A Time for Role Reversal

When I was a kid, one of the most powerful ads I saw on TV—this must go back 40 years—showed two old men grappling with each other like wrestlers while a circle of onlookers cheered for one or the other.  The idea was to show that if old men fought wars, instead of soldiers, we might not have as many wars.

That Vietnam-era ad came to mind this week as the politicizing of the debt ceiling issue roiled markets across the globe, led to the downgrading of U.S. Treasury obligations, and threatened the fragile recovery.

It gave me an idea.

What if we brought all the service people home from Iraq and Afghanistan to run the government, and what if we sent everyone running the federal and state governments to Iraq and Afghanistan to fight on the frontlines of the war?

No matter how you feel about our involvement in Iraq and Afghanistan, you’ve got to admit that our troops are superb.  They’re well-trained, dedicated, imbued with love of country, and are willing to lay their lives on the line for the rest of us.  They embody the notion that “freedom isn’t free.”

At the same time, never have we raised a more slothful, indolent, self-serving, borderline useless group of individuals as those we have somehow elected to federal and state office.

The only difference between the way government officials run the United States and the way they run Italy, Greece, Portugal, Ireland, and Spain is…um, well, nothing.  There is no difference.  The people in our nation’s Capitol have pretty much spent all of our nation’s capital.  Especially in the last few weeks, they have done the seemingly impossible—destroyed the last shreds of self-respect and dignity that the United States used to enjoy in the  community of nations.

That’s why I say it’s time for a role reversal.

If the government were run by people who loved the country, like our service people, it would be a different world.  Work would get done on time and under budget.  There’d be a spit-shine on senators’ shoes, instead of the rest of us wanting to spit on them.  The business of government would be handled as adroitly and expertly as these brave young men and women handle their missions on the battlefield.

Meanwhile, if you took these lazy slobs running the country—the real welfare kings and queens—put them in uniforms, outfitted them with weapons, and sent  them into harm’s way, the wars in Iraq and Afghanistan would be over in a New York minute.

Think of the savings.  We’re spending billions of dollars a day in these foreign lands, and for what?  Breathes there a soul this side of David Petraeus who truly believes the Afghanistani “army” will be able to defend itself from the Taliban?  You might even have some money left over to defend U.S. borders, instead of the border between Afghanistan and Pakistan.

The trouble with war is that the people who sign on to it are seldom confronted with the reality of the battlefield.  And the trouble with government is that the people who spend our money seldom have to go out and earn it.

This reminds me of Jackie Mason’s line about Congress.  “You know why there’s a deficit?  Because the Senators are all paid salaries.  Put them on commission.  That’s why they’ve never had a profitable season.”

Most Americans whose fortunes are tied to the wild fluctuations of the stock market haven’t been sleeping well these days.  But it seems like Congress has been sleepwalking to the edge of the precipice, and into the abyss.

It’s no longer enough to send them packing for home.  Let’s send them packing for Kandahar.  And let’s take advantage of the training, acuity, and dedication of our service people, by letting them run the country.

If you take one look at the people running our country and running our states, the evidence is irrefutable.

They couldn’t make things worse.

                                               

New York Times bestselling author Michael Levin runs the Orange County, California-based business ghostwriting service, www.BusinessGhost.com.

CA State Revenues Down Over 10 Percent

State Controller John Chiang announced today that there is more bad news for the Golden State: Revenues are down over 10 percent, or $538 million, from projections. Steven E.F. Brown for the San Francisco Business Times wrote the following:

State Controller John Chiang said California’s revenue was 10.3 percent, or $538.8 million, below budget projections in July.

July was the first month of the Golden State’s new fiscal year, and the tax take was lower in many areas. Only personal income taxes were higher than budget estimates — they came in 2.9 percent, or $89 million, over estimates.

Corporate taxes were 19.3 percent, or $69.5 million below estimates while sales taxes and use taxes were 12.5 percent, or $139.4 million worse than guesses made in the most recent budget.

Both corporate taxes and also sales and use taxes were below their level in July 2010, too, though overall general fund revenue was up $39.9 million, or 0.9 percent, in July 2011 over a year earlier.

California’s budget is a series of guesses about revenue and spending for the year running July 1 through June 30. The controller keeps track of cash levels — how much money the treasury actually has.

Chiang’s office blamed the acrimonious debt-ceiling debate for creating “a great deal of uncertainty for state and local governments, the bond markets, banks and businesses, and the economy.”

In his summary of the situation, Chiang said consumer spending has been dropping, but no one’s sure whether it’s for “a genuine slowdown” or because of logistical problems from natural disasters like this year’s earthquake and tsunami in Japan.

