California: Taking a Back Seat to Texas

Comparing California to Texas is not a fair comparison. Texas has better schools, lower taxes, and better business climate, loves jobs and creates a family atmosphere. It is a State with low unemployment and a growing economy. More homes were built last year in Houston than in the whole State of California.

“The Toyota decision also reflects the continued erosion of California’s historic economic diversity, which provided both stability and a wide variety of jobs to the state’s workers. We have seen this in the collapse of our once-burgeoning fossil-fuel energy industry, capped this year by the announced departure from Los Angeles of the headquarters of Occidental Petroleum. Blessed with huge fossil fuel reserves, California once stood as one of the global centers of the energy industry.

Now, with the exception of Chevron, which is shifting more operations out of state, all the major oil companies are gone, converting California from a state of energy producers to energy consumers, and, in the process, sending billions of dollars to Texas, Canada and elsewhere for natural gas and oil that could have been produced here.”

Texas allows fracking and is rolling in jobs. California does not—cost of unleaded gas in California is as low as $3.81 in the Central Valley—and at $3.00 in most places in Texas!

Flag_of_Texas

California: Taking a Back Seat to Texas

Written by Joel Kotkin, City Watch LA,   5/23/14

SOCAL IN THE REARVIEW MIRROR-The most important news recently to hit Southern California did not involve the heinous Donald Sterling, but Toyota’s decision to pull its U.S. headquarters out of the Los Angeles region in favor of greater Dallas. This is part of an ongoing process of disinvestment in the LA region, particularly among industrially related companies, that could presage a further weakening of the state’s middle class economy.

The Toyota decision also reflects the continued erosion of California’s historic economic diversity, which provided both stability and a wide variety of jobs to the state’s workers. We have seen this in the collapse of our once-burgeoning fossil-fuel energy industry, capped this year by the announced departure from Los Angeles of the headquarters of Occidental Petroleum. Blessed with huge fossil fuel reserves, California once stood as one of the global centers of the energy industry.

Now, with the exception of Chevron, which is shifting more operations out of state, all the major oil companies are gone, converting California from a state of energy producers to energy consumers, and, in the process, sending billions of dollars to Texas, Canada and elsewhere for natural gas and oil that could have been produced here.

As did the oil industry, the auto industry, and, particularly, its Asian contingent, came to Southern California for good reasons. Some had to do with proximity to the largest port complex in North America, as well as the cultural comfort associated with the large Asian communities here. Back in the 1980s, the expansion of firms like Honda, Toyota and Nissan seemed to epitomize the unique appeal of the L.A. region – and California – to Asian companies. Today, only Honda retains its headquarters in Los Angeles (Nissan left in 2005), while Korean carmakers Hyundai and Kia make their U.S. homes in Orange County.

Retaining these last outposts will be critical, as Southern California struggles to retain its once-promising role as a true global city. With the exception of the entertainment industry – itself shifting more production out of town – our region is devolving toward marginality, largely as a tourist and celebrity haven.

Still, I’m concerned less about the region’s reputation than about the economic trajectory of its middle and working classes. The Toyota relocation from Torrance will eliminate 3,000 or more generally high-wage jobs, something that usually accompanies the presence of headquarters operations. It will cost the region, most particularly, the South Bay, an important corporate citizen, as, over time, the carmaker will likely shift its philanthropic emphasis toward Texas and its various manufacturing sectors.

Perhaps more disturbing are the fundamental reasons behind the Toyota move. According to Toyota’s U.S. chief, James Lentz, they weren’t even courted by Texas, which has fattened itself on California’s less-competitive business climate.

Some of Toyota’s reasoning is geographical. The port link is less essential now since close to three-quarters of Toyota’s vehicles sold in the U.S. are built here, up from 58 percent in 2008. At the same time, the growth of the “Third Coast” ports – Houston, Mobile, Ala., New Orleans and Tampa, Fla. – buoyed by the widening of the Panama Canal, makes it increasingly easy to ship components or cars in and out of the central U.S.

More troubling still is the logic, both on the part of Nissan and Toyota, linking headquarters operations – with their marketing, design and tech-oriented jobs – closer to their industrial facilities in the south and Midwest. Toyota, for example, has a large truck plant in San Antonio as well as auto assembly plants throughout the mid-South. Honda, now the last major Japanese carmaker with a Southern California headquarters, last year also moved a number of executives from Torrance to Columbus, Ohio, closer to the company’s prime Marysville, Ohio, production hub.

This pattern contradicts the notion, popular in both the Jerry Brown and Arnold Schwarzenegger administrations, that California’s massive loss of industrial jobs over the past decade can be offset by the creative industries, notably Hollywood and Silicon Valley. Since 2010, California has managed to miss out on a considerable industrial boom that has boosted economies from the Rust Belt states to the Great Plains and the Southeast. Los Angeles and Orange counties, the epicenter of the state’s industrial economy, have actually lost jobs. Since 2000, one-third of the state’s industrial employment base, 600,000 jobs, has disappeared, a rate of loss 13 percent worse than the rest of the country.

But, the prevailing notion in California’s ruling circles seems to be, if you have Google and Facebook, who needs dirty, energy-consuming factories or corporate operations filled with middle managers? Silicon Valley crony capitalists and urban developers who support our political class, and are willing participants in various subsidized green energy schemes, have little interest in traditional manufacturing, regardless the damage inflicted on blue-collar workers, whom progressives are happy to subsidize (and thus gain their unending support) outside the labor force or keep severely underemployed.

The deindustrialization of California was one reason behind the withdrawal of both Nissan and Toyota. Each automaker has established strong manufacturing operations in the mid-South and wanted to integrate technology, production, sales, marketing and design as a way to keep an edge in the competitive global industry. An area that seems determined to let its industrial base wither is not likely to attract companies whose basic business is building things.

What is too rarely understood is the link between production skills and high-end jobs. The Toyota jobs that are leaving L.A. County are largely white-collar and skilled. Toyota engineers will be headed to Texas, and many also to Michigan, where, despite the travails of the past few decades, the engineering base is already very deep – roughly twice as strong per capita as formerly engineer-rich Los Angeles.

This link between manufacturing and higher-end technical jobs is rarely appreciated among our political class. As President Clinton’s Board of Economic Advisors Chairman Laura D’Andrea Tyson points out, manufacturing is only about 11 percent of gross domestic product, but it employs the majority of the nation’s scientists and engineers, and accounts for 68 percent of business research and development spending, which, in turn, accounts for about 70 percent of total R&D spending.

Of course, neither Jerry Brown nor any other reigning political figure would cavalierly dismiss manufacturing jobs, or even those at a major port. Yet, as we move toward ever-higher energy prices – likely aggravated by California’s “cap and trade” regime against global warming – industrial firms seem increasingly reluctant, at least without massive subsidies, to move to or expand in California.

And, contrary to arguments offered in Sacramento, and reflected in much of the media, there are never going to be enough “green” jobs to make up the difference.

