Back when most sensible Californians were concerning themselves with Thanksgiving preparations, the California-bashing right wing went hog wild over a stunning report that almost all private job growth in the state collapsed from January 2022 to June 2024 and almost all growth — 96.5% — was in government jobs.

“California’s Businesses Stop Hiring,” was the headline on the report published by the conservative Hoover Institution. Its main claim was that from January 2022 to June 2024, private employers in the state added only 5,400 jobs.

You can imagine how California bashers, including some within the state, greeted the news that government was propping up the state’s economy.

“This is what a failing state looks like,” Rep. Kevin Kiley (R-Rocklin), who badly lost a bid to replace Gov. Gavin Newsom in the 2021 recall election, tweeted. Others who gleefully tweeted about the Hoover claim included Rep. Vince Fong (R-Bakersfield), and venture investor Steve Jurvetson. Right-wingers outside California also joined the choir.

The Hoover article was what we in the news biz often pigeonhole as “interesting, if true.”

But it’s not true.

The original article, by UCLA economics professor Lee Ohanian, a Hoover Institution senior fellow, asserted that California added only 156,000 nonfarm jobs in the January 2022-June 2024 period. Since government statistics also showed that government employment in the state rose by 150,500, that left (after rounding) only about 5,400 new jobs created outside the government sector.

The picture painted was one in which private employers are shutting down and only government hiring is keeping the California economy afloat. The opposite is true, however.

(The Hoover Institution has retracted the original article and removed it from its website. An archived version of the original can be found here.)

Here’s the main problem with the Hoover analysis: During the sample period, California actually added 672,300 nonfarm jobs, not 156,000. Consequently, the 150,500 new government jobs accounted for only about 22.4% of the total, not 96.5%. The accurate figures show that not only did California’s businesses not stop hiring, but continued to hire fairly robustly from January 2022 to June 2024.

How did this calculation go so awry? The answer is simple. Ohanian conflated the two separate monthly employment surveys issued by the Bureau of Labor Statistics: One is its so-called household survey, which asks a national sample of about 60,000 households how many people in the household are employed. The other is its establishment or “payroll” survey, which asks about 629,000 workplaces how many people they employ.

Generally, the household survey yields a higher number of employed persons than the establishment survey. That’s because it counts the self-employed (including gig workers) and farmworkers, among others who are excluded from the payroll statistics. But that relationship breaks down when you’re counting only payroll workers, slicing and dicing the statistics into industry sectors.

Mixing together the BLS household data and the BLS establishment data is “a cardinal sin of BLS data analysis,” observes the pseudonymous economics commentator Invictus on The Big Picture blog of Ritholtz Wealth Management, in an indispensable deconstruction of Ohanian’s original post.

In that post, Ohanian subtracted the government jobs figure reported in the establishment survey from the nonfarm employment figure in the household survey. That effectively overstated the government jobs percentage of California employment growth. The proper approach, Invictus notes, would have been to use the establishment survey for both measures.

Ohanian acknowledged in an email that he had erroneously considered the household and establishment figures similar enough to treat them as effectively equivalent. “If I had seen the differences in the two series,” he says, “I would have written the piece differently. Mea culpa.”

In a corrective article posted Tuesday on the Hoover website, Ohanian makes public his mea culpa but also reiterates a point he made in the original article, which is that California’s job growth is weakening. That’s echoed by other studies, including a recent warning from the state’s Legislative Analyst’s Office.

Yet there’s much more to be said about Ohanian’s original article, as well as the glee with which conservatives seized on its headline claim as the basis for largely groundless attacks on California’s economic policies. First, it’s proper to note that the original piece was published Aug. 7, which is why its analysis covers only the period that ended in June.

Why it got resurrected and shot around the right-wing echo chamber last week is a mystery. Ohanian himself seemed uncertain when I asked him about it. Kiley, Fong and Jurvetson haven’t responded to my requests for comment.

That brings us to the statistics themselves. Employment data bristle with pitfalls for the unwary, even among experienced economists such as Ohanian. Indeed, in April, Ohanian posted an analysis on the Hoover website that purported to show a loss of 10,000 fast-food jobs in California from September 2023, when Newsom signed a minimum wage increase for that sector, through January this year — even before the increase went into effect.

As I reported, Ohanian based his post on a Wall Street Journal article that used employment figures that weren’t seasonally adjusted. That’s a crucial error when tracking jobs in seasonal industries such as restaurants.

