Carnegie Mellon University economist Allan H. Meltzer’s Wall Street Journal article Wednesday contains some thoughts that can be applied to California’s upside down fiscal situation.

One point Meltzer makes is that, "High uncertainty is the enemy of investment and growth."  Businesses uncertain if tax laws will change pull away from hiring more employees or building more facilities until they know what to expect.

Corporations in this state face uncertainties on the tax front that will cause them to hesitate investing in their California operations. That in turn will keep the Golden State unemployment rate high and economic growth subdued, which only extends, if not deepens, the state’s economic chaos.

If you paid any attention to the debate over Prop 14, the top two primary initiative, you probably heard the following argument trotted out: if both political parties agree on something, it must be bad.

Many, many smart people made this argument, even though it’s a demagogic argument that provides a way to avoid examining the substance of the issues. Of course, the determination to avoid examining the substance of the issue is the basic organizing principle of California political debate (and media coverage of same). And who can argue with success? Prop 14 won.

So when it comes to bigger controversies – particularly about our budget system – perhaps it’s time to stop marshaling evidence about the damage done to California by its twin supermajorities, on budgets and tax increases. It’s time to stop showing how two-thirds adds to spending and borrowing.

I’ve
criticized the city of Los Angeles for the way it treats businesses. It
says it wants companies to call the city home, then it all but cudgels,
kicks and chases businesses out of town.

But I must admit that I’m pleased
to see a proposal from Councilmen Richard Alarcon and Greig Smith that,
if passed, may be a modest help to lure businesses to the city or allow
them to get started.

The proposal would temporarily
expand the waiver on the gross receipts tax on businesses. Basically,
new businesses or ones that relocated to Los Angeles would not have to
pay the tax for three years.

Mark Twain once commented about Sacramento: "people suffer and sweat, and swear, morning, noon and night…"

Twain may as well have been talking about the budget negotiations, be he wasn’t. He was talking about the weather and Sacramento’s "eternal summer."

The budget morass has become as predictable as the weather in the state capitol.

"The
Lottery" is a compelling film that focuses on the families that need
school choice the most. This film is so good that it is hard to believe
that it is Madeleine Sackler’s first feature length film or that it has
such high production values on a $350,000 budget. She offers a forceful
story line that shows just how hard parents will work to find
high-quality education options for their children.

Sackler’s documentary follows four Harlem families, who are waiting to
find out if their child will be chosen in the lottery to attend Harlem
Success Academy. Each family puts the child’s name into a lottery for
one of fewer than 500 spots at the school.

They are among more than
3,400 families competing for the chance to attend the high-rated
charter school. The four families face unique personal challenges from
a father who is incarcerated, to a mother who is hearing impaired, to a
child with a mother living in Africa. What the families share in common
is a desperate wish to put their kids in a high quality education
setting with a clear track record of high performance.

On Wednesday, the SEIU converged on the lawn of the State
Capitol for a massive protest in their trademark purple shirts — screaming,
shouting and chanting about a State budget mess that they, in large part, have
gotten us into.

You can bet your bottom dollar (it is your dollar, after
all) that this is only a preview of what is to come during the Fall campaign’s
crazy season.  After all, it is a terribly kept secret around town that
every Union is lying in wait to attack Gubernatorial nominee Meg Whitman and
any number of the other Republicans and fiscal conservatives on the November
ballot.

Therefore, as we enter the battlefield for the General
Election I think it’s worth pausing to ask the question:  "What
is the current State of the Union(s)?"

Cross posted at www.cala.com

I am certainly
not a role model for eating habits.

Believe me I will jump at an
Entenmann’s donut any day of the week over a salad, but you will not
see me sue Entenmann’s. I guess I should have seen it coming. First the
County Board of Supervisors in Santa Clara banned McDonald’s from
putting toys in its Happy Meals. Now comes the Center for Science in
the Public Interest sending a letter of intent to sue McDonald’s if the toys are not removed from all Happy Meals.

History often repeats itself, sometimes in odd ways.

Proposition 19 on the California ballot will not be the first time California voters had an opportunity to legalize marijuana and the previous effort carried the same proposition number. Proposition 19 in 1972 qualified for the ballot by volunteers attempted to legalize the drug but fell at the polls winning only 33% of the vote.

The 1972 measure would have allowed personal pot growing and use but forbade selling the weed. Today’s Proposition 19 would allow legal, recreational use.

On Tuesday, California’s Applicant Review Panel sits down to narrow the pool of remaining applicants. The Panel’s
responsibility, under the regulations adopted by the State Auditor, include ensuring the final pool reasonably reflects California’s
complex diversity.

As stated in Proposition 11, California’s diversity
is defined as "including, but not limited to, racial, ethnic,
geographic, and gender." The ARP’s June 11th decisions, which reduced the pool to its current 622 applicants, were done based
on individual evaluations of each applicant. As it reduces the pool
from 622 down to the 120 people it will invite for interviews, the Panel is expected to begin looking at the pool as more of a group.

Earlier postings evaluated the overall demographics of the pool of 622. Yet the Panel’s
decisions are more accurately evaluated by looking within each of the
three separate pools: Democrats, Republicans, and Others. The Rose
Institute acquired the full database of applicants (through a public
records request) and analyzed the demographics of each pool. The
results indicate the opportunities and challenges facing the ARP.