Indeed, even Elon Musk, head of electric-car maker Tesla, though a primary beneficiary of California crony capitalism, is not considering the state for a proposed $5 billion battery plant, which would employ upward of 6,500.

In its nonresponse to the Toyota move, the Governor’s Office stressed the state’s role as the epicenter of the “new electric, zero-emission and self-driving” vehicle industry. Nevertheless, even as devout a “green” company as Tesla will likely locate its battery factory in Nevada, Arizona, New Mexico or Texas. California, reports greentechmedia.com “didn’t make the short list because of the potential for regulatory and environmental delays.”

For a state that has built its future vision on “green” industry, this is both ironic and tragic. It may not bother the Legislature, whose welfare state is now being propped up by windfall tech profits, but it leaves many localities outside the Silicon Valley exposed to more job and company losses. Think of Torrance Mayor Frank Scotto, who concedes the struggle to keep companies around is becoming ever more difficult. “A company can easily see where it would benefit by relocating someplace else,” Scotto said.

Even so, it is unlikely that Toyota’s leaving will impact the state’s leftward political trajectory. After all, if the New York Times regularly describes the California economy – fattened by stock market and real estate gains of the very rich – as “booming,” why should Gov. Brown, about to run for re-election, say otherwise, proclaiming to anyone who will listen that “California is back.”

True, California may not be in a Depression, as some conservatives contend, but it’s hardly accurate to proclaim the Golden State as back from the brink. But, if having among the country’s highest unemployment rates, the worst poverty levels, based on living costs, and being home to one-third of all U.S. welfare recipients can’t persuade the gentry about California’s true condition, Toyota’s move certainly won’t.

 

New York Schools Declare 4 ft.1/66lb girl OVERWEIGHT

Why do we have kids with eating disorders? Maybe it is because Michelle Obama is running around the country (in jet planes) telling kids they are fat, lazy and eat the “wrong” food. Or maybe because Washington has a program and too many local government school district use it. The program is run as if children are owned by the State. Now we have young, fit girls, in New York, thinking they are fat. This is how an eating disorder starts. Does your school district have this program? If so, stop it.

“”My daughter is thin; she knows she doesn’t have a weight problem, but that night, I caught her grabbing the skin near her waist, and she asked me, ‘is this what they were talking about?”‘ Laura Bruiji Williams, the girl’s mom, told FoxNews.com. “It was awful to see.”

Gwendolyn along with her classmates, were handed a “Fitnessgram” sealed with a sticker at her public school in Brooklyn. The class was told not to open the letters, issued by the New York City Department of Education, but like most of her friends, she couldn’t resist and read it.”

A Fat Cat.

A Fat Cat.

New York mom fuming after daughter gets school letter calling her overweight

By Edmund DeMarche, Fox News, 5/23/14

A New York City mom was fit to be tied Wednesday after her 4-foot-1, 66-pound daughter came home from school with a note calling her fat.

Eight-year-old Gwendolyn Williams is anything but fat, but her mom worries that the school’s note, citing her body mass index, has left her daughter confused about her body.

“My daughter is thin; she knows she doesn’t have a weight problem, but that night, I caught her grabbing the skin near her waist, and she asked me, ‘is this what they were talking about?”‘ Laura Bruiji Williams, the girl’s mom, told FoxNews.com. “It was awful to see.”

Gwendolyn along with her classmates, were handed a “Fitnessgram” sealed with a sticker at her public school in Brooklyn. The class was told not to open the letters, issued by the New York City Department of Education, but like most of her friends, she couldn’t resist and read it.

“Some of her friends found out they were obese,” her mom said. “They were crying.”

The New York Post first reported that Williams approached the school’s principal to complain about the letter. The principal was sympathetic, but reiterated that students were given the instructions not to read the letter.

The so-called “Fitnessgrams” are issued annually in New York City by the department. They are intended to assess students from grades K-12 to help support lifelong health, according to the department’s website. About 870,000 students each year take home these reports.

“With body image such an issue, it’s amazing to me that these letters weren’t mailed to parents,” she said. “What kid’s not going to open that?”

The BMI report value in assessing health has been criticized.

“My organization and others believe that BMI report cards have no place coming from schools and can be more harmful than helpful,” Chevese Turner of the Binge Eating Disorder Association, told The Post.

No New Doctors or Hospitals—California has 3,000,000 NEW Patients!

If you are a Veterans Administration patient you could wait 8-10 months to get an appointment, then another 8-10 months to have the appointment. In Phoenix, 40 people have been identified as having died during this process. Get, ready for the MediCaid and MediCal patients to also be dying, waiting for appointments. Though there will be 3,000,000 new patients, there are less than 50% of California doctors are even willing to participate.

These three million NEW patients will find not a single new doctor—in fact, many less doctors. Imagine the wait time for appointments for three million people. California is going to quickly be a Third World health care State. Most will beg to go to the VA for health care!

“For one, almost one third of those new enrollees don’t have their cards yet.  Medi-Cal has a backlog of 900,000 applications, and while it is slowly overcoming processing problems, it also has a steady stream of new applications so the backlog is barely receding.

Second, many health care providers for lower-income residents are beginning to kick up the scope of practice of front-line health workers – nurses, physician assistants, and pharmacists—to help ease the pressure on physicians.  Individuals with chronic diseases such as diabetes may in fact be better off with regular visits to a pharmacist than waiting for months to see an M.D.”

Photo courtesy of RambergMediaImages, flickr

Photo courtesy of RambergMediaImages, flickr

Can 3 million newly insured fit into current system?

By Roger Smith, Center for Health Reporting, 5/21/14

California’s resounding success in enrolling residents in Obamacare health insurance policies and expanded Medi-Cal coverage—a total of nearly 3 million people—is bumping up against the next Big Question: can these new enrollees use their insurance cards to find adequate care?

It stands to reason that you can’t stuff 3 million new people into an existing system and expect everyone to get the same level of attention. But a panel discussion by top health policy experts Tuesday offered some clues as to why a stampede to doctors’ offices may not be imminent.

For one, almost one third of those new enrollees don’t have their cards yet.  Medi-Cal has a backlog of 900,000 applications, and while it is slowly overcoming processing problems, it also has a steady stream of new applications so the backlog is barely receding.

Second, many health care providers for lower-income residents are beginning to kick up the scope of practice of front-line health workers – nurses, physician assistants, and pharmacists—to help ease the pressure on physicians.  Individuals with chronic diseases such as diabetes may in fact be better off with regular visits to a pharmacist than waiting for months to see an M.D.

The panelists at a Public Policy Institute of California forum–California Health and Human Services Secretary Diana Dooley,  California HealthCare Foundation president Sandra Hernández,, and Los Angeles County Health Director Mitchell Katz–all agreed that access to care is the next challenge as health reform continues its roll out.

They seemed to indicate that as the pressures on providers increase, the definition of “care” will change.

“We want care that brings health,” Katz said. By that he meant that high-cost medicine needs to be supplanted as the gold standard of care by a regime of lower cost preventative measures to keep people out of hospitals.

