Creating Jobs and Boosting the Economy: Oil and Agriculture

There are over 600 million passenger cars in the world not to mention a few million planes, trains, buses and trucks. 99% of these modes of transportation are propelled by internal combustion engines which are fueled by our most abundant natural resource – fossil fuel.

Yes, there are alternative sources of energy and I’m all for them. In my book, Riding for the Brand: The Power of Purposeful Leadership, I paint a picture of a future where hydrogen powered vehicles are the norm. And I look forward to the day when that happens. But I’m a practical kind of guy. Even though I help my clients look 30 years into the future I have to help them build a bridge back to today. The future is meaningless if you can’t survive to see it.

So, here’s my formula for fueling our path to the future while fueling our economy today. Pick the low hanging fruit while planting the seeds of tomorrow’s energy sources. In the process we’ll rebuild our shattered economy.

I grew up in what is known today as the Tallgrass Prairie in Oklahoma. If you wanted a home where the buffalo roam this is where you’d build it. What most people don’t know is that this pristine piece of real estate was home to the oilfields that built two of the world’s biggest and best known companies which have since merged to become ConocoPhillips. Big oil and big agriculture coexisted there very nicely. Now, I want you think about that for a minute. What would your life be like without oil and agriculture?

Most of what I read in the popular press today condemns both of these industries. And all they do is feed and fuel the world every day. In the process of feeding and fueling the world they feed and fuel the economy. I’ll leave the topic of agriculture for another day but here’s how we can create millions of jobs and pump billions of dollars into the economy of the United States without outsourcing jobs. Consider this statement from an article by Clifford Krauss in the New York Times entitled Shale Boom in Texas Could Increase U.S. Oil Output: “The companies estimate that the boom will create more than two million new jobs, directly or indirectly, and bring tens of billions of dollars to the states where the fields are located, which include traditional oil sites like Texas and Oklahoma, industrial stalwarts like Ohio and Michigan and even farm states like Kansas.”

Here’s the local impact: “The oil rush is already transforming this impoverished area of Texas near the Mexican border, doubling real estate values in the last year and filling restaurants and hotels.” While other parts of the country would like a little of that action all of the country will benefit: “‘It’s the one thing we have seen in our adult lives that could take us away from imported oil,’” said Aubrey McClendon, chief executive of Chesapeake Energy, one of the most aggressive drillers. “‘What if we have found three of the world’s biggest oil fields in the last three years right here in the U.S.? How transformative could that be for the U.S. economy?’”

Now, I know what you’re thinking – what about the environment? Drive through the Tallgrass Prairie today and you’ll find little if any evidence that it is worse off than before the energy industry arrived. And today’s exploration and production methods are many times less invasive than when those fields were developed in the early 20th century. The few people who still live in that part of the country would love to have the economy that accompanied those boom years. It’s been slim pickings in the years since.

Now, back to the future – let’s develop alternative energy sources as fast as we can. But in the meantime it’s insane to saddle ourselves with an economy that is destroying lives and businesses while enslaving ourselves to the whims of oil producing dictatorships.

(Reprinted from the Purpose Unlimited E-Letter: For a free subscription, go to Copyright © 2011 Jim Whitt Purpose Unlimited.)

The Payroll Tax Debate: What Should Have been the Republican Position

The recent debate over the extension of the payroll tax holiday demonstrates how much politics has dominated the economic policy of the Obama Administration. The tax reduction was always more of a political ploy than it was an attempt to improve the economic climate.  President Obama took a page out of the Bill Clinton playbook and managed to position the Republican House as an extremist body that would deny the average working class American a tax cut.  As in 1995-96, the House Republicans have taken the more responsible position.  They must be more successful in developing why their position makes sense.

First, they should have questioned what sense it makes to add to the massive unfunded liability of Social Security by reducing the payments into the Social Security Trust Fund.  One might have argued that the reduction in the payroll tax would increase economic activity and eventually increase Social Security revenue enough to offset the drop in payroll taxes from the rate reduction, but this would require making a linkage between the payroll tax and economic growth.  If the payroll tax is reducing economic growth, then this should bring up the question of whether we should be funding Social Security through a payroll tax on the first place.

This is a question that makes sense to ask from the perspective of economic policy, but it is not a good political question.  So it is never asked nor answered.  Nonetheless, the fact that Social Security has had a negative cash flow position for the last two years, taking in $49 billion less in 2010 than it paid out and $46 billion less than it paid out in 2011, and has an unfunded liability in excess of $20 trillion ought to be a part of the discussion of the effectiveness of the payroll tax holiday.

More importantly, the House Republicans did not clearly make the important point that a temporary reduction in the payroll tax will have little or no effect on reducing unemployment.  In particular, the two-month extension of the tax reduction will not induce employers to hire more employees.  Employers will hire when they have some certainty about what their labor costs are going to be.  In fact, the temporary extension creates uncertainty about how to handle your payroll.    Imagine you are a small employer.  You have been unable to know what to do about processing your payroll for the past several months as the temporary reduction in the payroll tax was scheduled to expire, then was supposed to be extended, then was not going to be extended, and now has been extended for two months, but with some chance that it will be extended for up to a year when the Congress returns.

