Two Terrible Ideas, One Ballot Initiative

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

Many ballot initiatives are built around a big, bad idea. Bob Huff and George Runner have distinguished themselves by filing a ballot initiative with two big, bad ideas.

Their innovation, and I use that term in a Hindenburg-esque way, is to combine those two bad ideas. Reversing the high-speed rail project that’s already under way, and using bond money for water storage.

And I write that as someone who has deep doubts about the way high-speed rail is being done in California, and who thinks the state needs to do better holding onto water from wet years.

The core problem is that water engineer and high-speed rail projects are complicated things that need to be done by humans, constantly tweaking and negotiating and improving, not by ballot initiative. In fact, the biggest problem facing high-speed rail, perhaps outside the Tehachapi Mountains, is that it got a good chunk of its money and many of its rules from a California ballot initiative. And California ballot initiatives are inflexible bludgeons that have a long record of doing far more unintended harm than intended good. High-speed rail needs not more rules or less money but more flexibility, so it can design and build a project that knits together the state so tightly that it’s worth building.

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Contradictions in Tax Philosophy on Cigarettes and Marijuana

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

Isn’t there something odd about the tax arguments tied to the proposed initiatives on cigarettes and marijuana?

One of the arguments for raising taxes on cigarettes is to discourage their use. Raise the tax and fewer people will want to buy the product. Of course, some will seek cigarettes in the black market or online.

One of the arguments for legalizing marijuana is to tax it as a source of new revenues. No talk of using taxes as a disincentive here.

So the theory goes, taxing cigarettes might drive some people to the black market while legalizing and taxing marijuana would bring users into the sunshine away from illegal activity.

Because marijuana is not taxed now, legalizing it and taxing it will immediately bring in additional revenue. An increased cigarette tax will also boost revenue.

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Golden Blues: Brown and the Oligarchs Love Green Energy

Luke Phillips
Research Associate for the Center for Opportunity Urbanism and Senior Correspondent at Glimpse From the Globe

Good morning, California, and welcome to this week’s edition of Golden Blues. On tap today is a green boondoggle; later this week we’ll cover a blue one.

Governor Jerry Brown is in Paris working to encourage provincial leaders from other nations to sign a memorandum “promising to reduce greenhouse gas emissions 80 percent below 1990 levels by 2030.” Brown will predictably point to California’s recent passage of SB350, which requires California to “boost renewable energy use to 50%” over the next couple of decades, as an example of Californian “leadership” on the global climate issue.

Moreover, Brown has the support of what Joel Kotkin calls the “tech oligarchy-“ those Silicon Valley billionaires whose ascendancy has not only transformed the American economy and society, but also promises a generally liberal funding base for various social and environmental issues. Various tech oligarchs, including Jeff Bezos, Mark Zuckerberg, Bill Gates, Jack Ma, and Richard Branson, have teamed up to establish the “Breakthrough Energy Coalition,” an organization committed to saving the planet by encouraging wind, solar, and hydroelectric energy development. Read: subsidies for green energy companies and favorable positions for their (expensively-generated) power in public utilities markets.

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Tech Titans Want To Be Masters Of All Media We Survey

Joel Kotkin
Editor of and Presidential fellow in urban futures at Chapman University

The rising tech oligarchy, having disrupted everything from hotels and taxis to banking, music and travel, is also taking over the content side of the media business. In the process, we might see the future decline of traditional media, including both news and entertainment, and a huge shift in media power away from both Hollywood and New York and toward the Bay Area and Seattle.

This shift is driven by several forces: the power of Internet-based communications, the massive amounts of money that have accumulated among the oligarchs and, perhaps most important, their growing interest in steering American politics in their preferred direction. In some cases, this is being accomplished by direct acquisition of existing media platforms, alliances with traditional firms and the subsidization of favored news outlets. But the real power of the emerging tech oligarchy lies in its control of the Internet itself, which is rapidly gaining preeminence in the flow of information.

This transition is being driven by the enormous concentration of wealth in a few hands, based mostly in metropolitan Seattle and Silicon Valley. In 2014, the media-tech sector accounted for five of the 10 wealthiest Americans. More important still, virtually all self-made billionaires under age 40 are techies. They are in a unique position to dominate discourse in America for decades to come.

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Business, Taxpayer and Political Concerns Over “Secure Choice” Retirement Plan

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

Over the weekend, the Wall Street Journal highlighted California’s move to establish required private sector retirement programs in an editorial that criticized the Obama Administration for taking steps to “socialize” the private retirement business that will end up as a long term entitlement program backed by taxpayers. As often is the case, an idea promoted out of sincere concern opens the door to both politics and the possibility of taxpayers being the insurance of last resort.

The Journal’s criticism focused on the Department of Labor issuing guidelines to allow state mandated private economy retirement programs avoiding any hang-ups with the Employee Retirement Income Security Act (ERISA). Avoiding complications with ERISA laws is a principal concern of the California business community if the Secure Choice plan is ultimately implemented.

The editorial noted that, “nothing in California’s law guarantees ownership or portability. Private financial institutions will putatively insure the plans, but with an implicit taxpayer guarantee.”

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Jerry Brown’s Insufferable Green Piety

Joel Kotkin
Editor of and Presidential fellow in urban futures at Chapman University

As the UN’s climate change conference opens in Paris on Nov. 30, California Gov. Jerry Brown’s holier-than-thou pronouncements on climate change will be the gospel of choice.

At the site of real and immediate tragedy, an old man comes, wielding not a sword to protect civilization from ghastly present threats but to preach the sanctity of California’s green religion. The Paris Climate Change Conference offers a moment of triumph for the 77-year-old Jerry Brown, the apogee of his odd public odyssey.

Jerry Brown has always been essentially two people—one the calculating, Machiavellian politician, the other the dour former Jesuit who publically dismisses worldly pleasures for austere dogma. Like a modern-day Torquemada, he is warning the masses that if they fail to adhere in all ways of the new faith or face, as he suggested recently humanity’s “extinction.”

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California Turning Away From Oil? Sounds Good To Latinos

Adrianna Quintero
Director of Partner Engagement for the Natural Resources Defense Council, and Founder & Executive Director of Voces Verdes.

If you want to learn about the health impacts of smoking, you don’t rely on a tobacco industry web site. And if you want to learn about the oil industry’s impact on California, you don’t rely on a web site sponsored by an oil company.

But that’s what Fox and Hounds Daily seems to have done in a recent editorial. “Imagining California Without Oil – Two different Perspectives” quotes heavily from a web site produced by the California Resources Corporation, a spin-off of Occidental Petroleum. Nearly all of the information on the supposedly independently researched “Powering California” web site comes from a study funded by the oil industry’s lobbyist, Western States Petroleum Association. That’s not a source that most people trust for unbiased information.

The editorial suggests that moving away from dependence on petroleum and toward cleaner forms of energy might be bad for our state’s economy and for the Latino community. But the truth is that weaning ourselves off of dirty sources of energy means a stronger economy and healthier families. And that’s why Latinos consistently support California’s pioneering climate and clean energy policies.

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“Temporary” Taxes Forever

Ben Boychuk
Associate Editor of the City Journal

Nothing is so permanent as a temporary tax. In California, the state’s most powerful public-employee lobbies are preparing two initiatives for the November 2016 ballot that would either extend or simply make permanent an income-tax increase on the state’s highest earners that was scheduled to expire at the end of 2018. Legislators and their union patrons can hardly contain themselves.

Anyone with eyes to see could have predicted this turn of events. In 2012, the Golden State faced a $16 billion budget deficit caused almost entirely by unchecked entitlements, poor revenue estimates, and years of bad legislative choices. Governor Jerry Brown went to voters and said, in effect, he wouldn’t raise their taxes; he wanted them to raise taxes on themselves. But he promised that the pain would only be temporary. And if voters didn’t go along, well, the governor couldn’t guarantee what might happen next to public schools, health care for the poor, and other beloved programs. No pressure or anything—just vote for Proposition 30 and nobody else would get hurt. Brown tramped up and down the state in the weeks before the election, quoting scripture as he often does to make his case. When the ballots were all counted, 55.4 percent of voters went along.

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Happy Thanksgiving

Fox and Hounds Daily Editors

We wish you a Happy Thanksgiving Holiday.

Fox and Hounds Daily will resume publishing on Monday, November 30th.

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A Sleeper Senate Race in California

John J. Pitney, Jr.
Professor of government at Claremont McKenna College and coauthor of American Government and Politics: Deliberation

The race to succeed Sen. Barbara Boxer (D) of California could very well produce the upset of 2016.

The prohibitive favorite would seem to be Kamala Harris. As the state’s two-term attorney general, she has good name recognition and an established political network. As a woman with both African and Asian heritage, she has a unique appeal to the state’s diverse electorate. She has achieved national prominence, albeit in a slightly awkward way. At a San Francisco fundraising event a couple of years ago, President Obama praised her brilliance and toughness, then added: “She also happens to be, by far, the best-looking attorney general in the country.” After getting widespread criticism for the sexist character of this remark, the president apologized. Ms. Harris accepted with good grace.

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