“Temporary” Taxes Forever

tax signNothing is so permanent as a temporary tax. In California, the state’s most powerful public-employee lobbies are preparing two initiatives for the November 2016 ballot that would either extend or simply make permanent an income-tax increase on the state’s highest earners that was scheduled to expire at the end of 2018. Legislators and their union patrons can hardly contain themselves.

Anyone with eyes to see could have predicted this turn of events. In 2012, the Golden State faced a $16 billion budget deficit caused almost entirely by unchecked entitlements, poor revenue estimates, and years of bad legislative choices. Governor Jerry Brown went to voters and said, in effect, he wouldn’t raise their taxes; he wanted them to raise taxes on themselves. But he promised that the pain would only be temporary. And if voters didn’t go along, well, the governor couldn’t guarantee what might happen next to public schools, health care for the poor, and other beloved programs. No pressure or anything — just vote for Proposition 30 and nobody else would get hurt. Brown tramped up and down the state in the weeks before the election, quoting scripture as he often does to make his case. When the ballots were all counted, 55.4 percent of voters went along.

Prop. 30 amended the state’s constitution to raise the sales tax from 7.25 percent to 7.5 percent for four years and retroactively hiked for seven years the income tax on Californians earning more than $250,000. The top tax bracket went from 10.3 percent to 13.3 percent, giving the Golden State the distinction of boasting the highest marginal income-tax rates in America. The “temporary” measure was supposed to raise anywhere from $6.4 billion to $9 billion a year, with the bulk of the money intended for public schools (or, at least, the public school teachers’ beleaguered retirement fund). Brown admonished legislators in his January 2013 “state of the state” address not to let the additional revenues cloud their judgment. “The people have given us seven years of extra taxes,” he said. “Let us follow the wisdom of Joseph, pay down our debts, and store up reserves against the leaner times that will surely come.”

That notion lasted about a year before state officials — the ones not named Brown — began speaking openly of extending the Prop. 30 hikes forever. Then, earlier this year, California’s Service Employees International Union and the California Teachers Association met to discuss a ballot initiative, dubbed the “School Funding and Budget Stability Act,” to extend Prop. 30’s income tax portion at least through 2030, when everyone will have forgotten why the additional taxes seemed necessary in the first place. The SEIU-CTA measure would purportedly raise between $5 billion and $11 billion annually, depending on the performance of the stock market. The state’s nonpartisan Legislative Analyst’s Office has long pointed out that the state relies too heavily on capital gains taxes, making revenues volatile and difficult to predict. “Near the midpoint of this range — around $7.5 billion — is one reasonable expectation of the additional revenue that this measure would generate in 2019,” the LAO’s analysis of the SEIU-CTA initiative concludes. “Thereafter, through 2030, that amount will rise or fall each year depending on trends in the stock market and the economy.”

A second proposal by the SEIU-United Health Care Workers West, the California Hospital Association, and Common Sense Kids Action — cloyingly titled the “Invest in California’s Children Act” — would drop any pretense of sunset dates and permanently enshrine the 13.3 percent bracket in the tax code. It also would impose even higher rates on “super-earner” couples who make more than $2 million a year.

The measure could raise upward of $10.6 billion yearly — again, depending on the market — with 45 percent earmarked for K-12 education, 5 percent for community colleges, 10 percent for child development programs, and 40 percent for Medi-Cal, the state’s version of Medicaid. Common Sense Kids Action is the brainchild of Jim Steyer, brother of billionaire environmentalist Tom Steyer. Jim Steyer contends that early childhood programs such as First 5 California, funded by cigarette taxes and Head Start, are at once indispensable and insufficient. He argues that his measure simply asks the richest Californians to “pay a little more so we can make the investments every California kid needs to have a great start in life.”

Last month, the different groups began a series of meetings to see whether they could avoid an expensive and divisive campaign next year. The teachers unions are keen to expand the 1988 state constitutional mandate requiring at least 40 percent of the general-fund budget be allocated to K-12 education. They’d like to push it to 50 percent. But the health-care lobby, particularly the California Medical Association, has been pushing for the state to increase Medi-Cal reimbursements to doctors. If the CMA and the hospitals can’t get a larger cut from permanently higher income taxes, they might push for yet another $2-a-pack cigarette tax.

Where is Brown in all this? “I said when I campaigned for Prop. 30 that it was a temporary tax,” Brown said in October 2014. “That’s my belief, and I’m doing what we can to live within our means.” He added, “Don’t worry about having too many Democrats in Sacramento. If they get out of hand, I’ll keep them in check.” Brown reiterated his point in January in response to another reporter’s question. “I said that’s a temporary tax,” he said curtly. And when Brown released his revised 2015-16 budget in May, the 104-page summary noted that general-fund revenues are expected to keep growing even without Prop. 30’s additional taxes.

But now the governor is being coy and his spokesmen nonresponsive. The interests that secured Brown’s historic third and fourth terms are taking no chances. Unlike death and taxes, Jerry Brown will be gone in January 2019. The CTA, SEIU, and the alphabet soup of Sacramento lobbyists will be around forever.