The handling of the payroll tax highlights one fundamental problem with the Obama Administration’s economic policies.  They have created what Robert Higgs of the Independent Institute calls regime uncertainty.  No one knows what the rules of the game are or will be in the near future.  The reason we have a jobless recovery is because entrepreneurs have no certainty about what the government will do next.

Suppose you are owner of the Oasis Car Wash and are thinking of opening a new car wash at the cost of $300 thousand and hiring 15 new workers.  An investment of that kind must pay off over a period of years.  Why would you ever make that kind of investment with the current administration?  You have no idea what your health care costs per employee are going to be.  With the passage of Obamacare  you will have to provide some form of health care to these new employees, but whether your particular plan will qualify is unknown and the fine you must pay if you don’t provide insurance is unknown.  In fact, it is not known if the legislation will be upheld in the US Supreme Court, or when that decision will be handed down.

You do not know what your electrical power costs are going to be, as the Administration has favored cap and trade legislation that was not able to be make it through this Congress, but might in a future Congress.  The EPA has determined that it can regulate carbon emissions under the Clean Air Act, and its proposed rules are already leading to the closing of some coal-fired power plants,

If you are organized as an S-corporation, LLC, or a sole proprietorship you don’t know what your future tax liability is going to be.  The Bush tax cuts, which reduced the marginal tax rates, have been set to expire, then extended temporarily, and may or may not be extended beyond 2012.

These uncertainties have resulted in an employment recession. More than 13 million Americans who are still in the labor force remain unemployed.  The unemployment rate, which was at less than 5% in April of 2008, has above 8% since February of 2009 and has been below 9% in only two months of 2011.   Over 8.5 million workers are employed part time for economic reasons, that is, they are employed part-time but would like a full-time job.

Given the uncertainties caused by our federal government we are likely to be stuck with high unemployment until Americans elect a Congress and a President dedicated to the type of federal government envisioned by our Founders—one without arbitrary power and limited to the protection of life, liberty and property.

(Dr. Gary L. Wolfram is the William E. Simon Professor in Economics and Public Policy at Hillsdale College.)

CNN Money Reporter Hits Keystone Pipeline from Far Left

When President Obama put off giving the go-ahead to build the Keystone Pipeline until after the 2012 election, it put the liberal media in a difficult position. Just about everyone from Big Labor to congressional Republicans to the states through which the Keystone would run agrees it would create thousands of jobs, strengthen ties with Canada and reduce dependency on oil from unstable and unfriendly nations.

Obama, who has yet to embrace a jobs scheme that actually produces jobs, bowed to the environmentalists and wealthy celebrity liberals who hate the Keystone, which would run from Canada to the Gulf coast.

Journalists like CNN Money reporter Steve Hargreaves were left to defend the decision. In a Dec 14 piece titled “Keystone Pipeline: How many jobs it would really create?” Hargreaves cited two sources to make the case that the job-creating impact of the Keystone pipeline would be minimal at best – without noting the liberal environmental leanings of those sources.

“The Keystone pipeline project is back in play as part of the payroll-tax cut debate,” Hargreaves said, “and Congressional Republicans say it would create jobs. But there’s a wide range of estimates, with one forecast that Keystone could actually cost jobs.”

That “one forecast” was a study from Cornell University that blasted the potential job-creating impact of the pipeline. Other studies have forecast positive job impacts for the pipeline.

The libertarian Competitive Enterprise Institute has previously documented that the Cornell study was authored by a board member of Greenpeace Canada and financed by the Goodman Group, which counts among its clients the Sierra Club and Greenpeace. This information did not appear in Hargreaves’ report.

Hargreaves also quoted spokeswoman Susan Casey-Lefkowitz, of the National Resources Defense Council, who said “The Republicans have been acting like this is a national jobs package, and it’s not.”

Again, Hargreaves failed to explain that the National Resources Defense Council is an environmentalist group that is adamantly opposed to the pipeline. The group recently joined with three other environmental groups to file a lawsuit to block the pipeline. (Ironically, the National Resources Defense Council has previously come out against American dependence on unstable countries for foreign oil.)

In fairness to Hargreaves, those defending the indefensible are likely to pick up any tool at hand. Obama’s decision was transparently political and deeply cynical, and no credible source would back it up.

(Paul Wilson writes for Media Research Center’s Culture & Media Institute and Business & Media Institute. This story was first posted on the MRC.)

PPIC Poll claims 60% of voters support CA tax hike

The tax-and-spend Sacramento insiders who hunger for more taxpayer cash are having to secure their drool bibs after the release of a poll claiming broad public support for Jerry Brown’s proposed tax hikes.