“Cost is the elephant in the room,” said Dooley.  Her department has pushed Medi-Cal into managed care arrangements, replacing fee-for-service payments with per-capita contracts that make providers responsible for patient health.

Those contracts mean patients have much less choice of doctors and hospitals, which can also translate into an access squeeze.

But that’s probably unavoidable, when millions who were shut out of health insurance are now getting it.

“The system won’t be able to function as it did in the past,” Dooley said.

 

What Recovery? Hewlett-Packard to Fire 11-16,000 MORE

Firms are leaving California as fast as possible. Now we find that one of the first technology companies in Silicon Valley is about to fire between 11-16,000 workers. They are no longer needed, so says Meg Whitman, the CEO of the company.

“On the conference call, CEO Meg Whitman stressed that the new cuts came not because the company was worried about being able to sustain its profit growth through the next year, but rather because she saw more opportunities to make cuts without hurting HP’s ability to compete. The savings from the cuts will let the company invest more in new technologies, she said.”

Technology is killing technology workers. Yet at the same time Whitman has asked Congress to expand the H1B visa program so more foreigners can come into the U.S., take American jobs and lower wages. On who’s side is Whitman—Americans or foreigners?

Obama Jobs Tour

Hewlett-Packard to cut additional 11,000 to 16,000 jobs, stock falls on earnings report

Jon Xavier, Silicon Valley Business Journal, 5/22/14

Hewlett-Packard Co. will cut an additional 11,000 to 16,000 jobs as the company pursues its restructuring under CEO Meg Whitman. That brings the total planned cuts to between 40,000 and 50,000 positions, which would equal roughly 15 percent of its global workforce.

According to HP, the restructuring will be mostly complete by the end of this year. It expects to hit about 41,000 job cuts by the end of 2014, with the rest coming by the end of 2015. HP expects to take a $500 million charge related to the cuts, with another $200 million charge coming in the second half of the year. The cuts are expected to result in incremental savings of 2 to 3 cents per share over the rest of the year.

On the conference call, CEO Meg Whitman stressed that the new cuts came not because the company was worried about being able to sustain its profit growth through the next year, but rather because she saw more opportunities to make cuts without hurting HP’s ability to compete. The savings from the cuts will let the company invest more in new technologies, she said.

“The cuts have nothing to do with our confidence in the business. It has to do with having a better understanding of the opportunities we have to make the company better,” Whitman said. “I’ve done a few turnarounds now — obviously nothing this big — but it’s always the case that you see more opportunities the deeper you get into the business.”

Whitman said that there will not be more cuts at the corporate level once the company’s restructuring program is complete.

The news came as part of the Palo Alto company’s fiscal second-quarter earnings, released today. Earnings barely met expectations, with revenue falling slightly faster than anticipated and profit staying right in line with expectations.

HP announced profits of 88 cents per share on revenue of $27.3 billion, in line with analyst estimates of profits of 88 cents per share on revenue of $27.41 billion. That’s about a 1 percent revenue drop over second quarter 2013, when it announced earnings of $27.6 billion. Profits, however, have continued to grow. The EPS number was up about 1 percent year-over-year. And profits came in at about $1.3 billion according to standard accounting, up about 18 percent year over year.

The earnings announcement hit before the markets closed, which gave the Street a few precious minutes to sell furiously before closing up for the day. The stock almost immediately fell 2.7 percent, and closed down 2.46 percent at $31.72.

You might be wondering why the sell-off was so quick and brutal, as layoffs often lift stock prices. The answer is that CEO Meg Whitman is tasked with turning the company around, so investors want to see growth, or at least a slowing decline. Simply, when you’re banking on a company making a turnaround, earnings that are “good enough” just aren’t good enough. HP has managed to beat expectations for the past three quarters, so merely coming in close to the mark this time around is a troubling sign for the strength of the recovery.

 

Briefing Report: Obesity – Personal Responsibility vs Trial Lawyers’ Pursuit of Deep Pockets

We talk about health care, pensions, choo choo trains, debt and taxes…lots of issues. Some issues keep coming back like a boomerang. Lawyers suing deep pockets is one of those “you will never get over” it will always be with us. Tort reform works in Texas. In California it is just the opposite—lawyers run the show, just the fear of attorneys raises the cost of products and services.

The bottom line is that people act and then refuse to take responsibility. Many see a lawsuit as winning the lottery. We are taught that poverty, joblessness, not being rich is not our fault, and it is always the fault of society. Obama said, “You did not build that”. He told us we are not responsible for good or bad. So why not sue?

“Currently, there are the hundreds of cases concerning labeling and marketing disputes, many of them about the term “all natural.”   Some speculate that the focus will shift eventually to “food addiction,” a theory pioneered by former FDA Commissioner David Kessler.  He posits that if certain fats, sugars, and salt were “addictive,” and companies nonetheless proceeded to market products containing those nutrients, the consumer class action bar could attempt discovery in hoping to find company documents that validate Kessler’s addiction theory.  Are they fantasizing that the food companies knew of the addictive properties and suppressed the information?”

fat uncle sam obama

Briefing Report: Obesity – Personal Responsibility vs Trial Lawyers’ Pursuit of Deep Pockets

California Republican State Senate Caucus, 5/22/14 http://cssrc.us/content/briefing-report-obesity-personal-responsibility-vs-trial-lawyers-pursuit-deep-pockets

A short time ago an article discussed a scheme to make the food business bear the costs of obesity.  Twenty years ago the villain was “big tobacco.”  Now cleverly it is “big food.” Think of the “Stay Puft Marshmallow” man in “Ghostbusters.” There are trial lawyers trying to induce states to make the food industry pay for soaring obesity-related health care costs.  The 1990s tobacco litigation allegedly sought to recoup states’ healthcare costs for treating the diseases consequent from using tobacco products. That litigation resulted in hundreds of billions of dollars in settlements with 46 states, a ban on cigarette marketing to young people and the Food and Drug Administration stepping in to regulate tobacco products.  It is easy to expect that childhood obesity will garner similar focus and sympathy.  But can the trial lawyers work their magic again?  Will they find their next truckload of gold at the end of the rainbow?

A firm of trial lawyers sent proposals to Attorneys General from California to Mississippi explaining how suing “big food” could help their states close budget gaps as billions in Medicaid expenditures eat a growing share of tax revenues (no pun intended). Getting a piece of the huge costs of Medicaid would be a boon to cash-strapped states.  What they propose is simple, transparent and beguiling — find some industry with large financial assets, tag that industry with “responsibility” for a portion of a state’s total Medicaid costs and get a piece of that back to help close the budget shortfalls.

Some observe that the central argument is that food and beverage companies have contributed to the nation’s obesity crisis, and they should pay for the costs of that portion. They are presumably responsible because their practices and products lead people to eat too much.  Eating too much causes obesity in some.  A significant group of people in each state has their medical care subsidized by the state. Thus, Medicaid costs are too high because of the food companies.  Therefore, food companies need to bear some part of those costs. Got that?

