Thoughts from a reader regarding the Senate bailout bill now under consideration.
The Wall Street crisis and bailout reminds me of the parable of the debtor found at the Book of Matthew, chapter 18, verses 23-34: A royal servant cannot repay 10,000 talents of silver owed to the King. But instead of forcing him into what would pass for Chapter 11 in those times, the King listens to the plea for mercy and forgives the debt. (Obviously, if the King needed the money, he knew he could just raise taxes on everybody).
Having just been bailed out, the royal servant meets another who owes him 100 pence. Rejecting pleas for mercy and promises to pay the amount, the royal servant has his debtor thrown in prison and threatens dire consequences for the debtor’s relatives.
It seems to me that the credit crisis is already here. If, and when, a bailout happens, Wall Street (and our oversees creditors) wont loan money to business, instead they will invest in Treasury bills. In effect loaning money to the government to pay for the borrowing necessary to pay for their own bailout. And the interest will be high because of the fear of inflation. Wall Street will demand a tight money policy or exorbitant interest rates.
So if the bailout fails we have a credit crisis. But if a bailout passes, we will not only have a credit crisis, but also non-Wall Street America will be saddled with higher taxes, or inflation, to pay of a huge public debt. How will America react when prosperity returns to Wall Street, and a depression hits the rest of us?
And at the end of the parable, the sovereign learns how the royal servant treated the small debtor and decides to cancel his bailout. Will the sovereign people do the same?
-Mike from Davis, CA
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The talking points are the same this year as they were the last. And the year before that as well. “The Republicans are holding up the budget!!” cry the Democratic party leadership.
That is one way of looking at it. Another way is that what is going on in Sacramento is the fallout from a majority party that is simply too greedy. Not in money but in power.
Yes.. Democrats hold a large majority in the California legislature. But thanks to Howard Jarvis and the Prop 13 movement of the late 70’s the state is stuck with a law that requires a 2/3rds vote of the legislature to pass a budget or to approve a tax hike. We are only one of two states that require such a “super majority”. As a result the D’s need a few GOP votes.. and as long as Republicans remain in lock-step the minority party can block the will of the majority.
Frustrated Democrats blame “right wing Republicans” for the impasse. Lawmakers they argue are more interested in political orthodoxy than in facing the real and present problems confronting the state.
For the sake of argument lets say that is true. But where did these “right wing Republicans” come from? How did they get elected in a state that has for years been known as being politically moderate? And if the Republicans are too far to the right can’t it be also said that there are plenty of Democrats too far the the left? This is a legislature after all that routinely leads the nation in “progressive”.. or liberal legislation. These are lawmakers who believe government must play a major roll in nearly every aspect of society. Remember the anti-spanking bill? The ban on plastic bags bill? The socialized medicine bill? The Gay marriage bill?
The fact is the California legislature is simply too liberal and too conservative to serve a traditionally centrist state. The reason for the imbalance can be traced to the drawing of districts by the Democratic leadership to insure the Democrats control both houses. But in order for the Democrats to have a lock on the legislature they must round-up all the Republican areas of the state into the same districts. As a result most of the state Assembly and State Senate seats are dominated by one party or the other. There are no districts where there is enough of a balance between voters that the candidates must moderate their positions in order to placate voters from the other party.
So we end up with a legislature of ideologues with little chance of compromise on the budget, taxes or anything else.
One way to avoid the current mess is to get on with the business of re-drawing legislative districts. Failure to do so in the next election will insure that the government remains out of touch with the state it is elected to serve.
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They are the first thing we in the media look for during an earthquake. The bricks. There always is some place where bricks have collapsed onto a road/walkway/parking lot. Last week’s 5.4 magnitude quake provided the pictures in the city of Pomona. Fortunately nobody was underneath those bricks when they fell.
