Schwarzenegger and California Misgovernance

Sometimes I find an analysis that states the points I have been trying to make so well that I simply marvel. I found such a piece by Los Angeles Times columnist Michael Hiltzik in the paper's May 21 edition. You can go to the original and read it here. Written the day after the crushing defeats of the budget propositions Governor Schwarzenegger helped broker through the legislature, Hiltzik's piece details the lies that have brought the state's fortunes to their current point and the opportunity the governor had to fix things but squandered. Hiltzik's opening is right on the money:

Schwarzenegger had the kind of voter support in 2003 that would have allowed him to tell the voters the harsh but necessary truths about California governance and force real reforms down their throats. Instead, he uttered the same lies about state government and proposed many of the same nostrums as many of his predecessors: Californians are overtaxed and underserved, the budget can be balanced by cutting waste, fraud and abuse, etc. Like everyone else who has made these claims, he never delivered on his promise. His cut on the car tax cost the state $3.6 billion per year, making him directly responsible for pretty much all of today's $21 billion deficit.

He then goes on to demolish the, "lie that Californians are burdened by the highest state taxes in the nation." He cites U.S. Census figures from 2006 to show the state ranks 18th, and that, despite continual bleating from the Chamber of Commerce, Schwarzenegger and others, the burden on the rich is extremely light. "The top 1 percent of California income earners (average 2007 income $2.3 million) paid 7.4 percent of their income in various state taxes, counting the federal deduction for state taxes." In contrast, "the highest rate was paid by the poorest residents. Those earning $20,000 or less, with average income of $12,600, forked over 10.2 percent of their income."

As rational observers (including me) have long noted, "California's voters have been trained for too long to think they can have roads, schools, universities, clean air and other amenities without paying their true cost." Afraid to tax people as much as it would take, yet afraid to cut the services they expect and demand, politicians have refused to level with the people or make the realistic tough choices involved. So services deteriorate, especially at the local level, and "Voters get more cynical, more convinced that government is expensive and useless. It's a vicious cycle." By virtue of his early popularity, Schwarzenegger had a "golden opportunity" to correct these sophistries, but chickened out and failed to live up to his action hero image. He turned out to be a "girly man" himself.

Hiltzik's remedies are some of the same ones you have been reading here for quite some time: 1) "Eliminate, or at least seriously loosen the two-thirds legislative requirement to pass a budget or raise taxes." It gives the extremists at both ends the balance of power. 2) "Remove legislative term limits." They ensure inexperienced legislators. As Hiltzik asks of the years since 1995, "You want to tell me that government in Sacramento has improved since then?" 3) "Revise Proposition 13." It makes it impossible for localities to control their own revenue and leaves them at the mercy of Sacramento, which robs them to fund itself.

Schwarzenegger has lost his chance, his reputation now tattered beyond repair. It remains to be seen if anyone in the current crop of hopefuls will have the intestinal fortitude to tell the people how it really is. Or for that matter, if the electorate, fed on placating fairy tales for so long, will be able to accept the truth if someone ever does give it to them.

Proposition 8 Ruling

The California Supreme Court turned in a disappointing but predictable and legally coherent ruling on Proposition 8, the ballot measure that overruled gay marriage in California last November. The Court, presented with a narrow argument, decided by a 6-1 vote that the State Constitution gives the majority of voters extensive powers to rewrite the Constitution, and that therefore their will should stand. The decision was about a technical or structural issue, not about equality in the broad sense.

The Court showed what it really thinks about marriage equality by ruling in the same decision that the 18,000 same-sex marriages performed between July and November of 2008 will remain valid and recognized by the State of California. So in terms of equal rights, the Court feels same-sex marriage is justified. It also appears to validate an ex post facto concept by ruling that something that was legal when it took place cannot then be made illegal by a law or even a constitutional revision passed after the fact.

If those bringing suit against Prop 8 had based their argument on equal protection they might have gotten a favorable ruling. By instead focusing on the technical issue of whether Prop 8 was a sweeping or narrow change in the California Constitution they instead got a ruling on that narrow and technical issue.

In the long run, though, this may turn out for the benefit of the proponents of gay marriage. If it had been reimposed by court order after losing at the polls it would have sparked extreme anger among the opponents of same-sex marriage, who would have felt the will of the people was being subverted by "judicial activism." Such a development would have strongly energized the religious right and older traditionalists.