The pitching law firm has allied with a number of well-known obesity and diabetes researchers.  One medical advocate believes litigation should zero in on diabetes.   The diseases related to obesity are expensive, among them diabetes and cardiovascular problems.   The claim is made that about 75 percent of all the packaged foods in U.S. supermarkets contain added sugars; and therefore policy should change.  The battle cry has sounded. To the ramparts – fighting peoples’ struggle with food companies!  Remember the good old days of the battle against tobacco!

However, what is missing is that the food companies, unlike the tobacco industry, have not asserted that eating too much food is not harmful.  Besides, unlike tobacco, there are good and healthy ways to consume food.  After all, tobacco companies lied about the health effects of their products for decades.  No such denial exists for food.

Currently, there are the hundreds of cases concerning labeling and marketing disputes, many of them about the term “all natural.”   Some speculate that the focus will shift eventually to “food addiction,” a theory pioneered by former FDA Commissioner David Kessler.  He posits that if certain fats, sugars, and salt were “addictive,” and companies nonetheless proceeded to market products containing those nutrients, the consumer class action bar could attempt discovery in hoping to find company documents that validate Kessler’s addiction theory.  Are they fantasizing that the food companies knew of the addictive properties and suppressed the information? Do these medical advocates and lawyers dream every night of finding the company scientist willing to expose a food industry fraud as dramatic and corrupt as that uncovered by  Russell Crowe’s character in the 1999 movie “The Insider?”

The proposal is for the trial lawyers to represent states in the battle against the food business as they did against tobacco in the 1990s. They will stand ready to bear costs of the litigation, to some extent, but hope to participate in the attorneys’ fees that billions of dollars of recoveries would create. The proposal is questionable because it would rely on a contingency fee agreement, which allows a private firm to do legal work for attorneys general offices in exchange for a cut of the settlement. It’s an increasingly common practice because it allows AG offices to reward the trial bar and tackle expensive litigation without taking as much risk.  The ongoing lead paint litigation followed the tobacco stratagem, for example.  The Chamber of Commerce Institute for Legal Reform objects to these arrangements as “[p]ay-to-play relationships between [plaintiff’s attorneys and attorneys general] that exchange campaign contributions for lucrative government lawsuit contracts mean the food industry has a big target on its back.”

Will children be the focus? Sure!  Consider for a moment that childhood obesity rates remain high. Overall, obesity among our nation’s young people, aged 2 to 19 years, has not changed significantly since 2003-2004 and remains at about 17 percent.  One physician observes that looking at the risk factors for obesity, including poor eating habits and inactivity, provides lots of other people to blame.

1] Kids are less active today because they spend far more time in sedentary activities in front of the TV than any other generation. Perhaps we should blame television and video game producer and the TV networks. 2] Fast food is still a good target, with high calorie and high fat super-sized meals. 3] Drinking a lot of soft drinks and sugary “fruit” drinks are also linked to obesity, so maybe we can blame Coca Cola and Pepsi. 4] Super-sizing portions didn’t start at McDonald’s. Didn’t that all start with the mega drinks or Big Gulps at 7-Eleven? 5] Schools, which allow students to buy snacks and soft drinks from vending machines and don’t always require physical education classes, might also be partly to blame. 6] Doctors, who don’t do enough to encourage breastfeeding, which can decrease a child’s risk of becoming overweight later in life, and who don’t educate parents about healthy lifestyles might also be partly to blame. And the list goes on and on.

According to a survey of parents by ACNielsen: 1] only 1% of parents blamed manufacturers 2] 7% blamed advertising on TV, etc 3] 9% blamed the child and 4] 10% blamed fast food companies.  Even recently, two thirds of parents blamed themselves. After all, parents are the only ones that have control over all of these things, especially with younger kids. A parent’s role is to guide healthy food choices, both at home and when eating out. Parents can limit TV watching and time spent playing video games, and should encourage kids to be more active. In spite of the obvious behavioral factors, there are many experts who “know better.”  They seek to put the blame on food companies concluding that food marketing is responsible.  The results of many studies addressing links between food marketing and children’s preferences, requests, consumption, and adiposity finds that the preponderance of evidence supports their assumptions.

Who is to blame?  A newly released movie “Fed Up” goes so far as to call for the demonization of the snacks industry.  This movie has great credentials: 1] it is narrated by Katie Couric and 2] one of its producers worked on Al Gore’s “An Inconvenient Truth.”  A reviewer of that film observes “Fed Up’s” ultimate, if not fatal, weakness: “The movie seems to acquit consumers of any culpability in our health crisis. There’s a reason it’s called junk food, and unlike the air we breathe, we pay handsomely to ingest it. And although most of the parents of the kids are also overweight, there’s little reflection on parental roles in kids’ expanding waistlines.”

 

High-speed rail crashes into high costs

We were told by Arnold that the cost of a high speed rail would be around $30 billion and private investors would be flocking to participate. All that was needed was $10 billion to get the process started. Now we know the cost is north of $200 billion, not a single investors has come forward and the State is loaning money to the High Speed Rail Authority so they can keep the doors open. The group is still signing billion dollar contracts, yet not a dime to pay for them. This is a major lawsuit waiting to happen.

“The CHSRA personnel explained that the capital cost estimates developed for the 2012 Business Plan were the costs agreed to by the CHSRA; and that this Business Plan established the budget for the overall high-speed rail program.

URS thought differently, that the 2012 costs have evolved over the past two years and the capital cost estimate should be “re-base-lined.”  The CHSRA’s project management team told URS that no adjustments could be made without formal review to obtain CHSRA acceptance.”

Photo courtesy of Jon Curnow, flickr

Photo courtesy of Jon Curnow, flickr

High-speed rail crashes into high costs
By Kathy Hamilton, Calwatchdog, 5/22/14 

Funding for the high-speed rail project keeps chugging along in Gov. Jerry Brown’s May Revision to his budget proposal for fiscal 2014-15, which begins on July 1. He maintained the same funding request from his January budget, $279,316. That’s still just a fraction of the $10.5 billion in state funding for transportation, up 2.34 percent in the May proposal over the January number.

He continues to expect to use cap-and-trade money to fund the project, something CalWatchdog.com analyzed in an article last month, “Experts question legality of cap-and-trade for high-speed rail.”

Moreover, recent events further have called into question the proposed $68 billion project. 

Another billion

“A billion here, a billion there, and pretty soon you’re talking real money,” is a saying attributed to Sen. Everett Dirksen, R-Ill., the longtime minority leader in the U.S. Senate.

Well, high-speed rail just cost another billion, according to an May 7 Los Angeles Times story:

“The estimated cost of building a key Central Valley segment of the California bullet train has increased by nearly $1 billion from the original estimate, based on figures in an environmental impact statement approved by the rail agency Wednesday.

“The estimate, prepared for the state by a team led by San Francisco-based engineering firm URS Corp., includes higher costs for tracks, structures, land purchases, signals and electrical systems in a segment that would run from Fresno to Bakersfield.”