The rubble came from a building made of unreinforced masonry. “URM’s” as they are called by engineers are buildings made of brick and mortar and nothing else. So many of those buildings came down in the Long Beach earthquake in 1933 (6.3 magnitude 115 dead) that the state banned their construction in 1935. In 1986 a state law was passed requiring seismic retrofitting of existing structures. But the California law left implementation, and standards, up to local jurisdictions.
In a rare move of municipal leadership the city of Los Angeles was the first to require the seismic shoring up of its URM buildings. It wasn’t easy and it was costly. But the buildings most likely to fall down in an earthquake have been eliminated. That’s one reason why you didn’t see any bricks falling in Los Angeles Tuesday.
Pomona is a different story. As was San Luis Obispo County a few years back when the San Simeon quake resulted in the deaths of two women who ran from an URM building in Paso Robles. Normally smaller localities can accomplish more than the large ones… but not in this case.
Most older buildings in the state have been upgraded. It is up to the legislature to see what it can do to get the remainder of California cities to do the heavy lifting that comes with making sure their buildings won’t come down in “the Big One.”
As seismic engineers like to remind us… “earthquakes don’t kill people.. buildings kill people.”
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Boy did the Governor love it. So did all the lawmakers. California was moving up its Presidential primary to FEBRUARY! Wow.. that will put us in the thick of the primary campaign season. Yessiree.. those politicians will have to pay attention to us now! You bet.
Oh.. and about all those other races we also vote on such as the party nominations for Congress and the state legislature? We will keep that dusty ol’ June primary just for them.
Well.. well. Just our luck. As it turns out the February primary helped lock up the nomination for John McCain on the Republican side but that was only because it was a largely winner-take-all primary. But for the Democrats who love to divide delegates by the percentage of the vote well the California primary decided nothing. Nada. Zilch. It was a big win for Hillary Clinton but not in the delegate count. Sen. Obama and all the other Democrats knew they could ignore the state and still get enough delegates to keep their campaign alive.
So instead of having our Presidential primary on the same ballot as everybody else, which has been the case since 1940, we now have a June primary that voters will largely ignore. The marquee value of the Presidential race now gone it will be a miracle if a third of the registered voters show up to the polls. There are just two statewide ballot measures joining a host of local elections. And one of those ballot measures.. Prop 98? That was targeted by property rights advocates for this primary because they knew it would be a low turnout which gives their measure a better chance of passage.
And if Prop 98 does pass (along with its provision to gradually eliminate rent control) the opponants can blame Arnold Schwarzenegger and the California legislature. Why? Because moving the Presidential primary to February wasn’t about getting the state involved in the race for the White House at all. It was because the legislature would also have on the ballot in February a measure that would extend term limits for most of the members of the legislature. They kept the June primary where it was to give politicians the chance to “re-file” for their office in case the measure allowing them to stay another few terms passed in February.
Oh.. and by adding a third election to the ‘08 calander year it also cost taxpayers about 80 million dollars. Democrats hated spending that kind of money on Arnold’s special election in ‘05.. but they loved doing it this year.
So go vote. Its election day. Again.
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Fathers ran with their kids on the grass. Seniors laughed while sitting in overstuffed chairs. Toddlers played in a sandbox. School children sold 50 cent cups of lemonade for charity. And people shopped.
Welcome to Carusoland.. also known as the “Americana at Brand” in Glendale.
As with his previous projects there will be a small chorus of critics who will lament its “artificiality” (like a friend who was devestated when he build “the Grove” next to the beloved Farmers Market). Those critics would love nothing better than to see such a project collapse in debt and disinterest. So far, from Thousand Oaks to Fairfax, just the opposite has happened.
Instead the intellectual elites who tisk-tisk such places at “artificial” should instead gage not the buildings but the people who visit them. There is nothing make-believe about the reaction. They like it. They love it. Those with money who shop at the upscale stores subsidize a free park for those who just come for the scenery and conversation. Retirees can sit and enjoy the water fountain symphony without paying a dime. Families pinching pennies in a tight economy can take their children to the playground without any worry of finding a hyperdermic needle in the sand. And there is no evidence of plastic. With gold plated statues and marble counters at the parking kiosk this place is built as if it where hosting an OPEC conference.
