Tag: Jerry Brown

Categories
too much government

Down and Out and California

Barring drastic action, the Golden State will run out of cash in March.

There is no provision in the Constitution for dealing with a bankrupt state. But then, there’s nothing explicit dealing with federal bankruptcy, either. The founding fathers didn’t expect their republic to permanently accumulate debt. Indeed, Thomas Jefferson wished to foreswear all sovereign debt. He considered the practice parasitic.California's Direction

Our leaders are supposed to run our governments so to avoid debt crises.

But, because politicians do just the opposite, they run into cash flow crunches. Last year, California’s statesmen borrowed $5.4 billion to cover the lean time before Spring’s tax revenues flowed in. They had figured they would be good through June, but miscalculated. Now they’re scrambling for an extra $3.3 billion.

Time to fudge the books! Pay late. Not answer the phone or respond to dunning notices.

Of course, the real problem is over-​spending. California’s politicians spend too much.

Alas, it doesn’t look like they are about to reform.

Gov. Jerry Brown still pushes the huge “investment” of high-​speed rail, for the grandest example. The project’s supporters have over-​estimated ridership, underestimated costs (the most realistic official accounting now puts the system at $98 billion), and have been forced to restrict the extent of the line, excluding both San Diego and the state capital. Brown’s response? Making up for cost overruns by hijacking funds from the state’s “cap-​and-​trade” (the nation’s only carbon-​footprint-​based) tax.

Ah, politicians: Spend, spend, spend, even as the institutions they are responsible for lurch into insolvency.

This is Common Sense. I’m Paul Jacob.

Categories
folly

Pension Reforms Un-Ravel?

Jerry Brown has done some good work as California’s governor. When he promised to take on the common practice of pension double-​dipping, he spotted a problem and appeared to be on the right track.

But if you want to hire well-​connected, experienced and (therefore, or presumably, competent) civil servants to help you in your crusade to save your state, what do you do?

Why, you hire retired civil servants. They each get their salaries — plus their pensions.

There may be something faulty in the above rationale. But that’s what happened. 

Shane Goldmacher and Patrick McGreevy of the Los Angeles Times showed just how big this problem is, in a current exposé. They lead with the facts in the case of Ann Ravel, who “gets a paycheck from her salary as chairwoman of California’s ethics watchdog agency and a second, bigger check from her public pension as a retiree.” She makes a good living, since the two sources of income “total more than $305,000 a year.” 

This is not a good policy. Marcia Fritz, president of California Foundation for Fiscal Responsibility, says such double dipping “violates the whole premise of having a retirement program.”

I see her point.

Still, it wouldn’t be an issue if pensioners received retirement payments not in amounts promised by politicians and guaranteed by taxpayers, but instead coming from actual investments — defined contributions, not defined benefits — in something like each one’s individual 401(k).

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall

Golden State Standards

In their just completed session, California legislators expressed deep concern about transparency, democracy and good government.

Sen. Mark DeSaulnier authored Senate Bill 448 to mandate “a little transparency” in the initiative petition process. The legislation would have forced citizens paid to circulate petitions to wear a sign on their chests reading: “Paid Signature Gatherer.”

But Governor Jerry Brown vetoed the bill, stating, “I choose not to go down this slippery slope where the state decides what citizens must wear when petitioning their government.”

On the very last day of the session, Sen. Loni Hancock became concerned about democracy. “Low turnout elections do not represent the needs, priorities and desires of the larger electorate,” she decried.

So she stuffed new wording into one of her languishing bills, SB 202, to force all citizen initiatives to the November ballot. (Measures referred by legislators would, under SB 202, continue to go onto any ballot legislators desire.) In less than 24 hours, the bill was introduced, hearings were announced and held only minutes later, and the bill was rammed through both chambers.

Sen. Hancock pronounced this “good government.”

Legislators shouldn’t “gerrymander” which election citizen-​initiated measures are voted upon for their own political purposes and those of their preferred special interests — in this case, public employee unions. Nor should new legislation be introduced and passed in a single day, without the public having time to communicate with their representatives.

That’s not transparency. It’s not democracy. And it’s not good government.

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall

Punishing Productivity

California Governor Jerry Brown just vetoed Senate Bill 168, writing, “It doesn’t seem very practical to me to create a system that makes productivity goals a crime.” 

Senate Bill 168 makes it illegal to pay someone circulating an issue petition based either directly or indirectly on the number of signatures gathered. In fact, had Brown signed SB 168 into law, you’d get thrown in jail for awarding a prize, say a campaign t‑shirt, to the volunteer who gathers the most signatures. 

Petition campaigns like productivity. They don’t want folks locked up for it.

Could undercutting productivity and doubling the cost of petitioning be the real goal of SB 168?

Perhaps outlawing incentives isn’t intended to slow the pace and super-​size the cost of a petition drive. But it does. Californians have only 150 days to gather hundreds of thousands of voter signatures, so a slowdown and added cost means issues blocked from reaching the voters.

In a Sacramento Bee op-​ed, Sen. Ellen Corbett, SB 168’s author, addressed concerns about diminished democracy, writing, “[I]n states that have enacted a similar law there has been no change in the number of initiatives qualifying for the ballot.” 

But a review of those states shows a change — for the worse. Oregon saw a roughly 50 percent reduction in initiatives. In Montana and North and South Dakota the number of citizen measures dropped. After passage of productivity bans in Nebraska and Wyoming, neither state’s voters have seen another initiative on their ballot. 

This is Common Sense. I’m Paul Jacob.

Categories
crime and punishment national politics & policies

Ponzi in California

Keeping loans and investments distinct is important not merely for business people, but for governments.

Case in point? Mahmoud “Mike” Karkehabadi’s 89 felony counts of securities fraud and grand theft. The Laguna Niguel, California, movie maker is accused of turning his business into a Ponzi scheme.

When his film Hotel California flopped, bringing in just over half a million dollars, Mr. Karkehabadi convinced his investors to roll over their loans to him into future movie projects. When he did this, it is alleged, he fuzzed up the distinctions between different deals, and entered dark territory. Fraud.

According to California Attorney General Jerry Brown, Karkehabadi “ran a cold and calculated scam, making promises he never intended to keep and using the funds of new victims to pay off the earlier ones.”

I don’t know which this sounds like more, something out of Get Shorty or the Social Security Act of 1935.

It’s interesting that, at the same time it prosecutes Karkehabadi, the state of California is hastily and drastically re-​arranging its finances. Politicians are forced to do so because they have promised the state’s retiring employees returns on investments never made in amounts state government could never, realistically, afford to come through on.

The whole story of the accused Mr. Karkehabadi looks bad. Criminal. But then, so does the whole story of how politicians in California (and elsewhere) behave. 

Fraud isn’t as uncommon as it should be.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets nannyism

Jerry Brown’s Latest Trip

Some politicians are loathe to allow freedom of action even when they’re going out of their way to allow freedom of action.

California Attorney General Jerry Brown doesn’t want the federal government to harass patients who use medical marijuana, or to harass those who provide it. To implement this laissez-​faire policy, Brown wants to make darn sure that any businessmen who provide cancer patients with marijuana are the ones who get raided and arrested.

What’s going on?

Cannabis for medical use has been legal in California since 1996, when voters passed Proposition 215. The federal government has not been playing along, however.

To clarify things, Attorney General Brown has issued an 11-​page guideline to help “legitimate patients” avoid being arrested. The guidelines also confirm the legality of medical marijuana co-​ops. Brown hopes that under the new guidelines patients will steer clear of the unapproved dispensaries.

Who is an unapproved provider? Anyone who actually makes money selling medical marijuana. Supposedly, it’s okay for a cancer patient to ease his pain with the plant, so long as there is no economic incentive for anyone to help him ease it. It must be done by nonprofit co-operatives.

Bruce Mirken of the Marijuana Policy Project doesn’t agree that socialist medicine is good, capitalist medicine bad. “Last I heard,” he says, “Walgreens isn’t a charity.”

He’s right.

This is Common Sense. I’m Paul Jacob.