2014 forecast

2014 forecast

01/02/2014

 

With every year comes the hope that things will be better than the year before. We make our resolutions with anticipation and motivation, a fresh start. The reality of the new year, however, is that what was set in motion the year or years before carries onto the next. Local experts weighed in on what they predict the next year will have for us — some good, some bad, some completely expected. Underneath it all, though, this outlook should stir something in us to possibly change our course so that future forecasts may be more … well … positive.


The economy: outlook not so good, not so bad

by Bill Watkins

If you liked 2011, 2012 and 2013, you’ll like 2014. Expect to see continued slow economic growth, weak job growth, persistent unemployment and persistent poverty. There will be one significant difference between 2014 and 2013: In 2014, home prices will not likely see the gains they saw in 2013.


This is very disappointing because it was not inevitable. While this was always going to be a slow recovery, it did not have to be this slow. It is this slow because of policy, at every level of government.


National policy has increased uncertainty and created additional costs. The problems include a chaotic and overly politicized budget process and massive regulations that are unread, occasionally misrepresented and often contain unknown impacts.


While California has solved its immediate budget issues, it still has huge long-term problems, as evidenced by its second-lowest credit rating among states. The uncertainty over who will pay this contributes to a poor business climate, as does environmental regulation that, while well-intentioned, will contribute almost nothing to global environmental quality while making it very expensive to do business in California.


Ventura County is far better off than most California counties. Its location between Santa Barbara County and Los Angeles, along with its abundance of natural and man-made amenities, gives it advantages that allow an abundance of economic sins with relatively little economic impact. Our large employers, including the military and Amgen, complement those amenities and moderate economic swings.


The delay and uncertainty introduced by local governments, however, does slow economic growth. Similarly the expansion of property rights to include an ever-growing list of “stakeholders” slows economic growth by introducing uncertainty and costs. Finally, Ventura County’s attractiveness as a place to live means that its housing markets are less volatile than regions where the only demand for housing comes from economic growth.

Bill Watkins, Ph.D., is executive director of the California Lutheran University Center for Economic Research and Forecasting and an associate professor of economics.


 

Climate: The heat is on

by Simone Aloisio

Another year and another chance for me to predict that the next year will be hotter than the previous year. And that’s exactly what I will do, same as the last two years. I am going to guess that 2014 will be hotter than 2013. It’s not that 2013 is shaping up to be a cold year. So far, it’s looking like it’s tied with 2002 as the fourth hottest year on record. It was hotter than 2012 (10th hottest), which was hotter than 2011 (12th hottest). And 2014 will probably be hotter still because of a global climate that is changing, primarily due to human activity.


It amazes me that people still argue about whether the climate is changing or not. It doesn’t matter what scientists say, but it does matter what the science says. And the science seems to be pretty clear, especially globally, where temperature is concerned. It’s getting hotter.


How do we know it’s getting hotter? For one thing, people are measuring the temperature. 2013 will be the 37th consecutive year of above average temperature globally. Most people on our planet were not alive in 1976, the last year that the world saw below-average temperatures. For everyone in the world today, 2014 will be one of the hottest years in their lives to date. For babies born in 2014, it will be one of the coldest in their lifetimes. Twelve of the last 13 years have been the hottest 12 years on record.


Other evidence that the planet is getting warmer? Sea level is rising. As the surfaces of our oceans get hotter, they expand, taking up more volume. Glaciers melt, adding more water to the oceans. Higher sea level means more erosion and more damage during storm surges in cyclones. The places on our planet that are the most vulnerable to these seem to be low-lying coastal areas and river deltas. Hundreds of millions of people will probably be displaced over the next century because of this. Someone, late last year, asked me when I thought this was going to start happening. It’s happening now. People in New Orleans and the Philippines are permanently displaced because of sea level rise. Scientists cannot attribute specific weather events to global climate change. We can’t say this storm happened because of climate change, while this one would have happened anyway. But the sea level is rising, and that’s because it’s getting hotter.


Besides that, ice is melting. What is the physical state of most of the fresh water on our planet (ice, liquid or vapor)? Ice, in the form of glaciers, ice sheets and some snow. And it’s melting. It’s melting all over the globe, but ice is especially melting in the Arctic, because it’s getting hotter there more. Some people point out that this will make new shipping lanes accessible in the summer, increase access to Arctic oil reserves (ironically) and even increase grain yields in extreme northern latitudes. Fine. If that helps people believe that climate change is happening, so be it.


In most of the rest of the world, where almost everyone lives, climate change is expected to come with a cost. In California, that cost will include water we use for agriculture, drinking, bathing and everything else. Why? Because ice is melting and it’s raining less here. That will cost someone something. In the long run, it will cost more than it would have cost to prevent the problem to begin with. Unfortunately, we don’t do very well solving problems where the payoff is a long way away. So maybe people don’t like the answer science gives them, and argue that it will cost too much to fix this problem sooner rather than later. Maybe it helps people’s conscience. Not liking the answer doesn’t change the answer. I sure don’t like the answer, but it’s getting hotter.


How much will it cost to fix this problem for the planet? It doesn’t matter how much it costs to fix the problem, it’s getting hotter. The answer to that question does not change that fact. The children of people born in rich countries will pay a price, but survive.Those children will adapt to climate change. Children of people born in the poorest parts of the world will have their lives destroyed by climate change.


Is there a way to fix the problem? I recently saw a talk given by Bill Gates and he showed this equation, so I call it the Bill Gates equation for solving climate change.


CO2 = P x S x E x C


CO2 is carbon dioxide, the greenhouse gas we are emitting that is causing climate change. If we want to fix this problem, we need to reduce the amount we put into the atmosphere. P is the number of people on our planet and S is the services these people use. Most reasonable people agree that these are things we cannot or should not reduce to fight climate change. Reducing the number of people on our planet necessitates killing people, which is bad. Reducing P is not the same thing as population control. And while we may be able to cut back on some of the more frivolous services used, S includes things like eating, staying warm, getting from one place to another and staying safe.Everyone should have those things and more of them, as far as I am concerned.


That leaves the last two terms of the equation, E and C. E is the efficiency of providing services, so things like getting better gas mileage and using less electricity to light a home. Gates’ argument is that, while important and good to do, this won’t take us far enough to solving the problem. I agree with him.


If we really want to fix the problem, we need to reduce C. C is the amount of carbon dioxide we put in the atmosphere per unit energy. To fix this problem, we need to reduce that. Right now, something like 85 percent of the energy we use as a planet involves burning fossil fuels and putting the carbon dioxide right into the atmosphere. This makes the planet get hotter. So we either need to change to using something other than fossil fuels or stop letting the waste gas from burning those fuels go into the atmosphere.


We have already figured out how to generate energy without putting carbon dioxide into the atmosphere. We have figured out lots of ways of doing that actually. The problem is that it requires change and money. It requires money now, even if it saves money (and lives) in the future. That’s the big problem. I think that’s why we are not solving the problem. I think that’s why there are still a lot of people who don’t believe in climate change. If we decide to solve this problem — and that is a big if — we have to admit one thing right away: It’s getting hotter.


It won’t be easy for us to fix this problem. Oh, technologically, it’s relatively easy. We have ways of making energy that don’t put greenhouse gases into the atmosphere today. It’s getting the world to change that’s going to be difficult. Convincing people to pay now so someone else can save more later, good luck with that. Predicting the temperature trend will be easy though. It’s going to be hotter.

Simone Aloisio, Ph. D., is a professor of chemistry at California State University, Channel Islands. He is also chair of the chemistry department.


 

Getting political

by Herbert Gooch

Time again to elect a governor. What a ride. Last time out, in 2010, the air was filled with the diagnostics of doom: California is ungovernable, a basket case amid the states of the union. This year coming in, the air is filled with affirmation that California is back with budget surpluses, progress on immigration policy, school reform, carbon curbs and fracking disclosures, and set to be the poster child for implementing Obamacare — the patient is recovered and a leader of the pack.


Past pessimism was as exaggerated as current optimism may be. Huge problems linger: the hollowing of California’s industrial base, a continuing high rate of joblessness, the growing disjunction between coastal and upper-class wealth and inland and ethnic poverty; unmet infrastructure needs in water and transport, underfunded public pensions and shaky municipal finances, and some of the highest tax and regulation burdens in the country.


California’s reputation has been restored by a remarkable financial turnaround thanks to Gov. Jerry Brown’s deft combination of spending cuts and limited spending increases, and by sponsoring major revenue enhancements in sales, personal and corporate taxes. And thanks to a soaring stock market that has spun off a wealth of capital gains, especially welcome in a state so heavily dependent on personal taxes.


The tax increases are temporary and the market boom is always unreliable, so the turnaround may not prove durable. But talk next year will continue to be about tax surpluses, not whether they exist but by how many billions.


The turnaround will help explain why next year will likely be a year of incumbency, starring Brown’s campaign for an unprecedented fourth term as governor. It will also largely explain why, once again, California will seem to go in the opposite political direction from the rest of the nation.


In 2010 most national elections, especially for governorships and the House of Representatives, went Republican. John Boehner replaced Nancy Pelosi as speaker and President Barack Obama confessed the Democrats had suffered a shellacking.


But California veered 180 degrees off the national trend line. And not by a little: All state-wide offices were filled by Democrats led by Brown, both houses of the state legislature went Democratic (and elections since have increased that strength to more than two-thirds, rendering the Republican minority virtually powerless), and the 53-seat California congressional delegation expanded overwhelmingly Democratic.


In 2010 California went Democratic because of an unpopular governor (remember Arnold?), dysfunctional politics and a deteriorating economy. In 2014 California is likely to remain Democratic for converse reasons. Even if, nationally, Democratic fortunes continue to worsen, national tides won’t sink the partisan ship in California ports.


At the local level, offices are nonpartisan. With few exceptions, the momentum of the economy will ensure the potency of incumbency, and ripples of party struggles will have faint effect. Come June 3, countywide officers in Ventura County and two incumbent supervisors (Parks and Foy) up for re-election are likely all to be winners. Only the auditor-controller seat is vacant through retirement.


The local partisan races tell a different story, however, one that is truly fascinating and unpredictable. It will give Ventura County voters a chance to taste the national struggle for our political soul and draw in millions of dollars in campaign expenditures.


In late November, Assemblyman Jeff Gorell, R-Camarillo, surprised most everyone by announcing he will run against Congresswoman Julia Brownley, D-Westlake Village, for the 26th Congressional District. Her former opponent, Tony Strickland, R-Thousand Oaks, had been expected to oppose her. But the nearby congressional seat (25th congressional district ), which Buck McKeon has held since 1993, is likely to be up for grabs with his retirement. If as expected Strickland should announce and win, this would be a “safe” seat because of Republican registration advantage. He will first have to move his residence to Simi Valley (in that CD), but he did grow up there as a child.


Though Brownley can count on the advantages of incumbency and greater Democratic registration, she has been in office only since 2011; and even as she won it by a slight edge, Romney eked a slim Republican majority in the district. Moreover, Gorell is a Republican with significant crossover appeal to unions and Latinos, a military man in a district whose largest employer is the naval bases in Port Hueneme, and his twice-won assembly district covers the center and lion’s share of the congressional district.


This district is one of the relatively few swing districts in the entire country, and one therefore that the national parties will be looking to spend vast sums to win: Democrats to retain the seat and Republicans to solidify their House majority. Ventura will be ground zero in the national partisan struggle.


Gorell’s former assembly seat is left with neither an incumbent nor an heir apparent. Candidates and money will be drawn into a free-for-all engaging both parties. Especially contentious will be the Democratic fray as candidates eye registration figures that promise a Democrat a permanent advantage in future races if this first one can be won.


Two additional campaigns will add spice to the local political landscape. Conejo Valley School District will propose a bond issue to fund improvements in bricks and mortar. Requiring only a 55 percent majority to pass, it is likely to pass in an area where spending for education is sacred but spending has been scarce and lessening for years. In adjacent L.A. County, Supervisor Zev Yaroslasky is termed out. Look for an extension of the acrimony and feuds from last year’s mayoral election of Eric Garcetti.


In the Chinese zodiac, we have entered the Year of the Horse marked by activity and change. In Ventura County prepare for political rodeo in 2014.

Herbert E. Gooch III, Ph.D., is an associate professor of political science at California Lutheran University.


 

Technology: always on, always connected

by A. Michael Berman

In 2014, nearly anyone who wants to can carry an always-on, always-connected computer anywhere and everywhere. By late 2013, nearly a third of all Internet access comes from mobile devices. According to one source, 4 billion of the Earth’s 6.8 billion people own mobile phones, and something like a billion of those are smartphones. For the past few years, the iconic model for this device has been the iPhone, but in 2014, the trend toward a wider range of devices and providers will continue.


In the mobile phone market, Android phones continue to grow in popularity, even as the Blackberry fades to insignificance and Windows phones struggle for a foothold. Apple has made a strategic decision not to target the fastest-growing, most price-sensitive markets (such as the Chinese middle class), leaving Samsung and others with the opportunity to establish Android as the clear contender against Apple’s IOS (iPhone and iPad) devices.


While the iPad continues to be the dominant model for tablets, Android-based tablets have managed to chip away at Apple’s lead. I predict that in 2014 we’ll see Samsung and perhaps another manufacturer find the right combination of features, price and marketing that will take a bigger chunk of the iPad market.


There’s been a lot of attention to the use of tablets and other portable computers in schools, both good and bad. The mandate to move student testing from paper to online has driven a wave of experimentation and expenditure by districts, and Apple has been aggressive in positioning the iPad as the “premier” platform for students. The combination of a relatively high price and mixed publicity, such as the issues that arose with Los Angeles Unified School District is student iPad pilot, however, may encourage many districts to look at alternatives. One that may gain some traction in 2014 is Google’s Chromebook.


I expect that 2014 will be a year remembered as a turning point for wearable computing. Google’s Glass has generated a lot of interest, as well as some derision — but given the reality that many users never part with their smartphones or put them down for more than a minute or two, it’s not such a big jump to imagine wearing one all the time.


While there are some tough challenges to coming up with a computer you can wear on your face and that looks flattering instead of geeky, it’s already becoming commonplace for people to wear “fitness watches” such as the Fitbit or the Nike Fuel wristband. These devices can communicate in real-time with the user’s phone and log data on exercise and activity. Already, some devices can monitor heart activity, and the ability to provide more detailed fitness — and medical — information is on the way.


An older technology will be updated this year as new game console offerings arrive from Sony and Microsoft. While hard-core gamers will rejoice, it’s not clear that positioning the console as a family entertainment system — which seems to be Microsoft’s strategy — can be successful in a world where every family member carries all the entertainment that is needed in his or her hands.


Lastly, there continues to be a countertrend to “unplug” or perform a “digital detox.” It’s a sign of just how important these devices are to us that we are talking about being separated from them as an unusual condition.

A. Michael Berman is the vice president for technology and communication at California State University, Channel Islands.

 

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