Peter Allen - Hinged

Bloomberg Takes a Hatchet to Nurses

2011-12-19T09:16:00.000-08:00

I was disappointed to see Bloomberg run the following article that superficially looks like objective reporting, but actually is designed to get people mad at nurses working for the State of California. I am sorry, but going after nurses that work in prisons and mental hospitals - especially for something that is not their fault - is just low.

Here is the article, with my comments inserted in [italics in square brackets]:

Million-Dollar Nurses Show California’s Struggle to Cut Payroll

By Michael B. Marois - Dec 16, 2011

California (BCAX) has paid Lina Manglicmot $1.5 million since 2005, an average of $253,530 a year, to work as a prison nurse in the agricultural town of Soledad. [Yes, that is a lot of money. But she is working in a prison. In Soledad. For those unfamiliar with it, Soledad is a small, depressed agricultural/prison community. It is not in the worst part of California, but it is definitely not the best part. The nearest city of significant size is Salinas, a large, depressed agricultural community.]

Manglicmot is one of 42 state nurses who each made more than $1 million in those six years [Why six years? Because it adds up to $1 million?], mostly by tapping overtime [You can “tap” overtime, sort of like tapping a keg? I thought you had to “work” for it.], according to payroll data compiled by Bloomberg News. Together, those nurses collected $47.5 million. In 2008, Manglicmot was paid $331,346, including $211,257 in overtime. [That is a lot of overtime. Why does she work so much overtime? Are they understaffed?]

The extra pay that allows some nurses to triple their regular compensation underscores a broader trend in California, where government workers are paid more than in other states for similar duties [and where it costs more to live than most other states] and civil-service job protections hamper efforts to close budget gaps. [The dysfunction of the legislature has hampered it far more.] Governor Jerry Brown said this week that revenue will fall short of expectations, triggering $1 billion in cuts to school busing, libraries and care for children, the elderly and the disabled, among other programs. [Lina caused that? Bad Lina.]

“California taxpayers should be outraged,” said Lanny Ebenstein, an economics lecturer at the University of California at Santa Barbara and president of the California Center for Public Policy, a research institution critical of public-sector compensation. [It is good that they acknowledge he has an agenda.] “Taxpayers should insist that this is no longer acceptable because what government does is important and it’s important that government run effectively.”

California is home to city managers whose compensation is higher than the governor’s, prison doctors who make more than counterparts elsewhere, Los Angeles firefighters who collect twice the national mean and state workers who reaped $1.7 billion more than their regular salaries last year, from overtime and unused vacation pay to physical-fitness incentives. [Yes, there is too much overtime paid. But much of that is the result of measures designed to look like they save money when they really don’t, like blanket hiring freezes and furloughs.]

Above National Average

Public nurses make far more in California than they do in New York or Texas. Their pay also places them well above the $67,720 national average for registered nurses, according to the U.S. Bureau of Labor statistics.

The highest-paid nurse in New York last year earned $186,909 working in a prison north of Manhattan, according to payroll data from the state comptroller’s office. Seventy-five nurses in California made more than that in 2010, and the top earner was paid $269,810, including $179,800 in overtime. [California probably has more nurses than New York. And again, why is so much overtime needed?]

The director of nursing for the Texas prison system makes $165,000 a year, while rank-and-file registered nurses are paid $68,000 to $72,000, said Owen Murray, vice president of offender health services for the University of Texas Medical Branch. The state’s prison nurses aren’t unionized, and overtime payouts to the penal system’s health-care staff are limited, Murray said. [The Texas penal system is a good example for us to follow?]

‘No Way Possible’

“There might be some overtime opportunities, but it would never be more than a handful of hours in a pay period,” Murray said. “So there is no way possible, even at time-and-a-half, that you would reach the ranges that you are talking about in California.”

An array of union-sought laws and regulations keeps nurses’ pay high in California. A rule limits mandatory overtime, yet doesn’t control how much extra time employees can work voluntarily. California must offer extra hours to state employees first, even when officials estimate that a temporary nurse would be cheaper. The state isn’t allowed to hire new prison nurses to fill in for the 10 percent who are on long-term sick leave. [That is a lot of nurses on long-term sick leave. Maybe because they had to work too much overtime in bad conditions.]

California paid the overtime as the state grappled with more than $100 billion in budget shortfalls since 2008, forcing it to cut spending by 16 percent. The six-year period in which the 42 nurses collected $24.6 million in overtime coincided with the recession that damaged housing markets and curbed tax revenue in California and elsewhere. [No, it does not coincide. The recession started in 2008, not 2005.]

$98.7 Million in Overtime

Last year, the state’s nurses were paid a total of $98.7 million in overtime at one-and-a-half times their normal hourly wage -- an average of $17,692 each. [If a few are getting a lot of overtime, then this shows that most are getting little or none. If you have one person making $1 million and nine people making nothing, the average income is $100,000.] Since 2005, California has paid more than $424 million in overtime for nurses, data obtained from Controller John Chiang shows. [Again, why 2005?]

Most of the overtime is concentrated in prisons and mental- health hospitals, where 83 percent of the more than 6,000 nurses for those two agencies collected extra pay in 2010, according to the data.

Union officials say they have urged the state corrections and mental health departments to consider more efficient scheduling, which they say would reduce overtime.

“We actually have looked at this and tried very hard to get them to understand that mandatory and even voluntary overtime is not the way to go,” said Nancy Lyerla, former chairwoman of the bargaining unit for prison nurses at the Service Employees International Union Local 1000, the largest union of state employees in California. “It’s very expensive. We recognize that and have had lengthy discussions with them about that.”

State officials have taken some steps to curb overtime.

Looking For Fixes

Clark Kelso, the court appointed receiver put in charge of California’s prison health system after inmates filed a legal challenge to the quality of care, sent a management team to prisons with especially high overtime and sick-leave totals to examine the reasons and find fixes, said his spokeswoman, Nancy Kincaid. Kelso has sought lower costs from companies that offer temporary contract nurses to the state, she said. [Kelso is a federally appointed receiver, not a state official.]

Critics such as Ebenstein don’t understand how much the agency has worked to improve prison medical care efficiencies since 2006, Kelso said in a statement.

‘Examples of Mismanagement’

“We have been tackling these examples of mismanagement,” he said. “Over the last several years, we have improved medical care significantly while saving taxpayers more than $400 million. There is still more to do. We focus every effort on improving the system through increased efficiency and reduced costs.”

For example, the department has hired more nurse assistants and licensed vocation nurses to handle duties such as medication management and round-the-clock suicide watches, Kincaid said. In the past, that duty has fallen on the registered nursing staff, boosting overtime costs.

Before 2009, California law allowed personal-leave hours to be counted as time worked in calculating overtime. [This is probably why they go back six years, to 2005. If they just used more recent data, the numbers would be much smaller.] A state audit in 2009 found a worker at the Sonoma Developmental Center who was paid for 160 hours of overtime in a single month, even though the employee took 167 hours of leave during that period.

That rule has since been changed, so that only approved leave and not sick leave can be calculated toward overtime and only if the employee is ordered to work the extra hours. [So why cite to the older data that inflates the numbers?]

While the day-to-day causes of overtime vary, such as when a prison is locked down and a nurse already on duty must remain past her regularly scheduled shift, prison health-care executives are limited by state law in their ability to use contract nurses to cover for employees who are ill or on vacation.

Long-Term Leave

Labor laws also prohibit the state from hiring a new civil- service nurse to fill in for those on long-term leave. [Hiring freezes imposed by governors are likely a bigger problem, but it has not mentioned those.]

“The constitution says that if a civil servant can do the job, we must hire or use a civil servant and not an outside contract,” Kincaid said. “So we’re required to offer the overtime to staff before we can go outside to fill it.” [But statewide hiring freezes mean they cannot hire new nurses, but instead must pay overtime.]

Kincaid said the agency tries to anticipate what staffing level is needed for a given shift based on inmate population and the severity of medical issues. It schedules extra employees in anticipation that the ratio may change because of patient needs or workers who call in sick.

Not Enough

That’s often not enough, she said. During two hunger strikes by inmates throughout the state’s prison system in July and September of this year, nurses had to work an extra 7,000 hours of overtime to ensure proper medical care, Kincaid said. [Ah, there is a lot of overtime because there is a lot of work.] Three-day-a-month furloughs in 2009 through 2011 also thinned the staff, requiring more overtime, she said. [Yes, the furloughs designed to cut costs actually increased costs in some areas. Why so little attention to this fact?]

At a prison drug-treatment center in California’s central valley, 160 miles north of Los Angeles, nurse Milacris Andres has been paid more overtime than regular pay in each of the past six years, payroll data show. [Corcoran. That is probably one of the least attractive places to work and live in California. Again, why six years?] In all, she has collected almost $700,000 in overtime pay since 2005, boosting her income during that time to $1.24 million. Through Kincaid, Manglicmot and Andres declined to comment.

“I have never heard of a nurse making that kind of money,” said Lorry Schoenly, a Philadelphia-based prison health-care risk and quality of care consultant. “I’m shocked that they would have any openings left. [There are probably not any openings, due to hiring freezes. If there are openings, it is probably because the work sucks, but requires real training, so the market is setting the price.] California Department of Corrections and Rehabilitation may benefit from a fresh look at their staffing patterns and hiring practices.” [That is probably true. Shrinking the prison population would help reduce staffing costs, but that is never mentioned.]

