Thursday, November 25, 2010





In the midst of election-season headlines, the single best California budget move of the last few years got almost no public attention last fall.

That move came when lame duck Gov. Arnold Schwarzenegger signed a bill called SB1399, which may be only a start in cutting out some of the wasteful rules and practices of the state’s prison system. In a day of budget deficits amounting to $25 billion or more, the $100 million a year or so in eventual savings here may not seem like much. But this measure can lead to much more.

Authored by Democratic state Sen. Mark Leno of San Francisco, the new law will allow medical paroles for convicts so disabled they cannot possibly pose any public danger – except to the public pocketbook. The law specifically excludes parole for criminals with death sentences or those serving life without possibility of parole.

Nor will this measure allow financially-pressed wardens to release prisoners willy-nilly. The chief physician of any prison where a disabled convict is confined would have to okay parole and that decision would then need to be verified by the state Parole Board.

So there’s plenty of concern for public safety in this cost-cutting measure, which should see as many as 32 prisoners turned out of prison hospitals or other nearby medical facilities by the middle of next year. More will follow.

“Taxpayers should not be forced to bear the high cost of caring for prisoners who no longer threaten public safety,” Leno said in one legislative hearing. “Rather than continue wasting millions incarcerating these individuals, we could use the funds to keep our schoolteachers employed.”

While California’s convicts cost taxpayers an average of about $47,000 a year, the seriously disabled can cost well over $1 million each. Much of that cost stems from the legal requirement to guard prisoners around the clock, even when there is not the slightest chance they might escape.

As positive a move toward fiscal sanity as SB1399 clearly represents, it should be only a start. Several times this year and last, this column has noted the large amounts wasted not only on paraplegic prisoners, but in many other areas.

At least as much is currently being thrown away by the prisons in excessive medical expenses as on caring for completely disabled convicts.

Those expenses come in the form of payments to community hospitals in rural areas near state prisons. Most such hospitals have resisted for years efforts by the state Department of Corrections and Rehabilitation to negotiate rate agreements similar to those virtually all hospitals make with commercial insurance companies.

These hospitals are where prisoners are sent when hospital medical facilities or staff can’t deal with a particular illness or injury. As it now stands, prisons pay far higher prices for hospital services than ordinary citizens with health insurance.

“We pay at least $100 million – maybe much more – than we should,” complained Clark Kelso, the court-appointed prison health czar, in an interview last year. “We’ve contracted with a major consulting firm that negotiates with hospitals, but they’ve had only modest success. There’s not a lot of competition in the rural areas where more prisons are. Plus, we as a department, tend to pay late. So the hospitals are reluctant to negotiate with us.”

It’s an uncertain legal question whether state government could pass a law compelling hospitals, both private and public, to make such deals. But the high costs prisons now pay are one reason Kelso keeps pushing for new prison hospitals even in bad economic times.

The prisons also use a 30-year-old information system with few electronic files and large stacks of paperwork that can look like the messy evidence lockers of a big-city police department. That means the information Kelso and other top officials get about things like double-billing by hospitals and doctors is often many months old.

Movement toward stopping the waste in the prison system is clearly not fast. But the new law allowing release of the most disabled prisoners represents progress when taken together with new standards aimed at preventing excessive hospitalizations, blood tests and electronic diagnostic scans.


Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit





The scene was the waiting area for a flight to Los Angeles from what was then called Houston Intercontinental Airport (the airfield had not yet been renamed for ex-President George Bush pere). The date was mid-2000, before most Americans had heard of either Osama bin Laden or Barack Obama.

The waiting area teemed with young men milling around in expensive suits making jokes at California’s expense. These were almost exclusively Texans employed by big energy companies like Enron and Dynegy and Reliant or their law firms.

Just then, California was reeling through an unprecedented electricity crunch, enduring rolling blackouts and hearing giant utilities like Pacific Gas & Electric and Southern California Edison say they needed huge rate increases to cover the suddenly astronomical cost of power provided by the Texas-based generating companies. Those outfits and a couple of others had bought up many large California generating stations under a deeply flawed deregulation scheme pushed through in the late 1990s by ex-Gov. Pete Wilson with lobbying help from some of the same Texas-based firms.

The young Texans joked about “just going in and taking Grandma’s pension check.” They chortled over getting rich at the expense of Californians.

And they did – for awhile. Even now, Californians pay some of America’s highest electricity rates because of supply contracts forced on the state by Texas companies at that time. This is true even though dozens of energy traders who worked for firms like Enron and the Williams Cos. have done prison time for their market manipulations which caused the price spikes of a decade ago. Ex-Gov. Gray Davis called those firms “buccaneers.” He was right.

But they’re not the only Texas interests that have victimized California or tried to. Take the giant Valero and Tesoro oil refining companies. (Valero sells gasoline under its own name here, while Tesoro products are sold under the Shell and USA labels.) Those firms and the Kansas-based Koch family oil interests were behind Proposition 23 on the fall ballot, a losing initiative that aimed to get rid of the landmark law making California a global leader in fighting climate change and greenhouse gases.

