Two new headaches for beleaguered bullet train project

The California High-Speed Rail Authority – the agency in charge of building the state’s bullet train system – has already faced a tough year, with Gov. Gavin Newsom signaling in February that he’s not confident the full system can ever be built. But now the rail authority has two new public relations headaches on its hands.

In the Central Valley, farmers were already upset over state use of eminent domain to seize their property for construction of the project’s first segment – a 110-mile route from Bakersfield to Merced projected to cost $12.2 billion. But a recent report in the Los Angeles Times documented how slow the rail authority was in paying for seized land and in refunding farmers for the cost of the train project’s effects on their businesses.

The Times’ story focused on a kiwi farmer who lost 70 acres of land to the project more than a year ago and who since has gone unpaid for $250,000 incurred in “relocating wells, removing trees, building a road and other expenses.” It also noted farmers who had been owed $1.9 million and $630,000 for three years, and two others owed $500,000 and $150,000, though for shorter periods of time.

State officials questioned by the Times had no explanation for the delays beyond saying the project was complex in its legal and engineering challenges.

A follow-up story by Fox News emphasized why the delayed payments are particularly upsetting to many Central Valley residents. Not only is there a chance the initial segment between Bakersfield and Merced will never be completed because the state doesn’t have enough funds, there is a good chance that even if the segment is finished, some of the property that has been seized won’t be used for the project. That’s because even now – more than five years after the administration of Gov. Jerry Brown decided to start the bullet train’s construction in the Central Valley – authority officials still haven’t agreed on the exact details of the final route.

“The property owners are very frustrated that the High-Speed Rail Authority [doesn’t] seem to know what they actually need,” Sacramento attorney Mark Wasser said. “We have farmers who the authority has come back four times to change where they want to take.” Wasser has more than 70 clients affected by the rail authority’s Central Valley project.

Audit warnings validated by ethics probe

Meanwhile, state audits which have long warned that it is problematic for the rail authority to rely so heavily on outside consultants have been vindicated with what appears to be evidence of a conflict-of-interest scandal.

Recently, the authority’s deputy chief operating officer – Roy Hill – was suspended pending an investigation by the state Fair Political Practices Commission. Hill is a top executive with the WSP consulting firm employed by the authority. Evidence suggests that Hill approved a $51 million increase in a bullet-train contract held by the Spanish firm Dragados despite his apparent ownership of more than $100,000 in stock in Jacobs Engineering, a multibillion-dollar multinational corporation that is providing key services to Dragados on the California project.

The FPPC approved the request of Assemblyman Jim Patterson, R-Fresno, to investigate Hill, his actions and his personal economic interests.

“This is such a deep conflict that it calls into question whether the entire High-Speed Rail Authority and the contractors they have put together are involved in a massive corruption,” Patterson told Fresno TV station KMJ.

The rail authority says it will cooperate with the FPPC probe.

Hill has not yet commented publicly on the matter.

This article was originally published by CalWatchdog.com

President Trump Doing California a Bullet Train Favor

At last count, California’s Democratic political leadership had filed four dozen lawsuits against President Donald Trump’s administration, reflecting differences on policies large and small.

For the most part, California’s legal allegations have been on target. However, Trump is on solid legal and logical ground in the latest conflict over the state’s disastrous foray into high-speed rail transportation.

Nine years ago, the Obama administration gave the state a $3.5 billion grant to finance a big share of the initial bullet train segment, more than 100 miles of track from a point north of Fresno to the outskirts of Bakersfield.

The federal money was to be matched by state funds from a $9.95 billion bond issue passed by California voters in 2008 and the San Joaquin Valley stretch was to be completed by 2017. Later, before Trump became president, the feds gave California an extension to 2022, but only tiny portions have been built.

Late last year, the state’s auditor, Elaine Howle, told the Legislature that meeting the 2022 deadline would be nearly impossible, citing the High-Speed Rail Authority’s “flawed decision making regarding the start of high-speed rail system construction in the Central Valley and its ongoing poor contract management for a wide range of high-value contracts.” Howle said the problems “have contributed to billions of dollars in cost overruns for completing the system.”