The poll by the Public Policy Institute of California, a left-tilting think tank, asked the following question:

“Governor Brown has proposed a plan to help close the state’s budget deficit over the next five years. The plan, which would be put before voters in November, would raise $7 billion annually through a temporary four year half cent sales tax increase and a temporary five year income tax increase on those earning more than $250,000. Do you favor or oppose this proposal?”

According to PPIC, 60% of likely voters indicated support for the plan, which has those backing tax increases salivating.

Nonetheless, there are reasons to be skeptical. Let’s take a closer look.

Note how the question is framed in terms of deficit reduction, even though real world experience shows that there’s no correlation between raising taxes and reducing the deficit — or else California certainly would have no deficit at all by now.

In the second sentence, it’s stated the governor’s plan will, for certain, produce $7 billion in new tax revenue, even though, again, real world experience shows that tax increases rarely, if ever, produce the revenue that is predicted.

See how the tax increases are described as “temporary,” while also noting their sunset dates. Is it really necessary for a pollster to emphasize that four year and five year tax increases are “temporary?” Doesn’t their description as four year and five year tax increases already make that clear?

And the question mentions the sales tax, which impacts everyone, first, and then ends with the tax increase on top earners, so that the “tax the evil rich” element is emphasized at the end of the sentence, right before the respondent is asked to make a decision?

Ironically, this same poll shows 57 percent of Californians believe there’s a lot of waste in state government spending and 67 percent say the state government is pretty much run by a few big interests looking out for themselves and not for the benefit of all of the people.

If taken literally, the poll tells us that most Californians think government wastes their money and, therefore, they want to pay higher taxes. This significant contradiction of logic takes us back to the biased wording of the tax increase question.

Only an election can sort out what voters are really thinking, but before the Sacramento politicians start spending the “new” money they believe this poll shows they will get, they should look back to 2009. Two months before a special election vote on Proposition 1A, that would have raised taxes by $16 billion, a Field poll had the measure passing by 57%. It lost two months later by more than 65%

In releasing this latest poll, the PPIC should have provided bibs for everyone because what they have served up is pabulum.

(Jon Coupal is president of the Howard Jarvis Taxpayers Association -– California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights. This story was first posted on HJTA‘s website at

CalPERS board member rips earnings

Over the last 10 years CalPERS investment earnings are below the median among institutional investors. Are money managers being paid for poor performance?

In a feisty farewell last week, an outgoing CalPERS board member, Lou Moret, called attention to the below-median earnings as Wilshire consultants delivered a quarterly earnings report.

“Is this as bad as it looks?” said Moret, a gravel-voiced boxing referee leaving the California Public Employees Retirement System board this month after nearly four years.

Moret said that during his previous service on the Los Angeles Fire and Police Pensions board money managers with earnings below the median for three or four quarters were dismissed.

“We are glossing over this, and it looks horrible,” said Moret.

Delivering another jab, Moret reminded his fellow board members that CalPERS, the nation’s largest public pension fund, likes to regard itself as a leader among pension funds.

The report shows CalPERS earnings during the last 10 years, 5.4 percent, slightly below the Wilshire median for large funds, 5.7 percent, and a broader Wilshire median for institutional investors, 5.5 percent.

The CalPERS earnings for the last three years, 2.2 percent, are well below the three-year median for the two Wilshire measurements, 4 and 4.2 percent. But CalPERS earnings for the last year, 4 percent, are above the two peer groups, 2.4 and 1.3 percent.

Moret said it’s a problem if a CalPERS failure to take corrective action results in “giving the state a bigger number they have to come up with,” a reference to annual employer pension contributions.

In California public pension funds, investment earnings are expected to provide roughly two-thirds of the revenue. When earnings fall short of the target, the funding gap must be covered not by employees but by the employer with taxpayer funds.

A Wilshire consultant, Andrew Junkin, told Moret that a CalPERS portfolio heavily weighted toward international stocks is “probably swamping” the performance of managers.

Junkin said CalPERS corporate governance funds, after some poor performance, are doing better. He also said that CalPERS has scaled back active managers, relying more on passive management that tracks the market.

Janine Guillot, a CalPERS investment officer, said CalPERS “investment beliefs” limit “home country bias,” expecting greater long-term earnings abroad, and assume big U.S. stocks are efficiently priced, leaving little room for gain from active management.

CalPERS hired a new chief investment officer, Joe Dear, in January 2009. A new CalPERS chief executive officer, Anne Stausboll, had been hired a few weeks earlier in December 2008.

The new management was in place when CalPERS revealed in October 2009 that a former board member, Al Villalobos, received $50 million in fees from private equity firms seeking CalPERS funds.

A state lawsuit contends that a former CalPERS chief executive, Fred Buenrostro, who later went to work for Villalobos, urged CalPERS investment officers to give funds to Villalobos clients.

CalPERS had well-publicized real estate losses when the housing boom went bust, some advised by a firm later dropped by CalPERS. Under new management, CalPERS real estate is aimed more toward income such as rent, not speculative property.

