McCarthy: Obama-Pelosi stimulus bill has failed as jobless rate hits 26-year high

 Bakersfield Congressman Kevin McCarthy brings us up to date on his week on Capitol Hill.

 

 "It was nice to start off the week in Bakersfield with a visit to Mrs. Mehciz’s 4th grade Centennial Elementary School class. It was great to hear our local students take pride in knowing America’s constitutional form of government. I posted a few pictures from my visit on my facebook page: www.facebook.com/CongressmanKevinMcCarthy. 

 "If you missed the Ralph Bailey show on Wednesday, you missed Ralph trying to stump me on the locations of our U.S. Service Academies because we were talking about the Service Academy Forum that will be at the Kern County Board of Supervisors’ Chambers from 2:00-3:30pm on Saturday.  I hope all high school students that are interested in attending one of our academies, and their parents, will stop by to learn more and visit with an academy representative.  To RSVP, email: RSVP.McCarthy@mail.house.gov or call my Bakersfield office at 327-3611.

 "In the Financial Services Committee this week, I voted to protect American entrepreneurship. America needs jobs and not Washington business-as-usual regulation that stifles opportunity.  That is why my colleagues and I supported a solution that balanced protecting innovation with greater pro-consumer transparency measures.  Unfortunately, over my objection, the Committee approved a bill that would harm innovation by establishing a government-run financial product approval agency which goes too far in restricting credit. From my experience of starting a small business at the age of 19, I know how hard it can be to get credit, the lifeblood for many entrepreneurs trying to build their American dream.   At a time when Americans are asking “where are the jobs,” we’re continuing to see this Congress approve legislation that makes it harder for our small businesses and innovators to grow their businesses and hire more people.  

 "More broadly, as much as our nation’s unemployment rate rises, it continues to lag on this Congress’ priority list - Democrats spent a good part of this week bickering with themselves on how large their new government-run health care should be instead of working in a bipartisan manner to grow jobs.  While we all agree we need to improve health care, Congress must focus on reversing the job losses all over the country.  California lost over 39,000 jobs in September and ranks among the top 5 states with the highest unemployment rates.  Back in February, when the 8.1% national unemployment rate was then considered high, the President signed Speaker Pelosi’s $787 billion “stimulus” bill that Democrats claimed would “save or create” 4 million jobs.  Fast forward to today - our unemployment rate has risen to a 26-year high of 9.8%, with almost 3 million jobs lost.  And here in California, we know the stimulus has not created the jobs we need, as our unemployment rate has escalated to 12.2%.  As we approach November, I will continue to fight to refocus Congress on creating jobs, especially the small business tax relief ideas that are part of the Republican economic growth solution, a solution that could help grow over 6 million jobs. 

 

Bako bits: an explosion of swine flu cases locally and the local ties to Citizens Business Bank

* ... SWINE FLU CASES EXPLODE: Heard some alarming news regarding the swine flu Wednesday from Dr. Raj Patel, a co-owner of Preferred Family Care Physicians off Truxtun Extension and my personal doctor. Patel said his office has seen a virtual explosion of the swine flu (H1N1) in recent weeks, going from two to three diagnosed cases a day to 20 to 25 a day in just two weeks. These numbers far outstrip the  number of swine flu cases that the Kern County health department reported earlier this week, but Patel says the cases are real and frightening. "We've stopped counting," he said. "Every day it is more and more and more. We are swamped." Patel received his first shipment of the H1N1 vaccine but went through it in a couple days and is awaiting a new shipment. Now comes word that the U.S. health authorities are warning there will be shortage of the H1N1 vaccine (read the story here) and that there may not be sufficient quantities to cover everyone until December. Patel said the Centers for Disease Control estimates that 8 percent of all Americans have the swine flu now, and by the end of the year fully 60 percent of us will have some kind of flu: either a regular version of the flu or the H1N1.

 * ... THE LOCAL CONNECTION TO CITIZENS: Had a nice chat the other day with Ray Dezember, the retired banker who knows just about everybody in town. Ray reminded me that Citizens Business Bank, which took over the failed San Joaquin Bank, has a strong connection to Bakersfield. For you local history buffs, Ray was running the old American National Bank when it was absorbed by Wells Fargo Bank back in 1990. Working with Ray at American National was D. Linn Wiley, who shortly thereafter went to Ontario to become CEO of Citizens Business Bank. Linn has since retired but remains as vice chairman of the board at Citizens. Other American National alumni now working at Citizens Business Bank include Harold Hanson, John Ivy and John Tait. Ray said it was Linn Wiley who actually recruited Citizens CEO Christopher Myers.

 * ... WHERE'S MIKE OLAGUE? Speaking of local bankers, lots of folks are wondering what happened to Michael Olague, the longtime Bakersfield banker who has been replaced as head of the regional Rabobank office. Rabobank is a private, well diversified Dutch-held company that keeps a tight rein on public announcements, and it's not saying anything about what happened to Olague. All the office would say is that the new regional president is Anker Fanoe. Olague previously ran the regional Bank of America office and worked for a time at the old San Joaquin Bank.


 * ... THE MESS WITH LOCAL APPRAISALS: Readers of this blog know I am a big fan of local appraiser Gary Crabtree and his "Crabtree Report," which remains one of the single most authoritative sources on the local housing market. I'm always impressed by the depth and breadth of his reports, which in this day and age makes for a sobering read. His latest report shows Bakersfield remaining the seventh worst foreclosure market in the nation with a staggering 13.14 per 1,000 households. And the mess with out of town appraisers supplying incomplete or erroneous appraisals remains a big problem. From his report:

 "The HVCC (Home Valuation Code of Conduct) is continuing to cause problems with low appraisals performed by either lesser experienced and/or geographically incompetent appraisers ... Research of the MLS appraiser members indicates that 58 percent of the appraiser members are from out of the area as far north as San Francisco and as far south as San Diego, with one appraiser from Huntsville, Alabama. What is even more concerning is that according to the California Office of Real Estate Appraisers there are a total of 119 licensed appraisers in Bakersfield, yet only 50 are 'appraiser members' of the MLS. This begs the question: where and how are the other 69 members obtaining their market data information or do they possess a real estate license and are Realtor members?"

Short takes around town: Another financial institution on the ropes and Fred Drew is out at the Kern Community Foundation

  

* ... AND THE DOMINOES BEGIN TO FALL: The news that Kern Schools Federal Credit Union is on the ropes is further evidence of the depth of this recession. The credit union has lost over $54 million since the beginning of last year, a figure that makes the losses at the now shuttered San Joaquin Bank look absolutely paltry. And now we learn the credit union, like the bank, has been put on notice that it must dramatically increase its liquidity or face the consequences. Unlike commercial banks like San Joaquin, which got into trouble on soured development loans, the credit union issues are more consumer based - bad auto loans, delinquent personal loans and the like - and reflect the depths of the recession in Kern County, where our jobless rate is hovering around 14 percent. Another just stunning aspect of all this is the fact that at least one Kern Schools board member, Jim Fillbrandt, told The Californian he was unaware of the demands and written agreement with the National Credit Union Administration until Monday when outgoing CEO Vince Rojas mentioned  it. How and why the board would be left in the dark (if indeed it was) are questions that need to be answered. Looks like Rojas got out just at the right time, handing over the reins to Steve Renock, who previously worked at a credit union in Orange County. Here's hoping Renock is well versed in crisis management, because that's the job he's inherited.

 * .... DREW OUT AT FOUNDATION: I learned today that Fred Drew is out as CEO of the Kern Community Foundation. Drew has only been on the job since January. The press release from the Foundation was short and to the point and offered no explanation. But obviously things didn't work out between Drew and the Foundation Board of Directors. Judi McCarthy, the Foundation board chair, issued a press release saying only that Drew and the Board of Directors reached "mutual agreement" that he would leave effective October 31. In the meantime, retired CEO Noel Daniells "has been engaged by the Board to offer continued guidance and assistance" and McCarthy will serve as acting executive until a new CEO is in place. An appreciation dinner was just held for Noel last month at Stockdale Country Club. Looks like he'll stick around longer to help in the transition.

 * ... INDUSTRIAL REAL ESTATE REBOUND?: We all know about the funk that residential real estate is in, but what about the commercial and industrial side? I follow the blog of Wayne Kress, a principal over at CB Richard Ellis Bakersfield,  and learned that things are indeed slow but may be showing signs of a rebound. (check out his posting here). Kress said we have recovered a bit from the "lowly performance" of the first and second quarters. Some of the numbers and percentages here are staggering. From his blog:

 "Sales volume is down 30% over 2008 and a whopping 91% over 2007.  Average prices have actually increased over each of the last two years (+11% in 2008 and +7% in 2009), but this is a little deceiving, as the average building size has also declined in each of those years (by 43% in 2008 and by another 53% in 2009).  There is generally an inverse relationship between unit pricing and size:  the smaller the building, the higher the unit price.  This holds here."

* ... HOT SHOT WINS THE WORLD: Kudos to Bakersfield's Brian Foley, the college freshman who just won the World Championships in skeet shooting. Brian did it by not missing a single target in the 410 bore competition at the World Skeet Shooting Championships in San Antonio, Texas, and then beating perhaps the world's best shooter,  Todd Bender of Atlanta, in a shootoff. Brian graduated from Ridgeview High and is a freshman at Lindenwood University, a private college of about 13,000 students in St. Charles, Mo. He's the son of Tim and Kim Foley of Bakersfield.

Bako bits: Mourning the loss of a local bank and Laura Wolfe finds a new gig

 
 * ... LAMENTING THE LOSS OF SAN JOAQUIN: The closing of San Joaquin Bank is a loss for our community on many levels. First, it has been one of the stalwart business banks that has helped this community grow, and it has done so while choosing to support the non-profits in a way the "too big to fail" banks would never deign. It was San Joaquin, after all, that provided the loan (at below market rates) that allowed the Bakersfield Museum of Art to expand, and that's just one example. In addition to all the good people who are now out of work, one has to wonder about the aggressive tactics of the state Department of Financial Institutions and the FDIC in closing the place down. The bank argues that it had met and exceeded the DFI demand to raise $27 million in capital, so why would the state agency pull the plug anyway? What possible good can come from closing a community bank in this economy? And there are some interesting questions being raised about when Citizens Business Bank was told it had the green light to take over San Joaquin. For example, new custom Citizens signage was installed at the old San Joaquin Coffee Road branch  less  than 24 hours after the bail failed. Was the signage ordered while the San Joaquin board was busy raising capital and meeting the Fed demands? Had the FDIC and DFI already made up their minds by the time the San Joaquin board met the capital demands by the Friday afternoon deadline? When the real story of San Joaquin and the bank closings is told, let's hope it doesn't smack of a new era of McCarthyism.


 * ... WOLFE TO ARTS COUNCIL: Was happy to hear that Laura Wolfe, who lost her job in a shakeup at  CSUB's development office, has landed a new gig as part-time development officer for the Arts Council of Kern. Laura is a longtime Shafter resident who was a fixture at Cal State until new university development director Beverly Byl let her go, citing budget cutbacks. If Laura brings the energy to the Arts Council that she showed at CSUB, the arts will most certainly benefit. Laura reminded  me that ARTini, the Arts Council's martini tasting fund raiser, is set for Friday, November 6, at the Petroleum Club. Individual tickets are $65 for non members and $50 for members. Tickets include a tasting glass, tasting and heavy appetizers. I've heard this is a terrific event and all for a good cause: promoting the arts in our community. For more information call 661-324-9000.  

 * ... HUELL HEADS BACK TO BAKERSFIELD: Learned the other day that Huell Howser, the folksy and popular host of public television's "California's Gold" series, is heading back to Bakersfield next week. Huell will be filming a followup report on the relocation of the historic Lopez-Hill House to the Kern County Museum. Howser is scheduled to be shooting next Thursday, according to Penelope Birtenstein, who works with the museum Foundation. The original house was built by J.J. Lopez at Chester and California avenues in 1909. Lopez had  worked as a sheepherder at Tejon Ranch and died in 1938. The house was later moved out off Rosedale Highway and now is at home at the museum.


* ... THE BOYS FROM HODEL'S: Had a chance to speak to a luncheon meeting of the Sons in Retirement (SIRs), a group I didn't even know exist before I spent some time with them.  It was an interesting mix of about 100 retired business, educators and professionals who had one thing in common: staying connected with the community via friendly networking over lunch at Hodel's over off Olive Drive. The best of Bakersfield has always been its people, and it was good to spend a couple hours with a group of citizens who chose to stay involved and on the top of issues. My thanks to Lon Kellenberger, retired dean at the School of Education over at Cal State Bakersfield, for the invite, not to mention the free lunch.