Nurse Overtime Triples

Overtime pay at the Department of Corrections has declined by 27 percent to $475 million last year since reaching a high of $648.5 million in calendar year 2007, payroll data show. [So why do they keep going back to 2005?] Overtime for nurses more than tripled since 2005, to $54 million last year.

At the Department of Mental Health, also operating under federal oversight, overtime costs have soared about 75 percent to almost $100 million last year, from $56.6 million in 2005, payroll data show. Overtime pay for nurses in the agency more than doubled during that period to $41.2 million.

Maria Theresa Sicad was paid $227,014 last year as a nurse at the state mental-health hospital in Napa, even though her base pay was $86,427. Since 2005, she’s been paid $823,905 in overtime pay. Through agency spokeswoman Beth Willon, Sicad declined to comment.

The agency has been understaffed for years partly because of the difficulty of recruiting nurses in some rural locations, said the agency’s acting chief deputy director, Kathy Gaither. [Ah, market forces. Qualified nurses don’t want to move to the sticks to work long hours with crazy people.] Another factor that taxes the staff is federal oversight of the mental-health department, which requires nurses to spend many hours documenting patient care, she said.

Accumulating Overtime

Labor contracts for the nurses require that overtime be offered first to volunteers, so the agency doesn’t have a choice in which employees work the extra hours. That allows some workers to accumulate large quantities of overtime hours. [There is a problem with a few making a lot more than others? We should close the pay gap?] The agency can’t assign mandatory overtime until there are no more volunteers willing to take the hours. [Why is it bad that the nurses who want to and can work overtime do it? Why would it be better to force those who don’t want to work overtime to do it?]

California has made efforts to curb its payroll costs, include a hiring freeze ordered by the governor in February. [If you have a hiring freeze, and the amount of work doesn’t decrease, the existing workers have to work overtime. This is a big part of the problem, not a solution.] According to the controller’s office, the number of full-time employees of the state payroll has shrunk to 201,408 in October from 205,635 when Brown took office in January. [Yes. If the workforce shrinks, but the amount of work doesn’t, the remaining workers have to do more work.]

He and the state legislature passed a plan to ease crowding in prisons by shifting responsibility for thousands of criminals from state control to county jails and local probation.

The Department of Mental Health recently announced an overhaul that includes ways to make staff-to-patient ratios more flexible and technology and documentation improvements that will move nurses from paperwork duty back to direct patient care, Gaither said.

‘Each Patient’s Need’

“Because we are returning more staff back to the unit, we are able to make improvements in how staff are employed and at lower costs,” she said. “It’s really looking at each patient’s need and staffing based on those needs rather than doing a one size fits all.”

At least 15 states have privatized prison health-care to curb costs. Corizon, Inc., a Tennessee company that provides private healthcare to more than 400,000 inmates in 31 states, keeps a pool of temporary nurses on its payroll to fill in when an additional worker is needed.

Those nurses are paid regular hours instead of overtime wages and are not offered full-time benefits, helping to keep costs down, said Rich Hallworth, Corizon’s chief executive officer. [Saving money by not giving health benefits to nurses – quite ironic.]

“Sometime overtime is required,” he said. “But when we do, what we try to make sure is that the number they are working isn’t excessive. It’s a patient quality care issue. If you are working a 24-hour shift how attentive can you be?”

To contact the reporter on this story: Michael Marois in Sacramento at mmarois@bloomberg.net;

To contact the editor responsible for this story: Jeffrey Taylor at Jtaylor48@bloomberg.net.

The False Promise of Tax Cuts

2011-11-18T14:40:00.000-08:00

Let's look at the idea that tax cuts will help the economy recover. Let's go to Small Town USA. Small Town, like the rest of the US, has been suffering from the economic slump. Because they are in California, they get most of their income from property taxes and sales taxes.

Property values took a dive, so property tax revenues are down. Sales at the ten small local stores and one big-box store are down, so sales tax revenues are down, too. Small Town is looking at about a 10% budget deficit, so they decide to do a 10% across-the-board cut in spending.

Small Town lays off one of ten teachers, one of ten police officers, one of ten firefighters, one of ten maintenance workers, one of ten library staff and one of ten office staff. Because of the slump, one of the ten small stores goes out of business, putting three employees out of work. Business at the big-box store and the local factory is slow, too, so they each lay off ten people. So now you have six public employees and 23 private employees out of work.

Following the idea that tax cuts are good for the economy, the City Council of Small Town decides to enact an additional 10% tax cut, divided between property and sales taxes. Accordingly, Small Town lays off another six employees, so there are 12 public and 23 private employees out of work. But wait, shouldn't the tax cut result in more jobs?

Let's look. The small store that closed gets about a $1000 annual property tax break, but no benefit from the reduced sales taxes. Is $1000 and lower sales taxes likely to allow them to open up again? Not likely. The other nine stores get the $1000 annual property tax saving, and about $200 per month in lower sales taxes (assuming that the stores, not the customers, get the tax savings). Are any of those stores likely to hire additional help? Not just from the tax savings - it is not enough. Besides, business is still slow. It might delay them going out of business for a little bit, but that is about all.

The big store gets about a $50,000 annual property tax break, and a $10,000 monthly sales tax (again, assuming the store gets to keep that). That is enough to hire back a few employees, but business is still slow, and they don't need more employees. Besides, the money question is decided in Large Headquarters City, not Small Town. The big store headquarters happily keeps the proceeds of the tax break. When pressed by the City Council why they are not hiring, the big store agrees to hire back two laid off employees.

The local factory gets about a $50,000 annual property tax break, but no significant benefit from the sales tax break, as the bulk of their purchases and sales are made at wholesale. That would be enough to hire back one employee, but business is still bad, and they are worried that they may have to lay off even more employees, so they do not hire anyone.

But there are still 33 more people out of work than before (12 public plus 23 private minus 2 rehired private), and those 33 people (and their families) are not spending money. Since Small Town is not big, having those 33 people and their families not spending more than the minimum to survive makes a difference. Sales at the nine remaining small stores and the big-box store go down, further reducing sales tax revenue. One more small store goes out of business, laying off two employees. Big box store lays off the two rehired employees and three more. Now there are 40 people out of work.

Notice which direction things are going? Tax cuts are not a way out of recession

(For those interested, here are my assumptions: 1) the stores are open 20 days per month, and the pre-cut sales tax rate is 10%. 2) the small stores pay $10,000 per year in property tax before the tax cut, and they do about $1000 a day of business. 3) the big store pays $500,000 per year in property tax, and does about $50,000 per day of business. 4) the factory pays $500,000 per year in property tax.)

Getting Away With Murder (and More)

2011-11-06T00:26:00.000-07:00

When I was a kid, my parents would watch a TV show called Murder, She Wrote, starring Angela Lansbury as a mystery writer. She would just happen to be somewhere when a murder occurred, and would help the (usually clueless) local police solve the crime. I figured if she came to my town, I would either leave or kick her out, because someone was going to get killed. Every week, wherever she was, someone would get murdered, and she would be close enough to get involved.

In the real world, this would not happen. If every week you were near to a murder, the police would be hauling you in for some serious questioning. You would be in tabloid headlines ("Murder Magnet!") and people would avoid you like the plague. Unless, of course, you are near the top of the social elite, like Larry Summers.

If you don't know Larry Summers, as a high official in the Clinton administration, he was part of a unified effort (also including Alan Greenspan and Robert Rubin) to quash Brooksley Born's efforts to regulate derivatives markets. (For a short summary, check out: http://articles.businessinsider.com/2009-10-21/wall_street/30087500_1_brooksley-derivatives-market-stock-market.)

He also was instrumental in the repeal of the Glass-Steagall Act, enacted in the wake of the last great stock market crash, and designed to keep banks from getting too big, too powerful, and too speculative. (This is an interesting account: http://www.nytimes.com/1999/11/05/business/congress-passes-wide-ranging-bill-easing-bank-laws.html.)

By most accounts, these were two major factors that allowed for and exacerbated the 2008 crash and our current recession.

Larry Summers was also a supporter of Enron, willing to lean on California on Enron's behalf. (http://www.thedailybeast.com/articles/2008/11/12/larry-summers-and-enron.html.)

After Clinton left office, Summers became president of Harvard. His tenure there was marred by accusations of racism, sexism, and conflicts of interest, a faculty no-confidence vote, and huge investment losses. (http://en.wikipedia.org/wiki/Lawrence_Summers#President_of_Harvard.)

So what happens to Summers next? Does he slink off into obscurity somewhere? No, he is chosen to be Director of Obama's National Economic Council.

And this is not unique to Obama - there is also Gen. William Boykin, who played significant roles in the failed Iranian hostage rescue attempt, the Waco tear-gas-attack-turned-firebombing, and the "Black Hawk Down" fiasco in Mogadishu, only to be made Deputy Undersecretary of Defense under Bush and get his fingers into the Abu Ghraib torture scandal.

Summers, Boykin, and others at the top levels of American society have been relieved of the burden of having to do a good job. No matter how badly they perform, they continue to be rewarded, and even given higher positions.