Instead, now the equal rights supporters are the ones with the cause and momentum on their side. Gay marriage was opposed by 41 points, 68% to 27% according to Gallup in 1996. In 2000 when Californians voted on Proposition 22, which defined marriage as only between one man and one woman, it passed by 22 points, 61% to 39%. The anti-gay marriage position had already yielded 19 points of its margin. Just seven years later that margin had shrunk by another 18 points, down to 4, as Proposition 8 passed in 2008 by just 52% to 48%.

Both Democratic Senator Feinstein and Republican Governor Schwarzenegger released statements Tuesday saying it was only a matter of time before California legalizes same-sex marriage by the will of the people. Given the trend since 1996 and exit polling that indicates under-30 voters opposed Prop 8 63-37%, these are clear signals that time is on the side of marriage equality for gays and lesbians. When it does come it will almost certainly be by the decision of the voters rather than the judges, and that will confer greater legitimacy to the public at large.

But that still should not, in this view, give the courts a pass for ducking tough questions. Constitutional rights are not at the whim of the voters. If it had been up to the voters alone many states would still be racially segregated to this day. For now, we will have a strange mixture in the Golden State. There are 18,000 same sex-couples with recognized marriages. But many thousands more who might wish to do likewise will not be allowed to. And what will happen when the first of these 18,000 files for divorce? In 2010 or 2012 the question will be on the ballot again. And sooner or later it is going to win.

What Cage Fighting May Be Telling Us

I've been wondering about the apparent increase in the popularity of cage fighting lately. It's being shown on television and is becoming a regular attraction in Las Vegas and even at the Indian Gaming/Entertainment venues in my area. An explanation suggests itself to me.

First of all, abhorrently violent spectacles are nothing new. Our classical forebears had their gladiatorial combats, our medieval ones their jousts and trials by ordeal, and our early moderns their bear baiting, public hangings and witch burnings. But most of these seem to have abated in recent centuries. Even ones we have retained, like boxing, have somewhat civilized, with gloves and the Marquess of Queensbury rules replacing bare knuckles and anything goes. So something like cage fighting looks to be going against the grain.

But on the other hand, it appears part and parcel of a more violent focus currently underway. More and more violent video games, movies, and even musical lyrics have gone along with an upsurge in gangs and mass murder shootings in recent years.

It seems to me that when young men, especially, lack confidence in their ability to function and succeed in society they fall back on machismo and physical prowess to validate themselves. Young men, in particular, crave respect. When times are good for young men who are not academically inclined to provide for themselves, as in the 1950s, these violent urges are muted. When they are not, such as in the 1930s and now, they come to the fore. I think if we are to address a host of social problems we must find ways to engage and find places for what used to be called blue collar youth to work at jobs that provide them a living wage and promise of some stability.

Those who talk only of economic efficiency (i.e. greater productivity at lower and lower labor cost) do not seem to realize that may come at a high social cost. Frustrated young men are angry and often violent young men. Depending on their environments and perceived opportunities and options they are prone to become gang bangers, terrorists or maybe just cage fighters and their fans.

Most Beautiful Place in the World

Everyone has their own preference for natural beauty. Some like the stark desert while others love seascapes. I'm partial to mountain scenery. One of the bonuses of moving to Central California ten years ago is proximity to the Sierra Nevada. My wife and I will be spending the weekend in what is to me the most beautiful spot on Earth, Yosemite.

El Capitan, Glacier Point, Yosemite Falls, Half Dome. All these world famous landmarks are all in view at the same time. Late spring should see Yosemite, Bridal Veil, Nevada and all the other waterfalls at peak volume. The world's largest single exposed block of granite, El Capitan, stands sentinel over the entrance to John Muir's "heavenly valley." Fantastic glacially-scoured miles-long walls of stone hang thousands of feet over your head on all sides with a picture-perfect river and flat valley floor of meadow and forest in your foreground. The flora, the wildlife, the mountains, the roar of cascading water and the clouds of mist make this an unforgettable and awesome spectacle.

The national parks, sometimes called "America's best idea," are a treasure trove of gems. And Yosemite is my favorite of them all. If you would like to help preserve America's wonderlands and historic heritage, I'd like to recommend a membership in the National Parks Conservation Association for your consideration. You can go to their website here.

A Good Day for Consumers and the Environment

Elections do have consequences. Today came an announcement from President Obama that serious mileage improvements and pollution requirements for cars and trucks sold in the U.S. will take effect in 2016. In another development, the Senate voted 90-5 to rein in some of the worst abuses of the credit card industry. The changes illustrate both the positive effects of the election of a new administration and congress, but also the limitations inherent in the system of how things work in Washington.