That coincides with a Capital Public Radio report last year that the Central Valley has land subsidence issues. That means the land is dropping due to a reduction in the water table.

The change could mean higher construction costs.

Report uncovered

The problems with project are not just about a billion here and there, but how the California High-Speed Rail Authority has been able to obscure the actual cost numbers.

For example, a January Progress Report from the project’s Regional Consultant to the CHSRA surfaced only in April after a public records request by Californians Advocating Responsible Rail Design. The report revealed that sub-contractor URS, called a regional consultant (RC), disclosed information on the Fresno-to-Bakersfield Route. On Jan. 22, a teleconference took place between the consultant and the CHSRA’s Project Management Team (PMT). It discussed the consultant’s comments on the final Fresno-to-Bakersfield cost estimate prepared by the CHSRA project management team.

The CHSRA personnel explained that the capital cost estimates developed for the 2012 Business Plan were the costs agreed to by the CHSRA; and that this Business Plan established the budget for the overall high-speed rail program.

URS thought differently, that the 2012 costs have evolved over the past two years and the capital cost estimate should be “re-base-lined.”  The CHSRA’s project management team told URS that no adjustments could be made without formal review to obtain CHSRA acceptance.

URS said its “professional opinion” was that cost increases since the 2012 Business Plan should not be put in a contingency fund. Plus it found additional costs for roadway improvements that it thought should be added to cost estimates.

See the whole report, which Californians Advocating Responsible Rail Design obtained through a public records request.

Town halls

Finally, the CHSRA is holding town halls across the state to push citizen support for the project. According to the CHSRA flyer, “This is an opportunity to ask questions and provide comments about alignment alternatives that will be studied as part of the Draft Environmental Impact Report/Environmental Impact Statement (EIR/EIS).”

The Town Halls last from 5 p.m. to 8 p.m., with a CHSRA presentation at 6:30 p.m.

Coming dates include:

  • Wednesday, May 28, 2014 at the Burbank Holiday Inn at 150 E Angeleno Ave., Burbank, CA 91502
  • Thursday, May 29, 2014 at the Chimbole Cultural Center at 38350 Sierra Highway, Palmdale, CA 93550
  • Thursday, June 5, 2014 at William S. Hart Regional Park at 24151 Newhall Ave., Newhall, CA 91321

Kathy Hamilton is the Ralph Nader of high-speed rail, continually uncovering hidden aspects of the project and revealing them to the public. She especially is concerned about telling local communities how the project affects them. She has written more than 225 articles on high-speed rail and attended hundreds of state and local meetings. She is a board member of the Community Coalition on High-Speed Rail; has testified at government hearings; has provided public testimony and court declarations on public records act requests; has given public testimony; and has provided transcripts for the validation of court cases.

 

 

First in the World!! San Fran completes its first parking spot census

When you have the highest taxes in the nation, and the highest cost of living, how does government waste your tax dollars? San Fran government may be the most imaginative in the nation—or the world. They are the first city in the whole world to do a census of—-parking spaces! They are raising the cost of government transportation to pay off the extortionist unions. Now they are using tax money to figure out how many parking spaces exist in San Fran. Could it be they want to know, so they can eliminate a large percentage of them? Drivers pay for the roads but San Fran officials do not want cars parked on the roads. Imagine a city that only has government transportation? Visitors forced to ride buses—guess cabs will also be outlawed.

“The data collected for every parking spot in The City — through aerial photography and interns on the streets with clipboards — builds on the SFMTA’s first census in 2010 that estimated the total number of spaces on a random sample of 30 percent of blocks citywide. It is being used to inform the agency’s SFpark app, a pilot project launched in summer 2011 to help drivers find parking spots.”

Just an excuse to start limiting cars in the city. Do you really think the Mayor is going to stand at the entrance of the city with a flag, directing you to an empty space?

Photo courtesy Brian Auer, flickr

Photo courtesy Brian Auer, flickr

SF completes its first parking spot census 

by Jessica Kwong, SF Examiner, 5/22/14 

  • A citywide parking census, which San Francisco officials say may be the first of its kind, has found that roughly 90 percent of The City’s on-street parking spaces are nonmetered.

San Francisco today is the first city in the world, to its knowledge at least, to release a census on perhaps the most paramount issue in the minds of motorists on the diversity of The City’s streets — parking.

The complete citywide parking census, conducted as part of the San Francisco Municipal Transportation Agency’s SFpark app pilot project, found that The City has 441,950 publicly available parking spaces, of which 166,500 are in garages or lots and 275,450 are on the street.

Of the on-street supply, 248,700 spots are nonmetered and 26,750 spaces are metered, roughly a 90 percent to 10 percent ratio. For some perspective, if the parking spaces were put end to end, their length would total nearly 900 miles, exceeding California’s 840-mile coastline.

The data collected for every parking spot in The City — through aerial photography and interns on the streets with clipboards — builds on the SFMTA’s first census in 2010 that estimated the total number of spaces on a random sample of 30 percent of blocks citywide. It is being used to inform the agency’s SFpark app, a pilot project launched in summer 2011 to help drivers find parking spots.

The census, SFpark Manager Jay Primus said, “is a foundation for continuing to improve how we manage parking and ultimately making it easier to park.”

An SFpark evaluation, due next month, will detail how overall parking demand in The City increased and how the app succeeded in helping the public find parking spaces, Primus said.

Donald Shoup, a professor of urban planning at UCLA, called the SFpark app “the best in the world” in terms of using technology to manage parking and commended the parking census effort, but was struck by the 9-to-1 ratio of nonmetered to metered parking in The City.

“A source of San Francisco’s parking problem is you have some of the most valuable land on Earth and it’s free, and people complain there’s not enough,” he said. “I think San Francisco has to figure out a smarter way to manage parking other than just making it free to everybody.”

The elimination of Sunday parking meter enforcement, approved by the SFMTA board last month, was “another step backwards,” in Shoup’s opinion, given the overwhelming majority of nonmetered spots.

“One of the arguments in favor of [Sunday meter elimination] was very flawed, that people have to pay to pray on Sunday,” Shoup said. “I believe in the separation of church and parking.”

The census itself was a welcome addition to SFpark information, which is publicly available to third-party companies looking to build parking apps, said David LaBua, founder and CEO of VoicePark, an app that gives turn-by-turn voice guidance to drivers.

He said San Francisco should install parking sensors at every spot that was now accounted for in the census.

“We’d be the first in the world,” LaBua said. “And make a remarkable dent in preventing emissions of greenhouse gases and congestion.”

 

Los Angeles Dept. of Water and Power – Unions vs. Ratepayers–Ratepayers Lose

Corruption is the hallmark of the Los Angeles Department of Water and Power (LADWP). For years the LADWP gave “surplus” money to the city, to cover the deficit of the city of Los Angeles. The LADWP had to ask for a rate increase because they did not have the money to maintain the operation. In affect water and power uses were paying a tax so the City could continue to claim it was solvent. That has stopped. Then you have $40 million of tax and ratepayer money given to a union leader—and he refuses to tell how the money was spent—why isn’t he in jail? Why hasn’t his union been decertified as a criminal syndicate?