The same is true in American business, with top executives being rewarded with "golden parachutes" of millions of dollars when they have failed dismally. Alan Fishman got close to $20 million for running the failing Washington Mutual for 17 days. Leo Apotheker got over $7 million in severance, plus a $2.4 million "bonus," after unsuccessfully heading HP for all of 11 months. Peter Darbee got a $35 million severance from Pacific Gas & Electric despite an expensive failed ballot initiative and a fatal gas pipeline explosion and fire. There are numerous other examples of executives getting obscene payouts for utter failure.

It must be great to be at this Angela Lansbury level - no matter how many dead bodies you leave in your wake, they still want you back, and will even promote you. So how do you get up to this level, where you can get paid huge amounts and get offered ever-higher positions despite spectacular and repeated failure?

The classic American answer is that you do it through hard work and determination. We love those rags-to-riches stories, like Steve Jobs and Oprah Winfrey. And yeah, hard work and determination help. But the best way is to know someone already at the top, who can pull you up.

Let's look at the new Chief Operating Officer of Facebook, Sheryl Sandberg. She is likely a smart and hard-working person. But she got to her exalted position in large part because one of her professors at Harvard took her under his wing, and helped promote her. That professor? Larry Summers. (Check it out here: http://www.newyorker.com/reporting/2011/07/11/110711fa_fact_auletta?currentPage=all)

There were and are undoubtedly other students out there who are as smart and hard-working as Sandberg. But if they did not get to hang with Larry Summers (maybe they were at Northeast Texas Community College or Cal State Bakersfield instead of Harvard) their odds of getting to the top 1% are not so good.

In the real world that most of us live in, failure has serious consequences - we lose our jobs, and perhaps our ability to earn a living. For those lucky enough to get to the very top, despite the huge impacts that their failures have - people dying, thousands losing their jobs, multi-billion dollar costs - they get to walk away with payouts that most of us would associate with winning the lottery. And they get another plum job. And, perhaps most galling of all, they get to choose - like Larry Summers chose Sheryl Sandberg - who gets a shot at getting to the top next.

So maybe Murder, She Wrote was not so unrealistic after all. After all, reality looks even worse. Not only can some (but only a few) people get away with murder (figurative or literal, your choice), they get rewarded for it, and can set up their friends and toadies to be rewarded for it as well. Eat your heart out, Angela Lansbury.

What Does Occupy Want? Part 2 - They Still Want Back What Was Stolen, And Not Just The Dream

2011-11-01T23:09:00.000-07:00

While riding in the carpool I was subjected to Ronn Owens on KGO radio criticizing the Occupy movement for not having clear short-term demands, such as calling for specific legislation, or backing a specific presidential candidate.

This is a classic misleading argument - change the other side's position into something that is easier to attack than its real position. Owens is right that Occupy is not asking Congress to pass a bill - but that is because the goal of the Occupy movement is much broader. It is after a fundamental shift in our society's values, to refocus on human needs instead of accommodating corporate greed. Our elected government needs to be a part of that systematic change, so while passing a bill might be good (if it helps people instead of corporations), it is only a little piece of what is needed, a small step in the right direction.

The erosion of human values for the benefit of corporate interests has gone on for years, and is embodied in numerous laws enacted over the last 30-odd years. But those laws are not the disease - they are just a few of the symptoms. The disease is deeper, and more pervasive. So passing a bill or two, no matter how good, won't do it. Repairing the damage will be a longer term, ongoing process. Symbolic gestures are not enough - we need real change.

Changing some laws is part of the process, but how those laws are changed is important. It cannot be a corporate-whore Congress and President grudgingly giving in to a list of demands forced on them by public protest. Congress and the President must be on board, acting willingly and positively to treat our current corporate parasite infestation. If they did that, then passing some bills would be a sign that we might be on the road to recovery.

If Congress and the President took the following steps, I would take it as a positive sign that they are heading in the right direction. This is just my list of things that would relieve some of the symptoms of our malaise. It is not the cure, or the whole treatment, but even so it should make us feel better.

1) Enforce the the anti-trust laws. This would help keep businesses from becoming "too big to fail."

2) Undo the recent changes to bankruptcy that make it easier for corporations to duck out of labor agreements, and that make it harder for people to get relief from credit card debt.

3) Encourage the production of food that is healthy for us to eat, rather than encouraging the industrialization of the food industry. Heavy pesticide use, high fructose corn syrup, and genetically modified crops benefit big agribusiness at the expense of the small family farmer and those of us that eat (last I checked that was everyone).

4) Bring back something like the Glass-Steagall Act (enacted after the last big crash caused by banks getting out of control) that kept banks from becoming too big and engaging in overly speculative practices.

5) Require banks and other mortgage lenders to hold the loans they make, instead of foisting them off on others. Lending practices would suddenly become a lot more conservative - no "liar loans" and other speculative products, and lenders would not want to push people into loans they could not afford.

6) If we won't do #5, then we need effective regulation of derivatives markets (where the mortgages end up after being sliced and diced), which was quashed by the Clinton administration. The meltdown of the derivatives markets based on crappy mortgages was a major cause of our current financial crisis.

7) Stop the vilification of public employees and their pensions. They don't make that much money, and they did not cause our current problems. Wall Street hates the California public employees pension system since it has billions of dollars that Wall Street wants and it demands good corporate behavior.

8) Undo some of the recent limitations on class actions that prevent the thousands of people ripped off by corporations for $5 or $50 or even $500 at a time from having any effective recourse. You can't get a lawyer to help you sue a big corporation for $500.

9) Rein in corporate tax shelters. GE and other big multinationals can avail themselves of tax schemes that allow them to legally pay little or no tax on billions of dollars of income. You and I can't do that.

10) Make health care and higher education accessible and affordable. This should be a no-brainer, and would provide far more benefit to Americans (and our economy) than two wars, and at a lower cost. But no, we chose the wars instead. Something is seriously wrong here.

There are more, but that is a start. Occupy has not specifically asked for these things, but these steps would show that our society is moving in the right direction. Ronn Owens asked for legislation, so here is a sampling. But it is not enough.

New Name

2011-11-01T07:15:00.001-07:00

Yes, this blog has a new name. I am no longer running for California Attorney General, so it seemed a bit weird to still have that as the name of my blog. I thought of just starting a new blog, but I wanted to keep the content from my campaign blog. So, a new name.

Why "Hinged?" I like the idea of a hinge - things on opposite sides may move in opposite directions, but they are still connected. And it is the opposite of unhinged. I thought of calling it "Hinge of the World," but decided that might be a bit pretentious. Anyway, it is time to take a fresh swing at things.

Thanks for reading.

What Does Occupy Want? They Want Back the American Dream Stolen by Wall Street

2011-10-30T19:13:00.000-07:00

Things used to feel fair: if you worked hard, chances were pretty good that you could support your family, buy a house (in most places), get medical care, and maybe send your kids to college. But no more. There are now lots of hard-working Americans who can't buy a house, don't have health insurance, and can't afford to send their kids to college.

This means that the American dream - the dream of opportunity, of getting ahead and earning a better future for your children - is broken. That dream, that hope, for all Americans, however real or unreal it was, kept America going through good times and bad. But now, more and more Americans (and there were always some) are realizing that the dream is empty, and how hard they work does not matter. They see nothing in the future but an endless struggle to stay alive, to feed their family, keep the car running, to pay the rent and the utilities.

Unless you are Peter Darbee, who got a $35 million severance package when he resigned as CEO of Pacific Gas & Electric Company after a gas pipeline explosion killed eight people and the company's stock price took a dive. Or John Paulson, who made billions of dollars from his special deals with Goldman Sachs - deals designed to blow up in others' faces.

No wonder people are pissed off. How did we get to this point? It took a while, and there were plenty of warnings, but both Republicans and Democrats kept us on a steady course toward disaster for working Americans, and enabled the plundering of our future by ruthless Wall Street buccaneers. A craven Congress blinded by money heedlessly gutted the nation's defenses against the sheer greed that would ultimately cost American taxpayers trillions of dollars - and one precious dream.

From Reagan and his "trickle down" economics that blessed the rich keeping more and sharing less, through Clinton's quashing of attempts to think about regulating the derivatives markets, to Bush 2 and Obama, the Republicans and Democrats in the White House and Congress share the blame.

Neither Republican nor Democratic presidents enforced the anti-trust laws designed to keep banks from getting "too big to fail." Both Republican and Democratic congresses willingly - even proudly - eliminated the protections put in place after the 1929 stock crash and the Great Depression. Both Republicans and Democrats ignored the clear warnings: the savings and loan crisis of the 1980s, the failure of Long-Term Capital Management in the 1990s, and the few bold voices telling them "this is a bad idea." Instead they kept listening to the siren song of Alan Greenspan and the big corporations urging them to blindly trust in unregulated markets - regardless of the real-world evidence.

While things were going okay for most people (even if they weren't getting super-rich like the top 1%) they were content to just live their lives. The Occupy movement (and to a lesser extent, the Tea Party movement) is a sign that things are no longer going okay for most people in America. People are pissed off that they got ripped off, and particularly pissed off that the very government that is supposed to protect them from getting ripped off opened the door to the robbers.

Yes, we want the dream back. But now we want back more than just a dream. This time it needs to be real.

