Archive for January, 2011
A Clue to Brown’s Pension Strategy
Jan 29th
Shuffled in with Arnold Schwarzenegger’s last-minute appointments was one – a very good one – that almost slipped by largely unnoticed, until The Buzz blog at the Sacramento Bee outed it today:
Among other actions on his way out the door, then-Gov. Arnold Schwarzenegger appointed Cameron Percy to the California State Teachers’ Retirement System board in December.
Percy, 26, has a graduate degree from Stanford. While he was a student, he helped write “Going For Broke: Reforming California’s Public Employee Pension Systems.”
That’s the report that Schwarzenegger and Co. used as a source for the oft-cited and highly disputed calculation that California’s Big Three pension systems faced a collective $500 billion in unfunded liabilities.
If there’s one thing California’s public employee unions hate, it’s the Stanford report – so they are decidedly unhappy with Percy’s appointment. When Percy et. al. released their study (which you can download here), CalPERS immediately fired off a page chock full of stats that lacked one critical piece of information: Its own calculation of the unfunded liability. I’ve spent over 30 years in the communications business where we have a word for that sort of thing: stupid.
The unions’ pension unfunded liability calculation, it turns out, is about one-tenth that of Stanford’s: a measly, insignificant $55 billion. Why worry? That’s only $1,500 out of the pockets of every man, woman and child in the state and, heck, it’s not going to get any bigger, right?
The difference between the two numbers is that Stanford used a 4.14 percent “risk-free” discount rate, the rate private companies must use when calculating their pension liabilities. California’s public employee pensions use between 7.5 percent and 8 percent – a performance they’re not achieving, and most experts agree they have no hope of achieving on a sustained basis, and certainly not now.
With public support for Brown’s special election tax increase proposal barely breaking 50 percent in the early polling, he knows passing the tax increases may force him to bite the union hand that fed his election campaign, and submit a companion pension reform proposal with real teeth. So far, Brown, who left Oakland with its own $310 million in unfunded pension liabilities, has only talked about minor tweaks – just enough to not tick off the unions, but hardly enough to show voters he’s really serious about fixing California. Look for support of the tax increase measures to drop dramatically if Brown doesn’t take the unfunded pension liability more seriously.
Percy’s nomination will give us a clear insight into Brown’s thoughts as he grapples with this dilemma. The appointment must be confirmed by the Dem-dominated Senate, but Percy may not even get that far, since Brown has the power to boot him and name his own appointee. How Brown,and the Senate act on the appointment will tell California voters and public employee union bosses what they can expect from Brown. It’s routine for incoming governors to replace the nominees of out-going governors, but there’s nothing at all routine about this case.
California Universities are the Best
Jan 29th
Finally, a survey has shown that through diligence, hard work and unending commitment, California’s universities – Berkeley in particular – are the best in the whole wide world. Unfortunately, it’s for all the wrong reasons. Here’s why:
The University of California, Berkeley, has been crowned top … of the world’s most environmentally friendly higher education institutions.
The “UI Green Metric Ranking of World Universities” is based on several factors, including green space, electricity consumption, waste and water management and eco-sustainability policies.
Based on research and surveys conducted by the Green Metric team at the University of Indonesia on thousands of other universities around the world, University of California, Berkeley, United States scored best with a points total of 8,213 and is the greenest campus in terms of its environment policy.
Berkeley got the title, but the award really goes to the entire UC system, the UC Board of Regents and the UC faculty as a whole, because the green policies established at Berkeley are not unlike those at all the UC campuses. So it’s fair to say that California has the greenest public institutions of higher education in the world.
Now don’t get me wrong. I’m all about green space, conservation and eco-sustainable policies. Whether there’s a looming eco-catastrophe or not (I think it’s “not”), it makes sense to be good stewards of our shared resources. No, the problem I have with Berkeley’s new glory is that it’s really just the outgrowth of the deeper commitment to environmentalist brainwashing education that goes on at UC campuses. If it weren’t for Regents who have bought into environmental doctrine, a faculty that’s bought into environmental extremism, and a curriculum that ensures wave after wave of freshly minted environmentalist soldiers will be graduating every spring and going into battle for Gaea, Berkeley would not be at the top of the green university rankings.
It’s what I refer to as California’s PEER Axis, standing for progressives, environmentalists, educators and reporters. I wrote about it a few months ago in a well-read op/ed that ran just after the mid-term election on the national news website The Daily Caller:
While the established political parties and their consultants will ignore California and pore over campaigns in other states for clues on how to capitalize on — or crush — the Tea Party’s influence, the Left will be studying what happened in California, so they can replicate it the next time around. What they will find is not so much a magic formula but a vast progressive infrastructure they will then work to replicate elsewhere.
I call this infrastructure the PEER Axis, for the progressives, environmentalists, educators and reporters who collectively run California and influence the underpinnings of America. The PEER Axis remains powerful because politicians and political movements may come and go, but government bureaucrats and regulators, environmentalists and social justice activists, and their supporters in education and the media are pretty much forever. The structure of California ensures that appropriately indoctrinated college graduates will continue to fill the personnel pipelines that run from Berkeley, UCLA and other liberal universities straight into the progressive movement.
