President Trump’s weekly address: 10/7/17

“When the worst of humanity strikes, the best of humanity responds.” – President Trump

 

John Moorlach: “Who’s Your Daddy?” bills

When assembling the 2017 top 20 worst bills going to the governor’s desk, there were some 15 that were “Who’s Your Daddy?” bills. I could only include a sampling (see MOORLACH UPDATE — 2017 Top 20 Veto Worthy Bills — ).
Nearly two years ago, I provided an extensive analysis of how the public employee unions run Sacramento (see MOORLACH UPDATE — Blame the Unions —
One of my biggest concerns in this posting was reiterated recently (see MOORLACH UPDATE — What Pension Crisis? — ). “The unions will say it wasn’t our fault. We didn’t vote for it. You guys [the elected officials] voted for it,” said Sen. Moorlach in an interview Monday.
.  In fact, it even became a segment of a TBS MLB Post Season show.
The bill that set this chant in my brain this session was AB1250, which would greatly increase the cost to counties of personal-service contracts, sharply reducing help given to citizens, especially the poor. We introduced the consequences of the bill to you in this posting: MOORLACH UPDATE — Who’s Your Daddy? — I provided the fun when I asked this very question in the Senate Governance and Finance Committee meeting
I provided my own editorial, on the premise that AB1250 was not being relegated to a two-year bill status and may be resurrected and show up at the last minute on the Senate Floor (it didn’t) in MOORLACH UPDATE: Who Runs Our Government?
By the final night of session, one Democrat Senator made Bingo cards. The squares were words that may be spoken on the floor. This is one way to while away the hours as this annual exercise drones on past midnight. I heard one square stated, “Sen. Moorlach says ‘Who’s Your Daddy?'” The chant had sunk in.
The OC Register provides the details of the union-assisting bills in my editorial submission.
A common union tactic is to twist something. The headline of a recent post did just that. As Sacramento is brimming with current and retired state employees, the headline was inflammatory, when not factually accurate.  So, I decided to provide a clarification. The good news?  It was printed.

John Moorlach: What Pension Crisis?

I sit on the Senate Public Employment and Retirement Committee, which held a joint hearing with its Assembly counterpart earlier this year. During the hearing I asked a very difficult question of Dane Hutchings, the legislative representative of the California League of Cities (see MOORLACH UPDATE — 37th in the 37th — August 9, 2017).

In shaping my question, I used the “F” word – “fraud” – and it caught the attention of CalPERS and its administration. This started a dialogue, which has been very helpful. So, I recently sent two letters, addressed to two separate CalPERS Board members, requesting very specific information (see  https://www.calpers.ca.gov/docs/board-agendas/201709/financeadmin/item-6c-02.pdf and https://www.calpers.ca.gov/docs/board-agendas/201709/financeadmin/item-6c-01.pdf).

Instead of writing back with an affirmative response and attaching the requested data, the matter was put on the agenda of this month’s CalPERS Finance and Administrative Committee meeting (see MOORLACH UPDATE — OC’s Newest Landmark Plaque — September 20, 2017).

The entire segment of the Committee meeting related to my requests is an amazing watch. To have city managers state that they are facing Chapter 9 bankruptcy and even providing the precise upcoming year they may be filing is a massive disclosure. You would think it would be headline news for the local papers where the cities are located. The California Policy Center certainly thought the discussion was disturbing and provides the piece below.

I’m trying to address the pension crisis in California. It’s getting noticed. Let’s hope the testimony of a dozen plan sponsors wakes up the super majority in the Capitol. Also see MOORLACH UPDATE — Pursuing Reforms — August 11, 2017.

BONUS:  If you happen to watch the linked video to the CalPERS meeting, you will observe the public employee unions testify as the concluding witnesses to strong arm those CalPERS Board members who just also happen to be public employee union members. The massive influence of public employee unions in Sacramento is evident and detrimental to the fiscal well being of our state. I discuss this in more detail on Rick Reiff’s most recent “Inside OC” program and it is worth a watch at https://www.youtube.com/watch?v=t-rpMqqQJJE&feature=youtu.be.

DOUBLE BONUS:  I don’t want to be in the “me thinkest thou protesteth too much” category, but crime is going up (see MOORLACH UPDATE — Taken to Task — August 23, 2017). The FBI released the 2016 crime statistics on Monday of this week and the news is not good. Allow me to give you just one of the many links, as I spend a lot of time in Sacramento, at http://www.kcra.com/article/sacramentos-violent-crime-rate-was-higher-than-us-crime-rate-in-2016/12473362.

TRIPLE BONUS:  To date, the governor has not addressed any of the top 20 bills Assemblyman Harper and I have recommended he veto (see MOORLACH UPDATE — 2017 Top 20 Veto Worthy Bills — September 22, 2017).

