Questions For Mr. Fox
Editor’s Note: Joel Fox’s response to this piece can be found here
Dear Mr. Fox,
Your defense of the Small Business Action Committee’s ad attacking Jerry Brown raises more questions than it answers. Its comparisons of the ad, and the decision to not identify the financial backers that provided SBAC with the money to broadcast, begs other questions. Among them:
1. You compare SBAC’s ads to the American tradition of protest against the powerful, citing the Boston Tea Party. The tea party after all was a public act of civil disobedience against a distant tyrant. Your ad is a private act by somebody or some businesses who won’t identify themselves or their intentions to influence public opinion in a free election – and to curry favor with a Republican candidate for governor who has more than enough money to spread her own messages already.
Isn’t that comparison an insult to the patriots who took real risks to found this country?
My Boston Tea Party Analogy Strikes a Chord
My comparison of participants in the Boston Tea Party to those who supported a California political advertisement struck home considering the reaction I received from Joe Mathews in Fox and Hounds today, Jerry Brown’s spokesman Clifford Sterling at Calitics, and the guys over at Calbuzz, last week.
The three articles generally complained that the use of the Boston Tea Party analogy does not fit because the action by patriots in 1773 is not akin to funding a political advertisement in 2010. However, they focus on the act. The analogy is about consequences to the actors who speak up to "official" power and can be punished. In that framework, the analogy is extremely apt.
Notice in the responses, everyone ignores a central argument of the ad—the threatening of lawsuits — the menacing use of official power. It is understandable that donors fear exposure when such power is threatened.
CalSTRS’s Extra Hurdle
In May 2008, Federal Reserve Vice Chairman Donald Kohn
delivered important remarks about an obscure but
consequential issue:
"Public pension benefits are essentially bulletproof promises
to pay. The only appropriate way to
calculate the present value of a very-low-risk liability is to use a
very-low-risk discount rate. However,
most public pension funds calculate the present value of their liabilities
using the projected rate of return on the portfolio of assets as the discount
rate. This practice makes little sense from an economic perspective [and] pushes
the burden of financing today’s pension benefits onto future taxpayers, who
will be called upon to fund the true cost of existing pension promises."
To the vast
majority of Americans those remarks were hardly understandable, much less relevant. But not to some public pension fund
officials. Later, the CEO of the California
State Teachers Retirement System (CalSTRS) labeled as deserving of a "letter
grade of F" a study from Stanford University that adopted the Kohn methodology
for measuring California’s pension liabilities.
California’s Renewable Portfolio Standard
RPS. Never have three seemingly innocuous letters stirred so much
passionate debate and consumed so much legislative time in recent
years. And for good reason.
The future energy infrastructure of our
state over the next decade will largely be shaped by the decisions that
could result this year from the debate swirling around California’s
Renewable Portfolio Standard.
I am very supportive of efforts to increase our state’s reliance on
renewable energy, but I am also very aware just how difficult that task
is to accomplish. After all we have not even reached the state’s
original goal of 20% by 2010. Simply put, changing the culture of our
energy delivery system is extremely complicated. Many critical issues
must be fleshed out in a precise manner so that in the end we can move
California in what I believe is the appropriate direction without
harming ratepayers.