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Los Angeles City and County Spend Big Bucks to Influence Sacramento

John Myers
(Editor’s note: This is one of two stories that look at California’s largest lobbying player — local governments like Los Angeles city and county — and the lack of transparency in how private companies lobby for state government contracts. Read Part 2 here.) Annual scorecards and power rankings rarely take notice of the lobbyists for local…

2024 Olympics: Can We Trust City Hall?

Jack Humphreville
LA WATCHDOG--On Wednesday, the City Council will most likely authorize Mayor Eric Garcetti and City Council President Herb Wesson to execute a legal agreement with the United States Olympic Committee that will require the City of Los Angeles to indemnify the USOC and the International Olympic Committee against any losses if LA is selected as the…

Mayor Garcetti Mystifies and Irritates 1700 Unpaid Volunteers

Bob Gelfand
GELFAND’S WORLD--I'm not going to be the one to pile on Mayor Garcetti. I'll leave that to the Times editorial board and to my colleagues at CityWatch. But his honor Eric really blew it this week. You could tell, because phone calls and emails were coming from all over town, asking me about the mayor's latest commission appointment. That…

The Facts on Street Vending: Reality not Racism

Jay Handal
GUEST COMMENTARY-When civil conversation ends up with "you are racist", there must be something deep down that someone is afraid of. The debate about legalizing street vending continues to miss the point. The City is attempting to abrogate its authority to control street vending. Let's discuss food vendors: To state that giving them a city permit…

Surprise! Sacramento Wants More Gas and Tobacco Tax from Us

Ken Alpern
GETTING THERE FROM HERE--Isn't this a "surprise"? Sacramento wants to tax us some more! And it's more gas taxes and tobacco taxes! Well, ain't that special, and taxing both financially and emotionally to Californians, because our recovery isn't that great and new taxes might stop the recovery in its tracks. And in case you haven't heard, the…

LA Should Lead the Charge to Bring Bi-Lingual Education Back

Fred Mariscal
LATINO PERSPECTIVE-We’ve come a long way since proposition 227 … also called the English Language in Public Schools Statute … was approved in 1998. This proposition changed the way that "Limited English Proficient" (LEP) students are taught in California; it basically removed bilingual instruction in our state. But a bill that passed the California…

LAPD Hassling Homeless People … On Behalf of Rich Downtown Gentrifiers

Adrian Glick Kudler
GUEST WORDS-The Los Angeles City Council passed a cruel set of laws in June making it easy for the city to take and throw out the belongings of some of people who do not have homes, after a former set of laws was struck down as unconstitutional. Mayor Eric Garcetti claimed he would tell the LAPD not to enforce the law until it was amended to be…

Engagement: Neighborhood Councils Should Support LA’s New Mobility Plan 2035

Luke Klipp
GUEST COMMENTARY--Los Angeles has nearly 100 neighborhood councils, which are elected bodies of community members who volunteer untold time and resources in order to better connect city government with city residents and vice versa. While some might debate the relative efficacy of these organizations in small “d” democrac y, neighborhood councils…

Are the Olympics Anti-Democracy?

Bruno Kaufmann
VOICES FROM THE SQUARE--Can the Olympics and democracy co-exist? It’s a question being asked again this summer after Beijing won the bid to host the 2022 Winter Olympics. Beyond the fact that the International Olympic Committee put the biggest event in winter sports in a smog-ridden megalopolis without any real snow, people are concerned about…

Record Breaking! Josh Groban sings Trump

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Jerry Brown Pulls a Nixon

CALIFORNIA FINANCIALS - “Only Nixon could go to China” is a political metaphor referring to the ability of a politician with an unassailable reputation among his supporters for staunchly representing and defending their values, to take actions that would draw vicious criticism and fierce opposition if taken by someone without those credentials.
With California’s financial condition in free fall, ultra-union friendly Gov. Jerry Brown demanded public-employee unions cut  compensation by 10 percent.  If the People’s Republic of California is adopting fiscal responsibility, perhaps America can too.

For unions, Jerry Brown has been the governor who always kept on giving.  In 1977, he approved the Dills Act, collective bargaining for California government workers.  Last November, he signed SB 922, protecting “project labor agreements” that force non-union workers to apply for union membership, and pay dues, in order to work on public projects.

While predicting a $9.2 billion budget deficit in January, Brown sought to protect public service union jobs by cajoling private sector retailers to support a voter initiative to raise sales taxes. As state tax revenue had fallen by $4.9 billion in February, Brown focused on raising $630,000 in contributions for his tax increase initiative from unions, Indian tribes and crony capitalists.  As revenue continuing to fall last month, Brown extended union contracts representing tens of thousands of workers that increased the state’s health benefits by 9.5 percent.

Brown’s good-old-boy support for his union brothers and sisters may have come to a screeching halt as California State Controller John Chiang published a devastating April Financial Statement showing monthly income, sales and corporate tax revenue came in 20.2 percent below the governor’s latest projections; and sales tax collections fell by an astounding 61 percent below last year.

Looking closer into the numbers, California missed the national economic recovery.  As U.S. Gross Domestic Product grew by 2.2 percent, California employment grew by only 1.3 percent.  Given that the workforce expands by 1.5 percent annually as more young people begin looking for jobs, this explains why California unemployment rose to 11 percent in March from 10.9 percent in February — as U.S. employment fell to 8 percent.  Chiang ominously stated:

“Without a timely, financeable budget plan, the State will be unable to access the working capital needed to pay its bills later this year.”

This is bureaucratic speak for: We are insolvent, our credit rating should be junk and we will default when we can’t borrow any more money!

Standard & Poor’s, in a new credit report last week, warned that California lawmakers’ resistance to steep cuts in welfare and health care programs is to blame for failure to balance the state budget:

“As the most important month of the year for [income tax] collections, April receipts are not only failing to solve part of the state’s projected problem, they are deepening the estimated budget gap.”

With the state needing to borrow $20 billion in July to finance operations until collecting property payments in mid-December, this is S&P speak for: We will cut your rating.

California rolled over an $8.2 billion deficit from last year’s budget disaster and this year’s growing deficit has forced the state to increase borrow another $7.7 billion.

The state did cut $1.8 billion, or 8 percent, from operations; and school funding was flat this year. But spending on health and human services jumped by a stunning $3.7 billion, or 6.2 percent.

President Richard Nixon had a reputation as the leader of hardcore Republican anti-communists when he announced he was going to improve relations with China by personally visiting the country in 1972.  No Democrat at the time could have absorbed the political blowback of such a spectacular change in America’s foreign policy.  Over the next 40 years, America and China have become each other’s most important trading partners

Just as Richard Nixon was the strongest ally of anti-communists, Jerry Brown has been the strongest ally of public-sector unions.  Chief Executive Magazine’s survey of best and worst states for business ranks California dead last.  According to one CEO:

“The leadership of California has done everything in its power to kill manufacturing jobs in this state. As I stated at our annual meeting, if we could grow our crops in Reno, we’d move our plants tomorrow.”

Given that high taxes and onerous regulatory enforcement were championed by Brown in California and then spread out across the nation, Brown is best positioned to unwind these job killers.  When Jerry Brown told state employee union leaders his next budget would include a 10% cut in state worker compensation, there has been little opposition.  

Perhaps California’s financial distress may require Jerry Brown to be America’s pro-business governor.

(Chriss Street is nationally recognized financial writer. His latest book, “The Third Way,” now is available on Read more of Chriss Street and reach him at


Tags: Chriss Street, Richard Nixon, Jerry Brown, China, John Chiang

Vol 10 Issue 39
Pub: May 15, 2012