Weird Tax Plans

2011-10-25T22:19:00.000-07:00

I actually don't have a major problem with a flat income tax. I like the simplicity of it. Yes, I know progressive tax schemes are "fairer" - $2,000 in taxes for someone making $20,000 a year is a bigger burden than $20,000 in taxes on someone making $200,000. Yes, they are both 10%. But one person only has $18,000 left, while the other one still has $180,000. At $18,000, every little bit counts. At $180,000, not so much.

That said, I would only go for a flat income tax if 1) it covered all realized income from all sources, and 2) there are NO tax deductions or tax credits (except maybe a deduction for charitable contributions). This would go a long way to even out the fairness, as wealthy folks could no longer benefit disproportionately from tax avoidance schemes (that only the wealthy can afford). Even the old mortgage interest deduction mostly helps the wealthy (and creates perverse land use incentives).

Rick Perry's flat tax plan (described here: http://www.bbc.co.uk/news/world-us-canada-15451162) does not meet that criteria. It is full of loopholes that would make it meaningless except as a tool for avoiding taxes.

First, his flat rate of 20% is voluntary - you could pay the current rate if you wanted. Great, two different possible tax rates - way to (not) make things simpler. Okay, the poor might be able to choose a lower rate, but the rich get to have their accountants comparison shop between different tax plans.

Second, his plan would still allow for mortgage interest deductions, and would completely eliminate taxes on capital gains and dividends. Who gets capital gains and dividends? No, it is not the poor, or even most of the middle class. Under Perry's plan, the rich get a huge break - a lower tax rate, NO taxes on capital gains and dividends, and they get to keep the mortgage interest deduction. And tax avoidance schemes would still abound, with a focus on shifting as much income as possible to capital gains and dividends.

Perry's plan is grossly unfair, needlessly complicated, and would only encourage new forms of legalized tax evasion for the most wealthy at the expense of everyone else, especially those Americans that work for a living. A true flat tax on all income, regardless of source, would be simpler and fairer.

Herman Cain's "9-9-9" plan, clearly named by someone with mass marketing experience, is even goofier. It starts with 9% taxes each on personal income, business income, and sales, but after a few years, the income taxes go away, and the sales tax goes way up - to somewhere over 20%. (And that is according to Fox News: http://www.foxnews.com/politics/2011/10/20/cain-adds-to-plan-angering-unions/)

Like it or not, we have a largely consumer-based economy. We depend on people buying things. So putting a high tax on purchases seems really counterproductive. Adding this new federal tax on top of state taxes could result in sales taxes approaching 30%. That makes it much harder to buy a car, or a computer, or pretty much anything. Why would we want to do that? (It perhaps could be better for the environment if people bought less stuff, but that does not seem to be Cain's intent.)

In addition, a sales tax of that level would likely lead to significant black market activity, as buyers would seek to avoid paying huge taxes, and sellers would want to help them in order to make more sales. Large black markets can lead to corruption, as (underpaid) officials can get paid to look the other way. A large black market would also mean that fewer taxes would be collected, and those would be collected in an arbitrary and unfair way, depending on whether a particular jurisdiction suppresses or allows a black market.

Destroying the basis for our economy, creating a black market and disrespect for law, and providing incentives for corruption, does not seem like a good idea, even if it does have a catchy name.

Neither Perry's nor Cain's tax plans make sense.

More Regulation or Less Regulation? That is NOT the Question.

2011-10-18T21:21:00.000-07:00

During the 2010 election, a major media outlet presented me with a survey they said was developed by a range of political and policy experts. One of the questions was whether I favored more or less regulation. This is a silly and pointless question. The real issue is not how many regulations you have, but how good they are. Do they do what they are supposed to do?

Healthy competition, which is a fundamental basis for a functioning capitalist economy, requires regulations. Sports provide a good example. How about eliminating the rule against goaltending in basketball? Or the shot clock? (Who remembers the four-corners offense?) What about getting rid of the penalty for pass interference in football? Or limits on the number of players? ("Hey, I have 45 players, why are they limiting me to only using 11 at a time?")

Those are all regulations. But they serve a purpose of creating good competition. Getting rid of them would result in boring or one-sided games. Anarchy, rather than competition.

Going to the regulation of business, you could create one regulation that would completely stifle competition. Here is an example: all laptop computers sold in the United States must be made by Dell. Just one regulation, but suddenly there is no Apple, no Lenovo, no Sony. And how much incentive would Dell have to innovate or cut prices? None. Prices would be high, and there would be little or no innovation, all from just one regulation.

But you could also put in place a series of regulations that would create more competition. For example, US manufacturers complain that foreign manufacturers have a price advantage, which gives them an unfair competitive advantage. So one solution would be to add regulations that say: no laptop computer (or any component in that laptop computer) sold in the US can be made with child labor; no laptop computer sold in the US can be made by a process that results in a discharge of toxic chemicals to the air, water, or ground; and no laptop sold in the US can be made by slave or prison labor. Even though this is three times as many regulations as the previous example, the result would be that US manufacturers could better compete against foreign manufacturers.

Are there stupid regulations that should be eliminated? Yes, of course. Is blindly eliminating any and all regulations a good idea? No. There are fewer things more expensive and inefficient than a sloppy or botched deregulation. The savings-and-loan crisis and the California energy crisis are prime examples.

Most regulations are put in place one or two at a time, to address specific issues, and then they get adjusted as people figure out how to make them work. Deregulation should be done similarly - eliminate one or two regulations at a time that are no longer are effective, and adjust the remaining ones (or maybe eliminate one or two more) as people start to understand the new situation.

The real question is not how many regulations we should have, but rather how good they are. Quality, not quantity, is the right criteria.

Re-Starting Blog

2011-10-18T21:12:00.000-07:00

I want to start posting items on my blog again. I know the election is over, so I thought about starting a new blog, but for now at least I think I will just post more to this one. So stay tuned for more posts!

Thank you!

2011-02-27T22:49:00.001-08:00

I finished the election in third place, with over 250,000 votes. Thank you for your support and your vote!

Still Counting...

2010-11-05T22:51:00.001-07:00

I was going to post something when the election was over; but while the election is now over, the vote counting is not. There may be close to 2 million ballots still to count, and the race between Harris and Cooley remains very close. I am in third place, with a lead of between 4000 to 5000 votes over the Libertarian candidate, which hopefully I can maintain. Thank you for your support, and I will post something as things become clearer.

Peter's Quick Guide to the Propositions, Part 2 - Props 22, 23, 24, 25, 26

2010-10-15T20:40:00.000-07:00

Here is the rest of them:

Prop 22 - Neutral. The idea of keeping the state from raiding local coffers when it can't balance its own budget is good, but this may go a bit further than that. I simply have not dug deep enough into this one to tell if it is good or bad. (If you have, feel free to let me know.)

Prop 23 - Strong NO! This is the effort by the oil refiners to halt implementation of California's landmark greenhouse gas law. It is nothing but corporate dirty energy self interest, pretending to be a jobs bill. But it presents a false choice between jobs and protecting our environment. Failing to take action on global warming will cost us far more than taking action. Furthermore, Prop 23 it will damage the ability of renewable and clean energy developers to get funding, by creating uncertainty in state policy. So it will actually harm job creation in the state. Prop 23 is bad for the California businesses that are actually growing, and it is bad for all Californians. Vote NO.

Prop 24 - Medium Yes. This repeals three corporate tax breaks, mostly benefitting large corporations, that the Republicans managed to extract in budget negotiations in 2008 and 2009. It seems like a weird time to be creating new billion-dollar tax breaks for large businesses. (I understand the right-wing theory that says you get more tax revenue by cutting taxes, but it just does not work in practice.) This puts things back how they were before 2008. Businesses seemed to mostly be doing okay then, so this should not do them much harm.

Prop 25 - Medium Yes. This allows the state budget to be approved by majority vote, rather than the current 2/3 vote. Given the embarrassing gridlock the 2/3 requirement has caused, this is probably a good idea. Very few other states require a 2/3 vote to pass a budget. Of course, this also makes it easier to pass a lousy budget, too.

Prop 26 - Strong No. This would require certain fees (such as fees to pay for cleaning up oil spills and toxic waste) to be approved by a 2/3 vote. While increased fees can be a problem, the 2/3 requirement to raise taxes and pass a budget have eviscerated California's infrastructure and education systems, so extending that requirement to fees appears more likely to extend the harm than to solve the real problem.

Peter's Quick Guide to the Propositions, Part 1 - Props 19, 20, 27, 21

2010-10-13T20:02:00.000-07:00

Prop 19 - Strong Yes! Legalizing Marijuana. Prohibition didn't work for alcohol - people kept drinking, and it financed the rise of organized crime. Funny, but the same thing happened with marijuana. Substance abuse is a serious problem, but criminalizing the user is not the answer. Will there be implementation problems? Yes, but it is still worth saying "No" to our expensively failed drug policy.

Prop 20 - Mild No. Redistricting. In 2008, we passed Prop 11, which shifted state legislative district drawing from the legislature to a new commission, but it has not actually gone into effect yet. Prop 20 would extend the new process to federal congressional districts, too. Since we have not seen how Prop 11 actually works (it sounds good in theory, but may have some issues in practice), it seems a bit early to be extending it to other offices. Let's see how it works first.