McCarthy: fighting legislation that would restrict credit and entrepreneurship

 Rep. Kevin McCarthy, R-Bakersfield, talks about the week on Capitol Hill. In his own words:

 "Last Sunday I attended the league opener for the League of Dreams basketball season with my son Connor, who is a volunteer with the organization.  League of Dreams is a great initiative that believes “every child should have a chance to play".  Children with all types of disabilities can come and play basketball. If you would like to attend and cheer on our local kids come by on Sundays at 1 pm at Silver Creek Park - the season goes through November 15. 

"As the stock market made some gains, the House Financial Services Committee that I serve on began considering bills that could restrict America’s choice in how they save and invest.  After being approved by committee, these two bills – regulating over-the-counter derivatives and the creation of a new government agency – would then be brought to the full body for a vote.  During the committee proceedings, I asked my colleagues to put aside partisanship and consider the power of the idea in regards to amendments.  Both sides of the aisle agreed we need consumer protection, but remained divided by philosophical differences on how to do this.  As unemployment inches closer to 10%, we should not pursue legislation that could restrict credit and entrepreneurship.  When starting my own small business – Kevin O’s Deli – years ago, I used credit cards and other credit sources to start that small business. My risk paid off, as I sold my business and was able to pay for my college education.   As we look to significantly regulate our financial system, Congress must be forward thinking and carefully consider the direction we want our country to go. 
 "Also, this week on the House floor I joined my San Joaquin Valley colleagues by pushing for change in a San Francisco Bay water recycling program to include an amendment to turn the pumps on to nourish our local economy.  On the floor I asked Speaker Pelosi and the Democratic leadership to stop ignoring our proposed common sense solutions and help our struggling farmers and ranchers get the water they need.  Our provisions would help create jobs and alleviate the man-made drought ruining our Central Valley. 
Continuing the call to fix the behind-closed-door bill writing in this Congress, I cosponsored a resolution this week that would require House committees to post all bills and amendments online within 24 hours of adoption.  These changes would keep committee members and their staff from adding undeclared or “phantom amendments” in secret after the bill has already been approved by the committee. 
 "Next Saturday, October 24^th, my office will host an Academy Forum in Bakersfield at the Kern County Board of Supervisors office, from 2:00-3:30pm.  Last weekend we hosted one in Atascadero for students from San Luis Obispo County interested in attending any U.S. Service Academies.  Military training is excellent preparation for any future job and is highly sought after by today’s employers.  All those interested in attending, send an email to: RSVP.McCarthy@mail.house.gov or call my district office at 327-3611. 

Bako Bits: Death by a thousand cuts in a terrible economy, and a tribute to the warriors from the 'Greatest Generation'

* ... GLASS HALF FULL: It takes the heart of an optimist to see blue sky in the midst of this recession, with its daily drumbeat of bad news across virtually all sectors of the economy. Continuing job losses, rising foreclosures and the specter of a double-dip recession are not exactly a recipe for optimism, even if the DOW did rally and settle above 10,000. But that's just me, which is why I admire those folks who always seems to see blue skies in the middle of a thunderstorm. One of those is Wayne Kress, principal at CB Richard Ellis here in Bakersfield, who has started a blog about industrial real estate that is worth a read. (check it out here) Wayne is a graduate of Cal Berkeley, married to longtime residential Realtor Leslie Walters, and one of the more knowledgeable folks when it comes to commercial real estate. Naturally optimistic, he thinks we're cycling out of this doomsday cycle and will emerge just fine. And speaking of optimism, I ran into Shai Gordon, formerly one of the owners of the popular bar and restaurant Cafe Med over off Stockdale Highway, who is also working in the commercial sector. Shai left Cafe Med about four years ago and now works for Western Realty Advisors. After catching up on things he advised me to "be more optimistic." I'll try. Promise.

 * ... LIVING WITH PAY CUTS: I was thinking about the budget difficulties over at Cal State Bakersfield while reading a story in the New York Times about how pay cuts have become so much a part of the economic landscape. The story (read the full report here) follows the emotional roller coaster of an ExpressJet pilot who took a 50 percent pay cut but is thankful to still have work. Many companies  locally, including The Californian, have instituted across-the-board pay cuts to deal with the lingering effects of the recession. And of course we have the county furloughs and other cutbacks that have simply become a way of life. These kinds of moves were unthinkable a few years ago, but then who expected to see an economy like we are dealing with today? An excerpt from The Times story:

 " In recent decades, layoffs were the standard procedure for shrinking labor costs. Reducing the wages of those who remained on the job was considered demoralizing and risky: the best workers would jump to another employer. But now pay cuts, sometimes the result of downgrades in rank or shortened workweeks, are occurring more frequently than at any time since the Great Depression."

 * ... FINDING WAYS TO SAVE: If there's a common theme these days, it's that we are all finding ways to cut back: canceling vacations, putting off major purchases and keeping our cars longer. Every penny counts, and I am amazed at how we are all dealing with it in different ways. I was saddened to hear that Riley Parker, a private investigator and owner of Parker and Associates, dropped his membership in the downtown  Rotary Club as one way to save a few bucks. Riley has taken on some significant investigative projects out of town, and continuing Rotary was simply not practical. In addition, his wife Jane fractured her elbow in a nasty fall and the recovery means Riley had to hire an employee to replace her-an unbudgeted expense that just made things worse. Keep Jane in your thoughts as she recovers from the spill.. On another topic Riley passed on this email that I wanted to share. It speaks for itself:

"Some time ago you folks ran a great little story on a retired Marine aviator named Don 'Slim' Harris. Slim is one of my neighbors and one of the most delightful gentlemen that I have ever known. I knew that his poker group of retired Marines, all having served from WWII through Vietnam, were coming today for a quick game. Most of them retired from the old Marine Air Station El Toro or Camp Pendleton and still live in Orange County. There were 10 of these old timers seated at the table ... their lowest rank at retirement was Lt. Colonel and a couple of them were as high as two-star general.... all part of that 'greatest generation' and I left with a sense that I had just been a part of something so special and honorable that it is difficult for the rest of us to understand."

. * ... BUSINESS EXPO 2009: Don't forget about the 19th annual Bakersfield Business Expo set for Tuesday, October 27, over at the Rabobank Convention Center. Admission is $5 and it runs from 4 p.m. to 8 p.m. This is a Greater Bakersfield Chamber of Commerce sponsored event and always a good place to network and find ways to grow your business. Need tickets? Call the Chamber at 661-327-4421.

Bako Bits: foreclosures move to higher end homes and an update on community treasure Marv Steinert

 * ... MORE SCARY HOUSING NEWS: I'd love to share some good news on the housing front but the truth is our country and are community remain mired in a nasty mess that will likely linger on for a good time to come. More evidence of that came from the Wall Street Journal that reported that an increasing number of foreclosures are now coming in the high end market. Up to this point, the lion's share of foreclosures have been coming in the entry level market, where many folks got in way over their heads thanks to aggressive lending and "creative financing." Yet now we learn the high end accounted for 30 percent of the foreclosures in June, up from 16 percent when all this started three years ago. You can read the full Journal report here but this is disturbing data on any level. Some of these foreclosures involve so called "exotic mortgages" like interest only vehicles, which are virtually impossible to refinance once the property is less worth than the loan. Add to that folks losing their jobs at all levels, and we have a problem. From the Journal story:

 "The report shows that foreclosures, after declining earlier this year, began to accelerate in the late spring and that more expensive homes have more recently accounted for a growing share of all foreclosures. "The slope of that curve in recent months is much sharper than it was recently," said Stan Humphries, chief economist for Zillow. Rising foreclosures among more-expensive homes could create added pressure for a housing market that has shown signs of stabilizing in recent months as sales of lower-priced homes pick up."

 * ... UPDATE ON MARV:  Heard the other day that local businessman Marvin (Marv) Steinert continues to battle a condition that has left him virtually blind. A couple months ago Marv came down with something called "temporal arteritis," an inflammation or damage to the blood vessels that supply the head. It apparently has affected his eyesight to the point where he cannot see, but he is hanging tough, taking visitors and staying involved in the community. Marv is one of the most personally generous - and good spirited - businessmen in our community, and he has spread his largess to non-profits across town. Keep him in your thoughts.



