highest since march, 2007, so we are moving in the right direction. only 28% are pessimistic, compared to 38% concerned last year. quality of life scores are up with 70% of voters saying the quality of life in the city is getting better or the same, but we have a quarter of folks who say quality of life has decreased. jobs and the economy continued to be ranked as the top issue for the city. about 24% of workers, second only to homelessness. the local economy and quality of life have improved, and we hope that all of you will join the chamber and the center for

economic development as we work together to create jobs and create a prosperous future for the city of san francisco, and i want to end by talking about the process of how we elect our leaders, which is an issue that is shared by the majority of folks in the city. the experiment out of maryland is a terrible way to select a leader. no person in san francisco should have any question about who they are voting for, how their vote will be counted, or whether their vote will be thrown away. it is extraordinary we are faced with such a situation. it should be one person, one vote, one time for a healthy democracy, and i think the people of the city agree with that with over 58% for runoff

elections versus 31% for voting, almost a 21 margin, and i think it is time for a change. i want to invite steve and back up to share more of the details, and i will take that. i should have an ipad. >> thank you, wayne. all of these results can be found at your table and on our website. chamber members will also receive an expanded report later this month in a quarterly print newspaper. although voters are optimistic about the future, they have no appetite for fee increases. good news for everyone in this room. look at these numbers.

75% oppose a congestion pricing feet. 60% oppose an increase in the parking tax, already at 25% sent. 53% oppose a new commercial rent tax. 53% oppose the restoration of the new vehicle license fee, and more than half of the voters opposing the licensee. nonvoters understand the connection between healthy and new businesses and job creation. if you talk about job creation, 61% to support a two-year payroll tax exemption for any new jobs created in san francisco, and 57% support a lower payroll tax if it creates new jobs. clearly voters get it, and i

think we owe those folks are round of applause -- are round of applause. as you will hear, our focus for 2012 continues to be jobs. the same is working collaborative lead to improve the economic development through good government and a commitment to the future. for 2012 the chamber has an aggressive agenda for jobs. we advocate for creating a favorable business climate and regulatory climate in which all businesses can grow and prosper. here are the priorities. reform the business tax once and for all. reduce panhandling and improving

the visitor experience. advanced solutions to create jobs. to continue to attract business to send francisco, our priorities are to invest in vital projects. the central subway and a new community benefit district to improve safety and commerce downtown, and we need to update its long-range economic development plan. the chamber will support initiatives to reform campaign finance and make voting. we have also joined statewide efforts to bring performance based budgeting and greater transparency to state and local government. sustained transparency depends on investments we make in the future. joining forces to create a city that can withstand a natural

disaster and prosper afterwards. government efficiency, and investing in our cities assets. now is the time to plan for the future. in the months ahead we look forward to working with the entire board of supervisors and business leaders across the city to develop more fair and equitable business taxation, which will make it possible for all companies not just to survive but to thrive, and in summary the 2012 agenda will focus on advancing these priorities, putting job creation first, encouraging government efficiency, and avoiding new burdens, and we will continue to hold our elected officials accountable. everyone is talking about jobs, but the real test is how do they

vote to? we invite you to enjoy your breakfast and review the poll results at your table. our program will begin in 10 ministers. now we will turn this over to the great staff at the marietta -- marriott, and who will serve 900 breakfasts in 10 minutes. thank you. [applause] they have been helping individuals and businesses meet their goals for 200 years while also supporting the growth and vitality of the communities they serve. they raise financing for local

government and nonprofit organizations in california provided more than $1 billion in community and development loans and contributed it over $23 million duto california chariti. please welcome maine who -- please join me in welcoming sarah gardner from j.p. morgan chase. welcome, susan. >> i got to put on my glasses. good morning. california is a state with many opportunities for growth. the people, facilities needed to serve to businesses as well. we are creating many jobs, including construction to build a brand shows, vendors to provide services, and employees to help our customers with

financial needs. we are honored to sponsor today's event, and it is my pleasure to introduce him. jim is the managing director and chief economist for j.p. morgan chase and works closely with our investment banking and government relations groups. in addition to publishing independent research on the economy and financial markets, his views are widely cited in the media. he is a frequent commentator on economic policy issues. he received his undergraduate degree from the university of illinois and holds a ph.d. in economics from northwestern university. today he will provide a national overview and update us on what to expect as we go forward in 2012. goo[applause]