A couple of months later, Gavin Newsom succeeded bullet-train booster Jerry Brown as governor and told the Legislature in his first State of the State address, “Let’s be real. The project as currently planned would cost too much and take too long. There’s been too little oversight and not enough transparency. Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to L.A.”

He said he would concentrate on finishing the San Joaquin Valley segment and extending it on both ends to piece together a three-system pathway for traveling between San Francisco and Bakersfield.

After Newsom’s address, President Donald Trump declared on Twitter: “California has been forced to cancel the massive bullet train project after having spent and wasted many billions of dollars. They owe the federal government three and a half billion dollars. We want that money back now. Whole project is a ‘green’ disaster!”

Last week, the Federal Railroad Administration, in a 25-page letter, formally rescinded about $1 billion dollars not yet given to California and hinted again that it would claw back the other $2.5 billion.

“It is now clear that California has no foreseeable plans, nor the capability, to pursue that statewide High-Speed Rail System as originally proposed,” wrote Ronald Batory, the federal railroad administrator, adding that the state “is chronically behind in project construction activities and has not been able to correct or mitigate its deficiencies.”

“The Trump administration is trying to exact political retribution on our state,” Newsom responded in a statement. “This is California’s money, appropriated by Congress, and we will vigorously defend it in court.”

That’s not really true. The money was part of an overall appropriation by Congress for rail projects and California was given a piece of it by the Obama administration under a contract.

It has not met its contractual obligations and cannot, as Howle said late last year, meet the 2022 deadline due to poor management during Jerry Brown’s administration.

The bullet train utterly lacks a rational purpose, has been ill-managed from the onset and is a black financial hole. If the Trumpies strangle it, they would be doing California a big favor.

This article was originally published by CalMatters

High-Speed Rail Construction Continues as California Sues Trump

California’s high-speed rail agency remains determined to complete about 119 miles of bullet-train construction in the central San Joaquin Valley, even as a confrontation with the Trump administration over promised federal funds escalates into a lawsuit.

“We are looking for a ramp-up in activity for construction,” said Tom Richards, vice chairman of the California High-Speed Rail Authority, adding that he expects the pace of work to accelerate this summer. Richards, a Fresno businessman, said Tuesday at the agency board’s meeting in Sacramento that the state remains mindful of “the requirement to abide by all of the commitments we have” under a pair of federal grant agreements dating to 2010 and 2011 for about $3.5 billion to support engineering and construction in the Valley.

Tuesday’s board meeting came on the heels of California filing suit challenging the Federal Railroad Administration’s termination of the grant agreements. …

Click here to read the full article from the Fresno Bee

Trump administration cancels $929 million in California high speed rail funds

The Trump administration said on Thursday it was formally cancelling $929 million in previously awarded funding for California’s high-speed rail program after rejecting an appeal by the state.

The U.S. railway regulator, the Federal Railroad Administration (FRA), said on Thursday it had canceled the funding awarded in a 2010 agreement after it said the state had “repeatedly failed to comply” and “failed to make reasonable progress on the project.”

In a statement, the FRA said it was still considering “all options” on seeking the return of $2.5 billion in federal funds the state has already received. …

Click here to read the full article from Reuters.com

L.A. Politicians Want to Spend Bullet Train Funds

In a sign of frustration over the state’s transportation priorities, several board members with the high-profile Los Angeles County Metropolitan Transportation Authority have made the argument that it makes far more sense to use money that Gov. Gavin Newsom wants to spend on a bullet train route in the Central Valley on Los Angeles-area projects instead.

Newsom made international headlines in February when he pulled backfrom predecessors Jerry Brown’s and Arnold Schwarzenegger’s commitment to have the California High-Speed Rail Agency build a statewide high-speed rail network. Instead of continuing to try to secure all the funds needed for the $77 billion project, Newsom said the state should focus on completing a 110-mile segment from Merced to Bakersfield that is expected to cost $12.2 billion.

Five L.A. Metro board members – Hilda Solis and Kathryn Barger, both Los Angeles County supervisors, Inglewood Mayor James Butts, Los Angeles Councilman Paul Krekorian and Glendale Mayor Ara Najarian – think that’s a bad idea.