Prop 27 - Medium No. More Redistricting. This would repeal Prop 11, and give state legislative district drawing back to the legislature. Of course, the last time the legislature did redistricting they engaged in extreme and shameless gerrymandering that has contributed to our ongoing budget gridlock, and that led to passage of Prop 11 in the first place. Why should we trust them again? Besides, maybe we should see how Prop 11 works before we repeal it.

Prop 21 - Medium Yes. Vehicle Fees for Parks. Parks are good. Higher fees on cars are good (see my entry of July 10 re taxes). Fees on cars paying for parks instead of going towards public transit or air quality or road maintenance is sort of weirdly indirect. And having a specific budget set aside for parks will make budgeting harder still. On balance, while not the ideal approach, it is probably still a good thing.

More Propositions coming soon.

See Me, Hear Me!

2010-10-07T20:27:00.000-07:00

You can now see my videotaped interview on the California Channel, as well as the interviews with (most of) my opponents. Take a look here: https://www.calchannel.com/channel/sr1/Candidate%20for%20Attorney%20General

Kamala Harris totally botched one question - seemed like she was not listening very well.

I was also on Forum with Michael Krasny on KQED radio. Steve Cooley declined to participate, which for those of us in the Bay Area seems very weird. The four minor candidates shared half the show, while Kamala Harris got most of the other half. Take a listen here: http://www.kqed.org/a/forum/R201010060900

Are They Qualified to be Attorney General?

2010-09-21T23:47:00.001-07:00

Steve Cooley (Republican) and Kamala Harris (Democrat) have both been prosecutors. Both have both worked in local district attorneys' offices. But that is all they have done. Neither Cooley nor Harris has experience in civil litigation, neither of them have worked in the private or non-profit sector, neither have them have worked on energy or environmental issues, neither of them has been a judge or administrative law judge, neither of them have worked for a state agency, and neither of them have even worked in the other half of the state.

Given the broad responsibilities of the California Attorney General, their lack of relevant experience is striking. By comparison, I have significantly broader experience. I have worked for law firms, a non-profit, a state agency, and a major city. I have lived and worked in both Northern and Southern California. The following chart (based on information from the candidates' websites) shows the difference in experience between me, Cooley and Harris:

Candidates’ Experience	Peter Allen	Steve Cooley	Kamala Harris

Civil Litigation	X
Consumer Advocacy	X
Criminal Prosecution	X	X	X
Energy Law	X
Environmental Law	X
Financial/Securities Fraud Litigation	X	?	?
Judge or Administrative Law Judge	X
Telecommunications Law	X

Three Free Signs!

2010-09-20T23:25:00.001-07:00

Here are three signs - choose which one you like the best or print out all three and post them in visible places.

Send them electronically to your friends!

Going Back For More?

2010-09-07T21:36:00.000-07:00

The logic of much of the voting public, at least those responding to polls, escapes me. The Republicans (with assistance from the Democrats) blew up the US economy, in a big and ugly way. The Democrats (with resistance from the Republicans) have not managed to fix it. So now, according to various polls, people are going to vote for...Republicans?!?! This seems especially odd given that the Republicans are promising to run the economy the same way they did before.

This is like taking your car to the mechanic for a tune up, and he wraps it around a tree. So you take it to a second mechanic, but when he is having difficulty fixing it, or maybe is just taking too long, you take it back to the first mechanic. Who assures you he will treat it like he did before.

If you really thought the second mechanic could not fix it, wouldn't you take it to a third one, rather than back to the one who broke it in the first place? Maybe we should try that with elected officials as well.

Proposition 23 - The Job Killer

2010-09-02T21:26:00.000-07:00

Jobs or the environment - that is the choice presented by Proposition 23, a ballot initiative sponsored mainly by oil refiners, which proposes to suspend California's greenhouse gas law, AB 32, until unemployment drops below 5.5% for a year. But that is a false choice. The choice we really face is about the short term versus the long term.

The argument for Proposition 23 is simple - limiting greenhouse gas emissions under AB 32 will cost money, and will likely cost jobs in industries that generate greenhouse gasses. Based on that logic, Proposition 23 would only allow implementation of the greenhouse gas reductions currently in California law if California unemployment drops below 5.5% (it is currently over 12%) for a year.

But if California unemployment stays higher than 5.5%, or even if it drops to 4%, but bumps up to 6% after three quarters, then California would take no action to reduce greenhouse gasses.

Under Proposition 23, regardless of why unemployment is higher than 5.5%, California would take no action to reduce greenhouse gasses. Even if unemployment is high because jobs are being lost due to climate change - think of ski resorts closing due to no snow, fisheries destroyed due to changes in water temperature, beach resorts and airports damaged by higher sea levels, redwood forests dying from heat, valuable crops lost due to extreme weather conditions, and rivers running dry - we still would take no action.

The logic of Proposition 23 is the logic that says don't limit logging until all the trees are gone, because limiting logging takes away logging jobs that could last a few more years, or don't limit fishing until all the fish are gone, because limiting fishing takes away fishing jobs that could last a few more years. But how many logging jobs are there when all the trees are gone? How many fishing jobs are there when all the fish are gone?

If Proposition 23 passes, the oil refiners and other carbon-intensive industries who are backing it may get to make their profits for a bit longer. But at what long term cost? What happens when California and the rest of the world start really suffering from the effects of climate change? The potential job losses could make us nostalgic for the time when unemployment was only 12%.

Is it worth gambling with our economy, our health, perhaps even our survival, so that a few large companies can squeeze out a few more profitable years? The short term benefits to Valero and Tesoro are not worth the long term costs to every Californian and every California business. Vote no on Proposition 23 - we cannot afford it.

Proposition 19 Opponents Are Blowing Smoke

2010-08-10T22:17:00.000-07:00

You can read the arguments for and against Proposition 19 (The Regulate, Control and Tax Cannabis Act of 2010) that will appear in the Voter Information Guide here: http://www.sos.ca.gov/elections/vig-public-display/110210-general-election/

The arguments raised against Proposition 19 are really quite strange. The opponents of the measure don't say that marijuana should stay illegal - they just claim that the authors of the proposition made some "huge mistakes." The reality, however, is that the arguments against Proposition 19 are misleading.

My favorite is this one:

"The California Police Chiefs Association opposes Proposition 19 because proponents 'forgot' to include a standard for what constitutes 'driving under the influence.' Under Proposition 19, a driver may legally drive even if a blood test shows they have marijuana in their system."

Guess what - right now, under existing law, you can legally drive even if a blood test shows that you have marijuana in your system. Just like you can legally drive even if you have alcohol in your system (as long as it is less than .08% by weight). (See California Vehicle Code section 23152(a).) You just cannot be impaired by drugs or alcohol.

Proposition 19 changes nothing about existing DUI law. In fact, it even says: "This act shall not be construed to affect, limit, or amend any statute that forbids impairment while engaging in dangerous activities such as driving..."

I am guessing that the standard the proponents "forgot" to include is a numerical standard, like the one used for alcohol, which makes it illegal to drive with .08% or more alcohol in your blood. (See Vehicle Code section 23152(b).) But the reason there is no similar numerical standard for marijuana is because marijuana is illegal - no one has been able to do studies like those done for alcohol that led to the adoption of the .08% standard. (That is because you can't give a bunch of volunteers an illegal drug. But you can give them alcohol.) If marijuana is no longer illegal, then we can do studies that will lead to a valid numerical standard for marijuana.

So if you want clearer and stricter laws against driving under the influence of marijuana, you should actually vote for Proposition 19.

Green Tax, Blue Tax, Old Tax, New Tax

2010-07-20T20:25:00.000-07:00

As the legislature takes its recess from the stalemated trench warfare that has replaced a budget process, it makes sense to look at California's tax structure as a whole. The Republican rallying cry of "no new taxes" (while they clearly also dislike old taxes) unfortunately tends to legitimize our existing hodge-podge of counterproductive taxes.

Lets start with what is wrong. First, California has high personal income taxes, and derives much of its income from those income taxes. Because income is relatively volatile, especially at higher income levels, the level of tax revenue is extraordinarily hard to predict. When you cannot predict your income, it is almost impossible to come up with an accurate budget (especially given legislators' tendency towards extreme optimism that they will be able pay for every program that anyone wants). Warren Buffett warned Schwarzenegger about this, to no avail. In addition, the incentive created by high income taxes - reduce your income - is rather backwards.

Second, California has high sales taxes. In some counties they approach 10%. In a consumer-driven economy, this again creates a reverse incentive from what we want for economic growth, by discouraging purchasing of items in California. It also puts a huge burden on lower-income Californians, as a larger proportion of their money gets swallowed up by taxes on essential items.

Because local governments rely heavily upon sales tax revenue, they also have a perverse incentive to favor development of auto malls and big box retail, which are ugly and bad for small local businesses and the environment, but generate the most sales tax revenue. Housing, parks, schools, libraries, and mixed uses are discouraged.

Third, California has low or no extraction taxes. We have no oil severance tax, so the big oil companies can pull a lot of oil out of the ground under California (and reap huge profits) without paying for it. Alaska and Louisiana don't seem to have a problem with oil severance taxes - the oil companies are still pulling out oil and still making a very nice profit, but the states get something out of it. California is still the fourth-largest oil producing state, but it gets nothing for its oil. California could easily add an oil severance tax with no adverse consequences.