“This is cause for concern, but not panic,” he said.

 

For the rest of the article click here.

Redistricting commission dodging questions

During its press conference Friday announcing the release of redistricting maps, the Citizens Redistricting Commission evaded tough questions and refused to explain why one commissioner, Michael Ward of Fullerton, voted earlier in the day against moving all of the final maps to the public for review.

At the podium, Ward declined to explain his vote, but in a short interview with CalWatchdog afterwards said that he had explained his concerns at the appropriate time earlier in the day and was not sure about the legal ramifications of his sharing his concerns. According to published reports, Ward said “I’m sad to find myself compelled to vote no. In my opinion, the commission failed to fulfill its mandate to strictly apply constitutional criteria and consistently applied race and ‘community of interest’ criteria and sought to diminish dissenting viewpoints.”

Ward made it clear to CalWatchdog that he stands by such concerns and is waiting to see how the process proceeds. The commission will vote to adopt what they call “preliminary final maps” in an Aug. 15 meeting. Other commissioners who spoke said that the commission has exhausted its public review process and will indeed vote to approve the new district lines for U.S. Congress, state Senate, Assembly and Board of Equalization.

As the commission explains on its Web site, “In November 2008, California voters authorized the creation of the Citizens Redistricting Commission when they passed the Voters FIRST Act, which appeared as Proposition 11. Prior to 2008, California legislators drew the districts.” The goal was to take partisanship out of the redistricting process, yet the new commissioners have been dogged by allegations of inappropriate political activism and conflicts of interest.

An exclusive CalWatchdog series by reporter John Hrabe “reveals that at least one commissioner, Dr. Gabino T. Aguirre, has made multiple political campaign contributions to Democratic candidates — contributions that were previously undisclosed to the Commission; a long history of political activism in support of Latino causes; and an extensive web of connections to a special interest group that has submitted its own redistricting proposals to the commission.”

Hrabe also revealed that “a second member … ,  Jeanne Raya, failed to disclose financial contributions made within the past 18 months to a state political campaign committee . …” Somehow, a commission designed to be nonpartisan and charged with designing fair election districts, allowed left-wing political activists with an apparent political agenda to be among its members and to allegedly use the process to create districts that favor their political outlooks.

Based on the CalWatchdog revelations, California Republican Party Chairman Tom Del Beccaro called on Aguirre to resign from the post for what he termed “gross misconduct in office.” Del Beccaro questioned the fairness of a commission that failed to disclose the political activism of its members.

When one reported asked about allegations of impropriety by Aguirre, Galambos Malloy said, “All of our commissioners have conducted themselves with the utmost integrity and impartiality.” They did not address any of the specific concerns raised by the news reports and by the Republican leadership.

The commission also has been criticized by minority activist groups for not putting together enough Latino-dominant districts and not paying sufficient attention to African-American “communities of interest,” even though the commission must legally follow the federal Voting Rights Act, which dictates rules that enhance minority voting power.

At the press conference, commissioners refused to answer tough questions and focused mainly on their own sacrifices. “If anything was sacrificed in the process, it was our personal lives,” said Michelle DiGuilio of Stockton, referring to the long hours and the time spent away from her children. Vincent Barabba of Santa Cruz added that the rewards were worth the sacrifice and told a touching story about the way that Californians have embraced their diversity.

But when it came to questions about dissent, they kept repeating the mantra about this being an open and transparent process. It seemed more like a photo op than an opportunity to provide details about the inner workings of a commission that has much to say about the future politics of this state.

Jon Fleischman, publisher of the conservative Flashreport, argued Friday morning that the “The commission is likely to spend a good portion of today patting themselves on the back for a job well done. They certainly do deserve credit for spending as much time as they did on this project over the past eight months . …  However, the process was not a smooth one at all.” Fleischman points to self-interested agendas of commission members, unclear handling of Voting Rights Act rules and cast doubts on the much-touted openness of the process.

Commissioners seem to be gearing up for legal challenges and public scrutiny, and those surely will come in the ensuing weeks. Barabba argued that if the lines are that bad, then Californians can challenge them through the state Supreme Court or can launch a referendum drive. Those challenges surely are coming, and it will be interesting to hear what Ward has to say as redistricting critics get into gear.

 

This was originally posted and investigated by our friends over at CalWatchdog.