At a recent Metro board committee meeting, Solis said that “many, many projects” in the Los Angeles region would be more helpful in meeting state transportation goals.

In a motion they crafted for the Metro board’s consideration, they wrote that the Central Valley segment “has little value for public transportation and limited greenhouse gas reductions. Regional rail transit improvements in the Los Angeles region would be more cost effective with more substantial mobility benefits.”

The Curbed Los Angeles website reported that the five decided not to ask the full Metro board to endorse the motion, evidently after being reassured that the state would help fund some of the local projects that Solis had praised. But the sharp criticism from five board members of Metro – one of the nation’s largest transportation agencies, serving 10 million people in a 1,400-square-mile region – is a powerful reminder that even with Newsom’s scaled-back version, the state’s bullet-train project faces considerable skepticism.

Cost, viability of Central Valley segment questioned

The Central Valley route faces two of the same key criticisms that the statewide project did under Brown.

Its initial cost estimate of $6 billion has more than doubled, just as the statewide plan’s cost soared from $34 billion to $77 billion.

Under Proposition 1A, the 2008 ballot measure providing $9.95 billion in bond funding for the project, every segment is supposed to generate enough revenue to be self-supporting, with taxpayer subsidies banned. But assumptions that linking Merced, population 83,000, with Bakersfield, population 380,000, will lead to ridership that is heavy enough to cover the cost of bullet-train operations is tough to square with the fact that presently, there are only six conventional train trips daily between the cities with an average ticket price of $27.

Questionable assumptions about ridership have been common from the state rail authority. For example, in 2015, the Los Angeles Times reported that the authority projected annual ridership of up to 31 million passengers after the Los Angeles-San Francisco route was complete. That’s about the same number of annual riders as Amtrak, which operates in 46 states.

On Wednesday, the rail authority is expected to release more detailed plans from the Newsom administration for the Merced-Bakersfield segment.

This article was originally published by CalWatchdog.com

Central Valley Angered by Newsom’s Bullet-Train Plans


High speed rail constructionGov. Gavin Newsom’s announcement in his State of the State speech in February that he didn’t believe California had the resources to complete its $77 billion statewide bullet-train project produced a backlash that Newsom didn’t seem to expect. Within hours after the speech, his aides said the media was inaccurately reporting that Newsom’s only commitment was to build a $12.2 billion, 119-mile high-speed link between Merced and Bakersfield in the Central Valley and nothing more. They said he remained a supporter of the full project.

But nearly two months later, the initial reaction to Newsom’s speech remains the enduring takeaway for most Capitol watchers: He’s off the bullet train bandwagon. Building unions and green lawmakers who believe in the statewide project’s potential to help in the fight against climate change remain among the most upset.

Yet easily the most intense reaction is in the area where Newsom still wants the project to proceed: the Central Valley.

Coverage from The Bakersfield Californian, the Los Angeles Times and small newspapers in the region reflect anger over how the valley has been treated. Valuable farmland and family homes have been acquired with eminent domain for a project that no longer will link the area with the rest of the state – despite promises from Govs. Arnold Schwarzenegger and Jerry Brown.

‘My mouth was just open with shock’

“I don’t want to talk political because I don’t do it very well,” Fairmead resident Vickie Ortiz told the Times. “But you know, you had a governor that was pushing-pushing-pushing for the high-speed train, and we started getting used to the idea that we can’t stop a train but maybe we can use it to help the community. But then you get another governor and he says: ‘No, I don’t want to do that any more.’ My mouth was just open with shock.”

In the Antelope Valley Press, retiree Bill Deaver, a former official in the Federal Railroad Administration, blasted the “politics and ignorance” of project critics who he blamed for Newsom’s decision.

“Politicians used [high-speed rail] to score political points rather than supporting something that will be able to handle huge increases in traffic projected in coming years. That sort of behavior is one of the biggest barriers to progress.”

