Fix California? Here are a few ideas

Here’s the Cliff Notes version. Follow the link to read the entire op ed. Thank you again L.A. Times:

Putting California back together

The state’s Constitution needs a rewrite — and the federal Constitution should be the model.

By Tom Karako
July 26, 2009

If this year’s budget quagmire in Sacramento has you thinking there must be a better way, there is. To the extent that California is ungovernable today, it is partly because its legislative and executive branches are too weak and dysfunctional to resist entrenched special interests and non-elected bureaucracies. Fixing these problems requires constitutional change. It won’t be easy, but the time has come to do it.

Over the last 130 years, California’s Constitution has assumed the size of a textbook. The ease of amendment by initiative and referendum has produced endless gimmicks that diffuse accountability, confuse the public and produce thoroughly dysfunctional governance. People from across the political spectrum are calling for a constitutional convention.

If Californians do rewrite the Constitution, it should be revised to resemble more closely the concise federal Constitution: more responsible legislators and executives, stronger control of the bureaucracy and less direct democracy.

Of the many reforms being circulated, the Founding Fathers might approve these six.

Part-time Legislature:

Hard spending cap:

Two-year budgeting cycle:

Eliminate the two-thirds supermajority requirement for budgets:

Unified executive branch:

This is from Tom Karako who directs the Claremont Institute’s Golden State Center.

I’m not sure I agree with everything Karako has to say, but some things certainly make sense.

Actually, a lot of this makes sense. Over the past several years, it seems our Legislature has had too much time to consider and enact laws that benefit special interests, cost taxpayers huge amounts of money, or really do nothing but satisfy a pet peeve. If they didn’t have all year to enact legislation, maybe there would only be half as many bad laws on the books.

Hope for the underdogs after all, little guys triumph at box office as uke sales booming

‘G-Force’ guinea pigs upset ‘Harry Potter and the Half-Blood Prince’ at box office

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Disney Enterprises and Jerry Bruckheimer

Disney’s “G-Force” is a comedy adventure about a covert government program to train animals to work in espionage. Armed with the latest high-tech spy equipment, these highly trained guinea pigs discover that the fate of the world is in their paws.

Disney’s effects-laden movie comes in a surprising No. 1 for the weekend with a studio-estimated $32.2 million worth of ticket sales in the U.S. and Canada.

By Ben Fritz
July 27, 2009

If there has been one consistent surprise at the box office this year, it’s kids’ flicks.

Pre-release audience polling, called tracking, has a tough time divining the interests of the youngest moviegoers. As a result, studio executives usually rely on the interests of parents as proxies.

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But that system is far from exact, and this year it has resulted in a number of family films that beat expectations, including “Paul Blart: Mall Cop,” “Hotel for Dogs” and “Hannah Montana.”

“G-Force” now has a place on that list. Disney’s effects-laden guinea pig action movie came in a surprising No. 1 for the weekend with a studio-estimated $32.2 million worth of ticket sales in the U.S. and Canada. An overwhelming 75% of moviegoers were families.

It’s guinea pigs, of course kids are going to want to see the movie, even foresaking Harry Potter to do so.

This might be a little scary for some:

Ukuleles have gone viral

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Robert Durell / For The Times

Mike DaSilva of Berkeley ended his software career to make ukuleles. Now the waiting list for his instruments is more than a year long.

YouTube videos, online how-tos and social networking fuel the musical instrument’s renewed popularity.

By Dan Fost reporting from san francisco
July 25, 2009

Thanks to the Internet, the humble ukulele is pushing its recent popularity well beyond anything that old-time performers Don Ho, Arthur Godfrey or even Tiny Tim could imagine. ¶ From YouTube to manufacturers’ websites, from bulletin boards to iPhone and BlackBerry applications that mimic ukes and teach chords, the Internet has been stoking the craze for nearly two years and unveiling fresh talent. ¶ “The number of new players keeps going up,” said Mike DaSilva of Berkeley, who ditched a 20-year software career to make ukuleles. ¶ Guitar maker C.F. Martin & Co. stopped producing ukes in 1994 because they had become so unpopular, but resumed in 2001 and is selling some of the handmade instruments for as much as $10,000 — even in these tough economic times.

Maybe people just want something that is fun, relaxing, easy to learn and not expensive to get started.

Paul   

Lots of talk about healthcare reform, lots of questions

Here are some answers from the Los Angeles Times:

How healthcare overhaul may affect you

Lawmakers are considering options and costs for currently insured and uninsured Americans.

By James Oliphant and Noam N. Levey
10:37 AM PDT, July 24, 2009

Reporting from Washington — Why does the nation need to overhaul healthcare? I have health insurance, and I’m happy with it.

You aren’t alone in asking that question. Polls indicate that most Americans are satisfied with their coverage. But the White House and other advocates of overhauling healthcare say you are probably paying more for your insurance each year. Premiums for employer-provided plans have risen four times faster than wages, and are now double their cost nine years ago. Deductibles are rising as well. Both are likely to continue to increase. Supporters of the legislation contend that healthcare costs are a drag on the economy.

There are more Q&As if you follow the link. I’m not sure if it makes the issue clearer, but the article does answer a few of the questions. 

Paul

Economic mixed signals again, should we be surprised?

From the Los Angeles Times:

Stocks waver amid mixed signals on the economy

Associated Press

8:37 AM PDT, July 27, 2009

NEW YORK — Mixed reports on the economy and earnings left the stock market drifting lower today, easing off of a two-week rally that lifted major indexes 11 percent.

A government report showing sales of new homes in the U.S. rose by the largest amount in nearly nine years last month, but also contained troubling news that home prices fell sharply from a year earlier. Stocks got an early lift from the report but then quickly turned lower.

New-home sales up 11% in June from previous month

Price cuts and tax credits provide a boost. Still, 2009 is shaping up to be the worst year for new-home sales since at least 1963.

By Peter Y. Hong
9:47 AM PDT, July 27, 2009

Sales of new single-family homes were up 11% in June from the month before, as buyers responded to price cuts and tax credits meant to clear the still-massive backlog of unsold homes.

June’s sales total was still the lowest for the month since 1982 and was 21% below the same month the prior year, U.S. Census Bureau data showed.

June existing home sales rise by 3.6 percent

Associated Press

7:44 AM PDT, July 23, 2009

WASHINGTON — Signaling a housing recovery is under way in much of the country, sales of previously occupied homes rose for the third month in a row in June.

The National Association of Realtors said Thursday that home sales rose 3.6 percent to a seasonally adjusted annual rate of 4.89 million last month, from a downwardly revised pace of 4.72 million in May. Home sales haven’t risen for three straight months since early 2004, during the housing boom.

File this one under smart people stating the obvious, or is he just now catching on?

Ben Bernanke says Fed didn’t act quickly enough to stop reckless mortgage lending

But the central bank’s chairman defends its role in rescuing giant firms such as insurer AIG, saying that it needed to take steps to stave off an economic collapse.

By Don Lee
July 27, 2009

Reporting from Kansas City, Mo. — After taking a pounding in Congress over the economic crisis and the multibillion-dollar bailout of ailing financial firms, Federal Reserve Chairman Ben S. Bernanke went to Middle America to try to explain the central bank’s actions and shore up its bruised image.

In his efforts to open a window into the traditionally secretive institution, Bernanke conceded to an assembled audience here Sunday that the Federal Reserve did not act soon enough to stop reckless mortgage lending that fueled the global financial crisis.

Paul

Some positive news can be found

The New York Times reports leading economic indicators are trending positive, indicating a possible end to the recession is in sight.

Index of Leading Indicators Is Signaling the Recession’s End

By FLOYD NORRIS

Published: July 24, 2009

THE American recession appears to be nearing an end, but only after it has become the deepest downturn in more than half a century.

The index of leading indicators, which signals turning points in the economy, is rising at a rate that has accurately indicated the end of every recession since the index began to be compiled in 1959.

The index was reported this week to have risen for the third consecutive month in June, and to have risen at a 12.8 percent annual rate over those three months. Such a rise, pointed out Harm Bandholz, an economist with UniCredit Group, “has always marked the end of the contraction.”

Mr. Bandholz said he expected that the National Bureau of Economic Research, the official arbiter of American economic cycles, would eventually conclude that the recession bottomed out in August or September of this year.

If that proves to be accurate, the recession that began in December 2007 will have lasted 21 or 22 months, making it the longest downturn since the Great Depression.

Hopeful news, though tempered by information from the past couple of weeks and reported with the understanding that the figures are likely to be revised in the next few weeks as data is examined more fully.

Paul 

Inc. has a nice piece by Joel Spolsky about crashed entrepreneurial dreams

Joel Spolsky in Inc. reminisces about the golden age of tech dreams, when everybody who could string a couple of 0s and 1s together was going to thrive in the new economy.

That was all of, maybe, ten years ago.

Interesting reading and a good reminder that not all prognostications are valid and not every boom will last.

Joel Spolsky: The Day My Industry Died

A decade ago, everybody was starting a Web consulting business, so I did too. Then, one day, the industry died. Does that sound familiar?

By Joel Spolsky | Jul 1, 2009

With all the talk about the deaths of various industries — from the car companies to newspapers to mortgage brokers — I’m reminded of the time that my industry abruptly died on me.

It’s been more than a decade, so it’s easy to forget just how exciting the early days of the Web were. I first caught the bug in the mid-1990s, when I came across a programmer named Philip Greenspun — a man who was truly ahead of his time. Along with five of his friends, Greenspun had started a Web development company, ArsDigita, at the beginning of the dot-com boom.

And long before blogs, Facebook, and oversharing online became endemic, Greenspun maintained a personal website on which he did something astonishing: Greenspun shared the whole story of the company he was building, live, as it happened. Everything from the big vision to the technical details.

Eventually, these essays formed the basis of a book, Philip and Alex’s Guide to Web Publishing. (The “Alex” in the title was Greenspun’s dog, a huge white Samoyed.) The final chapter of the book was titled “A Future So Bright You’ll Need to Wear Sunglasses.” (You can read it, for free, at philip.greenspun.com.) It couldn’t help leaving its readers excited about the fantastic new opportunities available on the Internet. Every single industry was going to be turned upside down! New industries would be created! Start-ups would make people rich! Which is really nice, because it’s awesome to be rich! And, bonus: It’ll never be winter again!

Optimism is terrific!  It is good to remember that not every boom lasts and not everything works for everyone.

Paul 

Budget deal struck for California

News reports indicate that yesterday our legislative leaders and governor came to agreement on a budget deal.  Indications are it could be voted on by the Assembly on Thursday.

Some high points:

No big tax increases. The budget depends on deep program cuts. Local governments would lose billions, both in transportation funding and redevelopment monies. Prison cuts would mean the early release of thousands of prisoners.  State workers would continue to take unpaid furlough days. State parks are spared huge cuts. Oil drilling would be allowed off Santa Barbara. Billions in education funding will be cut, resulting in larger class sizes, teacher and staff layoffs and reduction in services and programs. State university employees would face unpaid furloughs.

Education funding would have to be paid back once the economy recovers.

Los Angeles County has already indicated it will sue to preserve local funding.  It is also anticipated that lobbying will be furious, heavy and heated from every interest group, affected labor union, business and advocacy group and the general public. Pasadena Police Chief Bernard Melekian, head of the California Police Chiefs Association speaks for law enforcement opposing the potential early release of 19,000 felons from state prisons.

There is much to dislike in the budget proposal. It remains to be seen if it will survive the legislative process.

There are also aspects of the budget proposal that are built on, according to some, unrealizable income, so we may be right back to having California issue IOUs again next spring.

Dan Walters of the Sacramento Bee calls this another in the line of tricky budgets that fail to address the real financial problems California faces.  You can read his comments here.

Paul

California’s run out of time

As of Wednesday, state Controller John Chiang began issuing warrants to cover some of California’s financial obligations. So far, it’s primarily just hurting those who were getting tax refunds. The longer the legislature and governor dither over this, the more obligations California cannot pay and the higher the cost to repay becomes, further building on our deficit.

My solution: get to work passing a balanced budget based on what the State of California can realistically anticipate in income. Current income, based on existing taxes and without borrowing from other funds or siphoning money from local government.

That’s going to mean dramatic cuts, many that we may feel here in Pasadena. It’s also going to mean an end to a lot of pet projects, unnecessary board and commissions, entitlements and programs. It could also force a realistic look at our state’s finances and a cold hard look at everything from state elected officials salaries, to employee pensions, to those very expensive presumptions that make worker’s compensation insurance so expensive.

It’s time for California’s elected officials to see what their constituents already understand, don’t use accounting tricks, borrowing, raids on municipal funds or higher taxes to balance the budget, just make what you have in income match what you have in expenses right now, then worry about how to reinstate programs, entitlements, benefits or salaries once our state is on a solid financial footing.

We know it will be painful.  That does not make it any less necessary for our elected officials in Sacramento to face reality and get down to business.

Paul