“. In fact, the union’s boss, Brian D’Arcy, successfully schemed to have the state government exempt the nonprofits from a law that requires records and meetings to be made public. But a year ago, despite the union bosses’ best efforts to use their members’ dues to buy a new set of compliant pols (IBEW 18 poured $4 million into a losing candidate for mayor), a few officials were elected who vowed to look into these two nonprofit honey pots, which by now have devoured 40 million ratepayer dollars. Give the L.A. Times credit, too, for writing about the situation and turning it into a political football.

All questions of where the tens of millions have gone provoke outrage and obstruction from the union bosses, who continue to fight disclosure in court despite repeated rebuffs from judges.”

Unions pension public sector

Los Angeles Dept. of Water and Power – Unions vs. Ratepayers

By Scott Walter, Union Watch, 5/22/14

Where are the charity watchdogs in L.A.? An ugly story from the City of Angels reminds us once again of how dangerous “public-private partnerships” can be, especially that worst of all such partnerships: government employee unions in bed with government officials.

The government of Los Angeles has long granted a monopoly to the Department of Water and Power (DWP), which in turn has long had the overwhelming majority of its workers represented by the International Brotherhood of Electrical Workers (IBEW) Local 18. Partnering against the public at large, the local government pols have enjoyed many millions in campaign donations made possible by the union’s hoovering of dollars from the paychecks of its members, who have little choice in the matter. In return, the pols have granted ever-so-generous paychecks and benefits to the IBEW folks by allowing DWP to charge higher rates than necessary.

Matters became even dirtier in 2000, when the DWP realized it needed to slash its payroll costs (wonder why those were a problem?). To buy the acquiescence of union leaders, who ended up partnering with management against their own members, the DWP apparently offered a deal: It would set up a new “nonprofit” entity, the Joint Safety Institute, to be run by representatives from the union and the utility, who would enjoy a few million dollars a year fleeced from the ratepayers to fuel this hybrid nonprofit – and neither workers, ratepayers, nor pols would quite know where the millions of dollars went.

Two years later, a second such entity, the Joint Training Institute, would be set up in exactly the same way, with the identical persons on its board. As long as the pols kept quiet about this cozy arrangement, Angelenos heard little about any of this. In fact, the union’s boss, Brian D’Arcy, successfully schemed to have the state government exempt the nonprofits from a law that requires records and meetings to be made public. But a year ago, despite the union bosses’ best efforts to use their members’ dues to buy a new set of compliant pols (IBEW 18 poured $4 million into a losing candidate for mayor), a few officials were elected who vowed to look into these two nonprofit honey pots, which by now have devoured 40 million ratepayer dollars. Give the L.A. Times credit, too, for writing about the situation and turning it into a political football.

All questions of where the tens of millions have gone provoke outrage and obstruction from the union bosses, who continue to fight disclosure in court despite repeated rebuffs from judges.

The two nonprofits do make public their IRS tax filings each year, but those filings tell the public little. As the L.A. Times observes, the filings…

“…show more than $360,000 spent on travel from 2009 to 2011 and nearly $2.4 million spent on “other.”

The groups are legally established, not under the usual “public charity” 501(c)(3) designation, but under 501(c)(6), the designation used by business leagues like the Chamber of Commerce and the NFL. I’m sure that has nothing to do with the fact that (c)(6) groups can spend their money on politics with far fewer restrictions than (c)(3) groups.

Back in January, longtime IBEW 18 boss D’Arcy had a date to sit down with DWP officials and bring them the real books for the two nonprofits, so that a public audit could begin.

But D’Arcy was a no-show that day and instead lawyered up to keep the public’s eyes out of this public-private partnership’s check book (city officials had asked to see what checks for $1,000 or more had been written). The courts to date have repeatedly refused to buy D’Arcy’s argument that this public-private partnership is just like a private company that’s a vendor to DWP, say, a health insurance provider. That’s nonsense, of course, because DWP can change vendors at will, whereas a trust document requires that DWP take money out of every dollar it receives from ratepayers and transmit the cash to the nonprofits.

The situation has deteriorated so badly that D’Arcy, notoriously publicity shy, wrote an L.A. Times op-ed pleading his case and even went so far as to release an internal financial statement and a “report” on each of the nonprofits (available here, here, here, and here).

So, how much real disclosure of spending has he made? Well, the reports give brief blurbs on various contracts the “institutes” have made with outside vendors from 2001 to November 2013. And if you total every dollar figure in the reports, you’ll find out where $ 10.6 million of the total $40 million has gone — or about one-quarter of the loot. Local blogger and CPA Paul Hatfield read the financials and turned up another $11.8 million. That sums sits unused in the cash balances of the two nonprofits:

“This stash of cash is over three times the annual operating expenses, so its purpose must be more than a rainy day fund. Then what is it for? …

Subpoenas should be issued for all the board members as well as the accountants and the trusts’ managers. Make them testify under oath.”

D’Arcy’s reports on the two different joint institutes have duplicate language, suggesting there’s not much difference between them, which begs the question why two were established.

The report on the newer institute doesn’t even have a section labeled “Results,” but its older brother has a brief paragraph with that heading. There one finds the only concrete claim put forward for the value of either nonprofit:

“In 1999 the total number of Lost Workdays at LADWP was more than 15,000, equating to nearly 70 employees off work every day due to work-related injury or illness. By 2005, that number had been reduced to less than 5,000 Lost Workdays.”

While a drop in injury and illness is obviously a good thing, one wonders why the last year cited in the statistics is almost a decade past? Have any results occurred in the past 18 nonprofit-years of the two groups’ work?

Then there’s the question of whether the nonprofits had much to do with the old improvement. Even D’Arcy’s report admits that the group…

“…cannot take credit alone for such improvement, but it is widely believed that the focus, drive and partnering effort the JSI provides has been a major part of that change.”

Actually, it is not all that “widely believed.” Joseph Tsidulko of LA Weekly retorts:

“DWP already expends $127 million a year conducting in-house training of its workers, including millions on employee-safety programs.”

Speaking of the LA Weekly, it first exposed these nonprofits in 2005, when they’d already made $12 million disappear, and more recently it reported on how the IBEW’s nemesis, the newly elected Mayor Eric Garcetti, has played along for years as a city council member who had no desire to upset the IBEW or its public partner, the DWP.

So, to review the bidding, we’ve got tens of millions of ratepayer dollars going for over a decade into a murky sinkhole with a crude sign over it labeled “Nonprofits at Work.”

Following a classic pattern, the union bosses involved never showed much concern for members who were going to lose their jobs, largely because of the excessive wages and benefits the bosses demanded the company pay. Nor did the union bosses shed a tear for (a) the many workers who would never get a job in the first place, thanks to the high costs of hiring new workers, or (b) the poor and middle-class citizens served by the DWP, who were paying significantly more for their basic utilities than they should have. No, the bosses just focused on helping themselves and ensuring that any remaining union members would have outsized compensation.