The auto changes come from an agreement apparently hammered out between the White House, congress, U.S. automakers, the UAW and the state of California. Members of all these groups stood behind the President as he made the announcement on the White House lawn. By 2016 fleets will have to average 35.5 miles per gallon and emissions will have to be cut by about 30%, including carbon dioxide. These are consequential requirements that will help on global warming and put a dent in our reliance on foreign oil.

On virtual life support from the federal government and badly wounded by the recession, Detroit dropped its opposition and finally went along. They had been fighting California's attempt to enact strict standards in court since 2002 but finally gave up. Better to strike a deal with the Democrats in power than stick with the Republicans in opposition, they must have figured. The way Washington works, they will now have influence on regulation over themselves, an important byproduct for them for the future.

The credit card companies will be restricted on some of their higher rates, will have to spell out their policies clearly in plain English and will have to give 45-days notice for most rate increases, among other things. The Senate bill is similar to a House bill passed earlier by a vote of 357-70. One downside of the bill is an amendment by Republican Sen. Tom Coburn that would "bar the Interior Department from prohibiting individuals from legally carrying firearms inside national parks and wildlife refuges." Great. Just what we need, more lunatics with guns in public places. Why not sticks of dynamite too, while we're at it?

The other problematic feature is the rules won't go into effect for nine months. We can expect the credit card lenders, who assailed the bill for as they termed it, restricting their ability to extend badly-needed credit, to use that time to gouge people as much as they can and put new rules in place to rip people off in whatever ways their lawyers find the new regulations haven't closed to them. These are the kinds of struggles that never end.

So in these two announcements today we see both the efficacy of change through the election process but also the persistence of some of the same old habits and processes that always mitigate the full scope of what can be accomplished. Still, by D.C standards it was a very good day at the office for Barack Obama, Democrats, consumers and the environment.

Dick Cheney: Darth Sinister

A pattern of increasing desperation on the part of the perpetrators is evident in the ever-unfolding drama over the Bush Administration's torture policies. It should be clear by now why former Vice President Dick Cheney is out in front of a camera seemingly every day now. He is trying to save his tail from the slammer.

The principal question regarding the issue of torture has gone through several stages, each based on the rationalizations or alibis dreamed up by the war criminals themselves in the face of each successive revelation. At first the issue was whether it was happening. After Abu Ghraib that became whether it was the work of a few bad apples. After it became clear senior officials gave the go-ahead the next dodge was whether it was illegal. Of late that one has morphed into whether it was effective. The latest is a question of the date Nancy Pelosi first knew about it for certain.

The one thing these excuses all have in common is their irrelevance to the matter at hand. The United States Constitution, U.S. statutes and the United Nations Charter (as a ratified treaty it has the full force of U.S. law) have all been violated. If we are a nation of laws under the rule of law we cannot pick and choose the laws to follow when it is convenient to do so.

The excuses offered are strikingly reminiscent of the same kinds of sorry devices I heard from adolescent miscreants as a middle school teacher for seventeen years: I didn't know it was against the rules. I was just holding it for somebody else. It was somebody else's fault. You're lucky it wasn't something worse. Everybody else is doing it. So-and-so saw me and didn't say anything. My other teacher said it was okay. This other guy told me to do it.

The more they try to explain and excuse their way out of it the deeper into trouble they get. The more lies they have to tell to cover up previous lies the more obvious everything becomes. What a sinister creep Dick Cheney is. So are his fellow travelers, people like David Addington, John Yoo, David Bybee and so on. They remind me of former Chilean dictator Augusto Pinochet and his cabal. The world canot afford a United States of America run by people like that. It is time to clean out the rot--all of it.

Compromise Talk Is Just That

There has been much talk over the past few years about how tired the American people are with excessive partisanship. Surveys have shown people are fed up with it and would like to see more problems solved in a collegial manner. That had a lot to do with Barack Obama's appeal in the recent presidential election. It similarly had a lot to do here in California with the election of Arnold Schwarzenegger as governor in 2003.

But when it comes down to it, there are a lot of indications that while many welcome a tone of civility, they really aren't much interested in compromising to get things done. They want their way on things. A lot of the talk about compromise appears to be just that, talk.

As a case in point, a new poll released today shows the California budget propositions 1A through 1E all losing, by 9 to 14 points. You can read about it here. These propositions are a quintessential compromise. They came after eight months of wrangling and gridlock in the California Senate and Assembly. They were made necessary only because the state's 2/3 requirement to pass a budget gives the Republican minority an effective veto.

