California’s senior population is growing faster than any other age group. How the next governor responds is crucial

(excerpt from an LA Times article by Melanie Mason)
OCT. 7, 2018, 12:05 A.M.

...California, ...must adapt to its reality. The state’s long-held self-image — a blend of Tomorrowland and Fountain of Youth — is colliding with the inescapable fact that the Golden State is getting old.

The next governor will be confronted with a demographic shift of epic proportions: Seniors will be California’s fastest-growing population. Between now and 2026, the number of Californians 65 and older is expected to climb by 2.1 million, according to projections by the state Department of Finance. By contrast, the number of 25- to 64-year-olds is projected to grow by just more than half a million; the number of Californians younger than 25 will grow by a mere 2,500.
Seniors to shape California’s future

According to projections from California’s Department of Finance, seniors will make up a sharply larger share of the state’s population by 2060 — the only age bracket to grow in scale.Source: California Department of Finance

That radical transformation has been largely absent from discussion as politicians grapple with education, healthcare and environmental policies.

But the graying of California will seep into nearly every nook of the state budget and policy planning under the next governor. It will determine what services will be in demand and how money must be spent. Most significant, it will place enormous strain on the state’s already fragile network of long-term services and supports, including in-home aides and skilled nursing facilities.

“We are exquisitely unprepared for that [oldest] age demographic pushing through,” said Dr. Bruce Chernof, president of the SCAN Foundation, an aging advocacy group.
‘Things are going to be dramatically changing’

What does it mean to govern an aging state? It means dealing with higher healthcare costs, particularly for low-income seniors who are eligible for Medi-Cal coverage, the state-subsidized healthcare system for the poor. There are currently close to 1.2 million Californians 65 or older enrolled in the program.

It means grappling with poverty in a different way. California politicians often focus on the state’s child poverty rate, which averaged nearly 23% from 2014 to 2016. But fewer talk about the poverty rate among seniors, which was 20% during the same time period, according to the U.S. Census Bureau’s Supplemental Poverty Measure. The fastest-growing population of homeless people is among older adults; in Los Angeles County, the number of homeless people 62 or older surged by 22% this year, even as the overall homeless population slightly dropped.A homeless man eats soup prepared by chef Lovejoy Cole during the weekly free food, clothing and water giveaway by My Friend’s House Foundation in Skid Row in Los Angeles. (Genaro Molina / Los Angeles Times)

As the population of low-income seniors swells, demand for safety-net programs for the elderly — such as financial assistance for low-income seniors or payments to in-home caregivers — is likely to balloon.

State coffers, as well as local governments and school districts, could be squeezed by growing numbers of retired government workers. Even best-case scenarios show the state could need an additional $230 billion over the next three decades for existing promises to cover retirees’ pension and healthcare costs.

It could mean revamping the transportation system to better accommodate people who can no longer drive, or making sure more units of new housing are accessible to people in wheelchairs or with impaired mobility. Is air quality an aging issue? Yes, particularly when incidents of asthma, commonly seen as a childhood disease, increase among those over 65.

And with projections showing that California’s population will skew older for decades to come — beyond the baby boomer generation — the decisions the next governor makes could reverberate for the foreseeable future.
A rapidly aging state

Almost every county in the state will see its median age rise more than five years by 2050. Many of the counties with the highest increases are in rural, more sparsely populated areas.


Median age in California counties
< 35 years
35-40 years
40-45 years
45-50 years
50+ years
The estimated median age in California was 35 in 2010

The projected median age is 38 in 2020

The projected median age is 40 in 2030

The projected median age is 42 in 2040

The projected median age is 43 in 2050

The projected median age is 44 in 2060


Median income in California’s oldest countiesSource: State Franchise Tax Board. Median income is from 2015.

“If we have that conversation based on the demographic makeup of what the state is today, and we don’t anticipate things are going to be dramatically changing over the next several decades, we’re not going to be prepared to make the right decisions,” said Paul Rosenstiel, chairman of the board of the California Budget and Policy Center.

No single government entity has ownership of the issue of aging. Medi-Cal is governed by the Department of Health Care Services, while the In-Home Supportive Services program, which pays for home care for the low-income elderly and disabled, is overseen by the Department of Social Services and is administered by each county. The Department of Aging contracts with local agencies to provide caregiver resources, while the Department of Veterans Affairs operates homes for aging vets.

“It’s like a hundred-piece jigsaw puzzle,” Chernof said. “None of those departments and funding streams have much connection to each other.”Aging is slow-motion. Fixing a pothole today is something everybody can see and feel.— Bruce Chernof, president of the SCAN Foundation, on the difficulties of getting public support for aging programs.

The correlation between inequality and mental illness

...the graph speaks for itself.

Insane Clown President

This is a lecture from Rolling Stone writer Matt Taibbi who, contrary to the headline, provides a very objective, measured assessment of the Trump campaign for the presidency, and the kind of systemic problems that led to Trump's victory. It's a little long...but worth it.

...

He catalogs lots of "voting with the middle finger" defiance from the electorate in the midst of a change in the primary news-getting media. We no longer have the three networks whose news programs were loss leaders, constructed to justify their licensing as public services. Now we have for-profit news, without much fact-checking.