How outsized? Well, DWP personnel who aren’t laid off enjoy an average salary of over six figures, as well as $17,000 per year in health insurance, an amount 50% to 70% higher than other city workers. Plus a few lucky union and DPW officials supplement their pay with the million dollars a year the two nonprofits pay their staff.

It would have been nice if charity watchdogs had barked over this mess earlier (Nonprofit Quarterly did run one item last November). And it would be even nicer if left-of-center folks in and out of the nonprofit sector could admit that a lot of money is wasted, and the poor oppressed, by government officials in bed with government unions (Rick Cohen, my friend, call your office).

Let’s give the last word on this public-private partnership to Steve Lopez of the L.A. Times:

“With DWP, it’s always about power and politics, with [union boss Brian] D’Arcy having had his way for years, bankrolling political candidates who showed their love by delivering spectacular contracts in return, making D’Arcy one of the most powerful players the city has ever known. D’Arcy bet wrong last year, throwing millions behind Wendy Greuel for mayor, and now he’s trying to prove he won’t be pushed around just because of a bad bet.

Let’s not let City Hall off the hook, though, because D’Arcy would be powerless if not for it. [New] Mayor and former councilman Eric Garcetti didn’t stand in the way of D’Arcy’s power grabs over the years. And as this paper has reported, Garcetti’s appointment of a new DWP assistant GM who was involved in a financial scandal years ago while overseeing DWP, and was also there when the nonprofits were established, is a head-scratcher.

Business and politics as usual in L.A.”

Sacramento Legislative Democrats: Spend $1.2 BILLION on Common Core—Instead of Quality Education

Democrats in Sacramento have decided to spend $1.2 billion of your money to transition California government education from mediocre to misleading and bad. Common Core math teaches that if a child adds two plus two and gets five, but understands the process, they have the right answer. Imagine that kid becoming an engineer! The tests have not been designed, the curriculum is sensitivity based, not educational and is going to cost a bundle to mis-educate children. For two generations educrats have tried all sorts of systems, which may be why our government system fails so many—even those that “graduate”.

“Looking to capture for schools a big chunk of unanticipated state revenue this year and next, a key legislative panel approved Thursday $1.25 billion in one-time grants to help with the transition to Common Core State Standards.

The Assembly’s budget subcommittee on education finance is also recommending that the state use $384 million to reestablish Regional Occupational Centers and another $313 million to pay down the backlog of K-14 education mandates.

Members would also increase support for schools under the Local Control Funding Formula by $153 million above the administration’s proposed $4.5 billion.”

teacher-apple

Panel offers $1.2b for Common Core, mandate money too

by Tom Chorneau, Cabinet Report, 5/22/14

(Calif.) Looking to capture for schools a big chunk of unanticipated state revenue this year and next, a key legislative panel approved Thursday $1.25 billion in one-time grants to help with the transition to Common Core State Standards.

The Assembly’s budget subcommittee on education finance is also recommending that the state use $384 million to reestablish Regional Occupational Centers and another $313 million to pay down the backlog of K-14 education mandates.

Members would also increase support for schools under the Local Control Funding Formula by $153 million above the administration’s proposed $4.5 billion.

“As California moves forward with Common Core, I want to make sure that our schools have the necessary resources to successfully make this transition,” said Assemblyman Al Muratsuchi, D-Torrance and chair of the budget panel. “And as a former SoCal ROC trustee, I am fighting to save successful career technical education programs that educate and train our kids today for the jobs of tomorrow.”

While the action of the subcommittee is not binding, it nonetheless signals significant interest – at least among the Assembly’s Democratic majority – to use some of the budget surplus on public schools.

Their counterparts in the state Senate appear to be more interested in using some of the same money to restore cuts to health and welfare programs, although Pro Tem Darrell Steinberg continues to push for his universal pre-school program.

Gov. Jerry Brown released a reasonably austere May budget revision last week that accommodated growth in the Proposition 98 minimum guarantee for schools from an adjusted $57.8 billion in 2012-13 to $60.9 billion in 2014-15.

The governor proposes using most of the anticipated revenue – which the administration estimates at $2.4 billion – to pay off school deferrals, shore up the teacher retirement system and set aside a rainy day fund.

The nonpartisan Legislative Analyst, however, has since suggested that state revenues will grow faster than the governor’s estimates – as much as $2.5 billion more.

A key action by the Assembly subcommittee Thursday was to adopt the LAO’s revenue projections as a starting point for building next year’s budget.

A spokesman for the governor’s Department of Finance warned lawmakers last week that the bulk of the additional money identified by the LAO would come from “volatile capital gains and is therefore temporary.”

The big news for schools is the proposed support for Common Core – a massive shift in educational goals that requires not only new instructional materials but also additional teacher training and improved technology resources.

The $1.25 billion was described as one-time grant money in a staff report to the subcommittee.

The LAO has estimated that the state owes $4.5 billion in outstanding mandate claims, which the governor has proposed to carryover until next year. Instead he wants to pay off the state’s $6.2 billion obligation for past payment deferrals in 2014-15. Brown has suggested he would pay the mandate claims off next year.

Under the subcommittee’s plan, $34 million of the mandate money would go to community colleges with the remaining $279 million to be used for K-12 reimbursements.

Assemblyman Muratsuchi, has made career technical education a funding priority as his district is home to one of the state’s biggest regional occupational centers.

Under the new funding formula, the $400 million that the Legislature historically has set aside for career tec was absorbed into the LCFF.

Under the plan approved by the panel Thursday, the $384 million to continue funding for regional occupational centers and programs would be established outside the LCFF as a standalone categorical.

Other education highlights from the subcommittee’s action:

  • Provides $205 million for the State Preschool Program in order to provide 20,000 new preschool slots, increase preschool provider rates by 10 percent, and eliminate preschool family fees.
  • Allocates $28 million in Proposition 39 funds for the Energy Conservation Assistance Act revolving loan program for schools and community colleges for energy projects.
  • Dedicates $4.9 million for the Specialized Secondary Programs and $4.1 million for the Agricultural Education Incentive Grants outside of the LCFF.
  • Provides a 0.85 percent COLA for categorical programs outside the LCFF, including Foster Youth Services, American Indian Centers, American Indian Early Childhood Education, Special Education, and Child Nutrition, consistent with the governor’s budget.

Ring: California’s Green Bantustans

Last week the California Political News and Views, now part of the California Political Review, published a shocking article. We found that the city of Houston, Texas built more houses in one year than the whole State of California in the same time. California homes are expensive, Houston’s’ are far less expensive. Texas has no income or corporate tax, California has the highest of each in the nation. Any wonder California is in a Depression and firms leaving the former Golden State are jumping to Texas?