California’s Uber Hunt

uberThe way things are going, Uber may soon face a court challenge in California over its failure to use an umlaut. The popular ridesharing startup has already been hit by an administrative law judge’s recommendation that the company pay $7.3 million in damages and suspend operation in the state. At issue: Uber’s alleged failure to provide the California Public Utilities Commission with internal data about how many customers with service animals or wheelchairs Uber drivers serve, along with time, location and fare data.

This decision came just a month after the California Labor Commission redefined the app-based ride-hailing service’s business model. In that case, San Francisco Uber driver Barbara Ann Berwick demanded that the company reimburse $4,000 worth of expenses. The commission ruled that Berwick, a transsexual who previously operated a phone sex business — Linda’s Lip Service — was a full-time-equivalent employee during four months of sporadic driving for Uber. (Berwick, now a financial consultant, expressed disappointment with the money an Uber driver makes.) The decision directly threatens Uber’s business model, in which drivers sign up as independent contractors with a minimum of the fuss and paperwork associated with modern hiring, choose their own hours, and are clearly remunerated on a piecework basis.

Last week, a U.S. district judge in San Francisco allowed a group of cab companies to proceed with a false-advertising lawsuit against Uber. The same judge also greenlit a suit against Uber claiming that it spammed potential drivers with recruitment text messages. That suit was dismissed when electronic records showed that one of the plaintiffs had begun pursuing the company herself.

Notably, complaints about Uber typically aren’t coming from customers, and even among the firm’s drivers, crusades like Berwick’s are rare. In fact, what’s striking about the various campaigns against ride-sharing is their reliance on paperwork and credentialing instead of outcomes. The CPUC, for example, doesn’t assert that Uber is harming actual handicapped people, only that the company has failed to produce paperwork that proves the absence of harm. Similarly, the cab companies’ speech-related lawsuit — which focuses on safety claims made in Uber ads — does not claim that traditional taxis are safer than Uber rides. The plaintiffs assert instead that cab drivers are subjected to more paperwork than Uber drivers.

The anti-Uber campaign’s reluctance to assess outcomes is understandable, given the public’s strong revealed preference for the company. Interest groups can complain, but drivers and customers continue to vote for Uber with their time and money. In a free country or a sane state, a clear market decision in favor of a business would be the end of the discussion. But Uber is increasingly under pressure to furnish evidence that its model works in theory as well as in practice.

The company recently commissioned Los Angeles-based BOTEC Analysis to measure service in low-income neighborhoods — a market in which anecdotal evidence already suggests that Uber’s influence has been positive. BOTEC compared UberX with taxi services in Van Nuys as well as Central and East Los Angeles. The median wait time for an UberX ride in L.A. neighborhoods was five minutes and 52 seconds; for a taxi ride, it was 14 minutes and 33 seconds. The maximum recorded wait time for UberX was 20 minutes; for a cab, 57 minutes. Despite Uber’s widely maligned practice of “surge pricing” — a concession to the law of supply and demand that is for some reason considered outrageous — UberX also soundly beat traditional cabs on price, with a median cost per ride of $6.28, versus $15 for taxis. Surge pricing didn’t even produce a higher maximum price. UberX’s max cost per ride was $11.68, against $22 for cabs.

BOTEC is led by UCLA public policy professor Mark Kleiman, a thoroughly un-libertarian, good-government figure. Nevertheless, Uber opponents have dinged the study as free-market propaganda from the Uber central command. SHOULD YOU TRUST UBER’S BIG NEW UBER VS. CABS STUDY? New York asks. (Answer: a definite maybe.) Meantime, L.A. Weekly wonders, “Is Uber really being straight-up about its commitment to serve folks other than young, white professionals and party people?” But defenders of the taxi status quo face an even bigger hurdle: Uber’s very existence is an advertisement for the free market. It’s an obviously less-regulated initiative that has produced measurable, positive outcomes across a wide spectrum. No wonder people hate it so much.

SF’s Police Chief Orders Officers to Play Nice for Appearance’s Sake

Police carEver since the eruption of violence in Ferguson, Missouri, following the death of Michael Brown, the nation’s police have come under severe scrutiny for any evidence of racial bias. The deaths of Eric Garner in New York, Walter Scott in Charleston, South Carolina, and Freddie Gray in Baltimore only intensified the focus on police tactics as buildings burned, protestors stopped freeway and bridge traffic, and cops clashed with civilians. Amid cries that “black lives matter,” widespread riots and further civil unresthave put police on their heels in cities that need their protection the most.

San Francisco police chief Greg Suhr responded to the threat of public turbulence and heightened awareness in a departmental bulletin published on April 27. Titled “Avoiding the ‘Lawful but Awful’ Use of Force,” the chief’s memorandum, number 15-106, began with something very close to an admission that his main concern involved publicity—not the safety of the police and public, but the media image of his subordinates and himself. “A ‘Lawful but Awful’ use of force is a use of force that is within the law and within Department policy,” Suhr wrote, “but an action that produces an undesirable outcome which is tragic not only for the individual(s) involved, but for all those touched by or exposed to the event.”

