition to it.

Rent control is quite literally the textbook example of a “price ceiling”– undergrad economics textbooks will often feature problem sets with questions about what’s wrong with rent control. The classic microeconomic downsides include killing the incentive to build more housing, causing landlords to neglect maintenance and repair, and inflated prices for non rent-controlled units. A poll of ideologically diverse economists found that only 2 percent agreed with the statement that rent control had had a positive impact on housing affordability in cities like New York and San Francisco. Read More > at CALmatters

Last year was a big year for housing in California. Lawmakers aren’t done yet. – California lawmakers are preparing new housing legislation this week, just months after Democrats in both houses pushed through the biggest legislative package on housing in decades.

As the Legislature returns for session, state Sen. Scott Wiener, a San Francisco Democrat, will unveil his 2018 proposals.

Wiener, author of a new law passed last year that allows developers to fast-track construction projects, is planning to announce a trio of bills Thursday aimed at requiring cities to build taller, denser housing near transit, boosting the supply of farmworker housing and ensuring cities and counties are planning for their fair share of housing to meet demand associated with jobs and population.

Assemblyman David Chiu, D-San Francisco, who has sought to encourage low-income housing construction through tax credits for developers, is also planning legislation.

Chiu tried twice over the past three years to pass such measures, including last year when he tried to expand low-income housing tax credits by $300 million and pay for it by eliminating the mortgage interest deduction for property owners with second homes. Read More > in The Sacramento Bee

Get a pencil: California marijuana-tracking system not used – California’s legal pot economy was supposed to operate under the umbrella of a vast computerized system to track marijuana from seed to storefronts, ensuring that plants are followed throughout the supply chain and don’t drift into the black market.

But recreational cannabis sales began this week without the computer system in use for pot businesses. Instead, they are being asked to document sales and transfers of pot manually, using paper invoices or shipping manifests. That raises the potential that an unknown amount of weed will continue slipping into the illicit market, as it has for years.

The state Department of Food and Agriculture, which is overseeing the tracking system, said in a statement it was “implemented” Tuesday. However, it conceded that growers and sellers are not required to use it yet and training on how to input data will be necessary before it becomes mandatory, apparently later in the year.

The slow rollout of the tracking system is just one sign of the daunting task facing the nation’s most populous state as it attempts to transform its long-standing medicinal and illegal marijuana markets into a multibillion-dollar regulated system. Not since the end of Prohibition in 1933 has such an expansive illegal economy been reshaped into a legal one.

So far, it’s been an unsteady start.

Business licenses issued to growers, distributors and sellers are temporary and will need to be redone or extended later this year. Much of the state is blacked out from recreational sales because of the scarcity of licenses and because some local governments banned commercial pot activity. Read More > from the Associated Press

Westward bound! More and more Americans are leaving the East Coast and heading west because it’s ‘cheaper, warmer and easier to find a job’ – Tracking statistics from the moving company United Van Lines indicate that Americans are still heading west, while parts of the Northeast and Midwest are losing people.

On Tuesday the suburban St. Louis-based moving company released its 41st annual National Movers Study, which tracks customers’ state-to-state migration patterns.
Three of the top four destination states are in the West including Oregon, Idaho and Nevada.

However Vermont, a Northeast state, had the highest percentage of inbound migration in 2017. About 68 percent of state-to-state moves in Vermont were inbound last year.

At the other end of the spectrum is Illinois, which had the highest percent of outbound moves, 63 percent, followed by New Jersey, New York and Connecticut.

Idaho is swiftly becoming the fastest-growing state in the union and is apparently the fourth-cheapest cost of living in the country, reported The Washington Post. Read More > in the Daily Mail

EPA Says Glyphosate Does Not Cause Cancer, Contradicting IARC – The U.S. Environmental Protection Agency (EPA) released on Monday a human health and ecological draft risk assessment for glyphosate, concluding that the widely used—and highly controversial—pesticide is “not likely to be carcinogenic to humans.”

According to the EPA’s announcement, the assessment “found no other meaningful risks to human health when the product is used according to the pesticide label.” However, the announcement noted, “the ecological risk assessment indicates that there is potential for effects on birds, mammals, and terrestrial and aquatic plants.”

Last month, the ingredient won a new five-year lease in the Europe Union, following a bitter fight. Similarly, Monday’s draft assessment is a foundational document in the EPA’s potential extension of the product’s registration for use in 2019, the Los Angeles Times reported.

The EPA’s latest findings contradicts the March 2015 conclusion of the World Health Organization’s International Agency for Research on Cancer (IARC), which labeled glyphosate a “probable carcinogen.” The France-based panel’s ruling sparked debate around the world, prompted hundreds of lawsuits over allegations that glyphosate causes cancer, and resulted in the state of California adding glyphosate to its list of cancer-causing chemicals.

Glyphosate is the active ingredient many herbicides, most notably in Monsanto’s star product, Roundup. The product is the world’s best-selling weedkiller, applied to more than 150 food and non-food crops and used on lawns, gardens and parks. Read More > at EcoWatch

Raiders’ pursuit of Jon Gruden could  include ownership stake, sources say– The Oakland Raiders are preparing to pursue ESPN analyst Jon Gruden with an offer so strong it could even include an ownership stake in the team, according to league sources.

Gruden will be tempted to accept the head-coaching job, according to sources, but preferred not to make any decisions before the regular season finished Sunday. Following their Week 17 loss to the Chargers, the Raiders fired head coach Jack Del Rio after three seasons at the helm.

Oakland long has appealed to Gruden for a variety of reasons: He would return to an organization he didn’t want to leave in 2001; he would inherit a young quarterback, Derek Carr, whom he feels strongly about; and he would get to coach a team that is slated to move in 2020 to Las Vegas, where he would not have to pay state income tax. Gruden’s contract could be backloaded to pay him more in the Nevada years of the deal and lessen his tax burden during his years in California.

Raiders owner Mark Davis has offered Gruden an ownership stake in the past, according to sources, and if Davis were willing to do so again, the contract would have to be approved by all 32 NFL owners.

An ownership source said owners might not be so quick to approve the deal, because they wouldn’t want to establish a precedent. The NFL’s finance committee also would have to vet Gruden; it would be that body, along with input from several owners, that would be responsible for raising an objection to an ownership clause. Read More > at ESPN

U.S. oil production booms as new year begins – U.S. crude oil production is flirting with record highs heading into the new year, thanks to the technological nimbleness of shale oil drillers.

…The United States is so awash in oil that petroleum-rich Saudi Arabia’s state-owned oil and natural gas company is reportedly interested in investing in the fertile Texas Permian Basin shale oil region, according to a report last month.

That is a far cry from the days when U.S. production was on what was thought to be an irreversible downward path.

“For years and years, we thought we were running out of oil,” Verrastro said. “It took $120 for a barrel of oil to make people experiment with technology, and that has been unbelievably successful. We are the largest oil and gas producer in the world.”

Shale oil drillers have spawned a revolution using high-pressure drilling, coupled with a mixture of water and sand, which breaks open — “fractures” — hard-to-reach oil pockets trapped in rock. Read More > in The Washington Post

California Says the Only Safe Way to Talk on Your Cell Phone Is to Text – Earlier this month, the California department of health released guidelines warning residents to avoid putting mobile phones up to their heads.

“Keep your phone away from your body,” the state health department writes. “Although the science is still evolving, some laboratory experiments and human health studies have suggested the possibility” that typical long-term cell phone use could be linked to “brain cancer and tumors of the acoustic nerve,” “lower sperm counts,” and “effects on learning and memory.”

Mobile phones emit radiation, which is measured in radio-frequency (RF) energy. In the manual that comes pre-installed on your iPhone, Apple explicitly tells you to use a hands-free option like speakerphone or headphones while talking in order to “reduce exposure to RF energy.” The manual also notes that cell phones are currently tested for radiation assuming the devices would be kept at least 5 mm (0.2 in) away from the body while being carried. That’s a lot more than the thickness of pocket fabric. (On an iPhone 6 and above, you can find this information by going to Settings > General > About > Legal > RF Exposure.) Read More > at Route Fifty

A Browser You’ve Never Heard of Is Dethroning Google in Asia – A mobile browser rarely used in the West has outflanked Google’s Chrome in some of Asia’s fastest-growing markets, giving owner Alibaba Group Holding Ltd. an advantage in the race among technology giants to capture the next generation of internet users.

Hundreds of millions of people in India, Indonesia and other emerging markets getting online for the first time are picking UC Browser, owned by Chinese e-commerce giant Alibaba, over ones made by U.S. rivals. Users say UC Browser works better in countries dominated by low-end smartphones and spotty mobile service.

“It’s faster, it takes up less memory, and it looks better” than Chrome, said Rizky Ari Prasetya, a 20-year-old Jakarta resident who recently ditched Chrome for UC Browser.

India and Indonesia are among the last, great untapped markets for internet users. Just 30% of India’s 1.3 billion people are online, and only 25% of Indonesia’s 260 million use the web, according to the International Telecommunication Union, a United Nations body. Read More > in The Wall Street Journal

In the new year, worry-free California has a lot to worry about – Propped up by media idolatry, California is moving from denial to delusion. Case in point: A recent AP story claimed that the state “flush with cash from an expanding economy” would consider spending an additional billion dollars on health care for the undocumented, as well as a raft of new subsidies for housing and the working poor.

All this wishful thinking and noble intentions ignores a slowing state economy, and a structural deficit, keyed largely to state worker pensions, that may now be headed towards a trillion dollars. Perhaps the widely celebrated, although poorly distributed “good times” of the past few years, have clouded Sacramento’s judgement.

Jerry Brown, repeatedly lionized in the national press, finally leaves office after next year, he will likely leave his successor both a totally out of control legislature and looming fiscal crisis. Brown’s replacement will also have to deal with a state that, according to the Social Science Research Council, suffers the greatest income inequality in the nation and the third worst economic environment for middle class families. Worse yet — upwards of one-third of the state population subsists near or in poverty.

It’s clear that period of tech-driven rapid growth is coming to an end. In the most recent quarter, BEA reports, California’s GDP growth ranked a meager 35th in the nation; just last year the state’s growth was twice the national average and among the highest in the nation.

Two factors are driving this turnabout — the fading of Silicon Valley’s boom and a hyper-inflated real estate market. After soaring for year, the tech economy has slowed dramatically. The San Jose Mercury recently reported that even as the country overall enjoyed strong job gains, the Bay Area lost 4,700 jobs in the last quarter, at least 1000 in the tech sector.

California has suffered from other tech busts before but this time there’s no suitable alternative — such as manufacturing or homebuilding — to create new source of high wage jobs. Overall blue collar jobs have declined for a decade; the state has lost a net 160,000 manufacturing jobs. In 2015-2016, sadly, near minimum wage jobs for almost two-thirds of the state’s net growth. Read More > in the Orange County Register

If you like gin and tonic, you might be a psychopath – If you’re looking forward to tucking into the G&Ts tonight, we have some bad news for you: Chances are you’re a psychopath.

According to a recent study, people who enjoy bitter foods and drinks also possess more malevolent personality traits.

The research, conducted by psychologists from Innsbruck University in Austria, consisted of two experiments carried out on 953 people.

Men and women were presented with a list of foods and beverages including bitter, sour, salty and sweet items.

They were asked to rate each item out of six, then given a personality questionnaire to fill out.

…Bizarrely, the people who expressed a greater liking for bitter foods like dark chocolate, coffee and tonic water exhibited more psychotic tendencies.

The researchers concluded: “The results of both studies confirmed the hypothesis that bitter taste preferences are positively associated with malevolent personality traits, with the most robust relation to everyday sadism and psychopathy.” Read More > in the New York Post

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About Kevin

Mayor - City of Oakley, Data Center Manager of Mainframe Operations and Optimization – USS-POSCO INDUSTRIES, Co-Founder and Board Member - Friends of Oakley A Community Foundation, Advisory Board – Opportunity Junction, Commissioner - Contra Costa Transportation Authority, Board Member - Tri Delta Transit and Transplan
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