A new CalPERS committee looks at risk management in investments and other operations. Hit by a sagging economy and market crash, CalPERS investments peaked at $260 billion in 2007, dropped to $160 billion and were $220.5 billion last week.

When Dear briefed the CalPERS board last week on economic trouble in Europe, board member Dan Dunmoyer asked if CalPERS will be able to hit its earnings target of 7.75 percent during the next decade and 8.5 percent in the following decade.

“Over 20 years I’m comfortable with our return target,” Dear said. “That’s long enough to ride through these cycles. On the short term, I think it’s going to be difficult, and I have said that. I was advised not to be so pessimistic on my point forecast.”

Dear said the next 20 years are likely to be different from the past 20 years. He said part of the evolving CalPERS investment strategy is a shift of focus from asset classes to risk factors.

“I’m confident that as we do this work, we will find a way to produce the returns that are necessary, even if we run the risk of being different than a lot of other pension funds who are pioneers in that effort,” he said.

Critics say optimistic earnings forecasts conceal massive pension debt and the need for higher contributions. Spending more money on pensions now as other programs are cut would be politically difficult and probably reduce public support for pensions.

A leading critic, former Assemblyman Joe Nation, D-San Rafael, of the Stanford Institute for Economic Policy Research, issued a new report last week analyzing shortfalls at CalPERS, the California State Teachers Retirement System and UC Retirement.

The report concluded that shortfalls remain under earnings forecasts ranging from the risk-free bond rate advocated by economists, 4.5 percent, to a very optimistic 9.5 percent. CalPERS and CalSTRS earnings would have to average 12 percent to close the gap.

“We estimate, for example, the additional cost of not fixing the state’s pension problem at $1.2 billion per year, roughly equal to the midyear budget cuts recently announced,” Nation wrote in a Sacramento Bee op-ed article. “And that figure will grow every day that they delay.”

Moret was chief operating officer of the Southern California Association of Governments for 15 years and a former Los Angeles public works commissioner. He also has refereed more than 100 professional boxing fights.

After Moret was appointed to the CalPERS board by the Legislature in February 2009, the Assembly Speaker at the time, Fabian Nunez, told the Los Angeles Times Moret was “an easy way out” as three union groups pushed different candidates.

In December 2008 Moret had paid $67,000 to settle a city of Southgate lawsuit in a probe of contracts steered to preferred bidders, the SacramentoBee reported. A city treasurer said to be a Moret protégé and three others received prison sentences.

Another departing CalPERS board member, Tony Oliveira, an economist, told the board last week that an attempt to create a “service” economy here has failed, while moving jobs that “make products” abroad has helped emerging nations prosper.

“Until we decide to use technology and innovation to take back those jobs, our unemployment rate will never go back close to where it was before,” said Oliveira, a gubernatorial appointee representing local government on the 13-member board.

In the future, departing CalPERS board members may have a wider audience for their farewell remarks. CalPERS plans to join CalSTRS and a number of local pension systems who have been webcasting board meetings.

“We anticipate rolling out our webcast opportunity beginning at our February meeting,” the CalPERS board president, Rob Feckner, said last week. “The decision is yet another step in our commitment of transparency and accountability to all of those we serve.”

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. THis story was first posted on CalPensions.

The Richest Man in Town

Author’s note: I first published this piece in December, 2000. It has become my traditional Christmas column each year since then. A blessed Christmas and new year full of success and happiness to all.

I’ve long thought It’s A Wonderful Life one of the finest movies ever made. Not on technical standards, though the movie is well made. Wonderful Life is a great movie — perhaps the greatest — because of the messages it imparts. And though it is ubiquitous on television this time of year, do yourself a favor and buy the DVD to avoid the editing done for the tube. Avoid the colorized version like you would a root canal sans novocain.

It is a rare person who is unfamiliar with the scene at the end of the movie, where all of George Bailey’s (Jimmy Stewart) friends and family have gathered round him to help him through a tough spot. That scene, to me, is the essence of a successful life, of a wonderful life — having those you love and who love you surround you with comfort when you need it most.

I know from whence I speak. In September of 1998 I went completely deaf in the space of three hours one morning. I recovered my “hearing” in April of 1999 after successful cochlear implant surgery. During the seven months of my “Simon and Garfunkel” period (think “Sounds of Silence”…ahem), from September to April, and for the first few months after surgery while adjusting to the cochlear implant, I discovered how George Bailey must have felt. That very rough time was made much easier because of the support and love of my family and friends — delivered on a daily basis.

In the last scene from Wonderful Life, mentioned above, George Bailey’s brother offers a toast that goes: “To my brother George, the richest man in town.” The toast is full of irony, as George isn’t rich at all in material things. Far from it. But he is fabulously wealthy in the things that really matter in life: faith, family, and friends.

The most compelling message of Wonderful Life is why George had all those friends willing to rally around him. The answer lies in the way he lived his life. He looked out for other people, was always willing to help out, ever eager to do the right thing. He engaged in kindnesses that usually appeared trivial on the surface but meant a great deal to the people on the receiving end of them. It was the small things, the every day things, which made the difference. George Bailey didn’t change the world. But he did make it a better place, one person at a time.

I learned the importance of small kindnesses during my deafness. In those seven months there were times I would get down, dispirited and stressed. Every time that happened — quite literally — one of my family or friends would call, write, stop by, send an e-mail, or do some small thing that picked me up. It may have taken them 30 seconds and involved the most trivial of things — but it made my day, many times. Many good things have come out of that time in my life. Among the foremost is my understanding that the little things can mean a lot to people in day-to-day living.

I’m not talking about the moronic “random acts of kindness” mantra of the Kumbaya crowd. What I’m talking about is specifically not random. Spur of the moment perhaps, but not random. I’m talking about premeditated acts of charity and love for those we know are in need of succor. Or even for those we only suspect are in need of it. I’m talking about appreciating the importance of taking time in our busy lives to do the small things — acts of friendship, for lack of a better description — that it is so easy to put off until “tomorrow.”

Don’t do that. Tomorrow is promised to none of us, and the spirit of somebody you know may well need a lift today. At 9 a.m. on September 18, 1998, I could hear just fine. At noon I was stone, cold deaf. Tomorrow may not bring you the opportunity to help someone that today carries. While we are busy trying to do the big things in our lives, let’s not forget what George Bailey teaches us — that often we do the most important work of living just by being a friend — one person at a time.

Mother Theresa put it this way: “Only rarely in our lives are we called upon to do great things. But every day of our lives we are called upon to do little things with great love.” I expect that sounds hokey and maudlin, yet I know the truth of it. During my challenging times I of course appreciated the “great things” done and grand gestures made on my behalf. But it was the small, day-to-day kindness and thoughtfulness that really got me through.

Doing “little things with great love” can be a challenge, as it requires a humility that isn’t necessarily natural to us. Most of us, myself included, define a successful life in financial terms far too often. Following Mother Theresa’s road will make the world better, but it’s unlikely to make you rich or famous. It probably won’t even get you noticed — except of course by the recipient of your thoughtfulness.

But there are other rewards. Standing before the Almighty on judgment day, would you rather be able to say you helped elect presidents, senators, and governors, or that you helped mend someone’s spirit when that spirit was tattered? That you drove only the finest cars, or that you took the five minutes necessary to brighten an estranged friend’s heart? That all your sweaters were cashmere or that you comforted all you met with love and laughter? These things aren’t mutually exclusive of course, but too many of us do not have them prioritized properly.

As we celebrate Christmas, let us contemplate the message of the child born in Bethlehem. And as we do so, let us keep in mind the admonition of Mother Theresa, who is doubtless one of His saints. Let us, by all means, do the great things that life brings to us. But let us — every day — remember to do the little things with great love. By doing so we can impact lives enormously, just as George Bailey did, one person at a time. It’s the secret to a wonderful life, and to being the richest man in town.  Merry Christmas to all.

(William E. Saracino is a member of California Political Review’s editorial board.)

The Grinch that Stole CA’s Christmas

Dr. Seuss’s children’s story, “The Grinch That Stole Christmas,” applies to California in 2011.

Seuss’s story is about an unhappy cave-dwelling creature with an undersized heart that lives on Mt. Crumpit just north of Whoville — home of the “Whos.”  The Grinch becomes annoyed with the Christmas happiness he hears taking place in Whoville.  Eventually, the Grinch makes plans to take their Christmas presents and decorations from them. The Grinch becomes resolved to “prevent Christmas from coming.”

The Grinch succeeds in confiscating everyone’s presents.  Nevertheless, Christmas can’t be denied and arrives.

In Seuss’s story, those who celebrate Christmas soften the Grinch. His heart grows in size.  He eventually returns all the gifts and decorations. He joins the community of the “Whos.”

In the California version of Seuss’s tale, however, Gov. Jerry Brown and his fellow grinches in the state legislature set about to take presents from next year’s Christmas as well. This plan includes placing on the November 2012 ballot several initiatives to raise taxes to purportedly reduce the budget deficit.

Massive Waste

Consider the following budget items that presently take from everyone’s Christmas but add to the $20 billion state structural budget deficit:

1. The reported $6 billion in above-market power costs, according to the Division of Ratepayer Advocates of the California Public Utilities Commission.

2. The proposed elimination and changes to $3.3 billion in tax credits, deductions and exemptions, as recommended by the State Legislative Analyst’s Office.  The LAO “selected tax credits or exemptions for reductions or elimination because they are not achieving their stated purposes or are of lower priority.”

3.  The estimated $2.75 billion it would cost to pay interest on water bonds, including the proposed $11.1 billion new water bond for the November 2012 ballot. These existing and proposed new water bonds would be unnecessary if the 2 million acre feet of contracted water per year from the California Aqueduct was allowed by cities to flow to California’s farms and cities.

