Newsletter: Welcome to California Inc.
Welcome to the inaugural edition of California Inc., the weekly newsletter of the L.A. Times Business section. Each Monday, we’ll run down what's expected during the week and highlight the news you need to know.
I'm Business columnist David Lazarus, and I'll be your host each week, with contributions from The Times' entire Business staff.
Looking Ahead
Water plan: Monday's the day that farmers in Northern California's Delta region have agreed to tell the state how they plan to cut water use by 25% this summer. Although the deal involves a relatively small number of growers, officials hope it will lead to similar agreements elsewhere in the agricultural industry, which uses about 80% of California's water.
Trade deal: In Washington, the House returns Monday from a 10-day Memorial Day recess, and considerable jockeying is expected on granting President Obama "fast track" authority to negotiate a Pacific Rim trade deal. The deal would establish closer economic ties in the region, which in turn could boost traffic in California ports.
Wall Street: Traders will be looking for a little sunlight after storm clouds rolled into the stock market on Friday. The government slashed its GDP estimate, reporting that the economy shrank at a 0.7% annual rate in the first quarter, instead of the 0.2% growth that had been previously estimated in April. Analysts say the economy appears poised for its worst first-half performance since 2011.
Movie credits: The California Film Commission is expected on Tuesday to announce projects that qualify for the state's newly expanded film and TV tax credit program. Nearly 40 TV projects, including six TV series relocating to California, applied for about $55 million in credits, intended to help stop productions from seeking more lucrative deals elsewhere.
Bags are back: Starting Wednesday, shoppers in Huntington Beach will again be able to get free plastic bags from stores. Bucking the trend toward bans on plastic bags, the city reversed course and repealed a bag ban it had passed in 2013.
The Agenda
Each Monday, the Business section will feature an in-depth look at a single important topic, which we're calling The Agenda. This week we'll ask: What would the national economy look like with a $15-an-hour minimum wage? Community activists and politicians see a $15 minimum -- more than double the current federal minimum-wage law of $7.25 -- as a key to addressing rising inequality, reducing poverty and stimulating the overall economy. Business owners warn that it would tie their hands in downturns, drive small employers out of business and lead to millions of layoffs. The reality is more complicated.
Story Lines
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Bye-bye, Broadcom: Irvine chip maker Broadcom Corp. is the latest of many corporate headquarters to exit Southern California, leaving the business community puzzling over the causes and effects. The technology stalwart is being sold for $37 billion in cash and stock to semiconductor rival Avago. Analysts say further consolidation among chip makers is likely.
Elon Musk: Best known as the king of high-performance electric cars, Elon Musk is really the king of subsidies. His companies -- Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp. -- together have collected or received a commitment for billions of dollars in government support, according to data compiled by The Times.
Time Warner takeover: Analysts say Charter Communications isn't a slam dunk to acquire Time Warner Cable, but it appears to have a better chance than former suitor Comcast. Regulators will take note of the fact that a merged Charter-Time Warner Cable would have a smaller footprint than if Comcast had prevailed. It also would have far fewer broadband customers.
Disneyland pricing: Think Disneyland is expensive now? Walt Disney Parks and Resorts is considering charging more for high-demand days during summer, the Christmas holiday and spring break, a survey the company sent to park visitors suggests. A three-tiered pricing system may be in the works -- Gold, Silver and Bronze.
Uber on a roll: The ride-hailing service Uber scored a win in Nevada after lawmakers voted to allow it and similar on-demand transportation companies to operate in the state. If Gov. Brian Sandoval gives it his blessing, as expected, there will be only four states that Uber doesn't operate in: Alaska, South Dakota, West Virginia and Wyoming.
What Our Editors Are Reading
And some recent stories from other publications that caught our eye:
Snapchat's plans: Bloomberg serves up a colorful profile of Snapchat co-founder Evan Spiegel, who unsurprisingly is planning to conquer the social media world. A 23-page sales pitch to advertisers makes the case -- lots of growth, lots of young users. Profit? Not so much.
Water crisis: A very interesting read from ProPublica on how federal dollars are exacerbating dry conditions in the West. The story focuses on efforts to grow cotton in the Sonoran Desert, made possible only by the importing of billions of gallons of water each year. Cotton requires six times as much water per acre as lettuce and 60% more than wheat. Yet federal subsidies continue pouring into the effort.
Pension puzzle: An opinion piece in Capitol Weekly takes a look at how the government accounts for public employee pension promises and concludes that it’s "nothing short of fraud." A booming stock market has done little to erase shortfalls in the California State Teachers Retirement System and the California Public Employees' Retirement System.
Binge watching: A sign-of-the-times story on the website Quartz: Netflix, the streaming video company, now accounts for almost 37% of peak Internet traffic in the U.S. and Canada. That's well over double the traffic from YouTube and almost 20 times that of its streaming TV competitor Hulu.
Today's Cool Consumer Tip
Want to cut down on junk mail? Check out DMAchoice.org, a website run by the Direct Marketing Assn. It will help get you off marketing lists for credit card offers, magazines, catalogs and other promotional materials. It's not foolproof -- you'll still probably get some junk mail. But it can put a dent in the deluge.
For the latest money news, go to www.latimes.com/business.
Until next time, I'll see you in the Business section.
