INCOME DIFFERENCES: AT LEAST ONE ‘OCCUPY’ GRIPE IS REAL

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, NOVEMBER 22, 2011, OR THEREAFTER

BY THOMAS D. ELIAS

“INCOME DIFFERENCES: AT LEAST ONE ‘OCCUPY’ GRIPE IS REAL”

It’s easy to dismiss the “Occupy” movement that quickly spread from Wall Street in New York to California points like Los Angeles, Oakland, Sacramento and San Francisco as mainly an activity for the homeless and a bunch of anarchists. The movement prides itself on having no formal leadership, no structure and has rarely been able to articulate any aims.

But a new report from the non-partisan, non-profit California Budget Project (http://www.cbp.org/pdfs/2011/111101_A_Generation_of_Widening_Inequality.pdf) gives some decent indications of why this phenomenon found fertile ground in California and why its protests did not quickly fade away.

The budget project’s analysts found that disparities in wealth – already wide in this state 20 years ago – have expanded into a chasm. Essentially, the rich have gotten much richer, while the poor and the middle class received fewer and fewer crumbs.

When this column noted the wide income disparities in the late 1980s, it concluded that if the gulf became wider or began to seem permanent and implacable, it would form an open invitation to class warfare on a scale unprecedented in America.

But the gap did grow steadily wider, as tax benefits and loopholes for the wealthy and outsourcing of jobs to cheap-labor foreign countries forced lower- and middle-class incomes and benefits ever downward during the last two decades, while corporate owners, managers and some investors piled up wealth -- much of which still lies unspent.

It’s far from certain that the Occupy movement marks the beginning of outright violence based on economic class, any more than the riots spurred by the Rodney King verdict in 1992 marked the start of perpetual race warfare, as some predicted they would. In fact, racial harmony appears to have improved over the 10 years since the terrorism of 9-11, perhaps because a sense of national unity ensued, at least for several months.

But the causes of Occupy’s wide appeal and endurance show no sign of abating. Rather, the trend is toward ever-wider income disparity.

The new report shows that more than one-third of all income gains in California between 1987 and 2009 went to the wealthiest 1 percent of the populace. Almost three-fourths of all income gains during that time went to the top 10 percent, while the other 90 percent of Californians received just one-fourth of all new income. With unemployment up several percent since 2009, it doesn’t take a genius to realize that differences in income growth have become even wider.

Putting this in real numbers, the average income of the top 1 percent of Californians rose from $778,000 to $1.2 million per year, while the average income of people in the bottom 80 percent actually fell. These figures include corporate kingpins paid in the tens of millions of dollars, but CEOs are few even within the wealthy upper crust.

Does anyone believe this has gone unnoticed by the tens of thousands of recent college graduates who can’t find work on the level for which they’ve assiduously prepared? Those young people, of course, are well represented among the Occupy demonstrators.

There’s nothing really unique about the income gap in California, which continues a national trend that sees the top 10 percent of American households receiving half of all the nation’s income and the top 1 percent getting nearly one-quarter of total income.

All this means the average income of California’s top 1 percent was 33 times the average for the middle 20 percent.

Robert Reich, the former U.S. Secretary of Labor who now teaches at UC Berkeley, sees this as one cause of the longstanding recession. “The economy is in trouble because so much income and wealth have been going to the top that the rest of us no longer have the purchasing power to buy…goods and services.”

All this suggests that even when the Occupy demonstrations die down or are forcibly dispersed, the causes of the protestors’ resentment will remain, along with the anger that’s fueled the movement.

This, in turn, indicates there will likely be more to follow. For the more people feel they have nothing to lose, the more they will act up.

One other statistic: California millionaires, just 0.2 percent of taxpayers, took in $104 billion in 2009, roughly 11 times what it would take to make sure no more Californians live in poverty.

Yet, the wealthy and their representatives in Sacramento and Washington, D.C., constantly work to assure their taxes do not rise above levels to which they were reduced in the early 2000s. They even seek further cuts, claiming this will lead to many thousands of new jobs.