Let's move on to what is mixed. Under Proposition 13, long-time homeowners get much-needed protection against property taxes escalating to astronomic levels, which is good. But land speculators, real estate developers, and commercial landlords - all of whom profit from increased property values - essentially get a free ride. They get to reap the benefits of rising property values without bearing a corresponding tax burden, so their business is basically being subsidized by everyone else.

Let's look at solutions. The first few are obvious, based on the problems identified above. We should significantly reduce personal income taxes and sales taxes, and add an oil severance tax. For property taxes, we should keep the Proposition 13 cap on taxes on a primary residence, while allowing taxes on commercial properties (and second and third homes) to float with property values.

To make up for the lost revenue, while simultaneously creating better incentives, we can add taxes that create positive incentives, and that people can reduce - or even avoid - by making choices that benefit everyone.

Given the increasing scarcity of water in California, a water extraction tax would create an incentive to save water by increasing its cost. The proceeds could be used to fund water projects instead of relying on state-issued bonds. Under this approach, the biggest water users would pay the most for water infrastructure, which is fairer than using bonds that are paid for by all taxpayers regardless of their water use. If you don't want to pay the tax, you can use less water.

Similarly, an increased car tax, with the proceeds used to pay for highway projects, would be helpful. Those who own more cars and more expensive cars would pay more for highways, which again is fairer than having all taxpayers pay through other taxes. Car use has been heavily subsidized, and this is a way to make cars bear some of the costs they impose on everyone else. Some of the proceeds could also go toward defraying the health care costs caused by cars and their emissions.

A carbon tax, or a proxy for a carbon tax, would create appropriate incentives for Californians to reduce their carbon footprint. The proceeds could be used to begin adapting California's infrastructure for the impacts of global warming.

A tax on toxic chemicals and pesticides would create incentives to reduce their use, and the proceeds could be used to defray the health care costs (particularly cancer) that they cause.

Finally, the legalization and taxation of marijuana would provide a substantial new income stream to California.

These tax changes would reduce the tax burden on most Californians - your income taxes and sales taxes would go down a lot, and the property taxes on your home would stay the same. You would pay more for water, gas, your car, and things made with toxic chemicals - but you would gain the ability to reduce most of those taxes by using less.

These changes would also refill the state coffers, allowing us to again fund the quality programs we should be providing to our residents. We are a rich state, and we should be embarrassed that we are pleading poverty and claiming to be unable to pay for schools, infrastructure and social services. With a little common sense, we can feel - and be - truly rich again.

Arnold Plays, State Workers Pay

2010-07-07T20:19:00.000-07:00

Arnold Schwarzenegger has decided to withhold the pay of some 200,000 state employees, including janitors, prosecutors, file clerks, and prison guards. He claims that he is required by law to not pay the employees in the absence of a state budget. But he makes an exception for those bargaining units that have accepted a deal including pay and pension cuts.

But if he can't pay employees in the absence of a budget, then how can he pay the ones that took his deal? This isn't law - it is heavy-handed extortion: sign the deal, or don't get paid.

And a big part of the deal - raising the pension retirement age for new employees - does nothing to deal with the current budget mess. It won't have any significant effect for 20 years or so.

Schwarzenegger is trying to play the political power "game," by using the current crisis to extract concessions from "the other side." He has lost sight that real people are more important than petty partisan "victories." The livelihoods of 200,000 Californians and those who depend on them are at stake - that is not a game, even if Schwarzenegger wants to pretend it is by using them as pawns.

This latest move only confirms that Schwarzenegger has failed as a manager, a governor, and a leader.

Insurance Companies To Save The Environment?

2010-06-01T20:35:00.000-07:00

The main complaint against environmental regulations is that they cost money. For most regulations, this is simply not true. Environmental regulations generally try to prevent one business (or individual) from shifting costs to other businesses or individuals.

Let's look, for example, at a regulation that requires toxic waste to be treated and properly disposed of, rather than dumped into a river. It is true that treatment and proper disposal will cost more for the producer of the toxic waste, but just dumping it in the river will raise costs for others.

People who eat fish from the river, or drink the water from the river, will have adverse health effects, causing them to incur increased health care costs, costing their health insurer more money, and perhaps costing their employers productivity. Water companies using the water will incur increased treatment costs. Commercial fishermen will get lower quality catches, and once the pollution problem becomes known, will have trouble selling their fish. Recreational uses of the river, such as kayaking and water skiing, will decline, harming businesses that cater to those uses.

In this scenario, the total cost of the environmental regulation is clearly less than the total cost of no regulation. It only costs the polluter more.

A related argument is that if California imposes environmental regulations, competitors in other places, such as Nevada or China, will gain an advantage, because those places allow companies to shift their environmental costs onto others.

First, there are obvious environmental and logical problems with this argument, which resembles the child's complaint, "But Andrew's mom lets him play with matches and gasoline." Second, those other places should be considered to be engaged in unfair competition. In essence, they are subsidizing polluting industries by shifting the costs onto the more general populace, like a hidden tax.

We should not tolerate such practices that not only disadvantage clean businesses, but that also degrade the environment. California should require that all products sold here, regardless of where they are made, are manufactured using process that meet the same environmental standards. This would not only protect the environment worldwide, but would also provide an incentive for businesses to locate here.

So why would insurance companies save the environment? It seems like the health insurance industry has a lot at stake here. Our failure to clean up vehicle and industrial emissions results in increased rates of asthma and lung cancer. Our extensive use of pesticides results in more cancers, plus skin, eye, and nervous system problems.

These all cost the health insurance companies money, so they should be supporting stringent environmental protection laws and regulations. Maybe their shareholders should be asking them why they are not doing more to protect the environment, our health, and their bottom line.

Or maybe we just need to protect our environment by ourselves, and for ourselves, our communities, and our children.

No Nuke Left Behind?

2010-05-19T22:08:00.000-07:00

The Kerry-Lieberman "American Power Act" was just rolled out amid much fanfare. It attempts to address climate change and create a national energy policy out of the vacuum of the Bush years. While the bill is a start, it is not a strong start.

The bill would enact a complicated version of a cap-and-trade system, which has plusses and minuses. Simplicity is not one of them, and Kerry-Lieberman appears to take this to an extreme, separating out different sectors (e.g. industrial, electric generation, transportation) for different treatment.

It would also boost federal (read: taxpayer) subsidies for nuclear power, which is already getting huge subsidies. You could buy an awful lot of solar panels for the money that we are giving to the nuclear industry now, and this bill would just give them even more.

The allocation of allowances is also problematic. It appears that a large number of allowances will be given away (to the electric generation section) for free, and the bulk of those would be given to the most polluting generators, who would be getting subsidized by (the ratepayers of) the cleanest generators. So California would be paying for the midwest coal states to clean up their act.

In the Washington tradition of providing something for everyone, but especially those who might oppose the bill, there are incentives aplenty for coal states, such as taxpayer funding for carbon capture and sequestration, even though a real carbon price should create a market incentive for the private sector to finance this.

There is a complex smorgasbord of offshore oil drilling provisions, designed to provide something for both pro-drilling and anti-drilling states, while also bribing states with lease revenues to encourage them to be pro-drilling.

Other aspects weaken the bill further. The timelines are slow, with the industrial sector not being covered at all until 2016. The bill appears to allow for huge amounts of potentially questionable "offsets," where you can offset your emissions by doing something like planting trees or capturing cow farts.

This is just a quick preliminary take, as the bill will come into clearer focus as folks start to wade through its roughly 1000 pages. It will also undoubtedly change as the various interests line up to reshape it in their favor.

Like a toddler's first step, the existence of the bill is significant, but it does not take us very far.

Waffling Toward Totalitarianism

2010-05-11T22:31:00.000-07:00

Eric Holder, speaking for the Obama administration (which is going seriously wobbly in the face of Republican accusations of being soft on terrorism), announced that the administration will consider modifications to the Miranda rule for terrorist suspects:
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/09/AR2010050902062.html

Joseph Lieberman would go farther, and strip Americans of their citizenship if they were tied to terrorism: http://www.nytimes.com/2010/05/05/nyregion/05arrest.html

One big problem: who is a "terrorist?"

Is it an art professor in Buffalo, making art with bacteria?
http://rochester.indymedia.org/newswire/display/21161/index.php
http://www.thenation.com/article/terror-hysteria-gone-absurdist

Or is it a Jewish college student, planning to protest the Republican National Convention?
http://www.commondreams.org/headline/2008/10/14-0

How about a graduate student in Idaho running a website for a Muslim charity?
http://seattletimes.nwsource.com/html/localnews/2002097570_sami22m.html

While these may not be the type of people who the change is aimed at, they have all faced terrorism-related criminal charges, and would be subject to the same law.

Anyone who has watched American television, with its plentiful cop shows, probably knows the Miranda warning better than the Pledge of Allegiance, so it seems unlikely that this new erosion of rights would actually accomplish anything, especially since there is already a public safety exception to Miranda. It is scary, however, how willing the Obama administration is to give away (or perhaps take away) even more rights just to appease right-wing attack dogs. But that is what happens when polling comes before principles.