Reading like a disciplinary lecture from a high school principal, Suhr’s guidance noted that a previous bulletin “requires officers to create time, distance, and establish a rapport with people in crisis who are only a danger to themselves.” Creating “time, distance, and . . . rapport” seems to be bureaucratic jargon mandating that police give people threatening them and others a period for reflection, an opportunity to detach themselves from a confrontation, and an offer of sympathy and comfort. Suhr’s memorandum repeats the formula, embellishing on it and emphasizing that “the strongest officers are those who consider all options—including creating time, distance, and establishing a rapport.” Bulletin 15-106 concludes, in an idiom weak in literacy, “An officer may not discharge a firearm at a person who presents a danger only to him or herself, and there is no reasonable cause to believe that the person poses an imminent danger of death or serious bodily injury to the officer or any other person” (bolded phrase and italics in the original bulletin).

SFPD’s rank and file have interpreted the bulletin as an order to give offenders a “head start” (time) in escaping the scene (distance) of their disputes with law enforcement and ordinary citizens, encouraged by the friendly demeanor (rapport) of police they encounter. Officers of the law, not for the first time, are expected to conduct themselves in the manner of social workers. While such an approach to disorderly and illegal behavior is hardly new, it appears especially inappropriate when outbursts of civil upheaval are spreading.

The mission of police to maintain public order is obstructed in San Francisco, where lawlessness and contempt for the rights of others increase daily. Notwithstanding the technological revolution continuing in nearby Silicon Valley, San Franciscans must contend each day with more homeless occupying the pavements and parks, more aggression against ordinary people attempting to go about their business, and more outright, serious lawbreaking. Faced with growing turmoil, Chief Suhr has commanded his troops to stand down, the better to avoid media hostility.

Police personnel in the city are discontented with the bulletin and the attitude it represents, which they view as requirement for a “hands off” approach to miscreants. For the benefit of police and citizens alike, Suhr should withdraw his memo. But he is unlikely to do so. For those responsible for the tranquility of San Francisco, an image of failure appears preferable to media complications produced by “lawful but awful” use of force. In such an environment, fewer people will feel the call to put on the badge and protect and serve the public.

CA Dems Want State’s Overdrawn Pension Systems to Dump Fossil-Fuel Stocks

CalSTRS1California’s two mammoth public-pension funds — the California Public Employees Retirement System and the California State Teachers’ Retirement System — are short a shocking $225 billion that they’re going to need to pay for the retirements of government workers. But what is it about the two pension funds that worries the state’s Democratic Party? Their fossil-fuel investments.

Delegates to the state’s annual Democratic Party convention voted over Memorial Day weekend in favor of a resolution urging the funds to dump oil, natural gas, and coal stocks. The vote follows the introduction earlier this year of state legislation that would require the pension funds to sell all coal-related stocks and study the implications of dropping oil and natural gas stocks. With the resolution, local Democrats jumped on the divestment bandwagon, inspired by radical environmentalist Bill McKibben, which has so far persuaded the endowment funds of about two dozen universities to sell shares in fossil-fuel companies. Yet if CalPERS and CalSTRS’s past social-investing records are any indication, the real losers from divestment won’t be the energy companies, but California taxpayers.

“I’ve been involved in five divestments for our fund,” CalSTRS chief investment officer Chris Ailman told his board earlier this year. “All five of them we’ve lost money, and all five of them have not brought about social change.”

For several decades, California’s pension funds have been subjected to a dizzying array of social-investment prerogatives. A 2011 Mercer Consulting study found that CalPERS investment officials had to follow 111 different investment priorities relating to the environment, social conditions, and corporate governance. Many of these directives have proven calamitous to the two funds’ bottom lines. Eight years after CalSTRS and CalPERS divested their portfolios of tobacco stocks in 2000, a study found that the move cost CalSTRS $1 billion and CalPERS about $750 million in foregone profits. CalPERS also ditched investments in developing countries such as Thailand and India, because board members objected to labor standards in these countries. A 2007 report found that avoiding investments in developing counties cost CalPERS about $400 million.

Considering its investment track record, CalPERS can hardly afford to absorb such losses. A 2012 study ranked CalPERS in the bottom 1 percent among pension funds in rate of investment returns over the previous five years. Only recently has the fund’s investment performance started to improve.

Last year, CalPERS introduced a new policy discouraging divestment. “Fiduciary obligations generally forbid CalPERS from sacrificing investment performance for the purpose of achieving goals that do not directly relate to CalPERS operations or benefits,” the policy stated. “Divesting appears to almost invariably harm investment performance.” The pension fund also argued that divestment is a poor way of achieving social goals.