But the Occupy demonstrators suspect lower taxes on the rich don’t produce more jobs. They know for sure it hasn’t worked that way for them, which means the feelings that produced their protests will remain strong no matter how their current activity ends.

-30-
Elias is author of the current book "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It," now available in an updated third printing. His email address is tdelias@aol.com

BASE CLOSINGS A CULPRIT IN STATE FISCAL TROUBLES

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, NOVEMBER 18, 2011, OR THEREAFTER

BY THOMAS D. ELIAS

“BASE CLOSINGS A CULPRIT IN STATE FISCAL TROUBLES”

When Californians complain, as they sometimes have in recent years, that this state doesn’t receive its share of the federal pie – getting back only about 78 cents in federal spending for every dollar paid in taxes – they are in effect slamming Sens. Dianne Feinstein and Barbara Boxer and the other 53 politicians we’ve sent to the House of Representatives.

The latest numbers from the U.S. Census Bureau (contained in a report to be found at www.census.gov/prod/2011pubs/cffr-10.pdf) spurred yet another round of such griping when California ranked just 43^rd among the states in per capita federal spending.

And yet…a close look at the numbers that went into that ranking indicates California’s congressional delegation, in spite of its well-known and considerable ideological divisions and an infamous inability to reach bipartisan consensus on almost anything, may not be the culprit. Rather, a big villain in the piece from this state’s perspective is the federal Base Realignment and Closure Commission (BRAC), which presided over two rounds of military base closures in the 1990s and another in 2005.

Another huge factor bringing down the state’s federal per capita spending rank is that percentagewise, Florida, West Virginia and several other states have many more retirees than California drawing Social Security and other federal benefits.

So while pensions paid to Californians amount to about $2,270 per year (out of $8,784 in federal spending for every man, woman and child in California), in Florida they average about 50 percent higher, $3,404 per person. That’s the only reason Florida ranks 29^th in federal spending, 14 places ahead of California.

But the military is biggest reason per capita spending in California ranks so low. This may seem a bit incongruous with California playing host to huge Naval bases in San Diego and neighboring Coronado, the Camp Pendleton Marine Corps complex and Fairfield’s Travis Air Force Base, from which many military transports operate.

But until recently California had many more military bases than today. Among those closed have been the Long Beach Naval Shipyard; the El Toro Marine Air Base in Orange County, three Air Force bases in Riverside, San Bernardino and Sacramento counties; the Presidio of San Francisco and the Army’s training facility at Ft. Ord in Monterey County. All fell victim to BRAC’s cuts, which required yes or no votes on each full package, with no amendments allowed. Those conditions prevented Californians in Congress for doing much to mitigate the slashes.

The nine-member BRAC commission had only one member with any significant California background, Philip Coyle, a former associate director of the Lawrence Livermore National Laboratory in Livermore, most of whose career nevertheless was spent in Washington, D.C. So there was no one very sympathetic to California’s huge economic interest in all those bases.

Because the base closures, the military spent just $10.3 billion on salaries in California in 2010. By comparison, military salaries in small- population states like Alaska ($3.2 billion), Alabama ($3.6 billion), Hawaii ($7.2 billion) and Georgia ($12.5 billion) were far higher on a per capita basis. Texas, with about two-thirds California’s population, saw military salaries of $19.7 billion. Do you think the extra 9 billion federal dollars might have had anything to do with Texas’ considerably lower unemployment statistics, touted so often by California’s critics?

The BRAC decisions also are reflected in federal procurement spending. Without all those closed military bases to supply and support, the military spent far less per capita on food and other items in California than it did in many other states.

One lesson from all this is that California’s congressional delegation was most sorely mistaken and self-destructive when it backed creation of BRAC. That should never happen again, nor should Californians in Congress support any similar commissions to cut spending on other programs unless this state gets strong representation on them. Note: there is one Californian, Democratic Rep. Xavier Becerra of East Los Angeles, on the current budget “supercommittee.” It remains to be seen whether he will fight for this state’s interests.

Without any doubt, the lowered federal spending caused by BRAC contributes significantly to economic problems of many kinds in California. There is less housing demand from military families here than at any time since the start of World War II. That helps fuel the foreclosure crisis, in turn contributing mightily to unemployment.

