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.