Gavin Newsom says “it’s absurd” that anyone would think he’d give up the race for governor and lower his sights to the second spot on the ballot.

“It’s Jerry Brown who’s putting those rumors out,’’ the mayor told the Chronicle.

There’s two bits of bad news for Newsom connected with the Sunday story. First, the story is coming from people close to the mayor and his campaign, not from the Brown camp.

But second, and even more dismaying for the mayor, is that just about the only person in California who thinks the rumor is ridiculous on its face is Newsom.

The talk about a lieutenant governor option has been swirling around the Newsom campaign for months. When Michela Alioto-Pier announced in late July that she was running for state insurance commissioner rather than lieutenant governor, there was immediate speculation that Newsom, who had appointed her to his old seat on the San Francisco Board of Supervisors, had asked her to stay out of the LG race.

State Treasurer Bill Lockyer generated a storm last week with his testimony before the Senate and Assembly Select Committees on Improving State Government.

He warned that public pensions and health care costs could bankrupt the state, that taxes will not go up, and that the legislature should clean up its act by getting rid of “junk” bills. An edited clip of his testimony can be viewed here.

Some might argue this was Lockyer’s Nixon-to-China moment, telling his Democratic colleagues to deal forthrightly with the state’s fiscal realities. In FlashReport, Former Republican State Senator Ray Haynes that Lockyer as the state senate leader had a different view of pensions, but now welcomed him to the fight.

The former legislative leader and former attorney general is no stranger to bold speaking.

It was about a year ago when Mattel of El Segundo won its eye-widening court case that put it on the path to take over the line of Bratz dolls from MGA Entertainment of Van Nuys.

Oh, sure, other skirmishes followed, but for the most part, the big doll brawl was finished last year. And it was the end of one audacious, memorable corporate fracas.

Wait a minute. Hold on to your Barbies. Maybe it’s not the end.

MGA a few months ago unveiled a line of dolls called Moxie Girlz that could be mistaken for Bratz dolls. There are four multiethnic Moxie dolls, much like the four Bratz dolls, and they have huge eyes and wear fashionable clothes, much like Bratz. (However, they are slightly less sexualized, from which parents like me can take some small comfort.) And since they retail for $19.97 each, they even cost about three bucks less than a Bratz doll.

If it takes a crisis to spark real government reform, California at least has the first part down.

At Thursday’s public hearing for the new Select Committees on Improving State Government, legislators, academics, good government types and various others all agreed that the state has big problems and that the California Legislature right now isn’t part of the solution.

Not to worry. The committee has four more meetings and a little over two months to come up with the answers that will put the Legislature on the road to reform.

It’s a serious effort, though, aimed at a serious problem. A Field Poll taken earlier this month showed that the Legislature’s approval level had plummeted to a record low 13 percent among voters and the annual – or biannual or tri-annual or … — wrangles over the state budget have Californians wondering what the heck they’re getting for the $116,208 a year they’re paying legislators.

The 2008-09 budget cycle will long be remembered as a tipping point in California’s economy.  But will we learn from it, or will the state repeat mistakes (or make new ones as the case may be) that will continue our long-standing hold on the precipice of economic collapse?

As California stumbled into 2009 having "solved" a budget crisis just three months earlier that proved to be no real solution, the Governor, teaming with the Democratic leadership, formed California’s Commission on the 21st Century Economy, a commission who’s purpose was to evaluate the state’s outdated and volatile tax system in hopes of bringing some measure of reforms, and with it stability to the state’s revenue stream.  After 9 months, the final product provides no more answers to the state’s ills than the current system, in fact, creates even more uncertainty and unpredictability.  What it does do however, is provide an opportunity for a classic battle between academic economic theory versus boardroom/dining room economic realities.

We applaud the commission for their efforts and contributions to this seemingly herculean task of reforming the state’s tax system. I believe that most everyone understands and agrees with the fundamental need for reform.  Unfortunately, that appears to be where the similarities of thought end.

We may never know the real reasons for Barack Obama’s failure to bring home the gold for Chicago – poor lobbying, anti-Americanism, inadequate venues, or the never-ending drumbeat of let’s blame Bush. The above notwithstanding, few can argue that the issue of geography played a large role. South America had never hosted the Games, Europe will host in 2012, Asia hosted in 2008 and North America has hosted most frequently of all in the past 50 years.

Everything else being equal, it made sense to send the games to a highly competitive attractive South American city such as Rio. Score one for Brazil, 0 for the United States.

Had Chicago won its bid to host the games in 2016, Los Angeles would not have had a legitimate shot in most of our lifetimes. Seriously, if the IOC already thinks the US has hosted too many games in recent years, does anyone really think LA would get to host the games anytime in the early 21st Century had Chicago won the bid?

What happened to the action, governor?

For two straight days, Gov. Arnold Schwarzenegger has whined about judges, especially federal judges, who are challenging the authority of state government. He’s complained about a recent U.S. district court judge who imposed a preliminary injunction blocking cuts that he and the legislature agreed to make in home support services. He railed against other federal judges that have demanded the state spend more on prisons. And he took a shot at the federal judiciary for imposing restrictions on water delivery. He even criticized previous state court rulings that limited some of the furloughs he’s ordered to save money.

“The big problem, as you know, we have is the federal judges… makes it very difficult to run the state,” he said in a press conference Wednesday. “We have a limited amount of revenues coming in and therefore we can only spend what we have. There are a lot of cuts that we made that we hate, that we don’t like.”

Initiatives, initiatives and more initiatives. By my count there are 50 initiative measures either already cleared by the Attorney General’s Office or sitting in the IN basket. And, some of the expected big money initiatives have not been filed yet. No split roll, spending limit, oil severance tax or even the measure to call for a constitutional convention.

Voters could get an advanced degree in political science if the ballot book is chock full of legal language, analysis and political arguments next Fall. Measures already filed cover familiar ground including abortions; the two-thirds vote requirement (both dealing with taxes and the budget and the budget alone); term limits; local government protections; and closing tax loopholes or denying business incentives, depending on your point of view.

Hold on to your hat, the initiative battles could outshine the governor’s race and certainly outspend the gubernatorial candidates even with a couple of billionaires vying for the state’s top spot.

“Reform” is the byword in Sacramento and the meme on the blogs. Constitutional Convention. California Forward. And we’re about to be awash in proposed ballot initiatives for November 2010. Perhaps in response to the former, or in anticipation of the latter, the California Legislature is getting into the act.

Speaker Karen Bass and Senate President Pro Tem Darrell Steinberg announced the creation of a special Legislative Committee on Reform to “look at ways to make the Legislature more transparent and effective and make state government more efficient and customer friendly.” The committees, chaired by Assemblyman Mike Feuer and Senator Mark DeSaulnier, are having their inaugural meeting today.

Bravo. If the Legislature can take a deep breath, reach across the aisle, and adopt substantive reforms, then maybe they can begin to climb out of the hole, instead of continuing to dig. In that spirit, here is my prescription for some easy, short-term successes – two principles, and three substantive proposals.