Newsom’s decision didn’t surprise some in the Central Valley who never believed a statewide bullet train would get built. “People lost their homes and businesses. And for what?” Visalia farmer Randy Van Eyk told the Times.

Some see commitment to help region

But other remarks the governor made about the Central Valley have resonated more positively – and created an expectation that he will do more than past governors to help the region.

“The people of the Central Valley endure the worst air pollution in America as well as some of the longest commutes. And they have suffered too many years of neglect from policymakers here in Sacramento. They deserve better,” Newsom said in the same speech in which he outlined his views on the bullet-train project’s future.

Bakersfield Californian columnist Robert Price said if Newsom was serious, he should help Kern County diversify its economy away from “two industries under assault in the Central Valley: agriculture and, especially, oil and gas.”

Anna Smith, another columnist for the Californian, also said Newsom should promote economic diversification. But she also called on him to address the Central Valley’s social ills, including “high rates of illiteracy and obesity, lack of access to quality education and health care (especially in rural communities), water contamination and extreme poverty.”

This article was originally published by CalWatchdog.com

Proposed legislation would redirect federal funds away from California high-speed rail


High speed rail constructionTwo House bills introduced this month by Republicans from California seek to redirect federal funds from the state’s high-speed rail project and use the money for other purposes. The Trump administration in February demanded funds back from the controversial project, which has been plagued by cost overruns and delays.

A bill introduced by House Minority Leader Kevin McCarthy would “repurpose” about $3.5 billion worth of federal funds for the rail system to water infrastructure projects to help the state cope with future droughts. A second piece of legislation, dubbed the “High-Speed Refund Act” and introduced by Rep. Doug LaMalfa, requires that any funds the Transportation Department provided to the high-speed rail development go instead to “important freight and highway projects.”

“The California high-speed rail project is a boondoggle that California and American taxpayers must move on from,” McCarthy said earlier this month. “Since its inception, the project’s costs have ballooned while oversight and accountability within the California High-Speed Rail Authority has been nonexistent.” …

Click here to read the full article from CNBC

This Train Won’t Leave the Station


High Speed Rail ConstructionGovernor Gavin Newsom has canceled the bulk of the state’s long-proposed high-speed line between Los Angeles and San Francisco, leaving only a tail of the once-grand project — a connection between the Central Valley’s Merced and Bakersfield, not exactly major metropolitan areas. “Let’s be real,” Newsom said in his first State of the State address. “The project, as currently planned, would cost too much and take too long. There’s been too little oversight and not enough transparency.” The project’s cost, originally pegged at $33 billion, ballooned over the last decade to an estimated $77 billion (or maybe as high as $98 billion), with little reason to assume that the cost inflation would end there.

This effectively puts an end to former governor Jerry Brown’s “legacy” project, the lone tangible accomplishment for a second gubernatorial stint that had been far better at raising taxes and imposing draconian legislation than building things. Brown wanted to build his beloved train in a state with some of the nation’s worst roads (despite its second-highest gas taxes), a deteriorating water-delivery system, and massive pension debt. With Brown finally in retirement, Newsom took the opportunity to free up billions of dollars that his Democratic allies would like to spend in other ways.

Perhaps the most critical national casualty may be the Green New Deal proposed by New York congresswoman Alexandria Ocasio-Cortez. Much of her platform for a ten-year transformation of the American economy centers on transportation. In her bid to kill the internal-combustion engine, Ocasio-Cortez apparently seeks to eliminate both cars and planes. Her favored solution for cross-continental travel: a massive network of high-speed trains.

Some of this must seem fanciful even to the democratic-socialist heartthrob from the Bronx. In contrast with Western Europe, where several high-speed rail lines operate, the United States has huge distances between cities; its average population density is generally lower than that of the European continent. Even on the California coast, a 450-mile high-speed rail trip from  Los Angeles to San Francisco would have taken nearly four hours, compared with a one-hour plane ride. Imagine taking high-speed rail from Los Angeles to Chicago: a three-hour trip by plane becomes a 15-hour or longer trek across vast, empty spaces. During that time, the traveler would cover more high-speed rail mileage than the current length of the entire French system.