Advocates counter that the state shouldn’t put profits above people. The author of the Democratic Party fossil-fuel divestment resolution, R.L. Miller, who chairs the party’s environmental caucus, said that the declaration would send a “moral message that California will not invest in those businesses that burn our planet in the name of profit and this resolution is that message.” Delegates compared the action with worldwide divestment in South Africa’s economy beginning in the mid-1980s—a movement intended to isolate the country and persuade its government to dismantle Apartheid. In 2006, Wilshire Consulting estimated that divesting from South Africa had cost CalPERS about $1.9 billion.

The analogy between South Africa under Apartheid and fossil-fuel companies is strained, to say the least. The world was able to isolate South Africa because few major industrialized countries depended heavily on its economy. But fossil fuels are pervasive throughout the world, and the energy they produce drives the economies of most nations. More than 80 percent of the energy the world uses currently comes from fossil fuels, while only 9 percent comes from alternative energy sources (including nuclear). Even under the most optimistic scenarios, it will be decades before countries can end their reliance on fossil fuels, so the demand for them, and the profits they generate, will attract investors around the world, regardless of whether endowments and government-controlled funds divest of their shares in these firms.

More important in the coming years will be technological advances that allow cleaner energy from fossil fuels. The rapid shift in the United States to natural gas—which emits nearly 50 percent less carbon dioxide than coal when burned — has already helped the United States cut its greenhouse gas emissions by 10 percent since 2005. Meanwhile, some 1 billion poor around the world await electricity, and coal will likely fire their dreams.

None of this matters much to California’s advocate-legislators, who always have the state’s overburdened taxpayers to fall back on when their social-investing schemes backfire. California residents already face an enormous bill for unfunded pension liabilities. Last year, Governor Jerry Brown signed legislation more than doubling the annual amount that school districts must contribute to CalSTRS over the next five years. Meanwhile, local governments have been absorbing steep funding increases from CalPERS. An April Manhattan Institute report by senior fellow Stephen Eide found that 25 California municipalities saw their pension costs increase by between 47 percent (Garden Grove) and 537 percent (San Francisco) over the last decade. The report estimated that CalPERS’s bills would increase another 20 percent to 48 percent over the next five years for the largest municipal governments in the pension plan. CalSTRS and CalPERS, meanwhile, will have to take this new tax money and produce above-average investment returns to make up for big gaps in pension funding. If the funds miss their investment targets, taxpayers will be on the hook for additional money.

The proposed legislation mandating divestment offers insight into what California’s elected leaders think of their taxpayers. To assure pension-fund officers and board members that they won’t be blamed for any investment losses generated by divestment, the legislation says that these officials will be “held harmless and eligible for indemnification” in such cases. If only California’s taxpayers could be held harmless from their legislators.

SF Disability Discrimination Case Could Hobble Law Enforcement Nationwide

adaThe Americans with Disabilities Act, passed by Congress in 1990, was the product of good intentions. Its proponents — President George H.W. Bush chief among them — wanted to eliminate arbitrary barriers to the physically disabled. “Let the shameful wall of exclusion finally come tumbling down,” Bush solemnly declared at the legislation’s signing ceremony. The ADA sailed through Congress with little resistance. Unfortunately, as is so often the case with federal do-goodery, those good intentions produced a poorly drafted statute full of vague definitions, ambiguous obligations, and complicated enforcement schemes, made even worse by byzantine enabling regulations and far-fetched judicial interpretations.

Twenty-five years later, the true consequences of the ADA are still unfolding. Hijacked by trial lawyers, government bureaucrats, and activist judges, the noble goals of the ADA have brought instead a host of other absurdities: costly and ubiquitous (and largely unused) curb cuts and ramps in public areas; Braille buttons on drive-through ATMs; alcoholic pilots and truck drivers, deaf lifeguards, and one-legged firefighters; drug-addicted employees who can’t be fired, lest employers “discriminate” against a “protected class”; and serial litigants — some of whom have filed thousands of lawsuits — who make a cottage industry out of fly-specking small businesses’ compliance with arcane and prolix structural requirements for bathrooms and parking lots. Much to the likely chagrin of the ADA’s proponents, the definition of “disabled” is not limited to people in wheelchairs — it includes those suffering from morbid obesity, drug addiction, phobias, allergies, narcolepsy, sleep apnea, and dyslexia. Of the estimated 43 million “disabled” Americans protected by the ADA, fewer than 2 percent are in wheelchairs, the vast majority of whom reside in nursing homes.

Employers must “reasonably accommodate” this thicket of disabilities by restructuring job duties, granting leaves, providing technological support, hiring assistants, granting reassignments, making “individualized determinations,” and entering into “interactive dialogues,” all while ignoring “discriminatory customer preferences” and, of course, “traditional stereotypes” (no matter how well-founded). The ADA essentially requires employers to function as social workers and ignore the economic burden unless it constitutes an “undue hardship.” In short, the ADA has short-circuited common sense.

Alas, critics have railed against the asininity — and astronomical compliance costs — of the ADA, to no avail. Despite their most dire predictions about the law’s nonsensical potential those critics had no inkling of the ridiculous extremes that were yet to come, thanks to an inventive ruling of the San Francisco-based U.S. Ninth Circuit Court of Appeals.