Many end up in government offices in Sacramento, where they write policies that are parroted in other states around the nation, as evidenced by the fact that the federal government is following California’s lead in setting the next round of vehicle fuel economy standards. Others will go to work at California’s giant environmentalist organizations, social justice NGOs and activist law firms, or the powerful public employee unions. Some will stay on the campuses, turning out future generations of progressives and writing studies to reinforce and justify progressive government policies, and those who graduate into the media will publicize these efforts and belittle any contrarian thinking. Many will find jobs in California’s foremost culture-bending venture, Hollywood, where they will pummel all the world with green messages (The China Syndrome, Avatar), anti-corporate tirades (Metropolis, Wall Street), anti-war propaganda (Apocalypse Now, In the Valley of Elah) and movies challenging conventional values (Milk, Juno).
Wherever they end up, they will be greeted by like-minded alumnae ready to show them the ropes so they, too, can form and implement policy, bring lawsuits, and mold the next generation.
In my 30 years as an Orange County and California public affairs specialist (maybe even a guru, now that my hair is gray), I’ve watched the PEER Axis in action. It has transformed California from a state that spawned great private enterprises and embraced needed public infrastructure into a state that could easily win the same award Berkeley just one, if such an award were given. Defeating the PEER Axis isn’t an option I see playing out in my lifetime, so I’ve made it my work – in business at Laer Pearce & Associates, and with the Crazifornia project – to win skirmishes, shine a spotlight on their activities and in so doing, dull the edge of their blade. Care to join us in the good fight?
Pacific Legal Foundation Likes Crazifornia
Jan 18th
The Pacific Legal Foundation has been an invaluable source to me as I’ve researched Crazifornia, and I greatly admire their efforts to stand up for the little guy who’s the target of zealous over-regulators in government. Paul Beard III has been particularly helpful in my work on the Coastal Commission, having represented plaintiffs in two high-profile cases, the Gualala Festivals Committee’s effort to put on a Fourth of July fireworks show, and George and Sharlee McNamee’s fight to keep their beachside furniture on their own private property.
Consequently, it was gratifying to see this on the PLF Liberty Blog:
Coastal Commissioner Sara Wan in hot water
Author: Paul J. Beard II
The California Coastal Commission routinely steals from and bullies coastal landowners who simply want to develop, use, and enjoy their properties. Among property-rights violators, the Commission may be the very worst. And among the agency’s 12 voting members, Commissioner Sara Wan, whose disdain for property owners and their rights is legendary, may be the worst of the lot.
Wan recently became chairperson of the Commission. The position gives her much influence over the agency’s agenda and operations. But her rise to power is not without controversy.
In an insightful article published in The Daily Caller, Laer Pearce offers a profile of, as he puts it, “the Queen of the Coastal Star Chamber,” and casts doubt on Wan’s future on the Commission. The article discusses several of PLF’s high-profile cases against the Coastal Commission. It is a must-read.
To learn more about PLF and their efforts on behalf of liberty, click here.
The Queen of the Coastal Star Chamber
Jan 18th
The Daily Caller ran my op/ed on the latest intrigue at the California Coastal Commission, the state’s all-time champ at trampling on private property rights and the test case for obsessive over-regulation. The column focuses on the new chairwoman of the Commission, Sara Wan, and is appropriately titled, “The Queen of the Coastal Star Chamber.”
When the Star Chamber ruled atop Great Britain’s legal system for 150 years until its demise in 1641, it was characterized by secrecy, intrigue, and the often arbitrary and oppressive dispensing of what could hardly be called justice. California has its own Star Chamber, the California Coastal Commission, lorded over, for the time being at least, by a portly grandmother from Malibu, Sara Wan.
There is a pitched competition between California agencies for which is the most nonsensical in its implementation of over-reaching regulations. Certainly, the California Air Resources Board, which recently tried to ban black cars in the state in its fevered effort to save the world from global warming, is a strong contender. The California Energy Commission, which last year deprived Californians of the right to purchase large, high-performance LCD and plasma televisions — also to save the planet — is another contender. But none can top the Coastal Commission when it comes to imposing its will forcefully on the hapless Californians who are deemed to fall short of the Commission’s deep green political will.
For the rest of the post – including a blow-by-blow recount of Wan’s recent power grab and the possible ramifications, read the entire op/ed at The Daily Caller.
Crazifornia on CalWatchdog
Jan 10th
The good folks at Pacific Research Institute’s CalWatchdog blog – Steve Greenhut, to be specific – posted another one of my op/eds today. Here’s a little intro to encourage you to read more:
If Gov. Jerry Brown has any chance of draining California’s budget swamp of red ink, he’s going to need more than aggressive spending cuts and votes for more taxes, as he proposes. He’s also going to need a resurgence in California’s business environment, but at one of the state’s few commerce success stories, the ports of Los Angeles and Long Beach, there are more signs of classic California non-competitiveness than there are of a return to health for the state’s business sector.