Glenn Beck, of all people, in discussing the suspect in the botched Times Square bombing, actually showed a better grasp of Constitutional law than Holder (Columbia Law School) or Lieberman (Yale Law School): “He has all the rights under the Constitution. We don’t shred the Constitution when it’s popular.”

If Oil Drilling Can Do This, What Could a Nuclear Plant Do?

2010-05-02T22:00:00.000-07:00

Given the ongoing disaster of the BP oil spill in the Gulf of Mexico, how much should we trust claims that nuclear power is totally safe? Maybe less than we thought.

The problem is that the potential scope and scale of a nuclear disaster, such as Chernobyl, is so huge that our minds don't really believe it. Our nuclear reactors in California have been operating for decades, and they have not melted down or blown up or spawned multi-headed livestock. Check out this article explaining why most California homeowners do not have earthquake insurance, despite the likelihood of a large quake: http://articles.moneycentral.msn.com/Insurance/InsureYourHome/why-you-may-be-in-disaster-denial.aspx

But the owners and operators of nuclear power plants, who would normally be on the hook if a reactor melted down, have insurance. And they have a federal law that limits their liability, and that provides for federal indemnification (read: taxpayer bailout) if the liability goes above that limit. It is called the Price-Anderson Act. http://www.eoearth.org/article/Price-Anderson_Act_of_1957,_United_States

Even that bastion of environmental protection, the Cato Institute, complains about how this is just one of the massive subsidies given to nuclear power: http://www.cato.org/pub_display.php?pub_id=3134

Oh, and the nuclear power industry gets government (taxpayer) loan guarantees, too: http://www.ucsusa.org/assets/documents/nuclear_power/nuclear-loan-guarantees.pdf

So we are subsidizing the nuclear power industry in a number of ways, including paying for part of their insurance, or more precisely, making it so that their insurers do not have to cover the full cost of a nuclear disaster - because we do.

If nuclear power was really so safe, would it need this protection against liability? If nuclear power was really so safe, would it need us to subsidize its insurance costs? If nuclear power was really so safe, why would it be asking us to pick up the tab if there is a disaster? There isn't really going to be a disaster, is there?

Environmental Disaster Continues to Grow

2010-05-02T21:28:00.000-07:00

The destroyed oil drilling rig is continuing to spill oil, but not just 42,000 gallons a day - more like 200,000 gallons a day: http://news.yahoo.com/s/ap/us_gulf_oil_spill

In addition to 11 lost lives, this is turning into an environmental catastrophe, and appears likely to be an economic disaster as well, with its potential effect upon fisheries and other resources.

This spill has shown the vacuousness of the claims that "drill, baby, drill" is an energy policy. Let us hope that BP can and will use all of its resources to stop the leak soon.

Destroyed Rig Continues to Leak Oil

2010-04-27T23:06:00.000-07:00

The offshore oil drilling rig that exploded, burned, and sank off the coast of Louisiana continues to spill oil at the rate of 42,000 gallons per day into the Gulf of Mexico.

http://uk.reuters.com/article/idUKTRE63O27L20100426

Offshore Oil Rig Explodes, Burns and Sinks

2010-04-22T20:52:00.000-07:00

An oil drilling rig off the coast of Louisiana exploded late Tuesday, and burned fiercely until it sank on Thursday. 11 workers are missing and 17 were seriously injured. For details, see: http://www.msnbc.msn.com/id/36683314

Our sympathy goes out to the victims and their families and friends.

The environmental and health costs of the explosion and its aftermath are still unknown. Just the air pollution from the burning rig is massive, but that could pale before the potential pollution from oil, as the well that the rig had just finished drilling could be spilling over 300,000 gallons of crude oil a day into the Gulf of Mexico.

California's fisheries, marine habitat and scenic coast are too valuable to risk this kind of damage. We should not endanger our coastal environment and human lives and health for the sake of a little more gas for the cars and a lot more money for the oil companies.

Even before the explosion, it was clear that drilling for oil off of California is a bad idea (see the March 30 post: http://peterallenforag.blogspot.com/2010/03/drilling-for-oil-dry-hole.html); this confirms it.

No more oil rigs off the coast of California.

Meg In Wonderland

2010-04-19T22:59:00.000-07:00

Meg Whitman claims her business experience would help her run California.

She also says she will cut 40,000 state jobs.
(http://www.kron.com/News/ArticleView/tabid/298/smid/1126/ArticleID/5691/reftab/622/t/GOP%20Gubernatorial%20Candidate%20Meg%20Whitmans%20Job-Cut%20Pledge%20Questioned/Default.aspx)

Since one of California's big problems right now is a high unemployment rate, it is not clear how firing 40,000 people would help that.

And, what Meg is saying she would do as Governor is exactly the opposite of what she did at eBay. According to her own website: "When she joined eBay, the company had just $4.7 million in revenues and 30 employees; when she retired in March of 2008, ten years later, the company had nearly $8 billion in revenues and 15,000 employees worldwide..."

It looks like Meg's business experience is in doing the opposite of what she claims she can do for California.

Proposition 16 - PG&E's Scheme To Buy (More Of) A Monopoly

2010-04-12T23:01:00.000-07:00

How far will PG&E go to protect its monopoly? Too far, judging from the huge amount of money PG&E is spending to buy votes for Proposition 16, and its misleading claims in support of its pet initiative.

Currently, communities can choose to stop taking service from PG&E by joining a municipal utility district, or taking the more limited step of buying their electricity from another provider by means of community choice aggregation. But even thinking about taking either of these steps will trigger a massive retaliatory response by PG&E, making getting out of the utility's stranglehold very difficult.

Just ask the folks in Davis, who tried to escape PG&E, only to be bombarded with something close to $15 million in spending by PG&E to defeat the effort at the polls. Which means it must have been worth more than $15 million to PG&E to keep them as captive customers.

PG&E has been using its standard scorched-earth litigation strategy against the not-s0-mighty South San Joaquin Irrigation District, which had the nerve to propose to provide electric service to 35,000 PG&E customers (at a lower cost).

And PG&E has pulled a bunch of dirty tricks, including scare tactics, threats, and bribes, to thwart the Marin Energy Authority's efforts to implement community choice aggregation. It got so bad that the CPUC slapped PG&E on the wrist for its behavior: http://docs.cpuc.ca.gov/word_pdf/AGENDA_RESOLUTION/115960.pdf

So it is already difficult to get away from PG&E to join a municipal utility or community choice aggregator, given that PG&E will do, say and spend just about anything to stop such a move. And now PG&E wants to make it even harder.

If passed, Proposition 16 would require a two-thirds vote for a municipal utility to expand its service territory (or possibly even to sign up new customers). PG&E is threatening to spend up to $35 million to pass the initiative. PG&E's arguments as to why we should vote for the measure are heartwarmingly philanthropic:

"1. What will this ballot initiative, Proposition 16, do?

Yes on Prop 16 – The Taxpayers Right to Vote Act – does only one thing… it ensures that voters will have the final say—by requiring a vote—when local leaders decide to spend public dollars or incur public debt to go into the retail electricity business.

2. Why is Prop 16 necessary?

When local governments enter the retail electricity business, it can cost taxpayers millions or billions of dollars in public money or debt. These are risky long term capital decisions that can impact local spending on other budget priorities, can increase consumer electric rates, and cannot be easily reversed...Especially in difficult times like these, why shouldn’t taxpayers have the final say on decisions of this magnitude?"

One can reasonably ask the question: why would PG&E spend $35 million to look out for the welfare of California taxpayers? Answer: They would not do so. They are spending it solely to look out for their own bottom line.

Instead of spending $15 million every time some community wants to bolt, they can spend $35 million one time to lock them all in. PG&E admitted this to its investors: http://pgandeballotinitiativefactsheet.blogspot.com/2010/03/peter-darbees-weird-prop-16-soliloquy.html. (Otherwise PG&E would likely face a shareholder suit for wasting its money.)

The only competitive threat to a monopoly is the possibility it will lose that monopoly. PG&E will spend whatever it takes to preserve its monopoly. Proposition 16 is designed to do that, by eliminating the only potential competition to PG&E. Proposition 16 will not provide voters a choice - it takes the real choice away. Vote no on Proposition 16.

Why Do Soldiers in Iraq Have to Pay to Call Home?

2010-04-08T22:58:00.001-07:00

This is not directly an issue for California's Attorney General, but it is emblematic of how our society's priorities have gotten really skewed.

I received a brochure, asking for a donation to the USO, so it could provide pre-paid phone cards to soldiers in Iraq and Afghanistan, so they can phone home for free. Details are here: http://www.uso.org/whatwedo/usoprograms/usooperationphonehome/

There is something very wrong here. We will send our soldiers to the far side of the planet to get shot at and blown up, but they have to pay to call their families? As a society, we won't even cough up the money for our soldiers to call home, while we are giving billions of dollars to Halliburton, Blackwater, and DynCorp? (And to bribe various Afghans and Iraqis.)

My guess is that someone is making money - lots of money - charging American soldiers for their phone calls home. There should be outrage at this, and a congressional investigation, but since the Democrats and Republicans have enabled this shameless corporate profiteering in all segments of our society, they can no longer recognize that this is simply wrong.

The Oil Empire Strikes Back

2010-04-06T19:36:00.000-07:00

I don't actually think that oil companies are inherently evil. Really. But there is a problem when large, wealthy corporations act as though their only responsibility is to maximize short-term profits, at the expense of our health, our communities, and perhaps even our long-term survival.