Even fervent supporters of the Green New Deal must recognize what California’s cancellation means: if high-speed rail is not feasible in the state with the three densest major metro areas in the nation, and the highest overall urban density, it is not feasible anywhere else in the United States. (And not just here: Britain’s proposed high-speed rail megaproject, HS2, also appears on the verge of cancellation. Sounding like Governor Newsom, a senior government official told Channel 4’s Dispatches public affairs program: “The costs are spiraling so much we’ve been actively considering other scenarios, including scrapping the entire project.”) It also suggests that the costs for a national network would be formidable and would require the printing presses at the Treasury to work overtime. Of the many high-speed rail lines built in the developed world, only two (Tokyo-Osaka and Paris-Lyon) have ever been profitable, and in each case highway tolls for the same routes exceed $80 one-way, making high-speed rail in those cases an economical consumer choice. California, the green heart of the resistance, has met fiscal reality; reality won.

Some greens and train enthusiasts, such as the deep-blue Los Angeles Timeseditorial board, have criticized Newsom’s move, and others remain adamant in their support of the plane-to-train trope. But California, which has embarked on its own Green New Deal of sorts, has seen these results:  high energy and housing costs, and the nation’s highest cost-adjusted poverty rate, and a society that increasingly resembles a feudal social order. Attempts to refashion global climate in one state reflects either a peculiarly Californian hubris or a surfeit of revolutionary zeal.

Of course, Newsom and the bullet train’s supporters justify spending billions more on the Central Valley line as a way of reviving the terribly challenged, impoverished economy of that region. Yet greens and their allies have already shown what comes of putting their ideas into practice—cutting water supplies to farmers, blocking new energy production, and leaving Route 99, the Valley’s main thoroughfare, in such awful shape that it has been named the country’s most dangerous highway. The Valley does not need a bullet train to nowhere. It needs, rather, policies that allow for its basic industries, such as agriculture, manufacturing, and energy, to expand and provide desperately needed jobs. Oil-rich California has been replacing in-state production for imported petroleum, to the enrichment of Saudi Arabia but to the detriment of California workers.

Newsom’s pullback from Brown’s Olympian high-speed rail vision may reflect growing concerns about the state’s economy. After several years of fairly robust growth, California’s job machine is now producing employment at mediocre rates, and worse than that in its biggest urban area, Los Angeles. The real-estate market, which was driving some of the revenue gains, appears stuck, with sales down and prices headed in that direction, though the regulatory environment is skewed to facilitate price escalation. If stock performance is weak, California could see its greatest source of revenue—capital gains from Silicon Valley—reduced. The last quarter saw falling tax collections, and any hiccup in the tech money machine, or even a mild recession, could prove devastating, as Brown himself warned before leaving office.

In Washington, Ocasio-Cortez and others will continue to push their fantastical Green New Deal, at least until the Senate votes on it. With the utterly predictable demise of California’s high-speed rail project, however, the Golden State may prove the unlikely place where would-be planetary redeemers were brought back to earth.

California Cronyism and its Consequences


Crony capitalism is an economy in which businesses thrive not as a result of risk, but rather as a return on money amassed through a nexus between a business class and the political class. This is done using state power to crush genuine competition in handing out permits, government grants, special tax breaks, or other forms of state intervention.
– Wikipedia, Feb. 2019

If the goal of public policy is to optimize the role of government, cronyism must be identified and curbed wherever possible. Cronyism wastes the limited resources of governments, at the same time as it reduces the efficiency of the private sector by using subsidies and other incentives to undermine healthy competition.

The harm caused by crony capitalism can best be illustrated by example. In California, cronyism is a major culprit in one of the worst policy failures in recent decades, the housing and the related homeless crisis. Several types of cronyism played into California’s housing debacle. The most significant was cronyism that took the form of regulations that favored the wealthiest, most established corporations, while driving the smaller, emerging competitors out of the housing business entirely.

