<p>Gosh hmom5, just one horrified post after another. Your VC friends have clearly scared you out of your wits, and you've scared yourself out of a pleasant retirement. Too bad. We'll miss you at the restaurants and on the beach, but we'll just have to make do without you.</p>
<p>hmom:</p>
<p>I think your friends are correct. California is losing its middle class. As in other parts of the country, manufacturing is essentially gone from California, and it's economically impossible to bring back (labor, taxes and environmental regulations). </p>
<p>Even Google, the poster child of the recent decade is expanding physical plant everywhere but California. New server farms, which require a LOT of energy, are being shopped to Oklahoma, North Carolina and offshore. Obviously, it makes sense for Cal-based companies to build infrastructure outside of the quake zone, but Google would look local first if the economics were good, but they are not and will continue to decline.</p>
<p>Dstark, you're right, if you have the money there is certainly is a nice life waiting. The issue is that it's never a wonderful feeling to be a have in a land of have nots and with a crumbling infrastructure.</p>
<p>Coureur, fear is not at issue, making an informed decision for our second careers and retirement home is. Sorry if my analysis sounds harsh. I know it's stark, but the facts are what they are and no one is debating them factually.</p>
<p>Blue, I think Google like every other company is concerned with global competitiveness, it's a public company now and has a responsibility to shareholders to keep costs as low as possible. As a VC friend told me this past weekend, the ideal that I have of what Silicon Valley companies do for employees is very dated.</p>
<p>What's interesting to me is thinking about how out of control it all got. The lifestyles and prices in NYC where a snack and a couple of drinks cost $100. Now half, fully half, of all Broadway shows, which cost the same $100, will be closed by the end of the month. My parent's modest CA home, bought for $34K in 1955, worth over $3MM at the height and people routinely borrowing 7 times income to buy them. What were we all thinking?</p>
<p>And college tuition's, which way outpaced inflation........what will happen? Can they roll them back like they're doing with everything else?</p>
<p>danas is even more bearish than hmom.</p>
<p>"And college tuitions, which way outpaced inflation........what will happen? Can they roll them back like they're doing with everything else?"</p>
<p>Yes, they can. But the niceties will have to go.</p>
<p>"What's interesting to me is thinking about how out of control it all got. The lifestyles and prices in NYC where a snack and a couple of drinks cost $100. Now half, fully half, of all Broadway shows, which cost the same $100, will be closed by the end of the month. My parent's modest CA home, bought for $34K in 1955, worth over $3MM at the height and people routinely borrowing 7 times income to buy them. What were we all thinking?"</p>
<p>This always happens. It's human nature and the kind of society we live in. It has happened before and it is going to happen again.</p>
<p>We're just animals. We're not really all that advanced. :)</p>
<p>There are plenty of books and articles about why situations occur like the one we are in now. Henry Blodget wrote an article. I like it.</p>
<p>Why</a> Wall Street Always Blows It - The Atlantic (December 2008)</p>
<p>"But most bubbles are the product of more than just bad faith, or incompetence, or rank stupidity; the interaction of human psychology with a market economy practically ensures that they will form. In this sense, bubbles are perfectly rational—or at least they’re a rational and unavoidable by-product of capitalism (which, as Winston Churchill might have said, is the worst economic system on the planet except for all the others). Technology and circumstances change, but the human animal doesn’t. And markets are ultimately about people."</p>
<p>And this looks like a problem to me...</p>
<p>I have no idea which states are in good shape.</p>
<p>"State governments from Rhode Island to California have run up estimated pension-fund losses of $865.1 billion, forcing some to cut benefits for new hires.</p>
<p>Assets for 109 state funds declined 37 percent to $1.46 trillion over the 14 months ended Dec. 16, according to the Center for Retirement Research at Boston College. The Standard & Poor’s 500 Index of stocks fell 41 percent in the period.</p>
<p>“Not a whole lot of people get too excited about pension funds,” Philadelphia Mayor Michael Nutter said in an interview. “But if you have to pay those costs, they do grab your attention.”</p>
<p>After Philadelphia’s fund lost $650 million in the first nine months of last year, Nutter joined the mayors of Atlanta and Phoenix in writing a letter to Treasury Secretary Henry Paulson seeking financial help for U.S. cities. Their November letter cited investment deficits and rising pension costs.</p>
<p>The $865 billion in losses, which exceed the $700 billion Troubled Asset Relief Program that Congress approved in October, comes as states face budget deficits totaling $42 billion." </p>
<p>[url=<a href="http://news.yahoo.com/s/bloomberg/20090113/pl_bloomberg/av0vzmxdimvq%5DState">http://news.yahoo.com/s/bloomberg/20090113/pl_bloomberg/av0vzmxdimvq]State</a> Pensions</p>
<br>
<blockquote> <p>My venture capital colleagues insist new companies in technology and biotech will have few employees in CA. Most of the corporate infrastructure and all manufacturing will be in low cost states and countries<<</p> </blockquote>
<br>
<p>New biotech and technology companies need highly educated workers. It's not by chance that the tech/biotech centers are located near big universities, including Stanford, UCSD, UCI, etc. That's where the workers are. Many of those workers are not willing to relocate to the middle of nowhere (although with the present hard times, perhaps that has changed). Gateway had to move away from the South Dakota to California. </p>
<p>Manufacturing is a different story...a lot of it seems to be going down south if not overseas.</p>
<p>^ Unfortunately California is facing a growing deficit of college educated workers and is not close to keeping pace with the demands of the 21st Century economy, according to a recent think tank study.</p>
<p>State</a> may see shortage of educated workers, group says - Los Angeles Times</p>