That dynamic, and the public’s reaction has recently softened the criticism. The Los Angeles Times Magazine not long ago did a remarkable piece on The Grove where it talked about how the center had become part of the neighborhood (complete with people jogging on its pedestrian street early in the morning before the stores opened).
Now the criticism is more subtle. Christoper Hawthorne, the LA Times archetecture critic, today wrote about the public-private partnership involving the two acre park space (which is owned not by Caruso but by the city) He wonders why that space needs to be patrolled by Caruso’s private security. “If the private cops, who will be backed up by a substation staffed by Glendale police, start breaking up pickup soccer games or taking away skateboards, they (condo and apartment residents at the site) may even start resenting it.”
I doubt it.
Perhaps it is a bit sad that the safe and beautiful is now being provided through the private and not the public. But ever since we decided to treat the mentally ill by dumping them on the street we have lost contact with much of our park space and communal areas. The critics hate the fact that the streets of a place like “Americana” are controlled and that it lakes the grittiness of a true urban center. But isn’t it allowable to give people a small refuge from panhandlers once in awhile?
It should not be a suprise that Caruso was inspired by Walt Disney and that his Caruso Affiliated contracts with Disney designers when building their “lifestyle centers”. In fact, Disneyland came to mind yesterday while spending a few hours at the Americana. While Glendale has long been the home to Walt Disney Imagineering the city finally found some of the old man’s pixie dust.
And Glendale is a better place for it.
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STEVE LOPEZ & “THE SOLOIST”
Hope you enjoyed this morning’s interview with Los Angeles Times columnist Steve Lopez. His book “the Soloist” is now available in bookstores citywide. Here is a link to his interview.Filed under: Uncategorized | 1 Comment
THE PRIMARY CALIFORNIA FORGOT
It was all we heard back in February. The Governor loved it and so did his Democratic party friends in the legislature. Everybody was thrilled that the state had spent 80 million dollars to become a “player” in the nominating process.
But the financial and political windfall from the new primary date was tempered by the fact that California wasn’t the only state holding a primary that day. The candidates time and money was split with several other states including New York, New Jersey and Illinois. And because of the various rules regarding the allocation of delegates it was unlikely the Democratic primary would be definitive. Sen. Borack Obama knew he could finish second in the state and still receive a large share of delegates. The only real purpose was served on the Republican side.
Of course it would have made more sense to move the entire primary ballot to February but that wasn’t possible. Why? Because lawmakers in Sacramento needed to keep the June primary in place just in case the term limits reform ballot measure passed, thus allowing them to refile for re-election to seats they otherwise would have been forced to leave.
So now we are faced with a June primary that has Congressional and legislative races and two statewide ballot measures. One thing it won’t have is interest. Expect a record low turnout.
And what if we had kept the June Presidential primary? California would not be in position to decide the Democratic party nomination. Of course they could have done that back in February had they followed the GOP’s example and their party’s own history. There was a time not long ago when California’s primary was winner-take-all.
Sort of like that other election in November.
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There is an election scheduled to take place tomorrow along the San Francisco peninsula. Most of the state won’t take notice and the outcome of the race does not appear to be in doubt. The special election is the result of the passing of Rep. Tom Lantos who was the only Holocaust survivor to serve in Congress.
But the person who will replace Lantos is also a survivor. Her name is Jackie Speier and her expected victory on Tuesday will the end point of a remarkable journey that started in Washington 30 years ago and nearly ended in the jungles of north- coastal South America.