This form of cronyism through regulations was originally described by Bruce Yandle, now with the Mercatus Center, back in 1983. Yandle, writing for the American Enterprise Institute, coined the phrase “Bootleggers and Baptists,” to describe how during prohibition, the bootleggers who profited from the trade in expensive illicit liquor, would support the temperance movement’s Baptist activists and others, who lobbied against legislation to restore affordable legal booze. This concept applies perfectly to California’s punitive legislation that restricts land development.

For the past 30-40 years, and especially in the last decade or two, a growing assortment of laws and regulations have driven control over all major land development into the hands of a shrinking group of very large corporations. Using Yandle’s analogy, these are the bootleggers. Smaller landowners and construction companies have to sell out or subcontract to these large corporations, because there is no way they can afford the thousands or millions of dollars in fees and litigation, nor the years or decades of regulatory delays. And the Baptists in this example? The environmentalist lobby and its army of trial lawyers, who have seen to it that housing is restricted to ever smaller slices of California’s otherwise vast reserves of land, at the same time as they’ve successfully promoted building codes that make building a home far more expensive than it would otherwise cost.

Tent of homeless person on 6th Street Bridge with Los Angeles skyline in the background. California, USA. (Photo By: Education Images/UIG via Getty Images)

California’s homeless crisis is certainly caused in part by unaffordable housing, but it is exacerbated by another type of cronyism, “nonprofit cronyism.” These are rent seeking nonprofits that develop scandalously expensive “permanent supportive housing” for the homeless. In Los Angeles today, apartments for the homeless – palatial abodes by any reasonable comparison to the squalor of living on the streets – are being constructed in some cases for as much as a half-million per unit. The government pays a portion of these costs through grants, using taxpayers money, while other funds are secured through tax deductible donations. And when these units actually are opened to a microscopic fraction of the homeless population, because they are owned and managed by nonprofit corporations, they pay no income or even property taxes.

Crony capitalism in its most obvious form is exemplified by massive public works projects of dubious value to society. California’s grandiose and possibly doomed high speed rail project is the classic example. Even if the final project is restricted to the segment from Merced to Bakersfield, tens of billions will have been spent on a project that never passed any reasonably unbiased cost/benefit analysis, which is why it never attracted matching funds from the private sector.

There are plenty of similar examples. One noteworthy case of a massive, and dubious public work, is the costly rebuild of San Francisco’s Transbay Terminal, which for over 50 years had functioned as the central bus terminal connecting downtown San Francisco with other points in the city as well as routes extending into neighboring counties. In 2010, the terminal was demolished to make way for an expanded, “multi-modal” transit hub for the 21st century. Not only would a new tunnel bring commuter trains into the rebuilt terminal from the existing Caltrain station, 1.3 miles away, but the new terminal would also serve high speed trains.

The probable demise of high speed rail hasn’t diminished enthusiasm for the project which in total is estimated to cost around $10 billion. Yet the design of the station itself, already mostly complete at a cost so far of $2.1 billion, is no longer considered sufficient to handle the projected volume of commuter trains. After eight years of construction, the new terminal opened for bus service in 2018 – essentially performing the same service as the old terminal – and then shut down a few months later because of structural defects. Nobody knows when it will reopen. And even when it does reopen, trains won’t be arriving until the $6 billion connecting tunnel is completed, sometime around 2029.

The enthusiasm that informs persistent supporters of dubious projects, which would certainly include high speed rail and San Francisco’s Transbay Transit Center, brings into focus one of the central questions about crony capitalism. How does one distinguish between a project of dubious value, and one of compelling value? Paul Rubin, a professor of economics at Emory University, expresses this question in his own humorous but revealing alternative definition of crony capitalism: “Crony capitalism is lobbying by someone I don’t like for something I don’t like.”

This question of one person’s good cronyism being another person’s bad cronyism is easily recognized in the allocation of subsidies to manufacturers. Ideally, there should be a level playing field between market participants. The government shouldn’t be, as they say, “picking winners.” To choose another obvious example, California’s legislature is determined to increase the number of zero emission vehicles in the state, via rebates, incentives and mandates. The cost to taxpayers – and benefit to manufacturers of electric vehicles – over the next ten years is estimated to range between $9 and $14 billion.

