Archive for the ‘California Economy’ Category



Three Weeks to Go: Krusty Holds Campaign Kickoff

Tuesday, May 18th, 2010

Casting himself as a populist who will “rein in greed,” Jerry Brown held the first official event of his campaign for governor Monday, promising to fight tax cuts for the wealthy, the repeal of climate change legislation and the scapegoating of public employees.

The attorney general, who has enjoyed the political luxury of laying low amid an uncontested Democratic primary and a concurrent brutal brawl for the Republican nomination, surfaced at a rally at UC Santa Barbara, three weeks and one day before the June 8 election. There, he assailed his GOP rivals as tribunes of the rich whose enormously expensive TV campaigns feed the “continuing corruption of the political process.”

“We have the ideas but we have to push back,” Brown told a crowd of about 200 students, faculty and staff who gathered on a gloomy day on a sloping lawn near the lagoon on the beachfront campus.

The other side, kind of the apostles of darkness and ignorance, are well heeled. They have great political consultants. And they intend to bombard the airwaves. It’s almost like a hostile takeover of the public airwaves and of democracy itself. We gotta’ fight back and you’ve gotta fight back and I need your help.

After months of avoiding campaign events, other than low-key fundraisers, Brown emerged on the trail with a raft of full-throated populist rhetoric and a notable shortage of specific proposals that went much beyond opposition to conservative policies embraced by Meg Whitman and Steve Poizner as the two battle for the right to oppose him in the general election.

‘Krusty the General portrayed both eMeg and the Commish as beneficiaries of the unregulated financial markets of recent years, casting their millions in campaign spending as symptomatic, not only of inequities in the economy, but also of the coarsening of political discourse in the nation.

Photos by Joseph A. Garcia, Ventura County Star

There’s no content there. It’s like, I don’t know who they’re appealing to, I don’t think they read much about the history of this country. Thomas Jefferson and the founders said we need an educated citizenry… it means when you’re having a campaign at least you could speak to the intellect and not to whoever they’re speaking too — they’re so banal.

If you want to know how to write and think, just look at those ads and it’s the exact opposite. I think, I don’t think they’re even healthy for the mind. I think they’re contaminating the children who may see these things.

Brown walked to the microphone with two pages of notes but wrapped them tightly in his hand in lieu of consulting them. His stump skills seemed rusty from disuse, as he winged his way through a 20-minute speech that careened from point to point on a course more disjointed than linear; several times, his sentences drifted off, before he ended them with an awkward “…anyway.”

At several points. he told his audience he wouldn’t name his foes, referring to them just as “two Republicans.” A moment later, he added:

“There’s two people. I’ll mention them – Whitman,” he said, before appearing briefly to forget the name of California’s state insurance commissioner, “and…Poiz…ner.”

Brown said that the type of campaigns being run by the two Republicans is partly to blame for the anger among voters and the low regard in which they hold government and elected officials.

That’s dangerous in a democracy, if the mechanism of our collective decision making is so discredited, what does that say about the viability of the whole set of our institutions? It is dangerous and you have a stake in this, your future is at stake here. It’s at stake in the continuing corruption of the political process, the degeneration of political discourse into the manipulation of these 30 second ads fed by massive sums made on Wall Street.

Brown repeatedly returned to the need for government regulation, saying the financial meltdown and the huge oil spill in the Gulf of Mexico both represent a set of Republican policies that is reflected in Whitman and Poizner’s desire to roll back AB 32 environmental regulations and to cut taxes for the richest Californians, policies he said he would resist.

They want to reduce taxes on the wealthiest people in the state and how’s that going to help you?

They say, ‘we only need police out on the streets,’ well, we need police in the corporate suites just as much because, boy, they can rip you off. Walk down the wrong street, yeah, somebody can hit you over the head and take your money, take your life, well, on Wall Street they really ripped us off…it’s the greatest bank robbery in the history of the United States, maybe the world, $11 trillion – there’s 11 trillion fewer dollars, about an 18% reduction in our wealth, that’s a big pay cut for America…

That was promoted by some of the same characters who are promoting these Republicans…We tried no regulation on Wall Street and that caused the biggest crash in the history, not just in this country, but the whole world…You need to rein in greed, you need to rein in risk…and that’s what this campaign is about.