Good old Marshall McCluhan used to say that the "Medium is the Massage"...essentially calling all human tools "media." So...we make our tools and then our tools make us.

Land Speculation and Electric Cars

At a recent conference, political leaders in California reaffirmed their support for California's commitment to carbon neutrality, but neglected to mention walking or biking. Making more compact, pedestrian-friendly communities can help meet that goal of carbon neutrality, and has the added benefit of ending the regressive "tax" that every driving age adult must own an auto. Non-sprawl neighborhood design can cut vehicle miles traveled roughly in half.

I own a plug-in hybrid, and like it so well I will not buy another gas-powered car, but ignoring simple solutions like building transit-friendly, pedestrian-friendly mixed use (stores and offices intermixed with the residences along streets that accommodate pedestrians) continuing to support sprawl, and outlying land speculation--is not a hopeful sign. Sprawl encourages longer commutes and longer streets, water and sewer runs, etc. Outlying development infrastructure maintenance costs roughly double compact infill, too.

Even though the Sacramento region has 20 years worth of unbuilt infill, local agencies are moving to make even more outlying "greenfield" development. LAFCO recently voted to expand Elk Grove by more than 1,000 acres, despite more than plenty of vacant acres within its current Urban Services Boundary. Barbara Leary, a candidate for Folsom's City Council, remarks that local planning is so dysfunctional that even if Folsom abandoned south-of-50 expansion, the land speculators would be able to get Elk Grove, Rancho Cordova or the County to annex the parcel Folsom rejected, and get their development approved that way.

Why bother? Because land speculators can purchase (or more likely option) the outlying agricultural land for a few thousand dollars an acre, then sell it to builders for hundreds of thousands of dollars once the "magic zoning wand" has been waved over it to approve development. They can get gross profits of 10,000% this way--and IRS doesn't even tax these outrageous profits if the speculators exchange into income-producing property like malls and apartments.

Meanwhile, in Germany, the developers must sell the outlying land to the local government at its agricultural land value, then buy it back at the development land price. All that profit benefits the public rather than a small plutocracy of speculators. And Germany has nice infrastructure, a solar program that's ahead of schedule, free tuition even for foreign students at its universities, etc.

Sacramento apparently can't get together the public policy to handle homelessness, or climate, but our political class can get a subsidy for the land speculators at the drop of a hat. In a betrayal of public interest, County Supervisors Susan Peters and Sue Frost provided the deciding votes on LAFCO for the Elk Grove expansion, but more of these outlying developments--North of North Natomas, South of 50 in Folsom, are cued up.

In any case, let's not get distracted by the shiny objects that have electric motors. Land use is the nexus of local political malfeasance, and the climate effects of sprawl are roughly double the pedestrian-friendly, mixed use alternative. Believe it or not, the real estate market actually pays premiums for those traditional, pedestrian friendly neighborhoods (e.g. McKinley Park). But as long as we want to give the speculators all the money that might go into civic improvements, we get nearer to the precipice of climate disaster.

Don’t Think The Trumps Were The Only Landlords To Screw Their Renters

...appropriate since rent control is on the ballot for the coming election...


by mikethemadbiologist


Yesterday, the NY Times published a bombshell story describing in great detail how much of Il Trumpe’s fortune was built on his father’s wealth and tax fraud. This part makes you think (boldface mine):

One of the first steps came on Aug. 13, 1992, when the Trumps incorporated a company named All County Building Supply and Maintenance.

All County had no corporate offices. Its address was the Manhasset, N.Y., home of John Walter, a favorite nephew of Fred Trump’s. Mr. Walter, who died in January, spent decades working for Fred Trump, primarily helping computerize his payroll and billing systems. He also was the unofficial keeper of Fred Trump’s personal and business papers, his basement crowded with boxes of old Trump financial records. John Walter and the four Trump children each owned 20 percent of All County, records show.

All County’s main purpose, The Times found, was to enable Fred Trump to make large cash gifts to his children and disguise them as legitimate business transactions, thus evading the 55 percent tax.

The way it worked was remarkably simple.

Each year Fred Trump spent millions of dollars maintaining and improving his properties. Some of the vendors who supplied his building superintendents and maintenance crews had been cashing Fred Trump’s checks for decades. Starting in August 1992, though, a different name began to appear on their checks — All County Building Supply & Maintenance.

Mr. Walter’s computer systems, meanwhile, churned out All County invoices that billed Fred Trump’s empire for those same services and supplies, with one difference: All County’s invoices were padded, marked up by 20 percent, or 50 percent, or even more, records show.

The Trump siblings split the markup, along with Mr. Walter…

While All County was all upside for Donald Trump and his siblings, it had an insidious downside for Fred Trump’s tenants.