4. The estimated $2 billion in additional costs to issue lease-revenue bonds instead of general obligation bonds to build new court-ordered prisons. The use of lease-obligation bonds goes around the requirement for voter approval of debt underProposition 13.

5. The $527 million in overspending by community colleges, as reported by the State Controller in the Statement of General Fund Cash Receipts and Disbursements of Oct. 2011

6.  The roughly $300 million in interest on stem-cell research bonds per year for a total of about $1 billion over the three-year authorization under Proposition 71. Public funding of stem cell research is duplicative to funding by the private sector and the National Institutes of Health.

7.  The more than $1 billion in lost output, more than 6,000 lost jobs, $425 million in lost labor income and $49 million in lost taxes from the Obama administration’s Environmental Protection Agency delaying the implementation of fracking — oil and gas extraction by fracturing rock formations — in California, according to a study by the Los Angeles Economic Development Corporation.

8.  The $62.5 million per year siphoned from electric utility bills and $24 million per year from natural gas bills via the Public Interest Energy Research surcharge that has accomplished nothing since 1996.

9. The $7.4 billion in potential cost savings in categorical or “earmarked” items in the K-12 Education Budget identified in the 2008 report, titled “Categorical Reform,” by the State Legislative Analyst.  Gov. Jerry Brown only cut 1 percent of the budget for categorical programs in 2010 and slightly increased the 2011-12 school budget by $2 million.

Taxes = More Bureaucracy

There are those who say the budget deficit can only be plugged by increasing taxes.  But in California more taxes have only gone to increase the size of bureaucracies and boost public pension benefits, thus fueling the deficit and the long-term debt.  Witness the tsunami of money from the Real Estate Bubble and the $50 billion from the Federal Stimulus funds spent in California to date.  Did any of it reduce the budget deficit or debt?

Neither Gov. Brown nor the legislature is about to let Californians have Christmas without stealing a few presents and Christmas tree decorations that do nothing to plug the state budget deficit.

That is how the “Whos” in Whoville got their name.  They kept asking, “Who stole Christmas?”  The answer is the same grinches that plan to steal next Christmas as well.

Merry Christmas anyway!

But watch out for an unhappy New Year.

(Wayne Lusvardi is a Political Commentator. This article was first posted  on CalWatchdog.)

Nicaragua: Don’t Cry For Me, Dan Ortega

What nightmarish character from the 1980s is legendary for saying, “I’m back!”?

I don’t mean Chucky. I mean Daniel Ortega, Marxist leader of Nicaragua.

If a trip down the Ortega highway feels like a nostalgic voyage, think again. Daniel Ortega has successfully reinstated himself as president of the western hemisphere’s second-poorest  country, thanks to a constitutionally illegitimate and comically corrupt national election.

For those of you too young to remember, and those of you who were old enough during the 1980s to be rocking out to Boy George and Culture Club, Ortega was a Cuba-trained guerilla leader who overthrew the corrupt Somoza regime in Nicaragua in 1979.

He nationalized (read:  stole) billions of dollars in private property, which he redistributed, in true Marxist fashion, to himself and his closest friends. His anti-American, anti-business stance drew the ire of the Reagan administration, which funded an opposition group, the Contras, to take him down.     He lost an internationally-observed election in 1990.

After years in the political wilderness, and two failed attempts to retake the presidency, Ortega cruised to an election victory, last month.  So enthusiastic were Nicaraguans for his return that he received as many as 500 votes in polling place after polling place that only had 400 voters. That campaign performance indicates that he is not just a man of the people, but a man of the people who doesn’t exist.

In recent years, Ortega was one of few world leaders, past or present, to express solidarity with Muammar Gaddafi. He has become allied with Mahmoud Ahmadinejad of Iran. He also threatened to boot the Taiwanese out of Nicaragua, so that he could draw closer to the People’s Republic of China, but now apparently is seeking to create his own two-China policy, drawing benefits from both nations.

Mr. Ortega’s primary political benefactor, however, is his neighbor and fellow Marxist, Hugo Chavez of Venezuela. Chavez has been bankrolling Ortega to the tune of $500 billion a year so that Ortega can buy—wait for it—chickens, liquor, and wide screen TVs (for watching soccer matches) in order to buy voters.

Ortega apparently bought enough of the electorate, or perhaps he invested his money more wisely in buying off the poll watchers, because pretty much anyone paying attention to Nicaragua condemned his victory as a reprehensible fraud. On top of that, Nicaragua’s own constitution forbids individuals to run for more than two terms, a fact Ortega conveniently ignored.

Actually, the Supreme Court of Nicaragua, whose chief justice is a crony of Ortega’s, found nothing wrong with his pal ignoring his own constitution and running for office yet again.

What happens if Nicaragua, now a major trans-shipment point for cocaine distribution, remains in Ortega’s hands?

From the perspective of Nicaraguans, it means an end to civil rights, dissent, or political freedom. For the poor of that nation, it means victimization by yet another kleptocracy disguised as a leftist, populist movement.

For those of us in the United States who care something about free and fair elections, it’s a step backward and an insult to the memory of Ronald Reagan.