Brown invited questions at the end of his talk, but danced around when asked for specifics about how he would change the tax structure and deal with the budget deficit, except to say he would encourage more “collaboration” between Democrats and Republicans.

He also equivocated when asked whether or not he supported furloughs for state employees to save money in the budget, except to say that he  believes the Republicans are unfairly casting blame on public workers:

They always want a scapegoat. What’s our problem? They say, ‘well, it’s the public employees, it’s the teachers, it’s the police, it’s the fire.’ No it isn’t – it’s the Wall Street people who destroyed 11 trillion dollars worth of our wealth. And I don’t know if we should have the same people who profited from that then take the reins of power, and not only have the money but the political power at the same time.

I think we ought to keep them separate and the best way to keep them separate is to separate the two Republicans from any chance of getting to be governor of California.

There were no injuries.

Jean Ross: “The Battle for California’s Future”

Friday, May 14th, 2010

Today the Governor will release his final “May Revision” – the document that updates budget estimates and policy proposals.

Release of the May Revision traditionally signals the end of spring training and the shift of budget season into high gear. And as much as we might have hoped otherwise, we’re not surprised by Schwarzenegger flack Aaron McLear’s statement that the May Revision would include no tax increases and “absolutely terrible cuts.”

Since January, much of the smoke from the smoke and mirrors “solutions” proposed by the Governor has dissipated. The state is likely to receive $3 billion to $5 billion in federal funds – but not the $7 billion unrealistically assumed by the Governor in January.

The state has won some legal challenges to past budget-balancing actions, but lost others. Unrealistic hopes that strong April tax collections would ease pressures on the budget have also dissipated, and the harsh reality of the state’s fiscal situation has begun to emerge from the Capitol fog.

We generally try to avoid hyperbole, but this year, it is fair to say that the battle over the budget that will soon begin is nothing short of a battle for California’s future.

Our public institutions and structures are battered, some near the breaking point.

Per student spending in California’s public schools has fallen so deeply as a result of recent budget cuts that we now trail the rest of the country by a greater margin than at any point in the last 40 years. Student fees have more than doubled in less than a decade in the California State University and University of California systems and more increases are in store, while 2009-10 budget cuts closed the door to the CSU and UC for nearly 20,000 students.

Cash assistance grants have been cut to 1989 levels and purchase half what they did 20 years ago at a time when one out of every seven mothers in the labor market finds herself without work.

While a litany of budget facts can be mind-numbing, they are also informative. The state is on track to spend $18 billion less this year than it did just two years ago – yet an almost identical gap remains. Just how large is that gap? Almost exactly equal to what the state spends annually for prisons and all higher education from community colleges to the UC and CSU and student aid.

By taking revenues off the table, the Governor places California firmly on a fast track race to the bottom. The glory days of California’s past were the direct result of investments in public structures from schools to transportation and health care. The state has not, and cannot, compete in a global economy with a workforce made up of individuals who were homeless or lacked health care as children and who were turned away from college as young adults.

By taking revenues off the table, the Governor also ignores one of the two major causes of California’s current budget crisis.

While the still-pervasive impact of the economic downturn is certainly the primary source of our current fiscal woes, over the longer term, a systematic erosion of state revenues – the $10 billion plus annual cost of tax cuts enacted over the past 15 years – ensures that the state faces bad budget times even when the economy is strong.

This last point bears mentioning, since the Legislature kicked off this year’s budget battles by digging an even deeper hole, approving hundreds of millions of dollars of new tax breaks on top of the billions of dollars of tax cuts enacted as part of the 2008 and 2009 budget agreements. All of which brings to mind the cover art from an old New Yorker in which artist Edward Sorel reserves the deepest ring of hell for “politicians who promised to cut taxes and balance the budget.”

There will be no happy ending to this year’s story.

The problem is too big and the options available just too few. However, there can be a better ending than the one promised by the Governor’s spokesperson. Craft the inevitable spending cuts so that they preserve the core capacity of the structures and policies that have served California well in the past.

Start the state on the path towards doing what it should and must do right: building a healthy future and providing a safety net for those who need one when all else fails. Go back to Washington, again, hand-in-hand with governors and lawmakers from around the country to make the point that prominent economists have made: state and local budget cuts threaten to derail an already fragile economic recovery.

Finally, the Legislature should admit that it made a mistake and roll back recent dark of night tax cuts. Lawmakers should also close loopholes in the sales tax that reward businesses that don’t create a single job in California and allow resource extractors to go untaxed.

So as the battle begins, the question remains: if this is a battle for California’s future, who’s going to fight for the future?

Jean Ross is the executive director of the California Budget Project, a Sacramento-based non-profit research group.

Measuring Goldman Taint; More on Arnold Flip Flop

Wednesday, May 5th, 2010

Alert readers might have noted that Calbuzz has, in recent weeks, paid a lot of attention to billionaire Meg Whitman’s links to Goldman Sachs.  They may also have gleaned that we kinda, sorta think that the stock spinning made possible by Goldman when eMeg was CEO of eBay, was, well, pretty darn unethical.

So when Steve Poizner pounced on eMeg’s Goldman taint, we gave The Commish a pretty good ride. But let’s be honest: Poizner’s not some poor schmo with a tin cup begging for nickels so he can run for governor. A zillionaire himself, he is certainly no Goldman Virgin.

In fact, back in 2004 when he was running for the Assembly, (as a Republican, btw when eMeg wasn’t even a registered voter, let alone a Republican – but we digress)* Poizner got himself a $500,000 loan on VERY favorable, preferential, best-customer terms (the federal funds rate + 60 basis points ) from Goldman Sachs. He repaid the loan about six months later, but he got use of the money at practically no cost – terms he was afforded because the loan was backed by his personal assets in a Goldman brokerage account (as noted in his 12/03 FPPC Form 700).

The whole loan and other complex Poizner/Goldman details are spelled out over at Whitman’s favorite conservative blog (at least she pays them huge amounts for her ads over there) Red County. The loan has also been noted here, here, here and here. Point being, the Whitman folks have shopped this one around, trying to suggest, “Hey, Poizner’s got just as much of a problem with Goldman Sachs as Meg does.”

But an exclusive Calbuzz analysis of the Goldman Sachs Taint of Scandal accruing to each of the candidates for governor – let’s not forget Attorney General Jerry Brown’s sister works there and the city where he was mayor had a credit deal with Goldman – demonstrates that the GSTS Factor for Whitman is 80%, compared to 15% for Poizner and 5% for Brown. (See chart above)

Bottom line: This is how smart, New Media Age guys and news gatherers avoid falling prey to the dreaded False Equivalence Syndrome – by scientifically analyzing the metrics and measurables of any given scandal – taking into account, of course, a margin or error of plus or minus 2.5 percentage points.

Terminator terminates T-Ridge: Gov. Schwarzmuscle’s stunning, 180-degree flip flop on offshore drilling near Santa Barbara astonished us for many reasons – not least of which was the utter lack of political grace he displayed towards his erstwhile environmental allies, whom he totally hung out to dry.

“Arnold loves to do that – it’s part of his control issues,” said former Assembly member and T-Ridge environmental  booster Hannah Beth Jackson. “Consistency and rationality have never bothered him in the least.”

In delivering a sudden and unexpected coup de grace to the fiercely debated Tranquillon Ridge project on Monday, Arnold totally blindsided the embattled coalition of Santa Barbara environmental activists who had put reputations, credibility and personal friendships on the line in fighting for the plan for the last two years.

Having appropriated for his own purposes a complex legal agreement over leasing arrangements that Santa Barbara’s Environmental Defense Center had reached with the Houston-based PXP oil company, Schwarzenegger couldn’t be bothered giving the enviros a heads-up before airily dismissing the painstakingly negotiated deal as if he were dispatching a fly, during the course of a press conference he’d called on an entirely different issue.

“We had absolutely no idea this was coming,” said Linda Krop, general counsel for the EDC, who spent nearly three years working on the PXP agreement, and who’d been enlisted by Schwarzenegger’s Department of Finance in his own, budget driven efforts to gain approval for it. “We were completely surprised.”

Krop only learned that Schwarzenegger had switched his position more than an hour after his press conference, when reporters started to call. The architect of the EDC-PXP deal,  she has long argued that giving the company  a short-term lease to drill into state waters, from a platform it already operates in federal waters, is a worthwhile trade off for its promise to end permanently most of its federally leased drilling in the region.

Whatever you think, as a policy matter, of the agreement she crafted – and environmentalist opinion was bitterly polarized on the issue – Krop is a smart, determined and passionate coastal protection advocate who’s paid her dues and deserves better than being dissed by a muscle-bound, metrosexual movie actor without a principled bone in his sagging body.

Whaddya mean you work for me? Of course, enviros don’t seem to be the only ones who failed to see Schwarzenegger’s switcheroo coming.

Last Saturday, Chronicler Marisa Lagos did a good piece probing whether the Deepwater Horizon catastrophe had triggered any rethinking within the Administration about its full-square support of the T-Ridge project. No effin’ way, one of Conan’s army of mouthpieces insisted to her:

As oil spewed Friday from a blown out well in the Gulf of Mexico and spread into Louisiana’s sensitive wetlands and rich fishing grounds, Gov. Arnold Schwarzenegger’s administration defended a plan to allow new drilling off California’s Central Coast.

A spokesman for Schwarzenegger said the proposed Tranquillon Ridge project off Santa Barbara County is attractive because the oil company behind the project has agreed to end drilling off the coast in exchange for a permit to do so for the next 14 years…

“This doesn’t really change anything, because we’re looking at a platform that’s already in operation,” said Jeff Macedo, the governor’s spokesman. “If anything this makes the T-Ridge project that much more important, because it would put a sunset date on when it shuts down.”

Oh, never mind.

Two days later, Schwarzenegger stood before reporters and sounded exactly the opposite opinion.

Without the simple courtesy of telling someone to pick up the phone and let the pro-T-Ridge environmentalists know what he was about to do, Arnold instantly and categorically rejected the entire environmental argument in favor of the project.

He not only turned his back on his previously stated certainty that the PXP deal, by aiming to close out currently open-ended federal offshore leases, would actually make an oil spill near Santa Barbara less likely; he also shrugged off the importance of the $100 million the project would have brought to the state annually – after more than a year of thundering about the crucial importance of that money to California’s fiscal condition.

Not surprisingly, he said he changed his mind after watching TV.

* correction

New Polls: Poizner Inching Up, Tom Beating Carly

Thursday, April 22nd, 2010

It’s not much to bank on, but Steve “The Commish” Poizner appears to have knocked eMeg Whitman down below 50% of the vote in the race for the Republican nomination for governor, according to a new public poll.

Following surveys in March from the Field Poll and the Public Policy Institute of California, both of which showed Whitman with better than 60% of the vote, a public poll by Capitol Weekly – this time with Republican and Democratic pollsters collaborating – finds eMeg leading The Commish 47-to-19%.

In addition, the Capitol Weekly survey found Tom Campbell solidly leading the GOP race for U.S. Senate, with 31% of the vote, ahead of Hurricane Carly Fiorina at 17% and Chuck DeVore, R-Stonehenge, at 14%, by far the strongest showing to date by the Orange County legislator.

“The good news for Jerry (Brown) is that Meg’s going to have to sweat this out,” said Ben Tulchin, the Democratic consultant on the poll. “In the Senate race. Fiorina is going to have to start bashing Campbell – she’s running out of time.”

There’s also a Rasmussen Poll – which Calbuzz dislikes because they do robo-calling and don’t disclose their methods – that shows Democrat Crusty the General Brown running ahead of eMeg in a November contest. More intriguing was Rasmussen’s finding that seven in 10 voters like Brown’s idea for three-way pre-primary debates with Whitman and Poizner.

Now, those numbers in the GOP governor’s race might not be much to brag on. But that didn’t stop Team Poizner Communications Director Jarrod Agen:

“Meg Whitman’s candidacy was always like one of those French soufflés one of her private chefs would cook up on her private jet — full of expensive air and destined to deflate.  All of Meg’s Goldman Sachs riches can’t convince California Republicans that we need a Barbara Boxer supporter as our nominee.  The numbers are moving as we expected, which means in this year’s general election Republicans will finally get a chance to vote for a Republican for Governor.”

The Whitman people – claiming that their internal polling has the race 55-24% for eMeg — smell desperation wafting out of the Poizner camp.