“And when there’s a shortage, prices rise. The median home price in Houston is $184,000. The median price of a home in Los Angeles is $530,000, nearly three times as much as a home in Houston. The median price of a home in San Francisco is $843,000, nearly five times as much as home in Houston. What is the reason for this? There may be a shortage of homes, but there is no shortage of land in California, a state of 163,000 square miles containing vast expanses of open space. What happened?”

It is a matter of dollars and common sense. Don’t Californicate Texas.

http://www.dreamstime.com/-image14115451

California’s Green Bantustans

By Ed Ring, executive director, California Policy Center, 5/21/14

One of the core barriers to economic prosperity in California is the price of housing. But it doesn’t have to be this way. Policies designed to stifle the ability to develop land are based on flawed premises. These policies prevail because they are backed by environmentalists, and, most importantly, because they have played into the agenda of crony capitalists, Wall Street financiers, and public sector unions. But while the elites have benefit, ordinary working families have been condemned to pay extreme prices in mortgages, property taxes, or rents, to live in confined, unhealthy, ultra high-density neighborhoods. It is reminiscent of apartheid South Africa, but instead of racial superiority as the supposed moral justification, environmentalism is the religion of the day. The result is identical.

Earlier this month an economist writing for the American Enterprise Institute, Mark J. Perry, published a chart proving that over the past four years, more new homes were built in one city, Houston Texas, than in the entire state of California. We republished Perry’s article earlier this week, “California vs. Texas in one chart.” The population of greater Houston is 6.3 million people. The population of California is 38.4 million people. California, with six times as many people as Houston, built fewer homes.

And when there’s a shortage, prices rise. The median home price in Houston is $184,000. The median price of a home in Los Angeles is $530,000, nearly three times as much as a home in Houston. The median price of a home in San Francisco is $843,000, nearly five times as much as home in Houston. What is the reason for this? There may be a shortage of homes, but there is no shortage of land in California, a state of 163,000 square miles containing vast expanses of open space. What happened?

You can argue that San Francisco and Los Angeles are hemmed in by ocean and mountains, respectively, but that really doesn’t answer the question. In most cases, these cities can expand along endless freeway corridors to the north, south, and east, if not west, and new urban centers can arise along these corridors to attract jobs. But they don’t, and the reason for this are the so-called “smart growth” policies. In an interesting report entitled “America’s Emerging Housing Crisis,” Joel Kotkin calls this policy “urban containment.” And along with urban containment, comes downsizing. From another critic of smart growth/urban containment, economist Thomas Sowell, here’s a description of what downsizing means in the San Francisco Bay Area suburb Palo Alto:

“The house is for sale at $1,498,000. It is a 1,010 square foot bungalow with two bedrooms, one bath and a garage. Although the announcement does not mention it, this bungalow is located near a commuter railroad line, with trains passing regularly throughout the day. The second house has 1,200 square feet and was listed for $1.3 million. Intense competition for the house drove the sale price to $1.7 million. The third, with 1,292 square feet (120 square meters) and built in 1895 is on the market for $2.3 million.”

And as Sowell points out, there are vast rolling foothills immediately west of Palo Alto that are completely empty – the beneficiaries of urban containment.

The reason for all of this ostensibly is to preserve open space. This is a worthy goal when kept in perspective. But in California, NO open space is considered immediately acceptable for development. There are hundreds of square miles of rolling foothills on the east slopes of the Mt. Hamilton range that are virtually empty. With reasonable freeway improvements, residents there could commute to points throughout the Silicon Valley in 30-60 minutes. But entrepreneurs have spent millions of dollars and decades of efforts to develop this land, and there is always a reason their projects are held up.

The misanthropic cruelty of these polices can be illustrated by the following two photographs. The first one is from Soweto, a notorious shantytown that was once one of the most chilling warehouses for human beings in the world, during the era of apartheid in South Africa. The second one is from a suburb in North Sacramento. The scale is identical. Needless to say, the quality of the homes in Sacramento is better, but isn’t it telling that the environmentally enlightened planners in this California city didn’t think a homeowner needed any more dirt to call their own than the Afrikaners deigned to allocate to the oppressed blacks of South Africa?

When you view these two studies in urban containment, consider what a person who wants to install a toilet, or add a window, or remodel their kitchen may have to go through, today in South Africa, vs. today in Sacramento. Rest assured the ability to improve one’s circumstances in Soweto would be a lot easier than in Sacramento. In Sacramento, just acquiring the permits would probably cost more time and money than doing the entire job in Soweto. And the price of these lovely, environmentally correct, smart-growth havens in Sacramento? Courtesy of Zillow – they are currently selling for right around $250,000 – more than five times the median household income in that city.

When you increase supply you lower prices, and homes are no exception. The idea that there isn’t enough land in California to develop abundant and competitively priced housing is preposterous. According to the American Farmland Trust, of California’s 163,000 square miles, there are 25,000 square miles of grazing land and 42,000 square miles of agricultural land; of that, 14,000 square miles are prime agricultural land. Think about this. You could put 10 million new residents into homes, four per household, on half-acre lots, and you would only consume 1,953 square miles. If you built those homes on the best prime agricultural land California’s got, you would only use up 14% of it. If you scattered those homes among all of California’s farmland and grazing land – which is far more likely – you would only use up 3% of it. Three percent loss of agricultural land, to allow ten million people to live on half-acre lots!

And what of these lots in North Sacramento? What of these homes that cost a quarter-million each, five times the median household income? They sit thirteen per acre. Not even enough room in the yard for a trampoline.

There is a reason to belabor these points, this simple algebra. Because the notion that we have to engage in urban containment is a cruel, entirely unfounded, self-serving lie. You may examine this question of development in any context you wish, and the lie remains intact. If there is an energy shortage, then develop California’s shale reserves. If fracking shale is unacceptable, then drill for natural gas of the Santa Barbara channel. If all fossil fuel is verboten, then develop nuclear reactors in the geologically stable areas in California’s interior. If there is a water shortage, than build high dams. If high dams are verboten, then develop aquifer storage to collect runoff. Or desalinate seawater off the Southern California coast. Or recycle sewage. Or let rice farmers sell their allotments. There are answers to every question.

Environmentalists generate an avalanche of studies, however, that in effect demonize all development, everywhere. The values of environmentalism are important, but if it weren’t for the trillions to be made by trial lawyers, academic careerists, government bureaucrats and their union patrons, crony green capitalist oligarchs, and government pension fund managers and their partners in the hedge funds whose portfolio asset appreciation depends on artificially elevated prices, environmentalism would be reined in. If it weren’t for opportunists following this trillion dollar opportunity, environmentalist values would be kept in their proper perspective.

The Californians who are hurt by urban containment are not the wealthy elites who find it comforting to believe and lucrative to propagate the enabling big lie. The victims are the underprivileged, the immigrants, the minority communities, retirees who collect Social Security, low wage earners and the disappearing middle class. Anyone who aspires to improve their circumstances can move to Houston and buy a home with relative ease, but in California, they have to struggle for shelter, endlessly, needlessly – contained and allegedly environmentally correct.

*   *   *

Ed Ring is the executive director of the California Policy Center