Ortega interpreted the 2007 economic collapse in the United States as God’s punishment for America’s militarist adventurism. Maybe he’ll take a weekend off from being president to spend a week at Occupy Oakland.

If you’ve been reading the papers lately, you know that both our military and economy are stretched fairly thin these days. So it’s unlikely that a latter-day Oliver North will be sending funds, legitimate or otherwise, from the United States to topple Ortega. After all, he stole his election fair and square.

The pity of it is that, in an era marked by the Arab Spring, and democracy sprouting across North Africa and the Middle East, a little of that legitimately populist fairy dust couldn’t be sprinkled on this once (and one hopes, future) ally of the United States.

(New York Times Bestselling Author Michael Levin runs, America’s leading provider of ghostwritten books.)

Nothing to Hide, Everything to Fear: The National Defense Authorization Act

One of the most haunting impressions of my Soviet childhood was stories my grandparents told about the Black Raven.  As a small boy I was terrified of this polished and poised creature of the night, usually sighted as it crouched to swoop upon an unsuspecting victim and carry him away, never to be seen again.

The Black Raven, however, was no avian figment of the human mind.  Rather, this secret-police sedan – named for the Russian symbol of death – was a very real fixture of life in the Soviet Union of 1930s.

Those who saw the Raven stop outside their building of communal flats contemplated last words to families as they waited tensely for the dreaded knock.  Its reverberations from another door brought a macabre sense of relief, lasting only until the Raven’s next appearance.  Such was the abject terror of living in the claws of despotism.  Unsurprisingly, it wasn’t tempered by that infamous platitude: “if you have nothing to hide, you have nothing to fear.”

How very different from a life in America, secured from fear by the assurances of individual liberty.

But in the 17 years since I became an American we’ve been averting our gaze as these sacred assurances slowly waned.  With passage of the National Defense Authorization Act, we look away again as Congress exposes Americans to the specter of prison without charge or trial and smothers that basic right of free citizens to invoke the law against their government.

Predictably, proponents of dispensing with that antiquated and inconvenient notion of due process would have us believe that warnings of the tentacles of tyranny are so much flimflam.

They declare that they didn’t change existing law.  That would be satisfying, if not for the inconvenient fact that there is no existing law on military detention of Americans on American soil.  Rather, the past two Presidents have simply asserted that power as lurking in an undisclosed location within the Constitution.

The Constitutional duty of Congress was to restrict that toxic overreach.  Instead we codified it.  Never mind that our nation successfully meted out justice to traitors for over two centuries, without destroying our commitment to such principles of freedom as the trial by jury that define us as Americans.

Supporters go on to say that this law was written to apply only to terrorists.  That would likewise be comforting, except that it consigns to indefinite detention anyone whom the government simply suspects of “substantially supporting al-Qaeda, the Taliban, or associated forces.”

What does it mean to “substantially support”?  And who or what are “associated forces”?  And above all, are we to retain our freedom by submitting to the untested breadth of those words?

The famous writer Alexander Solzhenitsyn, who exposed the secret network of Soviet indefinite-detention camps, wrote of a similarly broad and vague law that ultimately enabled the gulags:

“One can find more epithets in praise of this article than [the great Russian authors] once assembled to praise … Mother Russia: great, powerful, abundant, highly ramified, multiform, wide sweeping, which summed up the world not so much through the exact terms of its sections as in their extended interpretation.

Who among us has not experienced its all-encompassing embrace? In all truth, there is no step, thought, action, or lack of action under the heavens which could not be punished by the heavy hand of this article.”

Perhaps there is an explanation for the acceptance these empty assurances have found.  After all, our nation is only familiar with the travesties of tyranny by reputation: from the words and suffering of others.

But Americans should know that, to eyes familiar with tyranny by experience, Congressional consent to these broad new powers marks a major milestone on the road to serfdom.  Before it’s too late, let us resolve to renew and reinvigorate our vigilance for freedom.

Until such time, we are left with a familiar refrain as the proponents’ last refuge: “If you have nothing to hide, you have nothing to fear.”

That too rings hollow.  In a nation that casts aside the shield of individual liberty for the fig leaf of faith in a benevolent government, citizens with nothing to hide have precisely everything to fear.  The long story of humanity is very clear on this point: benevolence is fleeting.

And once it’s gone, we are at the mercy of that old Black Raven.

(Igor Birman arrived in Northern California as a Soviet refugee at the age of 13.  He serves as Chief of Staff to Congressman Tom McClintock.)

Occupy L.A.’s Enablers: Villaraigosa and the LA City Council

It’s no surprise, given the press’s sympathy for the Occupy Wall Street movement, that Time magazine named “The Protester” as its Person of the Year for 2011. The magazine’s editors point to the revolutionary uprisings in Tunisia, Egypt, Libya, and Syria—along with riots in Britain and Greece, and those campers in Lower Manhattan. People might not realize that the magazine’s cover illustration, however, depicting a stern woman with a bandanna covering her face, originated not from Cairo, Athens, or New York, but rather from a photo taken at Occupy Los Angeles.