But what if electric cars aren’t an unmitigated good thing, so good they are worthy of subsidies? What if electric vehicles produce illusory environmental benefits? What if the embodied energy in an electric car, far exceeding that of a conventionally powered car, represents an environmental cost that isn’t made up for during its useful, zero emission life? What if the environmental costs of recycling these cars and their massive batteries, or the environmental costs of extracting the resources needed to manufacture these batteries in the first place, represent an unrecoverable environmental cost? What if the emergence of some even better, cleaner transportation technology is being suppressed by the proliferation of subsidized electric cars?

This sort of debate surrounds any subsidized product. And it is fair to say that sometimes subsidies are necessary. But in crony capitalism, those debates are hijacked and skewed by the special interests in the private sector with the strongest connections to government policymakers.

There are myriad forms of crony capitalism. Incentives offered by California’s state and local governments for manufacturers to relocate to California, or stay in California, have cost taxpayers billions. A report published last year in the San Jose Mercury described how public money subsidies have poured hundreds of millions to Silicon Valley giants including Google ($766 million), Facebook ($333 million), Apple ($693 million), and Tesla ($3.5 billion).

These sorts of arrangements repeat themselves across California, and while there is an economic payback to keeping those companies and their jobs in-state, there is also a great irony. California is consistently ranked as the worst state in the U.S. to do business. Why not change the laws and regulations that make California such an unwelcoming place, which would help retain and attract all businesses, instead of pouring compensatory money into the hands of a favored few?

Speaking of the favored few, another problem that consistently accompanies crony capitalism is that it usually benefits the cronies more than it benefits whatever deserving group or cause the deal supposedly supports. The environment and open space is protected – or overprotected – enabling rich developers to get richer, and nobody can afford homes. Palatial “permanent supportive housing” is built for a handful of the homeless, while well heeled nonprofits collect subsidies that could have been used instead to house tens of thousands of homeless using tents and porta-potties. Billions are poured into monumental, landmark, “signature” transportation projects, while ordinary people sit in traffic on pitted, congested, inadequate roads. Taxes are raised so wealthy people can save money on electric cars that remain priced well out of reach of an ordinary Californian. High tech corporations earn hundreds of billions for their shareholders, yet taxpayers support subsidies to keep them from pulling up stakes and moving to Texas.

Finding examples of crony capitalism is an endless task, somewhat shrouded in ambiguity and contradictions. Whenever the government interferes in the “free market,” a subjective assessment is made that the interference is in the public interest, and an even more fraught decision is made to undermine one set of private concerns while creating an advantage for another. Apart from the the impossible extremes of anarchy or communism, good governments have to find that balance in between.

In California’s case, there is a great deal of room for improvement. Support efforts to increase transparency in contract negotiations and contract oversight to expose and deter overt cronyism. Recognize that the impact of environmental regulations has crippled the aspirations of low and middle income Californians, and repeal them, starting with the most extreme. Pay attention to the reports that expose the waste and corruption surrounding attempts to house the homeless. Fight for precedent setting court rulings that will make it easier and less costly to get things done – from building homeless shelters to constructing new roads and related housing infrastructure. Repeal CEQA; there’s plenty of regulation at the federal level. Most of all, make the state’s regulatory climate more inviting so it’s easier to keep and attract all businesses.

Trump Administration Demands California Pay Back Over $2 Billion for Bullet Train

High Speed Rail FresnoThe Trump administration announced on Tuesday that it is exploring “every legal option” to reclaim $2.5 billion in federal funds spent by California on its now-defunct high-speed rail project, and also that it intends to cancel $928 million in federal grants not yet paid for the project to link Los Angeles and the San Francisco Bay Area.

The move was a dramatic escalation in the ongoing war of words and policy between California and the White House. California Gov. Gavin Newsom, a Democrat, declared during his State of the State address last week that he was shelving plans for the $77 billion rail project that had been championed by environmental groups, admitting that “as currently planned, [it] would cost too much and take too long.”

In response to the Trump administration’s legal threat Tuesday, Newsom vowed that he would not sit “idly by” as the White House engaged in what he called “political retribution” against California. …

Click here to read the full article from Fox News