Yes, activity is up by single digits over last year at the ports, which are America’s busiest, as companies slowly bring in more goods from Asia to rebuild inventories they had let drop through the Great Recession. But even as more than 12 million containers will be unloaded at Southern California docks this year, there are grave threats to the future of Southern California’s logistics behemoths, and they’re posed by exactly the same elements that threaten the rest of the state’s economy – powerful unions and California’s incessant compulsion to be a world leader in the environmental movement without thought to the cost.
To read the rest of the piece, click through to CalWatchdog.
Here are the other Crazifornia op/eds they’ve run:
Daily Caller – From RINO to Redux
Jan 3rd
The Daily Caller, one of the nation’s leading conservative news websites, ran my Moonbeam Inaugural op/ed today. It also appears below, but please read it at the Daily Caller (here), since they’re always interested in seeing how many readers their op/eds get.
Thanks!
From RINO to Redux
Jan 2nd
(Please read this post at The Daily Caller, since they’re interested in how much traffic their authors generate. Thanks!)
Today, Arnold Schwarzenegger signs his last gubernatorial documents and spiffs up the governor’s office so he can get his security deposit back as the next tenant prepares to move in tomorrow.
The man who promised his charisma was sufficient to break down the boxes that hobble Sacramento leaves the place with all its boxes intact, and more than a few new boxes to boot – they’re just painted a greener shade of regulatory over-kill. As it turns out, the Schwarzenegger legacy isn’t governmental and budgetary reform; it’s AB 32 and SB 375, California’s hysterical global warming twins, and the passel of business-strangling regulations spawned in their wake. The incoming governor is apparently intent on protecting Schwarzenegger’s green legacy with the appointment of John Laird, co-author of AB 32, as Secretary of Natural Resources, ensuring that natural resources, not resourceful humans, will continue to be the focus of California state government. The leftist YubaNet.com declared the Laird appointment “sets off green fireworks,” adding:
On the first day of the New Year, Governor Brown showed that he is committed to a green agenda by appointing John Laird as the Secretary of Resources. … From waste reducer to wildlife protector Laird is sure to make 2011 a great year for the environment.
But California’s regulatory crusade to coddle the environment without care for the cost is not going to be the focus for Jerry Brown, as much as he might like it to be – it’s going to be the budget, debt and the ever-less-sustainable public employee pension funding gaps. If Jerry Brown is going to succeed on that score, he’s eventually going to have to take on the public employee unions he empowered in the 1970s when he signed the law giving them truly impressive collective bargaining rights.
It was the unions that terminated the Terminator. When Schwarzenegger put four mostly sensible reform initiatives on a special election ballot in 2005, he was handily disposed of by the unions, particularly the California Teachers Association, which mortgaged its headquarters to buy even more anti-Schwarzenegger ads. By most accounts, Brown is also plotting a special election strategy to fix the budgetary mess. First, he will get a budget through Sacramento (now, thanks to Proposition 25, requiring only the votes of the Legislature’s Democrats) that will include sweeping cuts in spending for popular state services, then he will call a special election and ask the voters to do what even the state’s all-powerful Democrats don’t have enough votes to accomplish: raise taxes and fees.
He should be able to count on union support for the higher taxes, but the voter’s mid-term rejection of Prop 21’s “park tax” and their approval of Prop 22’s and Prop 26’s restrictions on Sacramento’s non-tax revenue generation tricks indicates Brown’s going to have a tough time pulling off a special election win. Even if he does – and especially if he doesn’t – he’s still going to have to deal with pension reform if he has any hope of fixing the state’s fiscal mess. Meaningful reform seems just about impossible under Brown, as Orange County Register opinion columnist Mark Landsbaum wrote today:
Considering their clout, if public employee unions had a better candidate to run for governor, wouldn’t they have run him? Why didn’t they? Because Jerry Brown’s candidacy was their dream come true.
California’s future will be anything but golden unless Brown pulls off a “Nixon goes to China” with the state’s public employee unions and brokers sweeping and significant changes to public employee benefits. Tweaking at pension formulas isn’t going to be enough. Even the wholesale selling out of younger public employees by older pension-rich ones isn’t going to pull California out of the hole. No, dialing back California’s half-trillion-dollar unfunded pension liability before the state’s finances collapse entirely is going to take the kind of reform that will pose a threat to the future clout of the very public employee unions that swept Brown into office.
Can he do it? I don’t think so. His appointments thus far, while still few in number, indicate that the Jerry Brown we’re getting is the Jerry Brown we feared we’d get – Moonbeam Redux. He will use the Democrat’s complete control of Sacramento and the money and influence of his union benefactors to do everything he can to protect the status quo, because unlike where Sacramento was when he first came into office on the heels of Ronald Reagan, Sacramento today is exactly as he would like it to be – fat with government jobs and programs, committed to environmental over-regulation, and firmly in the hands of the unions he knows and loves.
Jerry Brown’s real challenge arises from the fact that the status quo will be impossible to protect unless the state’s businesses shake off the national recession and the state’s obsession with business-flogging and somehow begin to generate more jobs and more tax payments. Short of that unlikely salvation, it’s anyone’s guess how Brown will succeed in keeping his benefactors happy while dodging California’s looming fiscal black hole.