In 1978 Speier was working in Washington D.C. as an aide for bay area congressman Leo Ryan. Then just 26 years old the young staffer accompanied Ryan on a fact finding trip to Guyana. Ryan had gone to investigate a commune that had been built in by a charismatic San Francisco cult leader named Jim Jones. Jones had brought his “People’s Temple” commune to San Francisco years earlier and had developed relationships with political leaders in the city. Mayor George Moscone had appointed him to the city parks commission (People’s Temple members were often used to help fill auditoriums for political events. I experienced that first hand when as a college student I helped “advance” an event for Vice President Walter Mondale in the Hall of Flowers at Golden Gate Park. PT members were used to “pack the house”.)
Under investigation for tax fraud Jones decided to move his cult to a place where “his people could live in peace.” Eventually he convinced over 900 of his followers to leave their bay area homes to “Jonestown”, an isolated commune in the middle of the jungle of northern Guyana. Slowly word started to spread back in the Bay Area that members of the cult were being mistreated and were being kept against their will.
Rep. Ryan and a young Ms. Spiere decided to investigate. There were a total of 18 in the party that visited the commune including a crew and correspondent from NBC News.
By the time the visit was over Leo Ryan would be dead along with NBC News correspondent Don Harris and photographer Bob Brown. Jackie Speier was shot and left for dead on the tarmac of a small jungle landing strip. The attackers, who had been sent by Jim Jones returned to the commune where over 900 people, including several hundred children, would either be murdered or commit suicide. It may have happened a continent away but to this day Jonestown haunts San Francisco.. as it does Jackie Speier. This week, 30 later she will finally be replacing her murdered boss in Congress.
The Wikipedia entry appears to be an accurate rendition of the events of November 18, 1978. http://en.wikipedia.org/wiki/Jonestown
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The clock is ticking. California’s “Mr. Universe” Governor may have a few years left in office.. but he is starting to worry about his legacy. Various groups are hearing from his office about long forgotten initiatives that he may take up to help build a portfolio for historians. Expect some modest yet surprising policy initiatives over the next legislative session.
Of course the legacy matter should have been shored up with health care reform. Unfortunately for the Gov that ended up flat-lining on the floor of the California Senate. In fact, save for some major bond measures it is likely the Governor will be remembered more for his celebrity than for any major accomplishment as the CEO of America’s largest state.
But that could all change soon. The Governor has a chance to cement his place in state history. All because of the worst budget deficit in state history.
Today the Governor was in Riverside talking about budget reform. It is the same talk he had with legislators when he first arrived. It is the same talk he had with voters during his special election in ‘05. But this time.. both may listen.
What the Governor wants to do is change the budget system so that there would be a reserve fund “with teeth” that would help keep the state from the feast or famine cycle that currently exists. He wants a budget that allows for mid-term reductions when it appears revenues are falling short. He wants to change a system that allows the state to spend every penny in good times with nothing but protest demonstrations and sit-ins during the bad.
Democrats don’t like the idea for a number of reasons.. the least of which is that it gives too much power to the executive. But the Governor could end up passing major reform in a trade with lawmakers over tax hikes to fix the current budget crisis. Such a deal could be sold to the public as a one-time-only effort at righting the state’s fiscal ship. Not to mention giving Arnold Schwazenegger a chance to be remembered long after the credits start to roll on his Sacramento career.
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Recent Entries
- A BAILOUT PROPHECY FROM THE BOOK OF MATTHEW
- WHY SACRAMENTO DEMOCRATS ONLY HAVE THEMSELVES TO BLAME
- THE “CITY OF ANGELS” CHANCE TO BRAG.
- SO I GUESS THAT FEBRUARY PRIMARY MIGHT NOT HAVE BEEN ALL THAT GOOD AN IDEA AFTER ALL..
- THE MAGIC WAND STRIKES.. GLENDALE
- STEVE LOPEZ & “THE SOLOIST”
- THE PRIMARY CALIFORNIA FORGOT
- CHINA’S “OLD GOLD MOUNTAIN” PROBLEM
- JACKIE SPEIER’S RETURN TO WASHINGTON
- THE GOVERNOR’S OPPORTUNITY FOR A LASTING IMPACT
- ARNOLD’S TIMING
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