Base closings also lessened demand for other items from food and fuel to lumber, carpeting and air conditioning, all contributing to the state’s problems.

The bottom line: If any of this can be blamed on California’s congressional contingent, it was principally because of its votes to set up BRAC, which has decimated some parts of this state. But even if they’d opposed creating BRAC or accepting its reports, chances are they’d have been outvoted anyway.

-30-

Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

PENSIONS, PRISONS GIVE BROWN ‘NIXON-TO-CHINA’ MOMENTS

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, NOVEMBER 15, 2011, OR THEREAFTER

BY THOMAS D. ELIAS

“PENSIONS, PRISONS GIVE BROWN ‘NIXON-TO-CHINA’ MOMENTS”

Political landmarks that can properly be labeled “Nixon-to-China” moments are rare, usually occurring only once in a career, if ever.

But his actions on prisons and pensions gave Gov. Jerry Brown two of them this summer and fall.

The term Nixon-to-China stems from President Richard Nixon’s 1972 opening to what was then called Red China, where he sipped tea with Mao Zedong after spending a career vilifying others for “losing China” and otherwise blasting Mao and his fellow Chinese Communists. Had a Democratic resident done the same thing, Nixon and his Republican Party mates would have labeled it traitorous. This was something only a Republican could do.

So a Nixon-to-China moment comes when a politician makes a move counter to his previous type and one that someone from the rival party probably could not so much as attempt.

Brown’s latest such moment came, when he proposed a package of public employee pension changes the state Legislature’s big Democratic majorities would automatically reject if it had come from a Republican. Even coming from a Democratic governor, Brown’s plan has drawn skepticism from legislative leaders.

This proposal would give new state workers something akin to the 401(K) retirement plans common in private business, while still keeping elements of a traditional guaranteed pension system. Brown seeks to raise the age at which new state employees can draw full benefits to 67, rather than today’s 55, and to have many current employees boost their pension contributions. This would put state, city and county pensioners nearly on a par with people on Social Security.

When Republicans proposed similar items months ago, they were virtually ignored. For parts of Brown’s plan will need legislative approval and other portions can’t happen without a vote of the people, both of which would take Democratic support.

Brown also wants an end or limit to double-dipping, which sometimes sees people draw two pensions or go back to work with full pay for the very agencies from which they've retired. And he's targeting “air time,” where employees can raise their retirement benefits by paying to add as many as five fictitious years to the time they actually were in the public employ.

Republicans habitually blast Brown as a creature of public employee unions, since he granted them new bargaining powers during his first term as governor in the 1970s. Unions were the leading contributors to his campaign last year, but some will fight his new proposals.

“We are disappointed that the governor is proposing pension changes that will undermine retirement security for public employees,” griped Dave Low, chairman of a union coalition called Californians for Retirement Security. He sounded a bit like Republicans who complained about Nixon’s China trip.

Brown’s other Nixon-to-China moment came when he signed a bill now shifting tens of thousands of non-violent convicts from state prisons to county jails. This draws loud beefs from local officials who claim it will break their bank accounts, even though they are getting state subsidies.

Brown made this move both to help balance the state budget and to comply with federal court orders to ease overcrowding in state prisons within months.

The outfit taking the biggest cuts as this happens might be the state prison guards union, 26,000 of whose members are now receiving pink slips like those that have gone to schoolteachers in several recent years. Notices of potential layoffs went not just to guards, but also cooks, janitors and counselors. Almost certainly, the number of actual layoffs will be much smaller, but any loss of membership will reduce the bargaining power and political clout of a union that has been a huge force in California since ex-Gov. Gray Davis granted its members a fat raise just after they backed his reelection in 2002.

“Every (prisoner) that goes to the local level should be seen as a threat to the guards’ union,” Frank Zimring, a prison expert and UC Berkeley law professor, told a reporter.

Republicans made Davis’ concession to the guards a major issue during the election to recall him one year later, but it’s highly unlikely any GOP governor could have gotten Democratic lawmakers to okay a prisoner shift doing the union potential harm. Brown did it, despite Republican charges that he’s “owned” by that union and others.