Last year, in Sheehan v. San Francisco, the Ninth Circuit held that the ADA applies to law-enforcement officers, and requires them to “accommodate” armed, violent suspects if they are “mentally ill” (and therefore “disabled”). The case arose from an incident in 2008 involving two female police officers who were responding to a call for assistance by a social worker at a group home for the mentally ill. The social worker had been threatened with a knife by one of the residents under his care, a middle-aged woman with schizophrenia named Teresa Sheehan (whose condition had deteriorated because she refused to take her medication). The social worker wanted to have Sheehan involuntarily committed for 72 hours for evaluation and treatment, and requested that the police transport her to the mental health facility for that purpose. When the officers arrived, Sheehan became violent, grabbed a knife, and threatened to kill the officers. The officers drew their weapons and unsuccessfully attempted to subdue Sheehan with pepper spray. In the course of trying to arrest Sheehan (who was still brandishing the knife), the officers shot her several times. Sheehan survived, and sued the officers (and the City of San Francisco) in federal court for various claims, including violation of the ADA. Sheehan did not dispute that she was armed and violent. She alleged, however, that “the officers should have respected her comfort zone, engaged in non-threatening communications and used the passage of time to defuse the situation.” The federal district judge, Charles Breyer (younger brother of U.S. Supreme Court Justice Stephen Breyer), dismissed the case before trial on summary judgment. Sheehan appealed.

The Ninth Circuit ruled, as a matter of first impression, that the ADA applies to all arrests, even those involving violent confrontations, and that a jury should decide whether the officers “reasonably accommodated” the violent, knife-wielding suspect “by employing generally accepted police practices for peaceably resolving a confrontation with a person with mental illness.” The city appealed to the U.S. Supreme Court, which heard the case on March 23. The city contends that the ADA should not apply to police conduct when public safety is at risk. According to the FBI, about 400 people are killed each year by police—as justifiable homicides in the exercise of deadly force. Sadly, at least half the people killed by the police have mental health problems of some sort, according to a 2013 report from the Treatment Advocacy Center and the National Sheriffs’ Association.

Do we want juries second-guessing hundreds of police encounters each year to determine if armed, violent suspects were mentally ill and if the police “reasonably accommodated” the suspects? Police officers are not psychiatrists. They cannot be expected to diagnose whether a violent suspect is mentally ill or merely mean and aggressive. People who threaten to kill the police are by definition unreasonable and even irrational. Some social scientists believe that all criminals are emotionally disturbed; should this entitle them to special treatment by law enforcement? Hamstringing the police endangers public safety. Split-second decisions made in violent confrontations with armed suspects are not suitable for Monday morning quarterbacking. If the Supreme Court does not reverse the Ninth Circuit’s ludicrous decision in Sheehan v. San Francisco, the errant intentions of the ADA will have succeeded in disabling the police.

Fracking: California Newspapers Aren’t Telling the Whole Story

Anti-fracking sentiment is growing in California. In November, voters in Mendocino and San Benito Counties voted to ban the energy-extraction process, which involves injecting a pressurized mixture of water, sand, and chemicals into rock to release the natural gas trapped inside. In all likelihood, Golden State voters will be asked to consider a statewide fracking ban in November 2016. Not only do California’s environmentalists want to make a statement to the world; they also believe an anti-fracking ballot initiative would help boost turnout among voters sympathetic to liberal causes and politicians. This sentiment—along with sharp criticism by activists of Governor Jerry Brown’s relatively moderate views on hydraulic fracturing in California—led U.S. Interior Secretary Sally Jewell in January to call proponents of local fracking bans “know-nothings.”

In an interview with Northern California PBS affiliate KQED, Jewell said the proposed bans on fracking were misguided. “I think it’s going to be very difficult for industry to figure out what the rules are if different counties have different rules,” she said. “There are a lot of fears out there in the general public and that manifests itself with local laws or regional laws. … There is a lot of misinformation about fracking. I think that localized efforts or statewide efforts in many cases don’t understand the science behind it and I think there needs to be more science.”

A full-throated defense of fracking’s safety from an Obama administration cabinet official would seem newsworthy. But a Nexis search reveals that the only mention of Jewell’s pro-fracking remarks in a California newspaper came in my own editorial for U-T San Diego. This was no fluke. With the exception of a handful of stories in the San Francisco Chronicle, the state’s largest papers almost never report the administration’s view that—with prudent regulation—fracking can be safe.

At a May 2013 press conference, Jewell discussed new regulations governing fracking on public lands. She delivered her by-now standard endorsement of the practice and criticized misinformation about the energy-extraction technique peddled by environmentalists. “I know there are those who say fracking is dangerous and should be curtailed, full stop,” she said. “That ignores the reality that it has been done for decades and has the potential for developing significant domestic resources and strengthening our economy.”

That quotation appeared in the New York Times. The Los Angeles Times omitted Jewell’s quote and chose instead to turn to a spokesman for the Western Energy Alliance, a Denver-based trade association, for the pro-fracking view. If a pro-fracking comment appears in a California paper, you can be sure it will be from one of the Golden State media’s favorite bogeyman—either an energy trade association representative or an oil company executive.