The Journal’s article, and consequently Ohanian’s, mistook a seasonal decline in restaurant employment that occurs from September to January every single year for the one-time consequences of the minimum wage increase. Fast-food jobs, seasonally adjusted, actually rose by 6,300 in the period being reported. Ohanian told me at the time that he had been unaware that the Journal used nonseasonally adjusted figures.

BLS employment figures may be especially confusing because the bureau’s two surveys superficially seem to measure the same thing, but are very different — so much so that the bureau itself has issued a detailed explainer about the distinction. It notes that the establishment survey is “a highly reliable gauge of monthly change in nonfarm payroll employment.” The household survey is oriented more toward demographics and is best known as the source of the national unemployment rate.

Ohanian used his misconstruction of employment figures as the basis for a wide-ranging critique of California economic policy, mostly citing how the high cost of living drives people out of the state.

“Part of California’s job weakness,” he wrote, “reflects the number of people and businesses leaving the state.” California’s population fell by about 75,000 from 2022 and 2023 (the latest data available), he wrote, adding that companies such as Tesla, Oracle, and Chevron have moved or are moving their headquarters elsewhere.

“Population loss naturally leads to job loss,” Ohanian told me by email. “It is challenging to see how California could be gaining jobs as portrayed in the Establishment Survey, given a smaller population.”

That may well be true over the longer term and with larger numbers. But the 75,000 departed residents in 2022-23 represent less than two hundredths of a percent of the state’s population. Even the larger population decline of about 538,000 since 2020 represents about 1.4% of the state’s population.

The key question would be: Who’s leaving? Many emigrants may be retirees, who don’t have occupational reasons to stay in the high-cost state and may have sizable equity in their homes to pocket for a move to a cheaper location; about 7.5 million of California’s residents today are older than 65. The pandemic also drove the population down — COVID-related deaths numbered at least 60,000 in 2020 and 2021.

As for the emigration of corporate headquarters, California still leads the nation in headquarters of Fortune 500 companies, with 57. New York and Texas were runners up with 52 each. California remains a national leader in business creation, with nearly 560,000 new business applications filed with the state in 2023. When new technologies emerge with the potential to aid economic expansion, they tend to start in California.

One other subtext of the debate over California job growth needs to be mentioned. That’s the picture that conservatives paint about government jobs. The tweeted hand-wringings about the purported explosion in government jobs, which implies that the government workers are an army of faceless bureaucrats engaged in writing anti-business regulations.

The idea that the Musk/Ramaswamy Department of Government Efficiency can cashier them without affecting your daily life is a fantasy. In fact, the federal government employs only about 3 million workers, about half of whom are in the military, the Department of Veterans Affairs, and the Department of Homeland Security; the overall figure has remained fairly stable since the 1960s.

An additional 20 million are state and local employees, the majority of whom are teachers, along with police and fire fighters. Which of these workers should we fire?

Any discussion of California’s economy limited to periods of a year or two needs to be viewed in relation to the big picture, which is that California’s economy is by far the biggest in the country — indeed, it would rank in the top five or six countries if it were a sovereign state. At an estimated $4.08 trillion in gross domestic product, its economy is more than half again as large as the runner-up among U.S. states, Texas ($2.7 trillion).

Ohanian is right to argue that there’s reason for concern about where the state goes from here. But to suggest that there’s something fundamentally faulty about policies that still undergird the most powerful state economy in the nation or that California is a “failing state” — that’s “interesting, if true” … but, again, not true.

ServiceTitan, a Glendale tech firm that makes business management software for plumbers, painters and other contractors, announced Tuesday that it wants to raise up to $502 million in its initial public offering on the Nasdaq stock exchange.

The company said it plans to offer 8.8 million shares that would be priced between $52 and $57 each, according to a regulatory filing. At the top of that range, ServiceTitan would have a market capitalization of $5.16 billion. The company was valued at $7.6 billion after a November 2022 funding round. ServiceTitan hasn’t said when it plans to start trading.

ServiceTitan was founded in 2007 by two college friends from Glendale, Ara Mahdessian, 39, and Vahe Kuzoyan, 41, whose fathers worked as contractors. The company previously raised about $1.4 billion from venture firms, including Iconiq Growth, Bessemer Venture Partners and Battery Ventures.

It counts about 8,000 contracting firms as customers, providing an end-to-end software suite that can manage booking appointments, generating estimates and processing invoices as well as payroll and dispatching workers. Clients range in size from family-owned contractors to large national franchises totaling more than 100,000 technicians. It charges a subscription fee for its services.

The company, which assists contractors nationwide, says it wants to expand the number of trades and markets it serves. It employed 2,870 workers as of July 31 at its Glendale headquarters and offices elsewhere in the U.S. and internationally.

Competitors include BuildOps, Housecall Pro, Jobber and other companies that charge subscriptions for their web-based business management software.

ServiceTitan had filed confidential paperwork for an $18-billion public offering in 2022, according to Business Insider, but didn’t move forward after the Federal Reserve sharply raised interest rates to combat inflation, freezing up the IPO market.

The company reported revenue of $614 million in the fiscal year that ended Jan. 31, up nearly a third from a year earlier, and an operating loss of $195 million, 28% less than in fiscal 2023. It had about $147 million in cash and equivalents on hand as of Jan. 31 and was carrying $175 million in long-term net debt.

The company’s share structure will ensure that control remains with the founders — Mahdessian is chief executive and Kuzoyan president — who will retain all Class B shares, which are entitled to 10 votes each.

Lead underwriters on the IPO are Goldman Sachs Group, Morgan Stanley, Wells Fargo and Citigroup. They have an option to buy an additional 1.32 million shares, which will be traded under the ticker symbol “TTAN.”

Bloomberg contributed to this report.

You may have been tempted to believe Donald Trump when he swore, along with some of his Republican colleagues, to protect Social Security. If so, the joke may be on you.

That concern emerged Monday when Sen. Mike Lee (R-Utah) uncorked a tweet thread on X labeling Social Security “a classic bait and switch” and “an outdated, mismanaged system.”

Twenty-three minutes after Lee posted the first of his tweets, it was retweeted by Elon Musk, who has been vested by Trump with a portfolio to root out inefficiencies in the government. Musk led his retweet with the comment “interesting thread”; if that wasn’t an explicit endorsement, it matched his way of amplifying others’ tweets, tending to give them credibility within the Musk-iverse.

Lee’s tweet thread, along with Musk’s apparent concurrence, serves as an outline of the arguments the GOP may use to undermine faith in Social Security, the better to soften it up for “reforms” that will translate into costs imposed on retirees, disabled workers and their dependents.

I recently reported on all the ways that Trump could quietly or secretly undermine his pledge to protect Social Security. Lee’s thread and Musk’s apparent endorsement are different — they amount to a frontal attack on the program.

While delving into Lee’s screed, we should keep in mind that he’s a leader of the cabal with the knives out for Social Security. As I’ve reported, during his first successful Senate campaign in 2010, he unapologetically declared, “It will be my objective to phase out Social Security, to pull it out by the roots.”

Lee said that was why he was running for the Senate, and added, “Medicare and Medicaid are of the same sort. They need to be pulled up.”

So here he is, right out of the box.

Lee’s attack has four basic components. One is to bemoan the fact that Social Security is funded mostly by a tax, which he asserts the government can use for any purpose — not necessarily to cover retirement and disability benefits.

Another is to point out that the program’s reserves aren’t stored in individual accounts with workers’ names on them, but collected in “a huge account called the ‘Social Security Trust Fund.’”

A third is to claim that “the government routinely raids this fund. … They take ‘your money’” and use it for whatever the current Congress deems ‘necessary.’”

And a fourth is to complain that the trust fund is mismanaged: “If you had put the same amount into literally ANYTHING else — a mutual fund, real estate, even a savings account — you’d be better off by the time you reached retirement age, even if the government kept some of it!” He states: “Your ‘investment’ in Social Security can give you a return lower than inflation.”

None of these is a new argument — they’ve been swirling around the conservative and Republican fever swamp like a miasma for decades. They’ve been consistently refuted and debunked. Lee can’t be unaware of that. Some of his arguments have a tiny nugget of truth at their center, but in his hands are twisted and manipulated out of recognition. Consequently, we can label his claims for what they are: Lies.

Let’s examine them one by one. (I asked Lee via a message at his office to justify his tweets, but haven’t heard back.)

Yes, Social Security is funded by taxes. So what? Lee’s salary as a senator is funded by taxes too. Does that make it illegitimate? It’s true that once a tax is collected Congress can decide to spend it however it wishes. But it’s also true that the payroll tax was enacted jointly with the provisions of the Social Security Act that designated the revenue for Social Security benefits.