>> good morning, san francisco. i love visiting san francisco. i get a lot of my ideas from here. not far from here is a place i liked to stay. goothe last time i was there, my door said, people who live within their means have no imagination, and that is not really responsible, but i liked that idea of imagination, because for people like me, it requires a lot of imagination, and the reason for that is when you are watching the economy, but you do not see is more

important than what you do see. the damage is very visible from a recession. what you do not see is the healing that is helping us get back on our feet. of when i think about the stock market, it is the place where the imagination is the lifeblood of voters. as you can tell, we do not need a lot of prompting. the equity market gets what is going on, and this has been going on since the spring of 2009. if you think about the stock market, when market recovers as much as it has, we are not that far from the peak in october, 2007. people say, aren't we getting ahead of things to? the way we normally figure out

whether the market is priced properly or not, we think about what is happening to earnings, the fundamental drives, and relative to the earnings from the corporate sector, the value of the stock market is not that expensive. the line is showing you price earnings ratios. good one more housekeeping details. for those of you who find it difficult to follow the economy, i would say if i am only allowed to look at one thing to figure out what is happening with the economy, i thing many of us would tell you to keep your eyes on jobless claims, a weekly.

what you will see is jobless claims laid on top of gdp growth. when you look at weekly jobless claims that come out, they are very noisy, but they echo a lot of the theme's going on in the economy, and if you will watch these carefully you will note it is 90% of the story. the picture is showing year it is coming down. just to give you a benchmark, 300,000. and we are now at the 350,000 level, so we are getting there. the pace is coming down, and this is why the tone in the economics community has turned more upbeat. we smell something coming.

where are we in the rhythm of life? we have a lot of experience stumbling and getting back on our feet. this is trying to give you an idea of where we are. we are kind of in the second inning of an economic recovery. two things i think are useful. last october, our economy recovered to our last speaker. -- our last keepeak. we are bigger than ever, but we are struggling. it is not sufficient just to get back where we were. our economy needs to grow constantly to keep everyone employed. that gives you an idea of where we need to be, and what it shows you is even though we have gotten back to where we were, we

are a long way from our potential, and this is where the job market took a long time to recover. we do not have a jobs problem. we have a growth problem. you cannot force people to hire if they do not have reason to hire, and that is why doing things to get growth going, that is the best way to get a recovery in the job market. if you look back, we are seeing more signs of this. second, our recovery has been very slow. is it credible to believe the u.s. economy can speed up eventually and get back to full employment, which is around 4 or 5% unemployment rate. in my mind, there are five factors are would like to throw

out for you that i think are really driving a lot of what is going on, and i think these are five factors you will be hearing a lot about, and they are what is pushing the economy back to full employment, and it requires you to stretch your imagination to see this. the real estate industry, what is different about today's economy and the past gunman and and home-building is depressed. -- and the past? home building is the press. -- depressed. we have been under building for several years. when you under build you help clean up the glut of housing that is out there. the inflated conditions in real estate our history.

almost everywhere you look, housing is affordable as it ever was, and number three, the job market for young people is beginning to stir. if you asked who suffered the most, the younger you are, the fewer people in your age group are working. on the margin, it is young people who are starting to see some signs of life in the job market, and you are seeing employment ratios by age group. there are a lot of folks who got out of college, could not get a job, get married, and if you do not have a job, you are probably going to godawful lot of decisions. that is a big impact on home decisions. the demand for housing is beginning to change, and this is why you are starting to see new

signs of life. there is the second team. we economists, when we are asked to figure out what is going on, our natural instinct sphene -- in sync is to focus on what is going on in the business sector. we are shareholders. we invest in projects the produce revenue far into the future, so i have always been condition when you are trying to figure out what is going to happen in the economy, look to what is going on in the business sector. when you look, it is quite spectacular, and you see that in this picture fan. it is more than 10% of gdp, and this is a trend that has been developing for a while.

this is partly a story of what the business community is doing to reestablish its health and partly what nation the economies are doing. what is important about this picture and going forward, and now is when trouble and now builds, used to see the warning signs showing up. good when we are too optimistic and wrong, things start getting squeezed, but what you can see is not only a arlin -- our profits not getting squeezed, margins are widening. businesses have a powerful incentive to start focusing on the future. think about growth, because when you are facing record margins, it tells you there is an incentive to grow.

i think this is an important reason for young people looking for jobs you may notice the business sector has gone from a defensive strategy to a more offensive strategy, and that is the key parts of what is beginning to drive our cycle, and for those of you complaining companies are just sitting on cash and not spending and now, a software belies those claims. a lot of technology, which is why the area is benefiting. initially our focus is on technology and trying to become more efficient. if you look at capital spending, what is telling you is businesses have strong incentives to be thinking about the future and focusing on expansion, and they are actually doing it. there is a third driver in this cycle. people are starting to notice more thaan more.

we are coming to the conclusion that americans do not make anything anymore. is all going to china. you can see all kinds of trends common and and unemployment is beginning to turn around, and the following things are going on. when we go through tough times, people get focused, and they reinvent themselves. that is what is going on now. no. 2, and the auto industry has gotten its legacy cause behind it. there is a new out of detroit. it is a lot more upbeat. it is still a very depressed level, which tells you this industry had a lot of upside. good if you let the value of the dollar, it is more attractive to locate operations in this

country than in a very long term, so to me, this is great to be a new story you hear. it is not going to be the same generator of jobs and it was in the past. it is a much more of efficient, high end sector, and i think manufacturing will be an important part of what is coming in the coming decade, whereas in the past decade we have been struggling with relocating house were to take the vantage of low cost of production. fourth, what is going on in the energy sector is unbelievable. there is a virtual revolution. the way the economists discusses this, when you discover new sources of energy, the price tells you everything.

the price of natural gas compared to oil is about $15 a barrel. oil is $107 a barrel. that tells you there is a powerful incentives to find out how we are using energy. it is the reason natural gas is making inroads into electricity, the reason they are bringing some of their shortfall to natural gas, and when you have a powerful incentive, the price of the same thing costs a lot less you know that is creating tremendous incentive to figure out, and i do not doubt there is going to be a lot of activity. you would have a hard time understanding why is there so

much buzz in north dakota, where even cows have jobs? anergy, there is a lot going on common and and it is creating a lot of activity. finally, when the central bank has the ability to drive short- term interest rates below long- term interest rates, they are teaching the incentives for taking risks, and they are having to do this because in the wake of the financial crisis, everybody has lost their nerve, and our confidence in the future has changed, so it requires so little bit of nudging to get people to invest in the future, and that is what we are beginning to see, and you cannot dismiss the power of monetary policy actions, and the federal reserve has made it really clear what their goal is.

their mandate is maximum employment subject to keeping inflation down, so as i think of what is ahead of us, i imagine we are slowly getting back on our feet. we have a very slow record of doing this, and those who believe this is a new normal, frankly, there is no history to this, and that is why i am optimistic. we are going to see more signs of optimism. one quick note about this. we all know california is struggling, but what i think is interesting is you are starting to see things moving. employment growth.

employment growth is outpacing the national economy, so there is something happening here. even though we still have a lot of damage from the real-estate market, california is a very diverse economy, and you're beginning to see new signs of life, and for those wondering what about us, as i look at the national economy, i see lots of signs of life coming back into the economy, but i think what we are seeing is more signs of lifting california, so i am going to leave it at that, and i think we have a fairly good year ahead of us. thank you very much. [applause] >> thank you, jim.

that was a great message not only for business leaders but our elected leaders around the room, so it sounds like there is a good reason to be optimistic, but we have to stay focused. as we look to the future, we do not have to look further than the technology industry to see what is driving san francisco's knowledge economy. goo mayor lee wants to make san francisco the technology capital of the world. as a result, not only did twitter the site tuesday in san francisco, a company acquired of market square property and is in the process of turning it into 1.2 million square feet of renovated office space that will

include over 100,000 square feet of retail. someday soon up to 10,000 people could be working in markets where -- market square or the plan residences within a two- block area, so a payroll tax exemption can truly revitalize the entire area. if you have any questions involving technology, we have some cards. write down your questions, and remember, you can tweet with us. our moderator this morning has spent her career discovering great entrepreneurs in tech hot spots all over the planet. lacey wrote the definitive spoke

not on the web 2.0 movement and released her latest book last month. it is a great boat. formerly, lacy was a staff writer for business week, a senior editor of tech crunch, and now she is the founder, ceo, and editor in chief. please foreign-made and welcoming to the stage our moderator, and sara lee lacy, and her panel of tech visionaries. welcome. goo[applause] >> i was just telling