Among them, the three companies invested about $10 million in Proposition 23, hoping to avoid modernizing their refineries in both Northern and Southern California.

Two years earlier, it was Texas oilman T. Boone Pickens trying to milk Californians for $5 billion worth of bond money via Proposition 10, which would have fed most of those funds to a Pickens-owned firm for natural gas-powered cars and trucks.

Before that, Texas members of Congress united as Californians in Washington, D.C. almost never do to make sure the University of Texas at Austin got the federal contract for a multi-billion-dollar “supercolliding supercollider,” a pioneering project conceived at Stanford University and the Lawrence Livermore National Laboratory, both in the San Francisco Bay area.

Now there’s a new study from the Consumer Watchdog advocacy group charging that Valero and Tesoro don’t merely want to keep polluting California air, but they also have been gouging California drivers for at least 10 years.

Valero, for instance, averages a 37 percent higher profit margin on every barrel of oil it processes in California than at its refineries in other states. It does this, Consumer Watchdog charges, by keeping supplies artificially low during periods of high demand. Wonder why California has the highest gas prices in America? That’s at least part of the explanation.

The same group uncovered a slide show Tesoro presented to potential investors that highlights the “West Coast premium” collected by refiners here, placing oil profit margins at $8.50 per barrel higher than anywhere else.

No other state has seen its major companies and officials try so hard to cheat or take advantage of Californians and influence this state’s politics to their benefit. No other state has paid for studies about how to take business away from California. Not from other states, just California. Arizona hasn't done this, nor Nevada. Not Idaho, not New York or North Carolina. Only Texas.

It’s also a Texas company that’s now trying to buy up the choicest of California’s state office buildings and lease them back to this state at a considerable profit in a deal that’s not quite finalized yet. Tough to blame Texas for this one, though. It was the brainchild of California’s own shortsighted soon to be ex-Gov. Arnold Schwarzenegger.

There’s more, too. Taken together, it’s as if Texas has been waging economic warfare on California most of the last decade.

No wonder some Californians felt good last fall when an unranked UCLA football team traveled to Austin and creamed a Texas team ranked in the top ten – until then. And when the San Francisco Giants whipped the Texas Rangers in the World Series.

The bottom line: It may be time for California’s government to recognize that Texas is not just a friendly competitor, but an economic enemy whose denizens scheme often to harm California and every one of its citizens.


Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit

Friday, November 19, 2010




For most of this century, Republicans running for high office in California have proclaimed that only they can stem the tide of jobs and businesses leaving California, a phenomenon they blame on the Democrats they often say have controlled state government for decades.

The theme has only worked once, for outgoing Gov. Arnold Schwarzenegger when he seemed to spend more time in the parking lots of small businesses that anywhere else as he ran in the 2003 recall election.

But GOP claims about the allegedly rotten business climate in California ran aground this fall, when candidates Meg Whitman and Carly Fiorina often seemed to imitate Schwarzenegger, but could not achieve anything like the electoral results he did.

Which means it’s high time for Republicans to develop a new theme. It’s happened before, the party having to abandon a tried and tested campaign claim because it no longer worked. That came in the late 1990s, when Republicans abruptly quit blaming Democrats for rising crime rates and saying they were the only ones tough enough to solve the problem.

Why did they change that one? Laws passed by Democrats in control of the state Legislature (like three-strikes-and-you’re-out) helped produce a steady drop in crime rates and an equally consistent rise in the prison population.

Republicans are up against a different problem today, one they are so far trying to deny very loudly.

For their claims about businesses leaving California in droves and migrating to other states are simply not true.

An autumn report from the studiously non-partisan Public Policy Institute of California – funded with dollars from the estate of Bill Hewlett, a founder of the huge Hewlett-Packard electronics firm – found that “few businesses move into or out of California.

“Most job gains are due to the births and expansions of locally owned businesses; most job losses are due to the contractions and deaths of locally owned businesses,” the report added.

In recent years (the study covered the years 1992-2006), PPIC said, basely 1.7 percent of all job losses could be attributed to businesses leaving the state. That’s far less than the 6.9 percent of jobs that migrated from the District of Columbia to other states, or the 4.5 percent exodus from Delaware and the 3.9 percent from New Jersey.

What the report didn’t say, but what is clearly evident from anyone who studies California newspapers closely, is that the real estate collapse of the last three years is the single biggest reason for the state’s job losses and high unemployment. California’s growth has long been built on population influx and the housing that has had to be built to meet the needs of newcomers.

The sudden disappearance of new construction left tens of thousands of carpenters, masons, plumbers and roofers out of work. It forced scores of companies – from real estate brokers to air conditioning contractors, concrete suppliers to swimming pool builders and carpet stores – to shut their doors and lay off staff.

This is starkly visible in the pages of the state’s newspapers, where real estate advertising has been sharply down for the last two years, while the foreclosure category of legal advertising is way up in many places.

Those air conditioning businesses didn’t move to Nevada or Idaho (Nevada unemployment and foreclosures are higher than California’s); they just shut down.