A tale of two states: California and Wisconsin

Governor Scott Walker took office in Wisconsin on January 2, 2011. He declared Wisconsin “open for business” and initiated numerous business friendly reforms. He was immediately labeled Public Enemy #1. TV screens showed massive labor protests and the Capitol was occupied. Posters of Walker with a Hitler mustache popped up and frightening headlines were everywhere. A Huffington post article by Steven Cohen, Executive Director, Columbia University’s Earth Institute stated, “Governor Scott Walker is attempting to destroy public sector unions in Wisconsin”.

Fast-forward to August 3, 2011 –seven months into Walker’s term. The protesters and signs have disappeared. The headlines have changed. “Wisconsin has added 39,300 private-sector jobs since Governor Walker declared Wisconsin open for business,” said Scott Baumbach, Department of Workforce Development Secretary. Wisconsin has 7.6% unemployment, far below the national average. Wisconsin’s total private sector job growth of 1.7% has been almost twice the national rate.

Compare that to California. Governor Jerry Brown also took office on January 3, 2011. In January, there were 2,246,073 Californians out of work (12.4%). According to the Economic Development Department, 2,183,100 Californians remain out of work (12.1%). Underemployment and those who have given up make the figures much worse. There are no pictures of Brown with Hitler’s mustache. There are no scary headlines of Brown destroying the public sector, nor protestors occupying his Capitol. That is because Brown is seen as an agent of the public employee unions that dominate California politics.

Business is less enthusiastic about Governor Brown. Chief Executive Magazine ranks California as the worst place to do business for seven years. “California, once a business friendly state, continues to conduct a war on its own economy,” the magazine reported. Companies are “disinvesting” in California at a rate five times greater than just two years ago, said Joseph Vranich, a business relocation expert based in Irvine.

In response to announcements that PAYPAL and CARL’S JR. would take their businesses and employees elsewhere, Lt, Governor Gavin Newsome has set out to alter the “perception” that California is anti-business. Lorraine Yapps Cohen, a San Diego Conservative Examiner, responded, “Oh, this is priceless! In hopes that he would get the message that the state of California overtaxes, overburdens, over-

regulates, and overwhelms business, we discover that it is the “perception” of those maladies that need to be changed.  Not the maladies themselves!”

Will California awaken from its slumber and recognize what other states like Wisconsin have learned, or will the Golden State continue its inexorable slide to a future of never ending financial crisis like Greece and Portugal?

 

Robert J Cristiano PhD is the Real Estate Professional in Residence at Chapman University in Orange, CA, Senior Fellow at The Pacific Research Institute and President of the international investment firm, L88 Investments LLC. He has been a successful real estate developer in Newport Beach California for thirty years.

The Great Deconstruction of big government and public unions

The economic downturn of 2008 – 2009 has been labeled “The Great Recession” for good reason. Eight million Americans lost their jobs compared to six million in the last four recessions combined dating back to 1980. The jobless recovery may trigger a double dip recession in 2011. The Federal Reserve Bank of New York estimates that homeowners’ equity has fallen by over 50 percent, or about six trillion dollars, during this period. Some 22 percent of all mortgages are now under water. And, economists predict that between eight and 13 million homes will have been foreclosed before the crisis ends.

The eight million jobs lost during the Great Recession were primarily in the private sector.  While the private sector was ravaged, the public sector was protected and bolstered by the $800 billion Stimulus Bill (3) in 2008 that sent more than $200 billion to the states to keep public sector employees employed. The Stimulus money that California received allowed California to avoid the job cuts demanded by a state budget more that $20 billion out of whack.

Ironically, it will be the actions of the Tea Party, a movement that had no significant affect on California’s 2010 election, that will impact California’s future. While the Tea Party swept more than 60 Democrats out of the Congress in 2010 and replaced them with freshman conservative Republicans, there was no such sweep in California. Democrat Governor Brown easily won his election as did Barbara Boxer and literally every Democrat running for state-wide office.

The vote in the House of Representatives, led by the freshman Republicans, will reduce Federal spending by $2.1 trillion over ten years. The framework would immediately cap domestic and defense spending. These changes will find their way to California and signal the end to Sacramento’s budgetary fiction that the Federal government will bail out the wasteful spending of state politicians.  California will be forced to solve its budgetary shortfalls the same way as their federal counterparts – with less money than before.

The period following The Great Recession will be known as “The Great Deconstruction” and will usher in draconian cuts in public sector jobs and a reduction in size of California’ s government. Deconstruction is defined as the wholesale elimination of entire programs, their permanent funding and the jobs involved.

 

Robert J Cristiano PhD is the Real Estate Professional in Residence at Chapman University in Orange, CA, Senior Fellow at The Pacific Research Institute and President of the international investment firm, L88 Investments LLC. He has been a successful real estate developer in Newport Beach California for thirty years.

When elephants fly – the end of the dreaded RDAs

By Shawn Steel

California National Committeeman

Republican National Committee

Something strange happened in the first six months of the Jerry Brown administration. He killed the invidious Redevelopment Agencies [RDA] which many California cities used to confiscate private property against unwilling land owners, in the name of abolishing “blighted” neighborhoods. Through Assembly bill 26X, the legislature voted to disband redevelopment agencies unless they are willing to share property tax revenue in the future to help finance public schools.

[Read more…]

Mend, don’t end, redevelopment

By Richard Lyon, Senior Vice President, California Building Industry Association

California’s Economic Development Department recently reported that our state shed more than 29,000 jobs in the month of May – giving rise to fears that the California economy could be headed for a double dip recession.  In light of this reality, you’d think that policymakers in Sacramento would be doing everything they could to increase job opportunities and stimulate economic growth in our state.

Unfortunately, you’d be wrong.

Rather than work to create jobs, the Legislature last week passed legislation to effectively abolish local redevelopment agencies in California. In doing so, the Legislature has turned its back on one of the few economic development tools available to local governments’ to create jobs and economic opportunity.

Eliminating redevelopment is bad economic policy and will kill jobs and economic expansion at the worst possible time.  Statewide:

  • Redevelopment activities support an average of 304,000 full- and part-time private sector jobs in a typical year, including 170,600 construction jobs;
  • Redevelopment contributes over $40 billion annually to California’s economy in the generation of goods and services; and
  • Redevelopment construction activities generate $2 billion in state and local taxes in a typical year.

Abolishing redevelopment is extremely shortsighted. California’s construction sectors are experiencing historically high levels of unemployment. More so now than ever before, California needs to embrace policies of opportunity and economic growth.

Redevelopment offers that hope of opportunity and growth. It works to kick-start construction in urban areas that the business community largely cannot undertake on its own. By remediating environmental waste, building basic infrastructure, and making other improvements, redevelopment lures private investment in housing, jobs and businesses that otherwise would not occur. These investments mean jobs and opportunity in our most downtrodden communities.

Fortunately, by vetoing the main budget bills, the Governor has temporarily postponed the implementation of the redevelopment elimination legislation. The Legislature should take this time to pull back the legislation.

Instead of abolishing redevelopment, the legislature should instead adopt the compromise reforms being supported by a broad coalition of local governments, organized labor, housing advocates and business leaders that would reform redevelopment to strengthen what works and eliminate what doesn’t.

SB 286 (Wright) and AB 276 (Alejo) significantly enhance transparency and accountability, reduce the footprint of redevelopment, provide funding to schools, and ensure more targeted uses of redevelopment dollars.

Eliminating redevelopment will thrust our state economy into further recession, by reducing jobs and stalling economic growth. We should mend rather than end redevelopment. It is an essential tool to improve our economy and stimulate job-creation.

Governor axes redevelopment—Finally the bleeding stops

By Chris Norby, Assemblyman, 72nd District

Yesterday, Governor Brown formally signed AB26x, a long-overdue bill that ends redevelopment agencies in California as we have known them for over 50 years.

Redevelopment was originally created by the legislature to address urban blight and to revitalize decaying residential and commercial districts. Cities were empowered to create local redevelopment agencies with enhanced powers to divert property taxes, sell bonds, expand eminent domain and subsidize private development.

By the 1980s, a tool once used by a few large older cities had spread statewide. Newer suburbs were declaring raw land to be blighted to build new malls, auto plazas and big box retail centers—all subsidized at taxpayer expense. By 2000, over 30% of all urbanized land statewide had been declared blighted and included in redevelopment areas.

Tax increment financing diverted ever more property tax revenues into redevelopment agencies—at the expense of public safety and education. By 2010, over 12% of tax revenues had been hijacked by redevelopment agencies—over $6 billion statewide.

Eminent domain became the tool of choice to assemble the huge new parcels needed for redevelopment projects—all motivated by promised economic benefits. Homeowners, small merchants and even churches were targeted for taking on behalf of politically connected developers.

Repeated studies showed that redevelopment subsidies produced no net economic benefits. Savvy retailers, auto dealers and NFL team owners played one city against another for greater subsidies and land write-downs, but for the state as a whole it was a zero-sum game. California became littered with half empty malls, auto plazas and strip centers all over-built with huge public subsidies.

Meanwhile, bonded indebtedness soared to $90 billion, as agencies could encumber future property taxes without a vote of their constituents.