President Trump’s weekly address: Four principles for tax reform

Transcript:

My fellow Americans,

The American Family has always been the heart of our great nation.  In homes across this country, families teach their children to work hard, to love each other, and to make the most of their talents in pursuit of their dreams.

Yet for too long, American families have been hurt by Washington’s policies that put the interests of other countries before the interests of our country.

That is why, in my Administration, we are pursuing tax cuts and reform that create jobs in America, for American workers – not foreign workers, but American workers.

Here are my four principles for tax reform:

First, we are going to make the tax code simple and fair so that families can spend more time with their children, and less time wading through pages of paperwork.  A staggering ninety-four percent of families use professional help to do their taxes – and that’s not fair, that’s not right.  That’s why under our plan, ninety-five percent of Americans will be able to file their tax return on a single page without keeping receipts, tracking paperwork, or filling out extra schedules.

Second, we are going to cut taxes for the middle class so that hardworking Americans can finally save more for their future.  We want to help families keep more of what they earn – and to be able to afford the costs of raising a family.  Our tax code should recognize that the most important investment we can make is in our children.

Third, we are going to restore America’s competitive edge by making our tax system more attractive for investment and job creation.  Our business tax rate is the highest in the world – pushing jobs to foreign countries.  That’s not what we want, that’s not what I’ve been talking about all these years – I’ve been talking about the exact opposite.  We need to bring down our tax rate so we can create jobs, wealth, and opportunity right here, in the United States of America, so we can bring our hobs back and bring our businesses back.  We want tax reform that puts America First.  We want tax reform that makes America great again.

Finally, we are going to bring back trillions of dollars in wealth parked overseas so that it can be invested in our country, where it belongs.

We have a once-in-a-generation opportunity to reform our tax code and pave the way to unprecedented prosperity.  By doing what we’re doing, we will see results like you’ve never seen before.  It will be the largest tax cut in our country’s history.  I am asking members in both parties to come together, to put aside partisan differences, and to pass historic tax reform and tax cuts for the great citizens of our nation.  That’s how we will all succeed and thrive together – as one team, one people, and one American Family.

Thank you, God bless you, and God bless America.

###

John Moorlach: Sacramento has no clue how to solve housing crisis

Sacramento just doesn’t get it. A housing crisis is not solved with new fees, bonds and local government process overrides.

Let’s talk about housing. KQED provides some of the gory details in a recent piece. But, allow me to elaborate. A quick tip, KQED provides the last act first.

For Senate Bill 3 (and 5), I provided the following abbreviated concerns on the Senate Floor:

  1. Let’s review the housing market over the last 11 years. In Orange County, the median price for a home in 1996 was $221,800. Ten years later, after the subprime mortgage boom (for fun, watch “The Big Short”), the median rose to $739,000. With the Great Recession, the median went down to $498,200 in 2011. And, as of June 2017, it is back to $734,200.
  2. Why the recent resurgence?
    • A slow, but steady rise in job growth.
    • Foreign investors. They came in at the market low as a safe haven.
    • Explaining an increase of all-cash transactions; more than 50% in 2013.
    • This has caused a decrease in home ownership and more renters.
    • Difficulty for developers to obtain entitlements and to build.
    • The other usual suspects, like NIMBYism, CEQA and open space demands.
    • For those lucky enough, try working with the California Coastal Commission.

It makes you wonder, what has Sacramento done to address foreign buyers and entitlement restrictions? And, I can see now why SB 714 (Newman) was removed from the calendar this last week, as it doubles down on taking entitled property for building new homes in the city of Brea and requiring total open space. Boy, this bill was so out of touch, the Democrats had to save the author from himself.  But, I digress.

  1. What is the current dilemma?
    • Americans find the home buying process too overwhelming.
    • They find it too difficult to come up with the down payment.
    • More than other generations, millennials value experiences over ownership.
    • Americans change jobs more often than in previous generations.

With SB 2, Sacramento will be adding to the burdens. Within minutes, the Democrats also voted for AB 166 (Salas), which provides exemptions from the new SB 2 fees. You can’t make this stuff up. And those who qualify are not those going through a foreclosure!

Then I warned them about issuing more debt by sharing the following disturbing data from Moody’s Investors Service. Among the 10 largest states in the nation, California joins Illinois and New York as the three worst in all of the following categories:

  1. Debt to personal income – 4.70%, when the median for all states is 2.50%.
  2. Debt per capita – $2,323, when the median is $1,025.
  3. Debt as a percentage of state GDP – 3.94%, when the median is 2.21%

And the state’s own bond credit rating is a measly AA-, just above Illinois, at BBB+. This means that California will be paying higher interest rates than issuing states with top credit ratings.

If this wasn’t enough of a reason to vote against the bond measures, I also gave a lecture on future budget and balance sheet concerns – a “what’s up?” listing:

  1. A $4 billion bond translates into $225 million per year in payments! Where will this come from?  The Senate approved two such bond bills on Friday.
  2. The annual contributions for CalPERS and CalSTRS are also rising.
  3. The Proposition 98 school funding threshold into the General Fund is also rising.
  4. The minimum wage is rising and will impact the budget by $4 billion per year.
  5. The recent voter approved $9 billion bond for school improvements will impact the General Fund by $500 million per year (no wonder the Governor hasn’t released any tranches).

What does all this mean? In a few short years, the General Fund is screwed. But I put it more politely on the Senate floor, stating that “it will be dramatically impacted. Good luck with that.”

Sacramento so much wants California to be like other blue states that are heading for the fiscal precipice, such as Connecticut, Illinois and New York. And quickly. But, this is the wrong race to be in.

You can bet the governor will sign these bills and the monopoly party will pat themselves on the back for once again dealing with a problem with inappropriate solutions. Tragic.

Who Runs Our Government?

Many years ago, it became clear to many of us that Sacramento had two parties, the Republican Party and the Union Party. It is amazing how many bills are approved that incrementally give unions, both public and private, more and more territory over management or nonunion private sector businesses.  It’s a testimony to their effectiveness, that such a small portion of the work force can control so much influence. Now that they have so much influence, that the changes they seek are no longer incremental.  In fact, they are swinging for the fences and seem to be closing in on wholesale ownership of the state.  They will use their power to the fullest, following the dictum of “more.” They are proving that they are “the Daddy” around the Capitol.

The most egregious example this year is AB1250. Almost every newspaper in California has opined against this bill. Consequently, it was reported that it has become a two-year bill. Yet, we have been told that AB1250 may come back to the Senate floor today or tomorrow for a vote (also see MOORLACH UPDATE — AB 1250 OC Opposition — September 5, 2017 MOORLACH UPDATE — AB 1250 Labor Dominance — July 13, 2017 MOORLACH UPDATE — AB 1250 Labor Dominance — July 13, 2017 ).

With this shadow hanging over the Legislature, I submitted one last editorial in opposition and it was published by Fox & Hounds.

Moorlach Update – Whistleblower Reaction

The Senate voted on nearly 200 bills and then adjourned for the week a few hours ago. The only bill a reporter asked my opinion on was SB51. “Why did I vote against it?”

SB51 addresses a certain category of whistleblowers. Having held this title for my efforts back in 1994, you should know that I like whistleblowers very much. Earlier this year, I wrote a bill to protect whistleblowers in college who were being persecuted, vilified and punished for their political beliefs by college professors and administrators. This was a very real problem in my district. See Senate Bill 677, the Student Whistleblower Protection Act.

Incidentally, my bill died at the hands of the legislator who authored SB51, and she was the only opposing vote on SB677 (it received 2 votes, but the other Senate Judiciary Committee members abstained). You’ve got to love the ironies up here in Sacramento.

While the reporter accurately reflects my comments, focusing on my concerns that there were negative fiscal impacts of the state of California absorbing work undertaken by the federal government, it must also be said that my legislative colleagues need to be a little more circumspect and less reactionary in the work we’re doing in the state capitol. SB51 is another bill in a long list of anti-Trump measures that has no real bearing on fixing our poorly run state.

Yes, we need courageous people to stand up when government messes up, which is often enough. However, a new federal administration has the ability to run its websites as it sees fit as long as it obeys all relevant public information and transparency laws.

In all seriousness, while this may be a problem for some, pulling politically controversial links claiming “scientific consensus” on climate change off of a federal government website does not rise to a level of concern for me. As far as I can tell, the information hasn’t disappeared and is available to those that need it. Indeed, all of the scientific data prepared by scientists, often with government grants in government institutions or institutions of higher learning, is redundantly saved and shared in numerous places and any concerns of it being lost are absurd and rise to the level of hyperbole. I tried to address this issue during the very predictable debate over cap and trade on my website, as I prefer providing more information to you, rather than less.

The Mercury News provides my response. Next week we’re anticipating going through more than 300 more bills. The fun life continues.

John Moorlach, R-Costa Mesa, is a state senator representing the 37th District.

Freedom flourishes in San Francisco — if you can afford the rent.

San Francisco, CA, USASan Francisco, that most forward-looking of cities, has looked backward this summer. Half a century after an estimated 100,000 young Americans descended on the 20 blocks surrounding the intersection of Haight and Ashbury Streets to “tune in, turn on, and drop out,” the city has commemorated the birth of America’s counterculture. A frenzy of nostalgia—exhibitions, concerts, conferences, lectures, installations, street fairs, walking and “magical mystery” bus tours—has celebrated all things “hippie.” More than 50 of San Francisco’s best-known institutions — the California Historical Society, de Young Fine Arts Museum, University of California at Berkeley, San Francisco State University, San Francisco’s ballet and opera companies, dozens of art galleries, and private merchants — paid tribute to 1967’s Summer of Love, iconic shorthand for a decade that not only shattered the city’s and the nation’s cultural and political norms but also gave birth to a countermovement that elected Ronald Reagan as California’s governor—and, in 1981, the nation’s president. In 1966, Reagan ran explicitly against student activism in Berkeley, which was then merging with the growing youth movement across the bay in the Haight-Ashbury neighborhood to create the hippie counterculture.

California’s political schizophrenia, an enduring hallmark of the state’s politics, may have predated that fateful summer, argues Adam Hirschfelder, director of strategic initiatives for the California Historical Society, but it was “deeply exacerbated by the 1960s counterculture.” It is an irony not lost on some sponsors of these myriad anniversary “happenings” that, while San Francisco has been celebrating the youth culture that evolved into “San Francisco values” — left-wing or rigidly liberal politics, social tolerance, gender and sexual freedom, a shared sense of community, concern about the planet’s inherent fragility, and an embrace of change — President Donald Trump was marking a half-year in the White House by proclaiming in tweets and speeches the triumph of his own unorthodox, nostalgic political upheaval, one aimed at making America “great” again.

Today, San Francisco is better known as the home of another kind of revolution — that of high tech and Silicon Valley, which, by some accounts, owes much to the ideas and institutions that emerged during that fateful summer 50 years ago. It’s no accident, many argue, that the Bay Area became high tech’s geographic and spiritual global headquarters. Information, too, wants to be “free.”

By now, the information revolution has long since overrun the countercultural revolution, at least economically. Well-heeled techies have displaced latter-day hippies, says Stannous Fluoride, a wry, well-informed guide for Flower Power Walking Tours in the Haight. He spoke with me while guiding tourists along the Haight’s tree-lined streets and elegant late-Victorian houses, the so-called Painted Ladies, where Janis Joplin, Jimi Hendrix, Jefferson Airplane—and, yes, the mass murderer Charles Manson and Jonestown’s infamous Reverend Jim Jones—once lived or hung out. “What helped make the counterculture possible was cheap rent,” he says. But since 1987, San Francisco’s median home price has exceeded New York’s, and for years, the city has had the dubious distinction of being the nation’s most expensive; it appeared last year on the Guardiannewspaper’s list of the world’s ten costliest places to live. The older, avant-garde Beats and, later, the teenage hippies who flocked here could not have afforded to live in the city today. The musicians who combined elements of jazz, blues, folk, and rock and roll at the Fillmore West and the Avalon Ballroom to produce a quintessentially American sound would not be able to pay the rates at even a decrepit recording studio today, much less the run-down house at 710 Ashbury Street once shared by San Francisco–born Jerry Garcia and other members of the Grateful Dead, the band that embodied the counterculture spirit.

Heroin, opioids, and crime are on the rise again in Fog City. Homelessness has again become a plague, and not only in the Haight. Billionaires step over sleeping bags and dodge dog feces on sidewalks to enter some of the nation’s most expensive restaurants. A city with more dogs than children, San Francisco has become, like New York, a city of extremes of wealth and poverty, with too few of the middle-class adults upon whom urban cultural and economic vibrancy ultimately depend.

According to Salon founder David Talbot, a San Francisco Chronicle columnist and author of Season of the Witch, a sweeping chronicle of the counterculture, “San Francisco values” did not “come into the world with flowers in their hair,” he wrote. “They were born howling in blood and strife.” As his book and the most forthright of the commemorations make clear, San Francisco endured years of “frantic and often violent conflict” after that much celebrated summer of ’67—the political assassinations of a mayor and the first openly gay member of the city’s Board of Supervisors, bombings, riots, kidnappings, serial race murders, antigay street mayhem, the biggest mass suicide in history in Jonestown, and a panic-inducing AIDS epidemic—before the city finally “made peace with itself and its new identity.”

Still, as Talbot argues, the counterculture could have been born only in this city of outcasts. Despite its modern-day obsession with astrology and all things spiritual, San Francisco, or Yerba Buena, as it was initially known, has always been unapologetically ribald, eccentric, and moneygrubbing. While most of America’s eastern cities were founded by God-fearing Puritans seeking freedom to practice their faith and form communities of decorum, the men who came to the Bay Area were schemers and dreamers, attracted by the lure of gold, copper, and silver, or by the opportunity to sell life’s essentials to those hoping to acquire them. (See “California Emerges,” Winter 2015.) By 1866, Talbot reports, the city had 31 saloons for every place of worship. Even the great earthquake of 1906, which some evangelical preachers considered God’s verdict on “Sodom Francisco,” failed to dampen the raucous, bar- and burlesque-filled energy and profits generated by the Barbary Coast. William A. Kelley, a visitor in the early 1990s, described San Francisco as a city of “precocious depravity.”

By the 1930s, however, the city’s more staid, God-fearing Irish—and later, Italian-Catholic families—had solidified their political control and imposed a new, unaccustomed order. San Francisco’s upper class had long been at least half-Catholic, a distinction among American cities shared only by Baltimore and New Orleans, notes Michael Anton, a native San Franciscan and critic of the city and its culture. The Catholic Church’s influence permeated key institutions, particularly city hall and the San Francisco police department. Cops routinely rounded up gays and lesbians in midnight raids. At the same time, the radical longshoremen’s union and the Democratic Party became embedded in the city’s political DNA.

But San Francisco’s inherent rowdiness could not be suppressed forever. It erupted once again in the mid-1950s, says historian Dennis McNally, when poet Lawrence Ferlinghetti’s City Lights Press (founder of the eponymous bookstore) published Allen Ginsberg’s poem “Howl,” warning that America was becoming a soulless monster of consumerism and conformity. “Howl” “lit a fuse and defined a mass of disaffected proto-artists who didn’t buy into mainstream values,” McNally wrote in an essay for the de Young museum’s catalog of its April-August exhibition Summer of Love, Art, Fashion, and Rock and Roll, a display of some 300 rare and familiar concert posters, photos, films, interactive music-and-light shows, and the embroidered denim jeans and loose-fitting shirts and dresses that forever changed how young Americans, especially young women, dressed. Arrested and charged with obscenity for selling Ginsberg’s poem, Ferlinghetti and the clerk who had sold the book to an undercover cop stood trial. Their acquittal in October 1957 was a pivotal free-speech victory that helped fuel the 1964 Free Speech Movement at Berkeley. Another precursor of the coming upheaval came in 1960, when protesters ran the House Un-American Activities Committee out of San Francisco after it tried holding hearings in the city. In 1965, psychedelic proselytizers Ken Kesey and Timothy Leary, along with members of the Grateful Dead, began hosting “acid parties,” at which LSD and other mind-bending drugs spiked communal punch bowls and were distributed to runaways for free.

Many historians date the unofficial birth of the Summer of Love to the winter of 1967—specifically, to January 14, 1967, when tens of thousands of “freaks,” as hippies then called themselves, gathered in Golden Gate Park for a “Gathering of the Tribes for a Human Be-In.” For a full day, they ate, chanted, sang, and listened to rock bands, poems by Ginsberg, Gary Snyder, and Michael McClure, and speeches by Timothy Leary, Shunryu Suzuki Roshi (the “primary apostle for Zen Buddhism in America,” as McNally calls him), and Berkeley radicals like Jerry Rubin. At day’s end, audience members picked up the trash, leaving the park spotless, to the amazement of police. The media took note, finding in the gatherings in and near the Haight a sharp counterpoint to the bloodshed of the Vietnam War. Hippie culture made the cover of Time. John Phillips of the Mamas and the Papas wrote a song encouraging people to attend the Monterey International Pop Festival in June wearing “flowers in your hair.” To ensure that they did, the festival flew in 10,000 flowers from Hawaii.

As legions of teenagers eagerly anticipating summer break made plans to travel to San Francisco, city government looked at the impending human flood with indifference. Meetings between Haight merchants seeking help from the mayor and city officials came to naught. The Haight would have to fend for itself. The “Diggers,” political provocateurs and members of a former mime troupe, provided volunteer services for the youth pouring in to the city—free food and clothing, “feed-ins” near City Hall, and a parade to celebrate “the death of money.” The Diggers sought to “liberate San Francisco’s consciousness” by arguing that food, shelter, health care, and even entertainment were not commodities but fundamental human rights. Their posters and street manifestos were the most “passionate expressions of what would later be called San Francisco values,” McNally wrote.

To rescue teenage runaways from being swept up in police dragnets, activist lawyers formed the Haight-Ashbury Legal Organization, or HALO, funded by the Grateful Dead and other bands’ benefit concerts. In 1967, Huckleberry House, the nation’s first alternative shelter for runaways, opened its doors. That same year, Robert Conrich, a physician and LSD enthusiast, launched the Haight Ashbury Free Clinic, which proclaimed: “Health care is a right, not a privilege,” according to Talbot. Kids freaking out during bad acid trips or bouts of suicidal depression filled the clinic’s “calm center,” where they received care from volunteer staff.

But these efforts were soon overwhelmed by the tens of thousands who flocked to the city that summer. Hard-drug merchants began replacing the dispensers of marijuana and LSD-spiked punch. The neighborhood’s fragile infrastructure crumbled under the weight of too many homeless people and too few city services, rendering the Summer of Love a “slightly cruel joke,” McNally observed. “By Labor Day, the Haight was a tourist carnival nightmare. By 1968, Haight Street would be inhabited by children shooting methedrine and heroin. The magic died hard.” Crime had doubled in the neighborhood by 1976.

Keepers of the counterculture flame note that some of what emerged from the Haight—especially what McNally calls a “Thoreauvian respect for the environment”—would eventually become mainstream beliefs. Many of the radical or fun-seeking counterculture pioneers may have left the Haight after the Diggers staged a “death of the Hippie” procession in October 1967, but they took their alternative ideas and lifestyles back home with them. Others went on to found communes and alternative communities elsewhere. Some activists would launch successful ventures—Stewart Brand, for instance, the army veteran who spent time on Ken Kesey’s bus, started the Whole Earth Catalog, which linked the counterculture to the digital future. “Counterculture values would be a significant part of the subsequent growth of Silicon Valley as the nation’s new technological center,” McNally wrote. “If you meditate in some fashion, or eat organic food, or do yoga, or support gay marriage, or are concerned about the environment and the survival of the planet, you are still swimming in the currents that picked up such a froth here in the 1960s.”

Others scoff at these ostensible achievements. San Francisco’s hedonist narcissism distracts from the huge challenges that the city now confronts—among them, scarce, overpriced housing and staggering income inequality. The top 1 percent of households in San Francisco’s metropolitan area earned $3.6 million on average in 2013, according to one report—44 times the average income of the bottom 99 percent. And San Francisco’s 1 percent, the Bay Area’s new gilded class, demands ever more from a city to which it gives relatively little philanthropically. Fund-raisers for impoverished children in South Sudan and to protect the Amazon are oversubscribed, while the city’s excellent opera company and ballet struggle financially.

It is San Francisco’s smug self-satisfaction that so enrages critics like Michael Anton, the San Francisco native who now works for the Trump White House in national-security communications. In a blistering 2015 critique in the Claremont Review of Books, Anton asserted that “San Francisco values” had come to reflect little more than a “confluence of hippie leftism and filthy lucre,” a marriage of convenience between “old-time materialism and hippie ‘morality.’ ” What kept the Summer of Love veneer going for so long, he asserted, is the implicit deal between the high-tech oligarchs and the hippie rank-and-file. “The latter not only decline to use their considerable propaganda skills to vilify the former, but cheerfully glorify and whitewash them,” he wrote. “The oligarchs in turn subsidize the lefties through nonprofits and make-work jobs” and, more important, “take their cues from them on matters of politics not directly contrary to their economic interests.” Both groups benefit from what he called this “socio-intellectual money laundering.” The resulting policies have done little to create opportunities for an aspiring middle class that is neither elite nor bohemian.

Anton is not wrong about the less savory aspects of the counterculture. A notable omission in the city’s much touted tradition of “tolerance,” for instance, is that it rarely extends to politics. There is no welcome mat out for Republicans, especially conservatives. Student mobs at Berkeley boast about preventing conservative scholars from speaking on campus. Socially liberal but fiscally conservative activists like David Crane, who worked as Governor Arnold Schwarzenegger’s finance director, struggle to raise funds for candidates willing to question the pension burdens being imposed on future generations by San Francisco liberals in the name of “workers’ rights.” Several Republican city residents confided that they would never display a Trump/Pence sticker on their car or home window for fear of vandalism.

Nor have many counterculture enthusiasts noted the irony of the use of the Summer of Love as yet another marketing tool for tourism, now a key industry for San Francisco. The San Francisco Travel Association predicts that some 25.6 million tourists will visit the city in 2017 and spend roughly $9.22 billion. Museums and other commemoration sponsors say that attendance is strong. “People throughout the world still care about what happened here when the counterculture was vibrant and organic,” said Hirschfelder of the California Historical Society, whose superb exhibition was curated by McNally.

McNally concedes that some of the commemorations have been “silly and trivializing.” The Summer of Love “wasn’t about love-ins and long hair,” he said. “It was about a movement and a generation that changed this city, the nation, and the world. It was about a serious challenge to the status quo. And that,” he said, “is always to be honored.” Or, at least, remembered.

Rent Control Makes for Good Politics and Bad Economics

affordable housingOne needn’t read very much about public policy before coming across some statement to the effect that “bad economics makes good politics.” This statement is clearly untrue when good politics is defined as furthering mutually beneficial arrangements, as good economics is central to that task. But the statement is often true when good politics is defined as attracting 50%-plus-one votes on some issue or candidate, which is a much different standard, leaving plenty of room for government-imposed harms to be imposed on citizens.

Few issues reflect this divergence between “good” politics and bad economics more clearly than rent control. One of the most universally accepted propositions among economists is that rent control produces a host of adverse social consequences with its large involuntary redistribution of wealth and suppression of market prices as communicators of information and incentives. Despite that, it has been adopted as policy in many places and times — and now is a good time to revisit these issues, as efforts are currently underway in several states (including California, Oregon, Washington, and Illinois) to repeal existing statewide restrictions on rent control.

How Rent Control Destroys Value

Rent control takes a large portion of the value of residential properties from landlords. It does so by removing owners’ rights to accept offers willingly made by potential renters. And the value of the rights involved are large. For example, after Toronto imposed rent control in 1975, affected building values fell by 40% over five years, and a decade ago, such losses were estimated at $120 million annually in Santa Monica. A law like rent control, which can take half or more of each apartment’s value from the landlord, harms them just as much taking away half of their apart­ments, even though the latter is recognized as theft. Those stripped property values are given to current tenants, whose resulting bonanzas are shown by the fact that those under strict rent control almost never leave.

Rent-Controlled United Decline in Quality and Quantity

By taking away so much of the effective ownership of rental housing from owners, rent control creates several other additional adverse effects. Without owners’ ability to capture the value of their buildings, the rental housing stock deteriorates in both quantity and quality. Reduced incentives for maintenance and repair erodes existing rental housing. Further, owners retain little incentive to construct new rental units, bringing new apartment construction to a virtual halt, taking with it local construction jobs and tax revenues. Rental units are also converted to condos and non-housing uses to escape the burdens rent control imposes. All of this reduces rental housing availability, which worsens the problem of inadequate housing rather than alleviating it.

Rent control also increases discrimination and landlord-tenant hostility. Owners who can no longer be compen­sated for increased costs created through crowding, water usage, potential damage, or reduced probabili­ty of actually paying the rent — or any other unattractive tenant charac­teristic — have sharply reduced incentives to accommodate those who might impose them. This is why rent controlled areas, rather than helping those of low and moderate means, become increas­ingly popu­lated by higher income tenants with few children. Further, tenants bla­me “greedy” land­lords for not providing the services they desire, and landlords view tenants as the enemy engaged in an ongoing rip-off, even though rent control is the real culprit.

Rent Control Creates Black and Gray Markets

Rent control’s artificial restrictions on mutually agreed upon exchanges also lead to evasion attempts, such as under-the-table payments, agreements to renovate apartments or upgrade appliances at private expen­se, personal connections, etc. Not only do these alterna­tive forms of competition favor higher income renters, rather than “the poor” (who populate rent control rhetoric but far less of the housing available under it), they lead to rent control boards to stymie such at­tempts. That enforcement, as well as the costs land­lords must bear both to defend them­selves and comply with its edicts, consumes a great deal of resour­ces that could have been put to productive uses.

Despite such an overwhelming case for rent control being bad economics, why has it not been equally politically unattractive? The essential reason is that in cities where rent control is imposed, existing local renters, who are the recipients of the value taken from landlords, form a political majority who approve of that theft, vote for it, and go to great lengths to rationalize and defend it as part of “the wonders of democracy.”

Rent control offers current tenants perhaps the greatest economic returns of any policy they could use their majority power to enact. Not only do they save what can far exceed $1,000 a month compared to what market prices would be, they are also awarded what amounts to life tenure. If you saved $1,000 a month and stayed 10 years, that would be $120,000, while staying 21 years would generate over a quarter million dollars in benefits. And many long-term tenants have saved themselves far more. What other political act offers local renters so great an economic benefit in exchange for their votes?

Rent control’s “pro renter” rhetoric also allows a powerful form of misrepresentation. Rent control benefits current renters, but it does not benefit renters overall. It harms all renters and potential renters who aren’t already in rent-controlled units. It harms all those who seek to rent apartments after rent control is imposed, mainly finding “no vacancy” signs instead. But they don’t get a vote in the communities to which they’d like to move. Even though those who are eventually successful in finding a controlled unit have been harmed, once there, they don’t want their finally-achieved good deal halted. Rent control also harms renters in surrounding communities, as the restricted supply of available units raises rents there, as well. But they don’t get a vote, either. Rent controls also harm those who rent houses, which are usually exempt, because rent control’s reduction in housing availability leads those rents to be bid up as well.

Rent control also involves unusual characteristics that weakens and divides opposition.

The Long-term Effects of Rent Control

Because housing is durable, there is an unusually sharp dichotomy between short-run and long-run effects. The short-term effect of imposing rent controls on the available supply of rental units is quite small. Proponents can focus only on the immediate effects to argue that objections are unsubstantiated. However, the cumulative effect of ongoing rent control is very large, leading many economists over the years to recognize its ability to decimate the supply of urban housing.

Property owners, who might be expected to be unified in opposition to the threat to property rights rent control poses, are also subject to divide and conquer techniques.

Not only are rental housing owners far outnumbered by current tenants, many of them live outside the jurisdiction considering rent control, undermining their voice. And if they raise money for an opposition campaign, their efforts against the harm that would be imposed on them can be easily demonized as proof of how much they rip off tenants whenever they are given a chance.

Some Property Owners Benefit

Property owners are also split in other ways. Owners in neighboring areas, who would otherwise tend to side with those in the jurisdiction considering rent control, due to the similar threat posed against them, can be bribed away because the reduction of housing supply “next door” increases their demand and raises their rents. Owners of commercial property, who are usually exempt from rent control, can benefit from higher rents for their properties due to the influx of higher income residents rent control brings. The restriction in supply of rental units in an area also raises the price of owner-occupied homes, undermining their support against rent control.

Rent control can give current tenants massive windfalls taken from owners by their dominant majority vote. That also means politicians who cater to that politically dominant majority can more easily acquire and maintain power. The fact that current tenants benefit at the expense of those in nearby areas and all other future prospective tenants can be masked by pretending current tenants interests are the same as all actual and prospective tenants. Rent control also splits owner opposition to the threat of expropriation by exempting commercial uses and houses in the jurisdiction by increasing the value of their properties, as does the spillover gains they capture from the reduced supply of rental housing nearby. That combination goes a long way to explain why, in majority renter areas, the truly bad economics of rent control frequently translates into “good” 50%-plus-one piracy politics.

Gary M. Galles is a professor of economics at Pepperdine University. He is the author of “The Apostle of Peace: The Radical Mind of Leonard Read.”

JFK or Patrick Henry?

U.S. President John F. Kennedy reports to the nation on the status of the Cuban crisis from Washington, D.C. on Nov. 2, 1962. He told radio and television listeners that Soviet missile bases "are being destroyed" and that U.S. air surveillance would continue until effective international inspection is arranged. U.S. government conclusions about the missile bases, he said, are based on aerial photographs made Nov. 1. (AP Photo)

May 29 marked the 100th anniversary of John F. Kenney’s birth, which has triggered multiple Camelot retrospectives. Seldom do they omit JFK’s power to inspire, often illustrated with his most famous quote: “Ask not what your country can do for you – ask what you can do for your country.” However, while many find it inspirational, it has been put to more ominous use. And comparing those words with those of Patrick Henry, who shares the same birthday, illustrates why.

Kennedy’s speech was inspired by a Kahlil Gibran article whose Arabic title translates as “The New Frontier.” It said, “Are you a politician asking what your country can do for you, or a zealous one asking what you can do for your country? If you are the first, then you are a parasite; if the second, then you are an oasis in the desert.” But Kennedy dramatically altered its meaning.

Clearly, politicians who benefit by abusing their positions are parasites. In America, with Washington supposedly limited by the Constitution to few, enumerated powers solely to advance the general welfare, such abuses are even more blatant. The same holds for everyone seeking special government treatment.

However, extending “ask what you can do for your country” from politicians and special treatment seekers to citizens turns America’s foundation on its head. Asking citizens to sacrifice for the country, with the government a misleading proxy for society, implies we were made for government’s benefit, rather than it for ours.

That is how “ask what you can do for your country” has been employed to create innumerable government policies helping some by imposing involuntary burdens on others, sacrificing America’s broad interests to political causes and favorites.

Kennedy was also addressing “what together we can do for the freedom of man.” But financing the unjustifiable policies that dominate politics sacrifices others’ life, liberty and pursuit of happiness rather than advancing freedom. And America’s federal government was explicitly limited to the few goals we actually share, such as defense against aggression and invasions of our common, inalienable rights, which describes liberty, not goals where some with shared interests force the costs of advancing them onto others, which is diametrically opposed to liberty. As Milton Friedman once put it, the latter is “at odds with the free man’s belief in his own responsibility for his own destiny … .[It] implies the government is the master … the citizen, the servant.”

The words of Patrick Henry, America’s “Orator of Liberty,” reinforces the large gap between JFK’s “ask not” and the liberty which inspired both the Declaration of Independence and the Constitution. Consider some of them:

Liberty ought to be the direct end of your government.

We wish to be free … we mean to preserve inviolate those inestimable privileges for which we have been so long contending.

Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!

Liberty is the greatest of all earthly blessings.

In the language of freemen, stipulate that there are rights which no man under heaven can take from you.

Guard with jealous attention the public liberty. Suspect everyone who approaches that jewel.

When the American spirit was in its youth … liberty, sir, was then the primary object … the foundation of everything.

The Constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government – lest it come to dominate our lives and interests.

No free government, or the blessings of liberty, can be preserved to any people but by … frequent recurrence to fundamental principles.

If our descendants be worthy of the name of Americans they will preserve and hand down to their latest posterity the transactions of the present times … to preserve their liberty.

Many have found JFK’s “ask not” inspirational. But it has been utilized for many purposes that are directly opposed to American liberty. That is why we need to also remember the unmatched potential and inspiration liberty offers us, which Patrick Henry’s words make clear. We must recognize that rhetoric, however inspirational, does not advance American’s interest when it leads us away from liberty

Gary M. Galles is a professor of economics at Pepperdine University, an adjunct scholar at the Ludwig von Mises Institute, a research associate of the Independent Institute, a member of the FEE faculty network and the Heartland Institute’s Board of Policy Advisors. His books include “Apostle of Peace” (2013) “Faulty Premises, Faulty Policies” (2014) and “Lines of Liberty” (2016).