Both sides had to agree to some things they hated in order to reach a bargain. Democrats, who would rather have preserved programs and raised taxes, agreed to $15 billion in cuts. Republicans, or at least a handful of them, who would rather have cut much more deeply and not raised taxes, agreed to $12 billion in tax hikes. It reads like a primer in the art of political compromise, and theoretically appears to represent what the voters have been asking for. Governor Schwarzenegger and the powerful California Teachers Association are supporting the deal, have raised six times the money of the no advocates and have been running ads in favor of the propositions. All to no avail, if the polls are right.

The Democratic Party convention could only muster the votes to endorse two of the five structural initiatives. Republican organizations are nearly unanimous in their rejection of all five. Too many Democratic activists and partisans would rather have no deal than agree to cuts in programs they feel are worthy. Too many Republicans would rather have no deal than agree to raise any taxes. The people are, in short, acting just like the politicians they purport to disdain. Make no mistake, if the propositions fail there will be blood. You don't fall 30% short of balancing a budget without repercussions. Prime conservative favorites like police, fire and prisons will have to lay off thousands, release convicts and so on. Major liberal favorites like schools, environment and children's health will have to be drastically slashed as well.

People are mad and of a mood to cut off their noses to spite their faces. An old saw tells us, "People generally get the kind of government they deserve." That seems as true now as ever.

Thoughts on Health Care

Yesterday President Obama and the representatives of six major health industry interests stood together at the White House and proclaimed their determination to rein in the industry's rising costs and produce reform this year. In terms of tone and a photo op, it was big news. As a matter of substance, it left more than a little to be desired.

Voluntary targets; where have we heard that before? The conventional wisdom is that the HMOs are making nice in order to avoid stringent regulation. Reducing the growth rate of increase by 1.5%, even if achieved, would leave that rate of increase above inflation, and thus still unsustainable.

For a new system to be credible it must first be universal. People cannot be left without access to coverage because they are not well and thus unprofitable for someone to insure. Three things are needed in whatever plan emerges. One is that there must be a public component in the mix. Another is that outcomes rather than just treatments must be incentivized. Finally, people must have a choice of physicians.

From his days as a candidate Obama spoke of a system in which people could join a public-sponsored plan or keep private insurance. Powerful interests will try to scuttle the public provision. They must be resisted if the new system is to accomplish much. On the surface one would think their belief in the innate superiority of privatism should make them welcome and even relish competition with a government-paid program. The fact they are so afraid of it and will try to kill it is clear evidence of their belief in the contrary. They know a system like medicare will save consumers, be they the public as an entity, individuals or business. Once in place such a system will likely gain the majority of the national business. If such is not included in the overall plan it will be clear evidence that business as usual has won the day.

Enormous improvements in cost and public health can be achieved by incentivizing outcomes rather than tests and treatments. For instance, British doctors get a bonus when a patient stops smoking. There could be similar incentives for when patients lower their cholesterol or reach or maintain a healthy weight for their height. These are the kinds of intelligent ideas that will cost a little up front but save much larger sums down the road in treatments for serious diseases and conditions.

These, then, will be the hallmarks of a plan that brings America into the modern world. No first-world nation should have one-sixth of its citizens uncovered for medical care or have medical expenses as its second leading cause of bankruptcy. Former Vermont Governor Howard Dean's organization, Democracy for America, is leading the campaign to make sure a public component is included in the new health care mix. To register your support click here.

Villines Out, Slash and Burn In

California State Assembly Republican Leader Mike Villines resigned his post yesterday and will be replaced by Sam Blakeslee of San Luis Obispo effective June 1. Villines wrote his GOP political epitaph by agreeing to the budget compromise with Gov. Arnold Schwarzenegger and legislative Democrats in February that broke an eight-month impasse. You can read the Fresno Bee story on it here.

Staying true to form, the heavy majority of Republicans would rather shut down the state and gut its economy than settle for less than their entire way on anything. So Villines is out. Villines hails from Clovis, a wealthy suburb of Fresno and a place where Republican candidates typically come to pad their war chests at campaign time. His apostasy came from his realization that, in his own words,

There's no doubt about it - the budget we passed was a compromise in every sense of the word. It included many things that were abhorrent to Democrats and Republicans. For me, I profoundly disagreed with the taxes.

But the consequences of not passing this budget compromise were significant. Californians would go without over a billion dollars in tax refunds for the foreseeable future, our credit rating would drop to junk bond status increasing borrowing costs, counties and small businesses that work for the state would go unpaid, forcing many to declare bankruptcy and triggering mass layoffs. Not to mention the loss of services to seniors, children and those with special needs

.