Occupy L.A. didn’t receive as much national attention as did the Occupy Wall Street crowd in Zuccotti Park. In fact, Los Angeles was one of the last major cities to evict the anti-capitalist protesters from a prominent public space. “Two months is way too long to occupy a park, way too long,” said Councilman Dennis Zine after an LAPD raid dispersed the Occupy camp from City Hall on November 30. “You either enforce the laws or you ignore them—these are the consequences. Once you permit this to start, there is no stopping it.” Mayor Antonio Villaraigosa and LAPD Chief Charlie Beck held a joint press conference following the closure of City Hall Park, praising the professionalism of the police as well as the “peaceful” occupiers. The mayor called the late-night raid “perhaps one of the finest moments in the history of the Los Angeles Police Department.” No doubt the police acted professionally, but the LAPD has had many fine and proud moments in its history (along with some scandals and disgraces). But after a dismaying stand-off—which dragged on largely because of City Hall’s indecisive leadership—an operation to evict 300 or so scruffy leftists, drug-addled squatters, and union agitators would hardly qualify for a list of the department’s proudest achievements.

City officials should be held accountable for their role in this debacle. Occupy L.A.’s final cost to city taxpayers is still being tabulated, but the toll is expected to top $1 million. And for what? The truth is, Los Angeles put up with the protesters for nearly months before officials found the nerve to call in the police. They didn’t merely look the other way; they encouraged and supported the protesters. In the early weeks of the “occupation,” Zine, Villaraigosa, and their colleagues were all too happy to have hundreds of protesters camped out on the city’s lawn. In October, some council members wandered around the City Hall encampment with cameras in tow, glad-handing protesters and listening to their gripes. Zine told the Los Angeles Times that engaging with the occupiers was “the right thing to do.” City Council president Eric Garcetti was even more accommodating, telling the assembled radicals: “Stay as long as you need to. We’ll continue to work with you.”

On October 19, Villaraigosa and the City Council put their official blessing on record with a joint resolution supporting the “continuation of the peaceful and vibrant exercise in First Amendment Rights carried out by ‘Occupy Los Angeles.’ ” The resolution, authored by Councilman Bill Rosendahl, read as though it had been ghostwritten by the protesters. And because nearly every one of the 15-member council is a liberal Democrat—with one or two passive Republicans—the measure passed unanimously and without a dissenting word.

Even after it became obvious that the occupying mob in Los Angeles was adversely affecting traffic and business downtown, city officials held off ordering a crackdown and instead began a futile series of semi-secret negotiations with the protesters. As time dragged on, occupiers drove a popular farmers’ market from City Hall Park; neighboring businesses reported a spike in vandalism and theft; and the local homeless population began drifting into the camp, bringing drugs and lice with them. There was little reason to hold off from evicting the protesters, since the courts had determined in almost every instance that the encampments were unlawful gatherings, violating a long list of city laws and ordinances. Yet despite the obvious nuisance, city leaders reportedly offered Occupy Los Angeles tax-subsidized office space and even farmland if they agreed to decamp peacefully. The talks went nowhere. The protesters, with their idealized notions of democracy, rejected the idea of “leaders” as hopelessly bourgeois.

Despite the happy ending on City Hall’s north lawn, officials are struggling to reconcile their conflicted emotions over the entire Occupy farce. In his press conference, Villaraigosa suggested that “the Occupy L.A. movement can now amplify their calls for social justice and economic opportunity.” This sort of official nonsense flies in the face of everything the American public has come to know about the Occupy protests. Poll after poll, from Gallup to Rasmussen to Pew, has reported that to the extent people are aware of the Occupy Wall Street movement, they don’t like what they see. Californians have been more sympathetic than most Americans, but even their patience has limits. A Field Poll released the day before the LAPD’s raid on the Occupy Los Angeles camp found that 58 percent of California voters agree with thesentiment behind the protest movement, but nearly half said they don’t identify with the protesters themselves. (Even that result is astonishing: it’s one thing to agree with the fairly straightforward idea that government bailouts of big banks are wrong. But do 46 percent of Golden State voters really identify with drum circles, pot smoking, public urination, indecent exposure, violent brawling, and semi-literate rants against capitalism? And did I mention lice?)

Now that most of the tent cities have been torn down, the Occupy Wall Street movement promises that we haven’t heard the last of it. This may simply be bravado, but Cornel West, the Princeton University “public intellectual,” self-styled democratic socialist, and a regular on the Occupy speaking circuit, predicts that—much like the demonstrations in Cairo, Tripoli, Damascus, and Tunis—the occupiers will ultimately settle their grievances “in the streets.” We’ll see. The question is whether Antonio Villaraigosa and L.A.’s City Council will step in earlier next time.

(Joe R. Hicks is the vice president of Community Advocates and a writer and commentator for PJ Media. This article was first published on City Journal.)