 * ... LOCAL KID WINS AWARD: Kudos to Jadon Gauthier, a Bakersfield High School grad and Biola University student, for picking up another award for "Jitensha" (Bicycle), a short film shot on location in Tokyo. (read previous story here) Jadon is a junior down at Biola and the son of Jay Gauthier, a manager at Guardian Guaranty Corp. The film didn't win anything at the Venice Film Festival but did pick up a Crystal Heart Award from the Heartland Film Festival. Jadon says "it nominates us for an opportunity for a $10,000 Vision Award for short film!" He says the movie cast and crew (check out the website here) is waiting to find out if Jitensha will be selected for the prestigious Sundance film festival.

 * ... VIA ARTE A SUCCESS: Stopped by the Via Arte exhibit over at The Marketplace this weekend and was amazed at the crowd and pleasantly impressed with some of the terrific chalk art. This is one of the signature events for the Bakersfield Museum of Art and it wouldn't be a success without folks from the museum like executive director Bernie Herman, Emily Falke and David Gordon, who put in long hours to make this a success. (Photo courtesy of Barbara Reid)

Short takes around town.: another restaurant to open downtown, Claire ties the knot and prayers for a local man at UCLA Medical Center

* ... DOWNTOWN REVIVAL: Saw on Facebook a posting by local artist Barbara Reid heralding the pending opening of a new sushi bar downtown on 19th Street , the same spot where Xander's and Benjamin's restaurants made a go of it. Barbara says the place is being opened by Yuri and Phil Chang, the folks who own Toro Sushi Bar and Grille over at the Marketplace. Toro is a class act and a second location downtown (apparently it will be called simply "O") would be a boost to the emerging downtown art and restaurant scene. Barbara, whose art graces the wall of Toro, said she was treated to some menu ideas for the new restaurant and had this to say:

 "They were all unique and yet displayed (with) what I have come to expect and appreciate as the artistry and flair of the sushi chefs at Toro. Beautiful presentation and wonderful mix of flavors. The offerings included sushi, tempura, stir-fry and salads. The opener was a serving bowl of skewered baby scallops, the tinest I have ever seen, in a spicy/sweet sauce with hints of citrus, tomato, cilantro. It was superb."

 * ... PRAYERS FOR A YOUNG MAN: Please keep Curtis Hartman in your thoughts and prayers. Curtis is the 35-year-old son of Linda Hartman, the executive director of the BARC (Bakersfield Association of Retarded Citizens) Foundation. Curtis just  underwent a double lung transplant at UCLA Medical Center and is recovering, but it will be long climb back. Curtis and Linda have a wide and supportive family. Linda's sister is Nancy Chaffin, Californian vice president of Human Resources and one of the founders of the local campaign to curb drunken driving that was recently recognized with a statewide award.

 * ... CLAIRE TIES THE KNOT: Congratulations to Claire Porter, the always gracious co-owner of Uricchio's Trattoria over off 17th Street, who got married a couple weeks ago to Mark Elieff, a physical therapist at San  Joaquin Hospital. Claire and Mark slipped off  quietly to wed in Las Vegas and then headed to New York for  their honeymoon, where they saw Bruce Springsteen at Giants Stadium. And speaking of Uricchio's, I was there the other night and had a chance to meet Mike Ariey, a local businessman who did a stint in the National Football League, playing for both the Green Bay Packers and New York Giants. He's also a graduate of Garces Memorial High School and San Diego State and represents the long line of local men and women who have represented Bakersfield in professional sports.

 * ... AMGEN TOUR ANNOUNCEMENT: It appears that the announcement of the host cities for the 2010 Amgen Tour of California will be made on Thursday, October 22. At least that's the word from Don Cohen, manager of the Bakersfield Convention and Visitors Bureau. The Amgen Tour is the biggest bicycle race in the country (read the previous post here) and would likely feature such heavy hitters as Lance Armstrong and Levi Leipheimer, as well as a host of European cycling stars. Bakersfield has made a strong pitch to host one leg of the event, either the ending of a race day or the beginning of one. This would be a huge plus for our town, not only in terms of tourism and revenue but also in terms of putting Bakersfield on the map. Stay tuned.