As Supreme Court Justice Benjamin Cardozo observed in 1937, writing for the majority in a 7-2 opinion upholding the constitutionality of Social Security, it was clear that Congress intended the payroll tax to fund the benefits, for lawmakers “would have been unwilling to pass one without the other.”

It’s proper to note here that no one has ever proposed diverting Social Security revenues for any other purpose without recompense — except Republicans such as Lee. George W. Bush proposed converting Social Security into private accounts, which would have been tantamount to such a diversion — and a gift to Wall Street money managers eager to get their hands on the program’s trillions of dollars.

But Bush’s 2005 privatization plan was stillborn and he quickly abandoned it.

It’s also true that the program’s revenues aren’t stored in individual accounts but in the trust fund. That’s right and proper: Social Security is a shared benefit; no one can know in advance what any worker’s benefits will be. They’re pegged to career earnings, but low-income workers get higher benefits relative to wages than higher-income workers. They’re also related to a worker’s personal and family situation — spouses, dependents, health and so on.

It also makes sense to invest the program’s revenues in a shared account, because large investments tend to perform better over time than those under the control of individuals, not least because that minimizes transaction costs.

That brings us to the notion that the government “routinely raids” the trust funds (there are two, actually — one to cover old-age benefits and the other to cover disability payments — but they’re generally treated as a single combined fund). The trust funds currently hold about $2.8 trillion in assets, all invested in U.S. Treasury securities.

Holding a T-bond, as anyone with the slightest knowledge of government fiscal policy is aware, means the bondholder has lent the money to the government, which can use it for any purpose Congress chooses and which must pay interest on the bond. Over the years, the government has used the money to build roads and other infrastructure and provide services. Using the borrowed money for these purposes allows the government to do so without raising income taxes, which would hit the wealthy harder than middle- or low-income Americans.

Lee should ask his well-heeled patrons if they’d prefer to pay higher taxes because the government couldn’t borrow from the Social Security reserves. Anyone have any doubts about how they’d answer? Me neither.

In any event, the financial transactions related to the buying and redemption of the program’s Treasury holdings are fully disclosed every year by the program trustees in their annual report.

What about Lee’s assertion that investing in “ANYTHING else — a mutual fund, real estate, even a savings account,” would make you “better off by the time you reached retirement age.” This statement is as solid a compendium of financial ignorance as one might wish, even coming from a U.S. senator.

To begin with, if Lee thinks the Social Security trust fund should be invested in something other than Treasurys, he can take that up with his colleagues on Capitol Hill. They’re the ones who have mandated, by law, that the trust fund can be invested only in Treasurys. Over the years, proposals to widen the portfolio have been raised and abandoned, for several reasons. Some were concerned about the potential conflicts of interest inherent in a government program investing in the stock market; others that the returns from market investments are too volatile.

Savings accounts? Is Lee kidding? The rate on savings accounts offered to the average customer of Bank of America, to choose a commercial bank at random, is 0.01% a year. As I write, a 10-year Treasury bond yields about 4.2% annually.

As for Lee’s assertion that “Social Security can give you a return lower than inflation,” the fact is that Social Security benefits are adjusted for inflation every year. They’re also lifetime benefits. Try to find an annuity plan that pays inflation-adjusted benefits for the life of the annuity holder and his or her spouse — for all but the richest people, it would be unaffordable or at least uneconomical.

Lee also reveals a fundamental misunderstanding about Social Security as a program. It’s not just a retirement program, but a combined retirement and insurance program.

Disabled workers — and their dependents — are entitled to benefits well beyond their contributions; the families of workers who die before retirement age receive benefits that include payments for children through age 17 — through age 18 if they’re in school. If those benefits were based on the balances in a worker’s individual account, then the families of those who have suffered untimely deaths could receive a pittance, running out while still needing help.

Lee concludes by urging his followers to “acknowledge the truth: Social Security as it now exists isn’t a retirement plan; it’s a tax plan with retirement benefits as an afterthought.” This is an outright falsehood. As it now exists, Social Security isn’t just a retirement plan, but a disability program. It’s funded by taxes, but to call retirement benefits “an afterthought” is so wrong it’s frightening.

What should we think about all this? Lee is a member of the Senate majority; his proposals could be a real threat to the program. The fact that they garnered an “attaboy” from Elon Musk should be their death knell. Let’s hope so.