Environmental-beat reporters at the L.A. Times, the Sacramento Bee, the San Jose Mercury-News, and other large state newspapers have reported on the Obama administration’s other energy policies, including its opposition to the proposed Keystone XL pipeline. But even as the president campaigned for reelection in 2012 with boasts about all the natural gas and oil produced by fracking during his first term, these reporters have somehow decided his views aren’t worth sharing with their readers.

In 1980, Arnaud de Borchgrave and Robert Moss published a thriller about a Soviet plot to subvert the United States called The Spike. It was inspired by de Borchgrave’s years as a journalist and his belief that stories that didn’t reflect news organizations’ liberal political views often got “spiked” (pulled from publication)—even really juicy and provocative stories.

It’s almost impossible to look at California newspapers’ coverage of fracking and not see it as “The Green Spike.” The narrative that the greenest president in history thinks fracking is safe doesn’t fit with the narrative that fracking is dangerous. So in newsrooms across the Golden State, the real views of this president and his administration are considered irrelevant—even as his interior secretary throws down the gauntlet with California’s greens.

Why Don’t California Lawmakers Want Residents to Buy Earthquake Insurance?

“California Rocks.” That’s the clever slogan for a new advertising campaign by the California Earthquake Authority (CEA), the state’s privately funded, publicly managed earthquake insurance fund. The message is both an allusion to the Golden State’s culture of musical cool and a literal statement of fact: California is earthquake country. The state experiences hundreds of tiny temblors every day that most people never notice. But it’s only a matter of time before a destructive quake rocks the Golden State. The Southern California Earthquake Center estimates that the state has a 99.7 percent chance of experiencing an earthquake of magnitude 6.7 or greater within the next 23 years. Yet, thanks to shortsighted public policy, only about one in ten Californian residents holds an earthquake-insurance policy.

Until recently, California’s insurers struggled to align their premiums with the actual peril that earthquakes represent. Insurance companies discovered after the 1994 Northridge earthquake that their estimates had been much too low. That magnitude 6.7 temblor killed more than 60 people, injured 9,000, damaged and destroyed thousands of buildings, and left parts of Los Angeles’s freeways in ruins. The losses suffered by insurers—$12.5 billion in all—were greater than the sum of earthquake insurance premiums they’d collected over the previous 25 years.

Politicians have always recognized that earthquakes pose a long-term problem, but their solutions have tended to be ad hoc and counterproductive. Two developments in particular made earthquake insurance less attractive to California homeowners. First, in 1985, the state took the unusual step of mandating that insurers offer earthquake insurance anytime they sell a residential insurance policy. At the time, an estimated 5 to 7 percent of homeowners had earthquake insurance. Publicly, legislators maintained that the goal of linking residential policies with earthquake policies was to raise awareness of earthquake insurance and encourage more people to purchase private coverage. But the underlying reason for the mandate was a state court decision that dramatically expanded insurer’s civil liability for damages not covered under existing policies.

The legislature had at least two choices in responding to the court’s ruling: take a free-market approach while limiting liability, or link the earthquake insurance to residential policies. Lawmakers went with the second, with the encouragement—later regretted—of some in the insurance industry. Insurers believed that most customers would turn down an offer of earthquake insurance, seeing it as an expensive option to hedge against a remote risk; meanwhile, the insurers would have insulated themselves from liability. In fact, the problem worsened: after Northridge, spooked insurers scrambled to limit their exposure to future quakes by refusing to sell residential policies. As a result, the real estate market ground to a halt.

In 1996, looking for a way to get insurers to issue policies again, legislators established the state earthquake authority, which offers earthquake insurance to satisfy the 1985 law. Participating insurers fund the CEA by pooling premiums in the state fund. The CEA’s earthquake insurance is better than what came before, but it’s still expensive, with high deductibles and limited coverage. So it’s unsurprising that only 10 percent of homeowners today are willing to pay for it.

The best way to control costs related to earthquake damage is to restrict development in earthquake-prone areas, but that opportunity passed long ago; the most dangerous areas in California are among the most densely populated. The most realistic and effective way to control earthquake exposure is to distribute the risk privately. Privately financed insurance policies aren’t susceptible to the political whims of state officials and regulators. They have the added virtues of scale, speed, and sensitivity to individual claims.

State senator Bill Monning, a Democrat from Carmel, has taken the lead on reforming the CEA and seeking ways to encourage more homeowners to buy insurance. But he’s found little support from his fellow Democrats. The best Monning could manage last session was a resolution encouraging Congress to pass the Earthquake Insurance Affordability Act, a taxpayer-funded insurance backstop. If lawmakers really wanted to see the public covered, they would liberalize the state’s insurance market and compel companies to innovate and compete. If they considered earthquake peril a statewide risk worthy of universal sacrifice, they might even make buying earthquake coverage a requirement for obtaining a mortgage, not unlike the mandate to purchase flood insurance in flood-prone areas. But until such changes come into effect, homeowners and taxpayers will wind up paying a steep price when California rocks again.