The bigger problem is that under current law, the corporations are largely correct in that assumption. We need to change the laws governing corporations, so their responsibility under the law extends beyond their most recent quarter's stock price. Instead of relying upon the courage and conscience of a relative few corporate executives who have embraced social and environmental responsibility, we need to raise the lowest common denominator, so that all corporations must take the interests of people and the environment into consideration.

If we did that, then the Texas oil companies Valero and Tesoro would not be trying to eviscerate AB 32, California's landmark law on global warming. As oil companies that operate refineries in California, Valero and Tesoro must believe that implementation of AB 32 will result in them selling less gasoline. Less gasoline sold means less $$$ in their pockets. So they are trying to halt implementation of AB 32: http://news.yahoo.com/s/ap/20100404/ap_on_bi_ge/us_calif_climate_law_backlash.

Burning more gasoline is bad for people's health and the environment, and global warming may be a threat to human survival. Valero and Tesoro know that. They just don't care. We can make them care, by passing laws that require higher levels of corporate responsibility and accountability.

In the meantime, we should ignore their arguments that we should sacrifice our health, our environment, and our lives on behalf of their stock price.

Eastman and Harman Try to Stretch the Truth

2010-04-04T00:37:00.000-07:00

I was a prosecutor. John Eastman and Tom Harman really want people to think they are prosecutors. Too bad that they are not really prosecutors.

Eastman, a Republican candidate for Attorney General, who until recently was dean of Chapman University's law school, tried to have the ballot say he is an "Assistant Attorney General." He isn't. And certainly not in California, although he is working on one case for the attorney general of South Dakota.

Harman, another Republican candidate for Attorney General, and a current member of the Legislature, tried to have the ballot describe him as a "Prosecutor." He isn't. He did sign up for an eight-week volunteer prosecutor program, but he has not tried a single case.

Fortunately for the truth, those designations were rejected. (Eastman sued to try to overturn the Secretary of State's determination, but he lost.)

More details are at: http://www.metnews.com/articles/2010/ag040210.htm
and:
http://articles.latimes.com/2010/apr/02/local/la-me-eastman2-2010apr02

Kamala Harris - Will Kill To Get Elected

2010-04-03T23:59:00.000-07:00

As San Francisco District Attorney, Kamala Harris gained notoriety for her opposition to the death penalty. Now, however, as a Democratic candidate for Attorney General, she has decided that the death penalty is really okay. Her campaign website is notable for its utter silence on the issue (at least I couldn't find it anywhere), and according to the San Francisco Chronicle she has flipped her position. (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/04/03/MNUJ1CNFH9.DTL)

The logic is hard to follow as to why the death penalty is a bad idea if you are district attorney, but a good idea if you are attorney general. Unless, of course, she thinks being anti-death penalty helps you get elected in San Francisco, and being pro-death penalty helps you get elected statewide.

Selling California - Cheap

2010-04-01T22:03:00.000-07:00

In a blatantly boneheaded attempt to avoid facing the roots of California's budget crisis, the Schwarzenegger administration is proceeding with a plan to sell a number of office buildings, and then lease them back from the new private owners. And pay a large commission on the sale. The logic is obvious - get a bunch of cash now, so the budget looks better, and let someone else worry about 20 or 40 or 60 years of lease payments stretching into the future. It is nothing but another smoke-and-mirrors budget trick.

Selling the buildings is a bad idea for a number of reasons:
1) If you are going to sell a large amount of real estate, do it when the market is high, not when the market is low. This is probably the worst time to sell commercial real estate in recent memory.

2) Don't sell something you plan to occupy for a long time. Why should we pay forever to rent what we already own? How much will California have to pay when the leases run out in 20 years, and it goes to renew? How much leverage will California have in negotiations? Will it threaten to relocate?

3) These buildings are a long-term investment paid for by California taxpayers, and the governor (and the legislature) want to sell them for a short-term gain to cover up their inability to balance the budget. This sort of resembles what Bernard Madoff went to prison for.

4) The deal reeks of cronyism, with the broker handling the deal and the commercial real estate interests buying the properties standing to benefit at the expense of California taxpayers. But it is easy to give away something that someone else, like the citizens of California, paid for. And I am sure it is just a coincidence that the broker chosen for the deal (CB Richard Ellis) has been a significant contributor to Schwarzenegger and his causes.

5) It is a stealth form of union-busting. By selling the properties, California would pay the new landlord for maintenance and cleaning, instead of paying its own employees, meaning Schwarzenegger can get rid of hundreds of unionized state employees. The new landlord will likely hire lower-paid workers and pocket the difference as profit, so California won't save any money, but the janitors will find it even harder to make ends meet.

Selling ourselves into eternal debt for the financial equivalent of a bowl of porridge now is short sighted, and a quintessential example of the budget shams that have kept us mired in our current mess. Tell the governor and your legislators to stop this misguided sale of California's future.

Proposition 14 - A Really Bad Idea

2010-03-31T00:34:00.000-07:00

Proposition 14 on the June ballot would, if passed, enact a "top two" election system, with the top two vote getters from the primary election, regardless of party, being the only candidates on the ballot in the general election. Chances are pretty good that this means only major party candidates would actually make it to the general election. In some cases, it might be two Democrats or two Republicans, but you won't likely be seeing any third parties on the ballot anymore. And that seems pretty undemocratic.

There are interesting commentaries here:

http://www.calwatchdog.com/2010/02/19/new-will-prop-14-kill-third-parties/

and here:

http://www.independentpoliticalreport.com/2010/03/editorial-ipr-opposes-proposition-14-in-california/

and here:

http://www.stoptoptwo.org/

Drilling for Oil: A Dry Hole

2010-03-30T23:08:00.000-07:00

Sarah Palin and John McCain got attention for their call for drilling for more oil, and Barrack Obama is following suit. But drill-for-more-oil is an energy policy like searching under the couch cushions for spare change is a fiscal policy. It is exciting when you find something, but it doesn't buy you much.

First, if what we are trying to do is protect against future supply disruptions in a world where oil is in shorter supply than it is now, doesn't it make sense for us to keep our oil, rather than pump it out and sell it or use it? If we pump it out, it is gone. Chevron and Shell are not likely to spend the money to drill wells, only to leave the oil in the ground - they will sell it or use it in their own refineries. So if we drill now and use the oil, if things get really tight in the future, we will be even more vulnerable to supply disruptions because we will have already used up our reserves.

Second, drilling here does not necessarily mean that we get the oil here. We do not have a state-run oil company that will keep the oil and its refined products here. The big oil companies sell oil on a global market, meaning that if China or Germany is willing to pay more for oil, that is where the oil will go. Just drilling here does not guarantee us any more oil.

Third, there is little economic benefit to California of drilling here. There are a few, but they are small. Some Californians, but not many, may be employed in drilling for oil. To the extent the oil is refined here and the refined products sold here, California will collect some taxes, but again, not much. If the drilling is done on state-owned land, California may get some lease revenues. California has no oil severance tax, meaning that we do not collect any money for the hundreds of thousands of barrels of oil that are pulled out of California every day. Zero.

Fourth, the costs of oil production to California are high. California gets significant income from tourism and from fisheries. Offshore drilling is a significant threat to both of these. Drilling platforms and the occasional oil spill will harm tourism, and oil spills and other pollution from drilling activities will harm valuable and already-threatened fisheries.

Drilling for oil in California, particularly offshore, simply makes no sense.

Cap and Trade: The Good, The Bad, and The Ugly

2010-03-30T22:45:00.000-07:00

Cap and Trade as a method for addressing greenhouse gas emissions has been hailed as the savior of the earth and demonized as the destroyer of our society. While it could end up being one of those, most likely it is neither. There are aspects of it that are good, some that are bad, and some that are just plain ugly.

The Good: It has a cap. If you are trying to control greenhouse gas emissions, having a firm and specific cap does it. (A carbon tax does not do this.) The cap on emissions would get lower over time, bringing down greenhouse gas emissions levels.

The Ugly: Setting the level of the cap and the rate at which it gets reduced. If the cap is set too high, it effectively does nothing to reduce greenhouse gas emissions. If the cap is set too low, you get significant economic and social disruption, as higher carbon industries or processes are forced to either shut down or rapidly change, potentially at great expense.

The Good: Theoretically, the trading of emissions allowances will result in a fair price being put on greenhouse gas emissions. No one has to try to calculate a carbon price - the market will just do it.

The Ugly: This pricing theory only works if the level of the cap is about right, and it only works if the allowances are not initially given away (or priced too high, but this seems less likely), and it only works if the market is set up properly with rules and enforcement to prevent fraud and gaming.

The Bad: If the initial allocation of allowances is made by giving them away, particularly if they are allocated based on past emissions, then the public is (again) subsidizing the emitters, and the price for carbon will be artificially low.

The Ugly: Allocation of allowances by auction would appear to be the approach that would result in the most accurate price for carbon, but then there will be arguments about who should get the proceeds from the auction. New clean technologies? Consumers? Dirty industries that need help cleaning up? The outcome will most likely be based more on politics than on sound policy.

This is just a quick examination of cap and trade - it does have some good aspects, and some bad aspects, but mostly it is just ugly.