Two Thirds: California Republicans and the Stockholm Syndrome
Joel Fox, a native New Englander, channeled Paul Revere on this site to warn of the coming invasion of Democrats and others seeking to overturn the state’s requirement of a two-thirds vote in the legislature before a budget may be passed or taxes raised.
I have to laugh whenever I hear Fox and other Republicans and anti-tax activists praise two thirds. Their logic is simply ridiculous. These are the folks who tell us over and over that California has gone to hell, that taxes are too high and that spending is out of control. Then they tell us that if we don’t protect the two-thirds requirement, taxes will be too high and spending will be out of control.
(Yes, you may scratch your head now.)
Which is it, guys?
The reality is that the two-thirds requirement is at the heart of the system that they denounce. Californian legislatures have operated under the two-thirds requirement for budgets since the 1930s and the two-thirds requirement for taxes since Prop 13 passed in 1978. And it is this two-thirds system that has produced the taxes and spending they complain about.
GOP State Convention: Who were the winners?
By all accounts, the California Republican Party State Convention this past weekend was a successful one – Republicans from throughout California packed into the Sacramento Hyatt to do their part in setting the direction of a party that was thrust into a rebuilding mode after getting trounced in the November elections. This past weekend was a stark contrast from the September convention in Anaheim – one of the most uneventful and under-attended conventions in a long while according to a number of party veterans.
Most visible throughout the weekend was the conservative wing of the party, out in full force to voice their disapproval of those legislators who broke their anti-tax pledges to join Democrats in passing a budget laden with tax increases. Attendees at the convention’s general session overwhelmingly voted to discipline those who broke ranks, denying them any party funding in the 2010 election cycle. Whisper campaigns spread about possible primary challengers for those who would be up for reelection.
Stimulus Package 101
Seventy years ago Oliver Hardy said to Stan Laurel, "Well, here’s another fine mess you’ve gotten me into." Well guess what, they’re back.
It took one super smart person from Harvard and one genius from Yale to come up with all that creative financing that has virtually destroyed our financial markets. Now we have 545 (mostly confused and misdirected) elected officials trying to fix the problem, when most of them are still trying to figure out how much taxes they still owe.
Why try and create the wheel all over again when the easiest way to stimulate the economy would be to cut the tax rate by one third immediately. Not a lot of paper work or attorneys that have to stay up all night burning $4.00 a gallon of gasoline.
The Bear Returns
For those who thought that the Dow had bottomed out in the low 8000’s, last week was a real migraine. The Dow closed the week at a 6-year low. The Bear has returned just when we thought it was safe to go back into the stock market forest.
Some say it was the talk of nationalizing the big banks that frightened Wall Street out of circling around the low 8000’s. The much-reported on Dow Jones Industrial Average consists of 30 blue-chips stocks. Friday, it closed at 7365.67, down 6.2 percent for the week, but, on Thursday, it dropped past the Bear-Market low we reached on Nov. 20, 2008 and hit its 6-year low. When the Obama administration said it was of a mind to keep big banks in private ownership, the market seemed to pause its downward slide, even recovering just a tad.
The two prime candidates for Nationalization are Bank of America and Citigroup. B of A ended at just under four ITunes songs per share – $3.79; Citi, at an equally appalling number just shy of two ITunes songs per share – $1.95! These are prices that startups and old, tired, broken-down companies on the way out trade at, not the behemoth bedrocks of our financial system. And, you thought B of A was a great buy at $18 per share last Fall; congratulations if you didn’t phone that one in.