As an owner of rent-stabilized buildings in New York, Fred Trump needed state approval to raise rents beyond the annual increases set by a government board. One way to justify a rent increase was to make a major capital improvement. It did not take much to get approval; an invoice or canceled check would do if the expense seemed reasonable.
The Trumps used the padded All County invoices to justify higher rent increases in Fred Trump’s rent-regulated buildings. Fred Trump, according to Mr. Walter, saw All County as a way to have his cake and eat it, too. If he used his “expert negotiating ability” to buy a $350 refrigerator for $200, he could raise the rent based only on that $200, not on the $350 sticker price “a normal person” would pay, Mr. Walter explained. All County was the way around this problem. “You have to understand the thinking that went behind this,” he said.

As Robert Trump acknowledged in his deposition, “The higher the markup would be, the higher the rent that might be charged.”

State records show that after All County’s creation, the Trumps got approval to raise rents on thousands of apartments by claiming more than $30 million in major capital improvements. Tenants repeatedly protested the increases, almost always to no avail, the records show.

One of the improvements most often cited by the Trumps: new boilers.

“All of this smells like a crime,” said Adam S. Kaufmann, a former chief of investigations for the Manhattan district attorney’s office who is now a partner at the law firm Lewis Baach Kaufmann Middlemiss. While the statute of limitations has long since lapsed, Mr. Kaufmann said the Trumps’ use of All County would have warranted investigation for defrauding tenants, tax fraud and filing false documents.

Don’t think Il Trumpe is the only large scale landlord doing this. Even without overt fraud, subcontracting in a variety of areas is a potential problem:

And it’s not just a single subcontract: sometimes these things end up looking like those Matryoshka dolls. One contractor hires contractors, who hires contractors. Leaving aside whether the work itself is shoddier under this system, every subcontractor gets a profit markup (they’re not doing this at cost). I’ve never dived into large infrastructure contracts (and have no desire to do so), but I suspect this plays a big role in why infrastructure costs are so high in the U.S.

Throw tax evasion, fraud, and so on into the mix, and it’s really easy to commit white collar crime. Whenever we don’t prosecute white collar crime, it always ends up hurting people, not just in the short term, but in the long run. A Democratic president (hoping for 2021!) along with Democratic attorneys general need to make this a top political priority.

...and a contrary view (from Yves Smith's Nakedcapitalism.com):

Trump Engaged in Suspect Tax Schemes New York Times. This is impressively detailed. I don’t mean to sound unduly skeptical, but the tax pro I reached was underwhelmed by this story, so I think we need to let the tax mavens chew over this one. The shortcomings here apparently include: 1. Settlements of big estates often involve disputes between the IRS and the estate and heirs over valuation of assets. IRS usually loses. Famous example was Sy Newhouse. This example from the story is not part of the estate but another apparent abuse (failure to pay gift taxes): the article goes through a fishy-looing valuation of Trump Palace shares bought by Fred Trump and later sold to The Donald at an extremely knocked-down price, but omits that Fred Trump bought the shares at the peak of the 1980s cycle, in 1987, and the NYC real estate market collapsed in the early 1990s. So even though Fred Trump still almost certainly exaggerated how much the value of his shares fell, both the residential and commercial RE markets in NYC tanked during this period, and the article is remiss in not mentioning that. 2. A lot of the alleged abuse in this article is of the father not paying gift taxes on gifts to The Donald. The donor is the one who has the tax liability, not the recipient. The story also reminds readers of a particular illegal gift for which fines were paid: the purchase of chips at one of Trump’s casinos with money that came from Trump’s father. The article puts likely gift tax abuses next to accounts of the father setting up trusts and partnerships from which The Donald benefitted. That sort of thing is very common among the rich; you’d need to know a lot more to see if there was anything improper (the big allegation is valuation abuse, see point 1 above). Note the father was clearly moving income aggressively into his kids’ hands when they were young, witness the article saying Trump was getting $200,000 a year at age 3, and even states: “Fred Trump was relentless and creative in finding ways to channel this wealth to his children.”. Recall the drama over Trump’s ginormous tax loss deduction in the 1990s, which tax experts have chewed over and came up with at least two routes by which this could have been kosher.

Put it another way: let’s see how tax experts who have some knowledge of how much people on the high end get away with calibrate what in this story is really bad v. what looks bad but the IRS has lost enough cases on that the tax pros think they are at little risk in pushing the envelope way beyond where mere mortals could go.

Having said that, there is a long discussion of overpaying for third-party services to various Fred Trump properties, with the excess proceeds largely going to Trump heirs with the apparent intent to escape gift taxes (note the recipients presumably paid income taxes). What does this look like? Private equity charging portfolio companies fees for services not rendered at all (as in they are disguised dividends) and/or inflated fees. They likely got this idea from NYC real estate families (most NYC big end commercial real estate is developed and owned by families like the Fisher Brothers and the LeFraks). The higher costs also served to justify rent increases in rent-regulated residential buildings that would otherwise have been impermissible. In other words, this looks like a hot new grifting idea making the rounds among the lawyers that served families like the Trumps.

Bill Maher interviews Steve Bannon

Maher values fearlessness...and so does Bannon. Worth a look...

Bank Secrecy promotes criminality

Ever wonder how criminals are able to keep their loot? They don't bury treasure any more, they put it in offshore banks. Here is a film that explains the surprising extent of the problems this creates: