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Posts Tagged ‘Michael Hiltzik’



Texas Gov Shovels Cow Pies About California

Monday, February 14th, 2011

Rick Perry, the blow-dried blowhard  recently re-elected as the Republican governor of Texas, was back at it last week, trying to puff up his national political prestige by dumping all over California.

This loudmouth clodhopper loves to boast about his economic development “hunting trips,” which he falsely claims have led a stream of companies to flee the Golden State for the Lone Star State. In that vein, he told a Washington gathering that  “California businesses are going to keep relocating out of that state,” according to a Richard Dunham dispatch:

In a speech to the Texas State Society in Washington, he cited California’s tax burden, its fiscal mess and its failure to adopt tough tort reform as reasons why its businesses are leaving. Unlike California, he said, Texas offers businesses headquartered there “a stable platform.”

Talk about big hat, no cattle.

The anti-evolution theorist Perry, who harbors delusional dreams of living in the White House, likes to travel the country bragging on what he calls the “Texas Miracle.” In this political fantasy, the low-tax, low-service government of America’s reddest state fuels a mighty engine of recession-proof economic growth, in sharp contrast to the policies of the  bluest in the nation.

But as the Calbuzzers in our Southwest Region and Turquoise Jewelry String Tie Bureau like to say: “Never kick a cow chip on a hot day.”

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Beyond Tom Meyer’s splendid sum-up cartoon today, recent takedowns of Texas by prominent economic columnists, from the estimable Michael Hiltzik to the hysterical Paul Krugman have shown that, by a wide variety of measures, Perry’s miraculous narrative is a fabrication.

Because Texas has a two-year budget – and because it was propped up by billions in federal spending from the stimulus bill that Perry never tired of hypocritically trashing — he dissembled throughout his re-election campaign, bloviating about how his right-wing fiscal policies had put his state into surplus, while California wallowed in red ink (loyal readers will  also recall that Meg Whitman, who like Perry has but a passing acquaintance with the truth, often pointed to Texas as a model of how she would govern if she beat Jerry Brown. But we digress).

But when the bill came due, shortly after Perry’s inauguration, it turned out Texas faced a $25+ billion, two-year deficit (representing about the same percentage of its total budget as California’s), along with high unemployment, plus education and health care services among the lowest in the country. As Hiltzik puts it:

The bottom line is that fashioning fiscal policies strictly along low-tax lines doesn’t protect you from budget deficits or business slumps or make your residents necessarily happy or healthy…

While Texas Gov. Rick Perry sucked up to the tea party, declaring himself opposed to “government bailouts” and prattling about seceding from the union, he papered over his state’s budget gap with $6.4 billion in Recovery Act funds, including increased federal handouts for education and Medicaid. So when you, the California taxpayer, hear talk of the Texas Miracle, you should take pride in having helped pay for it.

As for those businesses that Perry has allegedly stolen for his state from California, well, as we say around the Calbuzz campfire, “You can put your boots in the oven but that don’t make ‘em biscuits.” The redoubtable Evan Halper reports:

Even Perry’s claims of companies that have decamped from California to lay down roots in Texas appear to be overblown. When the Austin American-Statesman looked into the Texas governor’s boast that there were 153 such companies in 2010, reporters found the claim included California firms that stayed put but maybe opened a Texas branch. The newspaper concluded that Perry’s figure was grossly inflated.

Perry’s staff said the governor was too busy to be interviewed in Austin last week. Media reports later revealed that he was on a five-day trip through California, which involved trying to coax companies east. His spokesman refused to name the companies.

We just bet he did.

Now when it comes to Texas, this ain’t our first rodeo. In fact, a mere 19 years ago (see photo evidence) your Calbuzzards conducted our own extensive, on-the-ground Actual Reporting about the state (key finding: no  coincidence it’s where air conditioning was invented).

So our well-considered bottom line on Perry and all his budget bushwah is this: Just because a chicken has wings don’t mean it can fly. And that ole boy thinks the sun comes up just to hear him crow. Anyways, he’s as fulla’ wind as a corn eatin’ horse.

Besides, we still live in California, and he’s still stuck in Texas.

Humpday: Bell Chimes for Krusty, eMeg in 2016!

Wednesday, July 28th, 2010

Back when George Stephanopoulos was peddling his memoir of life in the Clinton White House, he often began his stock talk to audiences with a classic joke premised on him defining the word “politics,” which went something like this:

“It derives from the Greek root ‘poli,’ meaning ‘the many,’” he’d say, then pause a beat. “And the word ‘tics,’ meaning, “blood sucking parasites.’”

Given this Calbuzzian weltanschauung, George would naturally be our top pick to interview Meg Whitman for “Good Morning America,” far better suited than the rest of the steel-bellied airheads who populate the network airwaves at that time of day. And when he faced off for a 4:33 sit-down with Her Megness early Tuesday, he did a pretty good job of asking a few tough questions within the patty cake parameters of the GMA genre.

Unfortunately for any viewer who hoped to learn something new or authentic about eMeg, she also performed well, slipping, sliding and dodging throughout, as she stayed relentlessly on her straight jacketed message and tediously stuck to her tiresome talking points.

For Calbuzz, the highlight came when Stephanopoulos asked her if she wanted to run for president, the first time we’re aware that any national type raised the issue since we warned the world to keep an eye on the burgeoning Our Meg in 2016 campaign.

Sorry to say, he loosely worded his question so to give the slippery eMeg an easy out, as she instantly chuckled the phoniest laugh since 1950, when LFN made its debut on the pioneering Hank McCune show.

GS: You win in November, you’re automatically at the top of the Republican party list, not only in California., but the country. Ever thought about running for president?

MW: No (big burst of head tossed back fake hilarity). I am here to run California. I want to fix California. Where goes California goes the country.

“Where goes California goes the country”? Really?

Calbuzz sez: Not exactly what you call your Shermanesque statement. Keep those “Meg 2016” buttons – they could be worth big bucks on eBay.

More on Meg in the morning:

1-eMeg first tried to duck the question of whether she supports congressional Republicans in pushing to extend the Bush tax cuts; when George S.interrupted her filibuster – “Let me get back to my question” – she promptly threw in with the Laffer Curve crowd: “I do.”

In between, she served her usual fog of gibberish about “targeted tax cuts” in California, a mumbo jumbo mashup she uses to disguise a supply side agenda of gifting corporations and billionaires like herself, as the superb financial writer Michael Hiltzik made clear in Sunday’s LAT.

2-Stephanopoulos asked an excellent question about the well-deserved dismal public image of corporate executives, but failed to follow up, letting eMeg off the hook for her own sleazy history of  dealings with Goldman Sachs and Craig’s List, not to mention her manhandling of a subordinate press aide at eBay.

GS: Why should the public trust business leaders any more than politicians? These days they see all of the shenanigans on Wall Street and there’s just as much distrust of the business world today as there is of politicians.

MW: I would tell people to look at my eBay experience, blah, blah, blah…

3-Interesting visual: In his lead-in to eMeg, GS said, “We continue our series of interview with new faces on the political scene,” over a graphic display of newcomers that included wannabe California Senator Carly Fiorina, South Carolina GOP gubernatorial candidate Nikki Haley, Tea Party Kentucky Senate nominee Rand Paul and…Jerry Brown.  “New face on the political scene”? No way. Way! Chalk up one for Gandolf.

The Bell tolls for thee: In a sudden burst of energy,  Brown this week showed off his consummate skill as a political ambulance chaser, breaking all land speed records to dive into the middle of the story surrounding the widening scandal of gold-plated salaries and benefits local officials paid themselves in the small Southland city of Bell.

Wearing his Attorney General hat, Krusty immediately launched an investigation of the rancid mess, uncovered through first-rate enterprise reporting by the By God L.A. Times, managing in one swell foop to a) garner reams of free media attention in what is Topic A in L.A.; b) thumb his nose at eMeg who keeps insisting she’s shocked – shocked! – at the notion of an attorney general getting political benefit from the exercise of his official duties and c) find a strong pony to ride in the campaign contest to exploit  outrage over public employee pay and benies, without offending his allies in labor.

Debate over debates: We’re feeling a bit confused over Tuesday’s exchange of fire over debates in the governor’s race, as eMeg said she was challenging Krusty to three, and he responded that he’d already challenged her to 10 so she owed him an answer on three, but one of those she accepted was not in the original 10, so yadayadayada.

We’ll leave the untangling of all this to others. All we know is that Our Meg snubbed the gracious  Calbuzz/Flashreport/Calitics invite for an historic Blogosphere Debate, which Brown earlier accepted. As the late Calbuzz Joseph Marie Eugene Sue was fond of saying:
“La vengeance se mange très-bien froide.”

Goldman Sachs: A Case of False Equivalence

Tuesday, April 27th, 2010

One of the more persistently perverse practices of MSM journalism is the “false equivalence fallacy,” a technique too often seen in political stories, when reporters aim for even-handed balance but end up badly misleading readers.

A case study is the L.A. Times Saturday Sunday story, which posed “a phony evenhandedness,” as Ruth Marcus of the Washington Post once described false equivalence, between the connections of Meg Whitman and of Jerry Brown to the scandal-tainted investment bank Goldman Sachs.

A false equivalence fallacy occurs when someone falsely equates an act by one party as being equally egregious to that of another without taking into account the underlying differences which may make the comparison patently invalid.

In presenting an apples-and-oranges framework about the Goldman Sachs issue in the California governor’s race, the Times recalled political stories from the 2004 presidential race that matched unfounded charges about John Kerry’s record in Vietnam, where he won three Purple Hearts, with still-unanswered documentary questions about the service of George Bush in the National Guard or, more recently, cable TV shows that set up on-the-one-hand-on-the-other “debates” that include whack job “birthers” who charge that Obama was not born in the U.S.

Sometimes, attempts to present “balance” using the thin thread of commonality — e.g. Goldman Sachs — are wholly misleading. There really is an unbalance of connection and/or impropriety. One thing is actually more damning than the other and they cannot and should not be equated. This is a false equivalency.

Whitman’s links to Goldman Sachs are primary connections, which directly benefited her financially, both personally and politically; Brown’s are  secondary, at best, involving his sister’s employment at the firm and a complex policy decision about bond financing interest rates in Oakland, which was made a year before he was elected mayor there, which appears actually to have benefited the city during much of his tenure, and over which he had no direct control anyway.

Yet the Times story – online hed: “Whitman, Brown have ties to Goldman Sachs” – sends a clear message that these are matters of equal political weight, at a time when the bank has been charged with fraud by the SEC. Let’s look at the details:

Whitman’s connections to Goldman have been chronicled in detail by Lance Williams and Carla Marinucci.

1-Spinning. As CEO of eBay she steered millions of her company’s business to Goldman, a period in which she also engaged in “spinning,” a now-illegal insider stock deal in which the investment bank paved the way for her to buy early shares of hot IPOs. She was named in a congressional investigation of the practice and forced to return money she made from the deals to eBay after shareholders sued her. Her explanation: “It wasn’t illegal at the time.”

2-Directorship. Whitman was paid the equivalent of $475,000 in cash and stock options when she sat on Goldman’s board of directors for 15 months in 2001 and 2002. Among other actions, she served on the compensation committee, when it approved huge bonuses for Goldman’s current CEO, Lloyd Blankfein, and its previous chief executive, former Treasury Secretary Henry Paulsen, who oversaw the era of credit default swaps and consolidated debt obligations which is now the focus of the SEC fraud suit.

3-Contributions. Whitman has received at least $105,500 in contributions from Goldman executives to her campaign for governor, according to the Williams-Marinucci investigation.

Brown’s connections to Goldman, as set forth by Michael Rothfeld in the LAT:

1-Family. His sister, former state Treasurer Kathleen Brown, has worked for the bank since 2003, a family factoid that gains no elaboration, or further traction, in Rothfeld’s story as reflecting critically on Jerry Brown.

2-Oakland. A year before Brown took office as mayor, city officials did a deal with Goldman, known as an “interest rate swap,” in order to “guarantee Oakland stability in its debt payment,” according to Rothfeld. City officials renegotiated it in 2003 (before Kathleen went to work for Goldman BTW), paid off Goldman’s debt in 2005, but left the interest deal in place because canceling it would have cost $15 million, which was then considered a bad deal for the city.

At the time, Brown’s involvement consisted of a) being the non-voting president of the Oakland Joint Powers Financing Authority, which handled the negotiation and b) appointing the administrator in charge of borrowing for the city.  The Times story never even hints that Brown had anything to gain from the deal, even if he had had authority over it, and completely equivocates on the broader issue of whether or not it’s been a good deal for Oakland.

Today, because interest rates plummeted amid the Wall Street meltdown, the deal with Goldman is costing Oakland about $5 million a year, the story notes, but then adds this: “Oakland and Goldman officials say they believe the swap has benefited Oakland overall, though they provided no statistics to show that.”

Uh, so what exactly has Brown got out of his ballyhooed-by-the-Times  “connections” to Goldman Sachs?

Despite the total false equivalence between eMeg and Crusty’s* dealings with the investment bank, Rothfeld gave Whitman flack Tucker Bound a free hand to muddy the waters on an issue that threatens Whitman, allowing him to spin the non-event of Brown’s Goldman ties into the biggest scandal since Teapot Dome: “No matter how you look at it, Jerry and his sister were on both ends of a bad deal for taxpayers, and Goldman Sachs pocketed millions.”

Puh-leeze.

Fortunately for the Times, business columnist Michael Hiltzik presented a clearer-eyed view of the matter in a Sunday same day piece that recaps Whitman’s personal connections to the bank and drills down on the noxious “spinning” issue.

Yet the issue here isn’t anyone’s family connections or routine investments but Whitman’s acceptance of preferential treatment from a firm angling to do business with her employer…

As for her claim that no one ever suggested there was anything untoward about preferential allocations, not so. Financial regulators had been warning brokers for years that it was wrong to hand out hoards of IPO shares “to reward persons who could otherwise direct business to them.” Although that rule was directed at the brokers, not their customers, surely Whitman understood the concept of aiding and abetting. To avoid further confusion, the Securities and Exchange Commission later spelled out the rules: Offering such deals is now illegal.

And thank you for that.

P.S. For further understanding of what’s wrong with “spinning,” see the definitive Calbuzz piece by David Shapiro, a specialist on financial fraud at the John Jay College of Criminal Justice at the City University of New York.

* For the record, Calbuzz recognizes that the Simpsons character Herschel Krustofski, AKA Krusty the Clown and the Maitre d’ of Glee is spelled with a “K.” Our Department of Etymology and Copyright Infringement  is studying whether it would be appropriate to alter the spelling of “Crusty the General.”

Swap Meet: Oil & Con Con Meet Gambling Cowboys

Saturday, July 18th, 2009

namlogoNew push for Con Con: Latest player to jump into the battle for a state constitutional convention is the New America Foundation, the influential non-partisan. D.C.-based think tank, which maintains a formidable intellectual presence in California.

The foundation, which is home to big brain journalists including Calbuzz contributor Mark Paul and Blockbuster Democracy blogger Joe Matthews, is sponsoring two community forums in Southern California over the weekend. On Friday, they also released a new research report recommending that convention delegates be average folks, rather than the collection of hacks, flacks and usual suspects who are no doubt lying in wait to hijack the process.

Author Steven Hill based the conclusion on evidence gleaned from case studies of the “deliberative democracy” movement, a host of ordinary people political groups that tackled projects ranging from the rebuild of the World Trade Center to the economy of Northeast Ohio and post-Katrina reconstruction in New Orleans:

“Some have wondered if average people are capable of the kind of in-depth understanding of complex issues that will be necessary for redesigning California. But the truth is, average Californians are the only ones who can lead our state out of the quagmire of special interests and partisanship that currently is paralyzing it. That’s because average Californians bring a special quality that too many incumbents and the political class in general do not have: a pragmatic desire to solve the state’s problems, regardless of ideology, partisanship or career self-interest…

“Participants often demonstrate a ready willingness to mix and match elements from differing political approaches – market-based, public sector, ‘conservative’ or ‘liberal’– as long as the result is a solution that will work for themselves and their communities.”

oil_platformOn-again off-again on-again off-again oil project on-again: Enviros around the state are scrambling yet again to block the controversial PXP oil drilling project off the Santa Barbara coast (a Calbuzz debate on the issue is here and here ), amid reports that approval for the offshore plan is part of a proposed framework in the closed door, Big Five budget negotiations.

“We heard it’s back in the budget and the governor is lobbying very aggressively for it,” said one key player in the long-running fight over the project. “They would put (the project) into a trailer bill.”

If approved, the PXP project would be penciled in for producing $1.8 billion in royalties over the next 14 years, including $100 million in the current fiscal year; foes of the plan, which was defeated earlier by the State Lands Commission but resurrected by Schwarzenegger in the budget fight, bitterly complain that California could reap much more – $2-4 billion annually – and with less risk to the environment, by enacting an oil severance tax on existing production.

California currently is the only one of 22 oil producing states that does not have such a tax., according to a drill down piece by LAT business columnist Michael Hiltzik who went deep into the weeds on the issue.

Environmental groups “started (Thursday) sending dozens of alerts to tens of thousands of coastal activists letting people know that Schwarzenegger’s Vampire was up and stumbling around yet again,” one coastal advocate told Calbuzz. “How many times do you have to kill something, anyway?”

Fox100

What happens in Vegas: Over at Fox and Hounds Daily our friend Joel Fox is trumpeting an editorial in the Las Vegas Review Journal that fiercely attacks suggestions the Prop. 13 be amended, and assails California for having high taxes and too much regulation of business.

As California teeters, Democrats are left to contemplate how this living laboratory of liberalism — with its smothering taxes, intrusive regulatory apparatus, generous social services and well-fed, heavily unionized public sector — could now find itself on the brink of collapse.

Rather than conclude the obvious — that decade after decade of high-tax, anti-business, anti-growth policymaking designed to sate an ever-expanding state is ultimately unsustainable — a handful of liberals have found their culprit: Proposition 13, a measure limiting property taxes passed by voters in 1978.

Not surprisingly, neither the editorialist nor Fox mentioned that Nevada closed its own multi-billion dollar deficit this year by raising taxes, that the state’s unemployment rate is higher than California’s or that the Silver State was ranked the #2 most dysfunctional government in the nation.

To his credit, Fox did acknowledge that “one of the reasons I’m reprinting the editorial here (is) because it quotes me.”

Golden Lone Star State: Perhaps the biggest humiliation for California to date is a takeout in The Economist that compares the Golden State unfavorably to Texas, ferhevvinsake. Noting that Chief Executive magazine has ranked California “the very worst state to do business,” compared to the top-of-list rating of Texas, the piece concludes that “Mr. Schwarzenegger’s lazy governorship could come to be seen not as the great missed opportunity but as the spur for reform.”

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