<p>Businesses will indeed go where there's a highly educated workforce. But it's pure conceit on California's part to think that will continue to be the golden state, unless there's a major expansion and upgrade of its higher education system. They'll go to places like Ann Arbor, Madison, Columbus, and the North Carolina Research Triangle which are cranking out the highly skilled, highly educated engineers, scientists, computer geeks, and others they need. That trend is already well under way. The challenge for California going forward will be to eliminate the academic performance gap that currently keeps its burgeoning Latino population well behind the white and Asian middle class in educational attainment. If it is unable to do so, it will fall behind, the victim of high costs and underproduction of the workforce of the future.</p>
<p>^^ But I don't think there's any shortage of highly talented students from within the state, from other states, and from other countries applying to the universities in California. Take a look at the stats of the students at UCB/UCLA/UCSD and other UCs - especially in engineering, as well as Stanford, USC, the Claremont colleges, and others. I also don't think the UCs are going to go into the dumpster in the next year or two or three. I don't think the higher education system in California is in need of 'a major expansion and upgrade' to compete with other universities in this country and seem to be holding their own quite well. They, like other universities across the country, need to navigate the down times successfully but there's no reason to think they wouldn't.</p>
<p>But you're right that there are a number of other locations in the country with talent concentrations and it's not exclusive to California but I also don't think there'll be some kind of mass exodus of the talent from California either. I'm hoping all of these locations in our country thrive and manage to navigate the downturns well.</p>
<p>bc:</p>
<p>the performance gap about which you post has absolutely nothing to do with the University of California -- it's a K-12 problem. Add in California's high labor costs, high taxes and an anti-business regulatory climate, and the Research Triangle is a happy camper.</p>
<p>My mother, bless her, explained it all to me tonight. There's nothing wrong in CA that won't be fixed as soon as we get the republican out of the Governor's chair. What do movie stars know? I feel so much better:) The move is on.</p>
<p>Yes, it's all a problem due to a Repub...:rolleyes:</p>
<br>
<blockquote> <p>I feel so much better The move is on.<<</p> </blockquote>
<br>
<p>Well then, pass the margaritas!</p>
<p>Charleston SC has better beaches than California, a more refined lifestyle, and half the cost of California.</p>
<p>
[quote-bluebayou]
the performance gap about which you post has absolutely nothing to do with the University of California -- it's a K-12 problem.
[/quote]
</p>
<p>Of course it's a K-12 problem. My point is that those who think California's economic future is rosy because it will continue to generate high-wage, high-skill jobs had better think again. Unless California finds a way to dramatically improve educational achievement among its enormous and rapidly growing Latino population, AND to dramatically increase the production of college graduates with the skills to match the jobs of the future, those jobs are going to go elsewhere---because California is currently on a trajectory to have not enough college graduates to fill the available jobs, and employers won't wait around for the state to get its act together later. The connection with the UC system's immediate budget crisis may not be obvious, but it does suggest trouble ahead for the state of California which is probably going to need to invest significantly more in BOTH K-12 education AND higher education to prepare its population to capitalize on economic opportunities that will surely go elsewhere if California doesn't step up. And the next few years of red ink are going to put California even farther behind where it needs to be, with that much more ground to make up later. By slashing education spending, it's digging itself a hole that may not be so easy to climb out of.</p>
<p>
[quote]
Unless California finds a way to dramatically improve educational achievement . . . AND to dramatically increase the production of college graduates with the skills to match the jobs of the future, those jobs are going to go elsewhere---because California is currently on a trajectory to have not enough college graduates to fill the available jobs, and employers won't wait around for the state to get its act together later.
[/quote]
</p>
<p>Good point. California's stratified system of higher education, in which the children of academically adept families don't have to go to college with hoi polloi, has arguably reduced the sense of urgency California voters ought to have about their underperforming K-12 school system.</p>
<h1>of Trader Joe's located in South Carolina: 0</h1>
<p>If the only way that the UC system is able to accept more OOS students, is by rejecting more in-state students from CA, then it seems that its actually unfair to the CA residents, who've been paying taxes all along to benefit the schools, but in return, less residents will be able to attend them...</p>
<p>I may be wrong though.</p>
<p>
[quote]
it's digging itself a hole that may not be so easy to climb out of.
[/quote]
</p>
<p>IMO, it's already beyond that point.</p>
<p>
[quote]
the state of California which is probably going to need to invest significantly more in BOTH K-12 education AND higher education to prepare its population to capitalize on economic opportunities
[/quote]
Maybe but does that investment need to be in dollars or does it need to be in determining smarter ways to educate? I'm not convinced that K-12 educational issues can be solved by throwing more money at it. There are a lot of factors when looking at some of the metrics including the number of ESL kids in California with parents who aren't helping them with school.</p>
<p>
[quote]
And the next few years of red ink are going to put California even farther behind where it needs to be, with that much more ground to make up later. By slashing education spending, it's digging itself a hole that may not be so easy to climb out of.
[/quote]
Isn't this going to be a problem throughout the country for state funded and endowment enhanced schools in this immediate economic situation? I don't think California's unique in this regard.</p>
<p>
[quote]
Charleston SC has better beaches than California, a more refined lifestyle, and half the cost of California.
[/quote]
JMO and not trying to take anything away from there but I've been to SC in the summertime. To each his/her own though.</p>