You can read his entire statement on the compromise here.

The compromise includes $15 billion in cuts and $12 billion in tax increases to solve most of a projected $42 billion budget shortfall. The rest is to come from borrowing against future state lottery revenues, the federal stimulus and a couple of other fixes. Democrats hated the cuts as much as Republicans hated the tax hikes, but the leaders of the respective parties finally came to the rational conclusion that both sides would have to give some to close such a huge gap. The fact that Republican legislators had any say at all in the matter only owes to California's idiotic 2/3 requirement to pass a budget. The GOP holds only 29 seats in the 80-member Assembly and 15 in the 40-member Senate.

Senate Democratic leader Darell Steinberg said Villines, "courageously transcended party politics to do what was right for the state during a true economic crisis." But Villines was roasted in Republican circles and in the conservative blogosphere for deviating from the ideological line. Jon Fleischman's FlashPoint conservative blog, for instance, said, "He damaged the brand name of Republicans and he made it very difficult to say we are the party of lower taxes." These folks place rigid obeisance to ideological orthodoxy over any practical consideration whatever. They seem to have no awareness that even their icon Ronald Reagan agreed to a hefty tax hike in California as governor and another on Social Security as president when the books couldn't be balanced any other way.

It seems the proponents of slash and burn governance are about to get their way, too. The ballot Propositions necessary to activate the compromise all appear heading to defeat, according to a poll done by the Public Policy Institute of California. Read a complete article on that here. With Republicans angry at the tax hikes and Democrats upset over the cuts, the compromise settlement is in real jeopardy of being rejected by the voters. If that happens, does anyone think Villines, fellow Republican Assemblymen Roger Niello and Anthony Adams, and Senators Dave Cogdill and Roy Ashburn, who have all been raked over the coals for supporting the compromise last time, will be more amenable to compromise next time around?

Not bloody likely. Instead, what we're likely to see is a government shutdown, the layoffs of tens of thousands of state and local workers and the cancellation of state projects resulting in layoffs for tens of thousands more in the private sector as well. This is precisely what the economy does not need during a recession. The Titanic may be going down, but the band plays on and the deck chairs are nicely arranged.

Offshore Taxes Key Test of Change Agenda

When Senator Barack Obama was a candidate for president his consistently loudest applause line was, "We've got to stop rewarding companies with tax breaks for taking American jobs and shipping them overseas." Today, May 4, President Barack Obama began the fight to make that sentiment policy. He faces daunting odds. Whether he succeeds will provide the clearest picture yet of whether the new president and his party have the guts to make truly difficult change or whether, when it comes down to it, business as usual still has the upper hand in D.C.

You can see Margaret Talev's report on Obama's White House announcement for McClatchy here. "I want to see our companies remain the most competitive in the world," Obama said. "But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring jobs to overseas tax havens."

To accomplish this Obama wants congress to end the "check the box" rules that let U.S. companies set up shell subsidiaries in tax havens such as Bermuda to avoid paying taxes. He wants to eliminate the loophole that allows firms to avoid taxes on overseas profits if the profits are kept overseas but taxes them if they re-enter the U.S. He also requested giving the IRS legal authority to get more information from foreign bank accounts to fully track money trails. And he wants congress to approve the hiring of 800 new IRS agents to enforce the rules. Obama feels an additional $210 billion can be collected over the next 10 years if his plan is adopted.

To illustrate the level of abuse, the White House says the "effective U.S. tax rate on U.S. multinational corporations as of 2004, the most recent year of data, was 2.3%." Eighty-three of the one hundred largest U.S. corporations had subsidiaries in tax havens. Bermuda, the Netherlands and Ireland, all low-tax countries, accounted for a ridiculous one-third of all foreign profits claimed by U.S. multinationals.

U.S. Chamber of Commerce spokesman Marty Regalia predicted wreck and ruin. Longtime Republican corporate shills like Senate Minority Leader Mitch McConnell charged the plan with giving "preferential treatment to foreign companies." Business giants including Microsoft, DuPont, General Electric and Eli Lilly and "more than 200 companies and trade associations have gone on record in opposition to the move since March."

Opposition from these usual quarters is expected, of course. What remains to be learned is whether a popular president who campaigned on the issue and gained the enthusiastic support of the electorate for it, and his ostensibly progressive congressional majorities can prevail against the money, media blitz and right-wing talking head offensive that will soon be unleashed against the principle that corporate entities should pay their fair share. We shall see. If Obama and the true congressional populists can indeed pass a bill that means anything in the face of such powerful forces I will be impressed--and surprised.