With the state facing a $25 billion shortfall, the losses to redevelopment agencies became unsustainable. The state could no longer backfill the fiscal bleeding to local schools and services. The signing of AB 26x saves the state budget an immediate $1.7 billion. Once the debts are paid off the full $6 billion annually will be restored to fund public services and education.

Redevelopment was never indented to be a permanent drain on the public treasury, never intended to be a permanent cash cow to subsidize development that the market alone could not support.  Credit Governor Brown for ending a program that had long outlived its usefulness.

Opposing View: Eliminating Redevelopment Agencies threatens local cities, services

by Lacy Kelly, CEO

Association of California Cities – Orange County


The Association of California Cities – Orange County (ACC-OC) believes that redevelopment agencies need reform, not elimination.

In fact, the vast majority of redevelopment agencies and the projects they oversee are proven economic generators for California’s cities and provide exceptional returns on investment for the taxpayer.

Balancing these benefits with meaningful change is precisely why the ACC-OC developed a comprehensive set of redevelopment reform best practices. These ideals are meant to protect the new jobs, tax revenue and beneficial projects produced by the redevelopment process, while simultaneously addressing the isolated problems.

For example, we believe in greater transparency in the redevelopment process through robust online disclosures. In fact, our principles require that agencies post the past five years of redevelopment expenditures as well as all future funding obligations. Additionally, taxpayer oversight committees should be mandated for all redevelopment agencies in order to ensure that the original intent of redevelopment is protected and government abuse eliminated.

In Orange County, for example, the Orange County Transportation Authority has had great success with its Measure M-mandated Taxpayer Oversight Committee. This panel scrutinizes projects and expenditures against the original intent of the voter-approved half-cent sales tax. This can serve as a model for all redevelopment agencies.

We strongly recommend that redevelopment agencies also follow consistent, statewide benchmarks to curb abuse, including:

  • Cap administrative costs at 20 percent
  • Prohibit land banking for speculative purposes
  • Promote and develop affordable housing within redevelopment projects

All of the ACC-OC’s Redevelopment Best Practices can be found online at www.ACCOC.org/publications.

The ACC-OC agrees that redevelopment reform is needed.  But we must not throw the baby out with the bathwater. The wholesale elimination of a tool that creates jobs, increases revenues and removes blight during a time when cities are struggling to keep police on the streets and parks maintained is highly misguided and threatens economic viability in many California communities.

The ACC-OC will continue its vocal support for redevelopment agencies and champion the reforms necessary to ensure that they remain healthy, sustainable tools for California cities.

Eliminating Redevelopment Agencies: A Good Idea Implemented For the Wrong Reasons

By Allan Mansoor – Assemblyman, 68th District

Last week I voted to end redevelopment agencies (RDAs). While RDAs have been the source of wasteful spending at the local level, the biggest problem with RDAs is that they are a conduit used to initiate eminent domain actions against private property owners. In doing so, cities pick winners and losers by interfering with the free market.

The proposal to end RDAs was introduced by Democrats. Democrats generally oppose eminent domain reform measures and regularly use RDAs to support earmarked spending in their districts. With this in mind, their proposal deserved skepticism. What was their motive?

At a time of major budget deficits, the Democrat budget proposal included cuts to education along with increases to welfare and social services and new benefits to public employees. Their motivation in ending RDAs wasn’t an altruistic vision that RDAs are wrong. They wanted RDA money to pay off their public employee union supporters.

Redevelopment agencies are funded from the $45 billion Californians pay in property taxes. The RDA money in question is about $1 billion in savings that will be recognized after RDAs are eliminated. These are property tax revenues that I think should remain with local government. I am aware that there is abuse at the local level, but that abuse pales in comparison to what can happen at the state level where the abuse is more severe and more difficult to correct.

Raiding local treasuries is particularly troublesome in the current economic environment. I served on the Costa Mesa City Council and am aware of the fiscal crises facing many cities. For many cities, the unexpected taking of RDA funds is going to make tough times even worse.

The measure to end RDAs was actually two measures. One ended RDAs and the other took their money. My Republican colleagues who called the proposal a “money grab” were right when they focused only on the end result. But taken by itself, the bill to end RDAs was one of the most important pieces of legislation affecting private property rights in recent memory. I supported it even though I opposed the other. Unfortunately, the money-grab-measure passed.

In California, even the slightest victory in the fight for protecting property rights is cause for celebration, but victories public employee unions give us on a silver platter are hollow victories. As long as public employee unions control Sacramento, they can recreate RDAs anytime RDAs will serve their interests.