The Battle of Mount Soledad

Atop San Diego’s Mount Soledad — an 822-foot hill overlooking the seaside village of La Jolla — sits a 29-foot concrete cross. Erected in 1954 to commemorate Korean War veterans, the cross is part of a 170-acre, city-owned park offering breathtaking views of the Pacific coastline. For 35 years, it sat unmolested. Then, in 1989, an atheist named Philip Paulson, represented by the American Civil Liberties Union, filed a federal lawsuit alleging that the display of a cross on public land was an unconstitutional establishment of religion. Paulson died in 2006, but the litigation he began continues to this day.

The Mount Soledad case is a microcosm of the American culture war, with lawsuits used as weapons, federal courts serving as the battleground, and activist judges allying with the ACLU. The secular left has long sought to purge religious symbols and imagery from the public square, and the Mount Soledad cross was an inevitable target on a list that included nativity scenes, Ten Commandment displays, and religious invocations at public meetings.

In 1991, a federal district court judge ruled in favor of the ACLU’s claim that the presence of a privately funded cross on public property violated the California constitution’s establishment clause. The U.S. Ninth Circuit Court of Appeals rubber-stamped the district court’s decision in 1993. The city of San Diego faced a dilemma. The U.S. Supreme Court does not have jurisdiction over disputes involving state law, and the California Supreme Court does not have jurisdiction over federal court litigation. The liberal Ninth Circuit was the final word, with no further appellate review. As is typical in “civil rights” cases, the ACLU won substantial attorneys’ fees, thus creating a cottage industry and ensuring that the ACLU’s “pro bono” litigation would continue as long as the cross remained in place.

Rather than bulldoze the cross, the city decided—with the support of 76 percent of voters in a ballot referendum—to sell the land under the cross in order to remove any unconstitutional “taint.” After some legal skirmishing, the city held a sealed-bid auction to sell a half-acre parcel surrounding the base of the cross. The successful bidder wouldn’t be required to retain the cross, though the property would have to be used as a war memorial, and the buyer would be responsible for all future maintenance costs. The Mt. Soledad Memorial Association won with the highest bid of $106,000. This should have put an end to the dispute, as the privately erected cross was now standing on private property. The association expanded the memorial, adding features honoring individual veterans, such as bollards, engraved paving stones, and more than 3,000 commemorative plaques.

Remarkably, Paulson and the ACLU challenged the auction’s legitimacy. The same district judge who ruled in his favor in 1991 rejected the complaint, but Paulson appealed. In 2001, a three-judge panel of the Ninth Circuit unanimously affirmed the district court ruling. But Paulson still wasn’t finished. He sought an en banc hearing, an extraordinary procedure for correcting internal conflicts among panels. His persistence paid off. In 2002, the Ninth Circuit invalidated the auction by a 7-4 vote based on an argument Paulson didn’t even make: that it was “rigged” in favor of preserving the cross because—incredibly—any bidders wishing to remove the cross “would be saddled with the costs,” placing them at a financial disadvantage vis-à-vis bidders who intended to preserve the cross. Because the ruling once again rested on an interpretation of California’s constitution, the city couldn’t appeal the Ninth Circuit’s absurd decision.

As the city’s legal options narrowed, the cross dispute began to attract national attention. President George W. Bush in 2004 signed legislation designating the cross as a national veteran’s memorial if the city donated it, which more than three-quarters of voters approved. In the meantime, the city faced ongoing lawsuits along with the prospect of $5,000-a-day fines if officials did not bulldoze the cross. In 2006, the city obtained a stay of the removal order from U.S. Supreme Court Justice Anthony Kennedy. When a state court judge invalidated the transfer to federal ownership, Congress voted overwhelmingly to seize the cross by eminent domain, and the federal government took possession in August 2006.

Yet, litigation continued. After Paulson died, the ACLU found another atheist, Steve Trunk, to take his place. The ACLU challenged federal ownership of the cross as a violation of the U.S. Constitution, but in 2008 the district judge found that the federal government had a secular purpose for acquiring the memorial. The Ninth Circuit reversed the district court in 2011, ruling instead that even though Congress had a secular purpose for acquiring the memorial (including the cross), the primary effect was to endorse religious belief. The Supreme Court last June declined to review the case until the Ninth Circuit appeals are exhausted. Meantime, Congress—evidently not hopeful for a changed outcome from the Ninth Circuit—recently approved the transfer of ownership of the cross to the Mt. Soledad Memorial Association, repeating the strategy the city attempted without success in 1998. Even Democratic California senator Dianne Feinstein supported the bill, which President Obama signed into law this month.

The ACLU’s tactics, “secular in purpose,” resemble nothing so much as those of a religious fanatic. Its opposition to the cross is implacable. Commenting on the federal government’s transfer of ownership, ACLU lawyer James McElroy said simply: “We’ve been here before.” The Ninth Circuit’s resolve to bulldoze the cross is stymied—at least temporarily—by popular resistance to its destruction. Another quarter century of taxpayer-funded litigation may result.

Triumph of the Status Quo — Torlakson over Tuck

California’s education reformers had high hopes for Marshall Tuck’s insurgent campaign against State Superintendent of Public Instruction Tom Torlakson. The 41-year-old former investment banker and charter school president tried to paint the 65-year-old incumbent, former legislator, and fellow Democrat as a creature of the state’s powerful teachers’ unions. Tuck wasn’t wrong, though both candidates spent a great deal of energy and money attacking one another’s character. And the race did expose a growing fissure between traditional union-aligned Democrats and an emerging faction of pro-business, pro-reform Democrats. But the biggest difference between Torlakson and Tuck—their respective plans for reforming the state’s tenure and dismissal statutes—didn’t galvanize voters.

The day before the election, a Reuters analysis called the nominally nonpartisan state superintendent’s race the “most expensive political contest in California . . . for an office nobody’s heard of.” The candidates and their allies poured more than $30 million into the election—more than three times what Governor Jerry Brown and his Republican opponent, Neel Kashkari, spent on their campaigns combined. The California Teachers Association alone spent $11 million, including at least $2 million on independent radio and TV ads touting Torlakson and denouncing Tuck. Meantime, about a dozen well-heeled education reformers, including Los Angeles real estate developer Eli Broad and former New York City mayor Michael Bloomberg, contributed nearly $10 million to an independent campaign committee backing Tuck.

Yet in the end, Torlakson bested Tuck by a margin of 181,489 votes out of more than 4.3 million ballots cast. Not a landside, but not a nail-biter, either. What happened?

Tuck’s candidacy hinged on two issues: tenure reform and greater local control, especially for charter schools. He hammered Torlakson for supporting the state’s appeal of Vergara v. California, the class-action lawsuit in Los Angeles that seeks to void the state’s tenure, seniority, and dismissal rules. L.A. Superior Court Judge Rolf M. Treu had ruled in June that students and newly hired teachers “are unfairly, unnecessarily, and for no legally cognizable reason (let alone a compelling one), disadvantaged by the current [law].” Torlakson called Treu’s ruling “an attack on teachers” throughout the campaign. Tuck said Torlakson’s eagerness to appeal the decision showed that he put union interests over the interests of children.

But polls showed that Vergara resonated weakly with voters. Though 42 percent of likely California voters ranked education as their top priority this year, and the vast majority of voters surveyed after Treu’s ruling agreed that the state should do away with “last hired, first fired” tenure protections, nearly 60 percent said they didn’t know what the lawsuit was about. Reformers may not like to hear it, but Governor Brown wasn’t wrong when he dismissed tenure reform in the campaign’s waning days as an “ephemeral” issue. Nor was Torlakson wrong when he said, “I think [Tuck] is focusing inappropriately on one lawsuit, one set of issues around that.”

Tuck also touted his experience as president of the Green Dot chain of charter schools. He voiced his support for California’s landmark parent-trigger law, which lets parents at failing schools petition to force their school district to implement certain reforms, including charter school conversion. Here again, though, voters don’t completely understand charter school reforms. And the CTA and its lesser partner, the California Federation of Teachers, have opposed parent-trigger campaigns and generally consider the charter movement to be “privatization,” even though California’s charters are nonprofit organizations that must adhere to the state education code. The teachers’ unions and their surrogates, such as Diane Ravitch, used Tuck’s charter school ties to paint him as a racist, a bigot, and a tool of “the power elite.” Their attacks bordered on defamation, but they worked.

Outside those contentious but narrow policy questions, Torlakson and Tuck didn’t differ much. Both expressed enthusiasm for the Common Core State Standards, despite their declining popularity among Californians. The PACE/USC Rossier School of Education poll in June found just 32 percent of voters supported the standards, while 42 percent opposed them—a sharp drop over the previous year’s survey, which found majority support. Yet Tuck chose to distinguish himself from Torlakson by accusing the incumbent of implementing the standards too slowly.

On school funding, both candidates agreed that the state should spend more on public schools—apparently, the 1988 constitutional amendment requiring the legislature to earmark at least 40 percent of the general fund for elementary and secondary education provides too little money. Tuck himself told an Education Week reporter last month that on questions of compensation and professional development, “I have tons of alignment with CTA’s agenda.” At bottom, Tuck and Torlakson shared the belief that whatever ails public education, greater government intervention can cure it. They simply disagreed over the means. And with 40 percent of voters still undecided days before the election, it’s easy to see why voters chose to play it safe with the incumbent.

Before Election Day, education policy wonks speculated that the outcome of the Torlakson-Tuck fight could resonate into 2016. Sacramento Beecolumnist Dan Morain argued, “Public school unions will be fundamental to Democrats’ success. But there will be a cost. Teachers unions have not been a force for change for the better. . . . The question is when, not whether, that divide will become a problem for the Democratic Party.” Not this year. The status quo holds, for now.