“In February, Steve Poizner had a favorable rating of only 15% and an unfavorable rating of 10%. Now, Steve Poizner’s favorable to unfavorable rating is 26% to 30%. For every one Republican voter that became positive to Steve Poizner two Republicans became negative,” wrote Whitman pollster John McLaughlin in a survey analysis.

“The fact of the matter is that Republican primary voters personally like Meg Whitman and when they get to know Poizner, they just dislike him. For that reason alone winning the Republican primary for Steve Poizner is hopeless and pointless,” McLaughlin said.

Conservative pollster Adam Probolsky surveyed 751  registered voters with a past history of voting April 10-13. The survey’s margin of error is +/- 3.7%. Democratic pollster Ben Tulchin of San Francisco consulted on the survey, ensuring a partisan balance.

While the survey – based on a projected June primary electorate — did not include November match-ups, the pollsters did ask this question:

“Thinking about the economy and jobs, which candidate for Governor do you think would do the best job?”  Interestingly, Brown – a career politician — pulled 32.5%, compared to 30.5% for Whitman and 9.2% for Poizner – both of them Silicon Valley business veterans.

Predictably, 53% of the Democrats gave Brown the edge on the economy and jobs, compared to 14% for Whitman and 4% for Poizner. Among Republicans it was 54% for Whitman, 18% of Poizner and 7% for Brown.

But among independents and others it was 29% for Brown, 25% for Whitman and 6% for Poizner suggesting that — for whatever reason — when party is not a factor, voters appear to trust Brown more than the two business executives on the economy and jobs. At least for now.

Said Brown spokesman Sterling Clifford, with a touch of glee:  “There’s only one candidate in the race who’s actually guided the state through a recessionary period and who, in eight years, helped create 1.9 million jobs.”

Live from Los Angeles: Donkeys Run Wild

Saturday, April 17th, 2010


The big news at the convention: Jerry Brown challenges Meg Whitman and Steve Poizner to a three-way, pre-primary debate. It has to be all three of them, he said later at a news conference. More from Calbuzz on Jerry’s intriguing proposal to come.

11:10 Treasurer Bill Lockyer is challenging Meg Whitman’s assertions that California has one of the largest state governments and highest state tax rates in the nation, using a blizzard of stats and assailing Republicans for “selfish, scare-mongering, stupid and silly” policies.

10:33: The diminutive Barbara Boxer is asking delegates to stand with us against “Wall Street on steroids” and to join her in making California the hub for clean energy jobs  and ending tax breaks for corporations and the rich and add tax breaks for the middle class and small businesses.

Biggest whoppers: Boxer boasting of “working across party lines” on Capitol Hill and making a priority of reducing  the deficit. Best Line: Talking up health care as a big positive for Dems, she said: “Why would I want to pull the plug on grandma – I am grandma!”

10:24 Boxer was introduced and came through the center of the convention platform to a loud and enthusiastic non-spontaneous demonstration to the sounds of “Aint’ No Mountain High Enough” by Tammy Terrell and Marvin Gaye.

10:00 Chairman John Burton introduced Secretary of Labor Hilda Solis as “the only liberal in the Cabinet.” She delivered a tough partisan speech in which she challenged Republicans to campaign on a platform of opposing health care: “Bring it on,” she said repeatedly.

9:30 – After taking two buses, three cabs and a shuttle, Calbuzz finally made our way from the J.W. Marriott lobby to the L.A. Convention Center at the far end of the Earth.

Barbara Boxer scheduled a press conference before her speech. When she walked in, she went out of her way to greet Mickey Kaus, the pioneer blogger who’s filed a Democratic primary challenge to her. “I wanted to meet my opponent,” she said shaking his hand.

Kaus, who’s been banned from addressing the convention, told us he was allowed to come Boxer’s newser on condition he not ask any questions. In other non-news, Boxer said two reasons that the polls are close in her race is that she has “three strong (Republican) opponents who’ve been beating her up for months and voters haven’t been“paying attention to what I’ve done.”

In response to Calbuzz, she also offered a strong endorsement of AB32, arguing that Gov. Schwarzmuscle’s climate change legislation is necessary to jump-start a green energy industry in the state.  A batch of assembled press and bloggers had a bunch of questions left, but Boxer’s handlers cut it off at 9:45, saying she had to go make her speech to the delegates.