It adds up to the kind of independence Brown promised when he ran for the third term that no other California governor since Earl Warren has won. Now it will be up to Republicans to decide whether they'll vote for a considerable change in public employee pensions, even if it doesn’t give them everything they’ve wanted.

Brown’s pension plan falls far short of the ideal for both unionists and conservatives who like to blame them for many ills. But there’s no doubt it will help ease the state’s financial troubles. So one question now is how many legislators will let the perfect become the enemy of the good.

-30-

Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

WILL HIGH SPEED RAIL MOVE ONTO A SLOWER TRACK?

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, NOVEMBER 8, 2011, OR THEREAFTER

BY THOMAS D. ELIAS
“WILL HIGH SPEED RAIL MOVE ONTO A SLOWER TRACK?”

For the first time since voters okayed more than $9 billion worth of bonds to pay for a high speed rail system linking all California’s major metropolitan areas, it appears the commission charged with building that system is getting realistic.

In fact, you could say the entire idea of a bullet train in California is now on a new track – call it a backtrack or a slow track.

That’s the upshot of a new report to the Legislature from the High Speed Rail Authority (HSR), which has been widely lambasted for its plan to build the first segment of its system in the San Joaquin Valley, roughly between Bakersfield and Merced.

The report, required by a new state law, puts the bullet train authority on record for the first time saying there are plausible, acceptable alternatives to 220 mph trains for spending the bond money and the billions of dollars already committed to this project by the federal government.

One possibility, the report says, would “reduce the scope or delay the next phase of system development until the performance of the existing system can generate sufficient revenues to support future expansion.” In short, wait and see what the ridership will be before spending piles more money. But you can't know that unless you've built the whole system.

Later, the report adds that the new tracks it plans to build in the Central Valley could link with existing Burlington Northern Santa Fe (BNSF) railroad tracks at its northern and southern ends, with Amtrak running its current San Joaquin train on the new tracks. “This will reduce travel times on the San Joaquin service between Northern and Southern California – already one of Amtrak’s five busiest corridors in the nation – by approximately 45 minutes,” the HSR said.

Rather than 220 mph, this change would see trains running at speeds up to only 125 mph – which still meets the federal definition of high speed rail.

If the HSR system hooks up with the older BNSF tracks, the links would be paid for entirely with federal dollars and not state bond money, which is reserved for truly high speed projects only. Some federal dollars could also be used to make safety and smoothness upgrades on the BNSF system, thus allowing trains to go much faster than they do now.

It is, of course, remarkable that the until-now hidebound HSR authority so much as acknowledges there’s a possibility of building something other than what its 2008 ballot proposition called for. Yes, this does amount to a bait-and-switch on voters who were told they could get a real bullet train for about $36 billion, with the bulk of the money to come from private investors and national government.

The precise words chosen by the HSR authority are even more interesting. It did not say “…this could reduce travel times…,” meaning it’s just one possibility among many. Rather, the report said, “…this will reduce…,” meaning the HSR now apparently expects to build the cheaper, slower version.

It remains to be seen whether the twice-delayed business plan now due to come from the authority in early November will be as definite, but the rest of the HSR report to the Legislature explains the pullback very well.

It amounts to this: As things now stand, there is no interest in the project from private investors without federal investment guarantees or proven high ridership. Those things do not now exist, nor are they likely to be forthcoming as long as anti-high speed rail Republicans hold a majority or even a significant minority in either house of Congress.

The report contains multiple optimistic references to the possibility that an upgraded system will become self-sustaining by attracting significantly more passengers than today's trains. Only after that happens, the HSR authority concedes, are private investors likely to dive in. But will a 45-minute improvement in the one-way Los Angeles-San Francisco riding time really entice many new customers away from airplanes or their own cars?

All of which means two things: The new members of the HSR authority appointed last summer by Gov. Jerry Brown are taking a far more practical and hard-nosed attitude toward the entire development than the people they replaced, who were named by ex-Gov. Arnold Schwarzenegger.

And also that protesters who feared the effects of viaducts reaching as high as 40 feet while traversing suburbs of Los Angeles and San Francisco can rest a little easier now than just a month ago. For it no longer seems like anyone is dead-set any more on building a train to nowhere.

-30-
Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

CAMPAIGN TREASURER VICTIMS SHOULDN’T GET A REDO

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, NOVEMBER 11, 2011, OR THEREAFTER

BY THOMAS D. ELIAS

“CAMPAIGN TREASURER VICTIMS SHOULDN’T GET A REDO”

One of the few accurate statements ever made by former Gov. Arnold Schwarzenegger came just moments after he announced for office in 2003, pledging never to accept campaign donations from special interests.

Never mind that everyone’s definition of a special interest is different – my good cause might be your special interest. Schwarzenegger’s explanation for his promise was simple: “Whenever anyone makes a big campaign donation, they expect something in return.”

The expectation is often a simple quid pro quo. I give you money; you perform favors for me.

This might come in the form of a policy decision – and often did during Schwarzenegger’s seven years in the Capitol. It might take the form of access, the freedom to bend the ear of an officeholder and persuade him or her to take an action you like. But there’s always something expected, at levels from local city councils and boards to the President of the United States.

Schwarzenegger, of course, promptly reneged on his first promise, just as he did with most other commitments he made while in politics. But his point about donors wanting something is perhaps more significant today than ever.

That’s because a major item on the agenda of the California Fair Political Practices Commission when it meets Nov. 10 in Sacramento will be whether it can or should allow a chance at a redo for the many victims of a rogue campaign treasurer accused of taking millions of dollars from Democratic politicians.

The answer should be an unequivocal, resounding no to the politicians who allowed the apparent embezzling to proceed.

The accused campaign treasurer, Kindee Durkee, who operated from offices in Burbank, handled campaign money for U.S. Sen. Dianne Feinstein and scores of other Democrats. There were also funds raised by myriad charities, including one run by conservative Republican Mike Antonovich, a longtime Los Angeles County supervisor.

All these people and organizations placed their trust in Durkee, who controlled some of their bank accounts. The accounts are now frozen, leaving candidates who can’t write their own checks in a tough spot. Feinstein is one candidate still doing just fine despite the estimated loss or freezing (no one is quite sure how much of the money is actually gone and how much frozen) of $4.7 million of her money. She quickly wrote her campaign a check for $5 million, keeping it thoroughly solvent.

But the likes of Democratic Assemblyman Jose Solorio of Santa Ana and state Sen. Ted Lieu of Torrance, who have seen hundreds of thousands of their diligently-raised dollars go missing or frozen, are not so wealthy they can simply replace money that’s at least temporarily lost to them.

So pressure is building to suspend campaign donation limits and let Durkee’s victims go back to their donors for more money. Yes, it would be up to the donors whether to respond. But how many would say no to a significant officeholder asking for a do-over?

Not many, especially when some will no doubt figure that donating double the ordinary legal limit might give them twice the clout or access they got in exchange for their initial donations.

The FPPC is not sure whether it even has the authority to allow this. “It’s being looked at. We’re trying to figure out whether we could do this or would need legislation,” said a commission spokeswoman.

For sure, the commission cannot give candidates for federal office a redo. Embezzlement victims running for the House and Senate would have to seek a dispensation from the Federal Election Commission, which is not likely to come.

But where legislative candidates are concerned, it’s important for the FPPC not to allow donors any chance of doubling their already considerable influence. Especially when candidates had full ability to check on accounts jointly controlled by them and Durkee prior to the money being frozen after her arrest in early September.

In a sense, then, any losses are the candidates’ own fault. They willingly placed their cash and their trust with someone who paid more than $180,000 in fines for campaign finance violations over the last 10 years. They could have asked for accountings of their funds anytime they wanted.

The bottom line is that neither the candidates nor their donors deserve a do-over. If candidates were victimized, it was at last partly due to their misplaced confidence in Durkee, which some might call negligence.

If the FPPC were to allow candidates a redo, it would become a major enabler of the very kind of influence-peddling, pay-to-play politics it was created to combat.

-30-
Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net