Short Term Pain Versus Long Term Gain
Proposition 1A on the May 19 special election ballot will create a spending limit and a rainy day fund to even out the ups and downs of the budget and restrain spending. But, it is important to note, if the measure passes, the temporary tax increases approved by the legislature and signed by the governor will remain in effect for four years instead of two years.
A difficult choice is presented to the electorate. Is establishing a long term spending limit worth accepting the temporary taxes for an additional two years? I believe the answer is yes.
I do not reach this conclusion casually. The decision is the product of both analysis and history.
First, the history.
High Theatre in Courtrooms Large and Small
Tomorrow, the California Supreme Court will hear arguments on the constitutionality of Proposition 8, while a trial judge in Sacramento will hear arguments that the Legislature has tried to "rig" the upcoming election on Proposition 1A by drafting the ballot statements in, shall we say, a less than fair and impartial way. Both decisions will have far-reaching and long-term impacts, regardless of the outcome.
Proposition 8, one of the shortest initiatives in recent memory, added just 13 words to the State Constitution: "Only marriage between a man and woman is valid or recognized in California." Since Prop. 8 amended the Constitution, it must be constitutional, right? Maybe, maybe not. The question at issue is whether the voters had the power to enact Prop. 8 at all.
The Ballot Argument That Wasn’t
All those who favor putting the breaks on Sacramento’s ability to overspend, please raise your hands.
I see that is most of you. Those against? I see a couple of public employee union bosses over in the corner are opposed.
Well those Sacramento politicians who made a "deal" last month to resolve the budget process with a tax increase that will cost the typical California family over $1,100, are offering another deal they hope will appeal to the majority of you.
What they are offering is Proposition 1A on the May 19 Special Election ballot. 1A is being promoted as a spending limit that will compel those under the Capitol dome to behave responsibly.
If taxpayers are wary of any offer of reform coming from those who have behaved so irresponsibly that they have run up a $42 billion deficit, their suspicions are justified.
Reading the Tea Leaves of the Los Angeles City Election
Prognosticators will be out in force combing over the results of the Los Angeles City election held yesterday. Most of the chatter, of course, will be about the mayor’s race looking toward the Antonio Villaraigosa’s potential run for governor.
With another low municipal turnout of 15% of registered voters, city voters returned Mayor Villaraigosa to office for a second term. The mayor faced little opposition and captured 55% of the vote. That’s enough to avoid a run-off election but not enough to put a scare into potential rivals for the Democratic nomination for governor should Villaraigosa choose to run. If the mayor is interested in statewide office, his base in Los Angeles must be strong. With weak and barely funded opposition, a 55% vote will not impress the pundits.
Why We Keep Saving AIG: The Loose Thread
Wrap your bad-news-weary brain around this one: AIG’s reported earnings for the 4th Quarter of 2008, the Year that Will Live On in Financial Infamy, were far, far worse than a Giant Goose Egg – AIG lost, I repeat, LOST, $61.7 Billion in three months’ time – the single biggest quarterly loss in history, according to the NYT! This, despite three heaping helpings of your tax dollars and mine. Now, despite this, AIG lined up for a fourth helping of Federal BailOut dollars. What gives? Why do we keep giving blood transfusions when we already stand hip deep in AIG’s blood?
Well, the story is not a pretty one. The great Federal Economic Gurus – the Bernankes and Geithners, and a legion of others behind the scenes, are scared right out of their minds right now. What are they scared of, you might ask? They are scared of the downside of Globalization.