There are a number of old-line economists in California who have been calling for a rebound in the state’s economy for over a year now. Like most economists, they completely missed the destructive nature of the housing bubble when it was underway, and never integrated energy factors into their models. It should not be surprise that many economists are still using post-war recession models to account for extraordinary conditions in California today: oil prices above 75.00 dollars a barrel, overlaid on 21.9 % broad unemployment. Hello: those are not post-war recession numbers.

How can the state’s budget not be in a crisis, when the number of people employed in California has fallen back to levels seen ten years ago?  This is why I remain with my view that Washington will have to perpetually bail out the states in a kind of staged process that combines aid, with some austerity, followed by more aid. We have just been through one full cycle of this process already with the initial stimulus package, followed by California having to downsize its budget severely from the peak, to the resumption of aid via unemployment extensions. However, the fact that California is signaling a potential return to the IOU system in 2010 is probably a cry for help to Washington. And of course, elections are just 90+ days away.

As if to add a touch of comedy to this news, Alan Blinder and Mark Zandi are out with a Mission Accomplished paper today, which details how the FED and the Government saved the US from a depression. Perhaps a short walk through San Bernardino County (picture above) or several other California counties with their white paper in hand might be in order, as a way to augment some of those views. I would suggest that the US Dollar is probably indicating already some of what lays ahead, here. California’s broad unemployment figure at nearly 22.00% is yet another new high, and indicates the trend is still in place. While Blinder and Zandi are stuck in post-war recession-land, the US Dollar is pointing towards California.

-Gregor

The first debate between Whitman and Steve Poizner took place this week, appropriately, in Costa Mesa (that’s Orange County), and the back on track meme was on full display. But it was not just Whitman using the phrase. Poizner used it too. More than several times. Perhaps both campaigns use the same political research firm? The debate was additionally noteworthy in that not once, and I do mean not once, were the issues of transport or energy raised. In fact, I watched the debate twice, and even the words energy and transport were not uttered. For a state with 35 million vehicles, and which uses more gasoline than China, that is a stunning omission.  This is also a state that has to import more than 25% of its electricity, which uses 3 times as much total energy as it produces, and which has to allocate nearly 20% of its total electricity consumption simply to move water. According to my work, California spends nearly…(this article continues for subscribers through the membership gateway, on the right side of this page)

Beijingers Get Back on Their Bikes: Michael Bristow, BBC News.

Barbarism and Good Brandy: John Michael Greer, The Archdruid Report.

Unemployment Tops 20% in Eight California Counties: Alana Semuels, The Los Angeles Times.

The Great British Economy Disaster: John Lanchester, London Review of Books.

Economists Deliver a Sturdy Smackdown of Peak Oil Demand: Kate Mackenzie, FT energysource.

Innovation, Schminnovation – Welcome to the Boring Age: Paul Kedrosky, Infectious Greed.

-Gregor

Photo: Abandoned Car Off Highway in Rio Grande 1972 by John Vachon, from The EPA DOCUMERICA Project.

Can California Declare Bankruptcy?: Christopher Beam, Slate.

Exxon Lowers Bar, Buys Assets Once Seen Unattractive: Edward Klump, Bloomberg.com.

Requiem for a Dying City: Damien Perrotin, Energy Bulletin.

What’s Wrong with Venture Capital?: James Surowiecki, MIT Technology Review.

Losses Wipe Out Equity of Mexico’s Pemex: Robert Campbell, Reuters.

California Job Losses Grow: George Avolis, Contra Costa Times.

-Gregor

Photo: Cincinnati, Ohio 1975 by Lytha Scott Eiler, from The EPA DOCUMERICA Project.

PHOTOS: Taking a shine to the Owens Valley’s sun:  Brian Vander Brug, The Los Angeles Times.

Paying Zero for Public Services (Zero Rupee Notes):Fumiko Nagano, blogs.worldbank.org.

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On Proliferation, Climate, and Oil: Solving for Pattern: Amory Lovins, Foreign Policy.

Free – Adventures on the Margins of a Wasteful Society: review of Katherine Hibbert’s new book, GreenFudge.org.

The Day the World Turned from Brown to Green: Chris Nelder, GetRealList.com.

-Gregor

Photo: Saguaro National Monument, by Ansel Adams courtesy The US National Archives on flickr

The Unknown Cultural Revolution: Dongping Han – via the Rediscovering China’s Cultural Revolution symposium at UC Berkeley, KPFA Guns and Butter Radio Show.

Wall Street Revalued: interview with Andrew Smithers, Financial Sense Newshour.

California’s Budget Crisis – Harbinger for the rest of the nation?: Roundtable – Johnson, Eckl, Klein, Edwards, WAMU Dianne Rehm Show.

Exploring For Tin and Other Metals: interview with Peter Miller, Frisby’s Bulls and Bears (formerly Commodity Watch Radio).

China as the New Global Power: interview with Martin Jacques of Demos/The Guardian/LSE , WBUR OnPoint Radio.

-Gregor

Photo: Shasta Dam Under Construction, 1942, via Library of Congress on Flickr.

What Peak Oil Can Do for Climate Change: Chris Nelder, Get Realist.

Capital Journal – California’s Budget is Going to Be Dreadful: George Skelton, The Los Angeles Times.

Early Data Suggest Suicides are Rising: Murray and McKay, The Wall Street Journal.

Shifting the World to 100% Clean, Renewable Energy by 2030 – Here Are The Numbers – Jacobson and Delucchi (with links to White Paper and Scientific American Article): Stanford News Office.

Will Federal Stimulus Money Spark a High-Speed Rail Renaissance in the U.S.?: Larry Greenmeier, Scientific American.

Intermittency and You – Do We Need Coal and Nuclear Plants for Baseload Power?: Dave Roberts, Grist.

-Gregor

Photo: Santa Monica Beach, with Railroad: circa 1900.

GregorWeekly subscribers might enjoy reading a Gregor.us post from this evening, on the topic of California’s vulnerability to a second oil shock. | see Break Point.

States of shock: The Automatic Earth.

Welcome to Earth’s ‘New’ Ocean: The Arctic: Andrew C. Revkin, NYT Dot Earth.

Living With Coal: David G. Victor and Richard K. Morse, The Boston Review.

California’s cash coming in below guesses: Steven E.F. Brown, San Francisco Business Times.

The Rise and Fall and Rise of U.S. Cities: Paul Kedrosky, Infectious Greed.

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Painting: Passage, by Chris Clark. Proximity Gallery, Philadelphia.