But Republicans seem reluctant to confront these realities. Rather than accepting the PPIC’s numbers, many conservatives want to cling to their campaign theme. Some have resorted to called PPIC a “liberal think tank,” when its studies and polls finger Democratic weaknesses as surely as they do those of the GOP.

Instead of citing hard numbers, conservative bloggers and pundits have turned to business relocation advisers who stand to profit from creating the impression many firms are leaving California and to statements like this one: “It’s obvious to anyone that businesses are leaving in big numbers.”

If so, they apparently don’t show up in solid statistics. The frequent statement also ignores businesses that are moving in -- and there always are some.

None of this, of course, diminishes the threat of outsourcing jobs to foreign countries, something many California businesses continue doing. From newspaper graphic artists to computer programmers and from technical support workers to assembly line positions of all sorts, jobs have migrated overseas.

But that’s something Democrats usually complain about, not Republicans, whose candidates (see: Fiorina) and their biggest contributors have sometimes been those who hired the most foreign workers in the most remote locales.

BothDemocrats and Republicans have proved impotent to stop that kind of move.

Which doesn’t excuse the Republicans for persisting with an obsolete, inaccurate campaign theme that has only worked once, and then only when employed by a celebrity candidate who probably would have won no matter what anyone else did.


Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit




All right, Jerry Brown, you’ve bucked the huge national Republican tide. After 28 years, you’ve won back an office that’s been in your family 16 of the last 52 years.

That’s got to be satisfying. But you said you did it because you’re convinced you’re the only fellow who can rescue California from its current malaise. And it is a malaise, as you’ve pointed out, not a truly serious disease.

This place remains the dream residence of many millions around the nation and the world. Its economy would rank sixth in the world if it were a stand-alone nation, with a better balance of trade than America’s as a whole. Its populace is still the most creative in the world. Ideas that originate here may eventually lead to manufacturing in other states and other countries because big corporations have convinced state and national governments they deserve welfare in the form of tax exemptions or free land (look at the electronics factories outside Boise, Idaho, as examples of the latter form of welfare).

So there’s plenty to work with. But there’s also plenty working against you. You vowed during the campaign to meet with every single state legislator and every major special interest in the state – even those who financed scores of scurrilous campaign commercials falsifying your record – while putting together your promised plan to solve the seemingly perpetual budget problem.

But you’ve got to do more. After months of fairly leisurely campaigning that nevertheless carried you to most corners of the state, you know there’s a poisonous atmosphere in California and America, one where almost everyone believe that those who don’t agree with them down the line are their potential enemies. Yes, they may tailgate together sometimes at football games, but you oughtta hear what they say about each other when one person posts a political lawn sign the other doesn’t like.

The great national consensus that social studies teachers in the 1950s and ‘60s talked about so confidently (“Politics ends at the shores of the oceans,” was one popular line they purveyed) is largely gone. That unity began to unravel during the war in Vietnam, continued through Watergate, was briefly but only temporarily restored after the 9/11 attacks in 2001, but is very hard to find today. Instead, many Republicans now in office believe there’s no such thing as a good idea from a Democrat, and many Democrats will tell you they’ve never heard a constructive idea from a Republican.

All that seven years of Gov. Arnold Schwarzenegger’s vaunted “post-partisanship” have gotten him is a tag of “RINO” (Republican in name only) from his fellow GOPers. Whatever good ideas he had (and there weren’t many) were usually opposed by his own party.

So your work is cut out for you, and you demonstrated during the campaign that you know it by refusing to take the bait and respond in kind when Republican state legislators and right-wing bloggers repeatedly hurled the old “Gov. Moonbeam” tag at you. But you will have to take a vastly different approach to achieve any sense of being united in the cause of California’s progress and restoration than you ever did in your previous two terms, from 1975 to 1983.

Back then, you were convinced you had a monopoly on good ideas (some of them were good, like emphasis on solar energy and advocating for a state communications satellite) and were contemptuous of anyone who questioned you. “You won’t see contemptuous any more this time,” you pledged during a campaign interview, but time will tell how much you’ve really changed.

Last time you took office, you claimed to be hiring “the best and the brightest” from around America, and gave us Adriana Gianturco, who messed up the freeway system as never before, and Chief Justice Rose Bird, who was voted out of office for being out of step with most Californians. You backed liquefied natural gas, and time has demonstrated how wrong that was. You can’t afford those kinds of mistakes this time. There’s less margin for error.

If you haven’t really changed, and if you can’t make that change lead to some sense of unity in the Legislature, this state’s problems won’t get solved.

Public pensions won’t be cleaned up unless the two parties make common cause in Sacramento. If you agree that California needs some kind of tax reform to make it more competitive in drawing manufacturers here, you’ll also need help from both Democrats and Republicans.

You might think about insisting on a “pay as you go” system for major new infrastructure projects, to reduce the interest burden in the state budget, while making it clear there will be no new programs or spending mandates without specific funding sources. For that, you’ll have to jawbone your fellow Democrats.

You said you want to move government decisions closer to the people, give local government more say-so. You’ll have to get into far more detail on that than you have so far.

It’s a daunting task, but you insisted through the campaign you’re the one person best suited to take it on. For the sake of all Californians, here’s wishing you good luck.


Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit