On Thursday, college students throughout California especially, but also around the U.S., protested higher tuitions and costs, and cuts in their education that are sending many institutions of higher education into crisis--including Humboldt State University here in Arcata. So it's not surprising that at least here in the Eureka demo, students were joined by faculty and staff, as departments and entire programs are being weakened and eliminated.

The politics of this is fascinating, and educational. Universities and their students are being characterized as fighting for funds that would otherwise go to the poor and sick, whereas the real priorities being served are wealthy non-taxpayers, mega-corporations and the banks, that are currently mounting a so far successful effort to prevent the U.S. Senate from passing into law what the House has already passed--reforms that would strip the banks of their profitable control of student loans, and would ease the financial burden of students and their schools.

Here's the SF Chronicle story from which this photo comes, and another at the L.A. Times. Neither talks much about the underlying issues. No one much does.

Update: We'll see if this really happens, but at the moment, the legislation to take back control of student loans from the banks is part of the Senate healthcare bill, so if it passes Sunday, this will be law as well.

Bits

Two polls, CNN and Bloomberg show Obama approval up, and health care reform approval up.

A poll of physicians in the U.S. showed approval for a public option of nearly two-thirds. The approval cut across all demographic, geographical lines. NPR made much of this, and Sohum Parlance has one of several analyses.

The Massachusetts legislature is poised to vote authority to the governor to appoint a Senator to take Senator Kennedy's seat until the special election, or perhaps until 2010. No Kennedy is apparently running for the seat, but no word on who might accept the appointment, which might comes with the proviso that the appointee not run.

Bill Clinton settled another score by endorsing San Francisco Mayor Gavin Newsome for the Dem nom for governor of CA. Bad blood between Clintons and Jerry Brown, the other (but unannounced) candidate. Since nobody is paying attention to this race yet, it's not clear what this affects except big bucks fundraising.

Massive fires are only the most visible reason that California is a state of emergency. See post below.

State of Emergency

The Terminator returned from the East Coast to declare California in a state of emergency, due to the tremendous fires in the L.A. area. Apart from the immense damage, the loss of life (2 firemen so far) and the cost of trying to fight them (with no success so far) these fires threaten the Mount Wilson Observatory, and have caused the evacuation of the Jet Propulsion Laboratory in Pasadena, which means among other things that the Mars rovers have stopped in their tracks.

That the effects of the CA fires extend to Mars is just one of the operative metaphors for this state's plight. Schools are reopening, and starting to cope with budget cuts, and no one involved in them--students, teachers, administrators apart from the highest ones--is being affected. Mandatory furloughs and across the board pay cuts are just the beginning.

The spiral downward is accelerating due to these cuts. The CA economy, particularly hard-hit because of high participation in the housing market bubble, started to falter, and to send less in taxes to Sacramento. Refusing to raise revenues, the Terminator terminated or disemboweled programs mostly for the poor, old and sick. Very heroic. Already the CA economy appears resistant to the improvements seen elsewhere--the official unemployment rate rose to nearly 12%, the highest in more than 60 years. Despite the federal recovery act, construction jobs fell, as did tourist related jobs, the combination hitting the Latino community hardest. But that was even before the decline in pay for state workers, and the loss of jobs because of cut programs. Those effects are now rippling through the economy as well as the society.

Since the Terminator gave in so bravely to the quaint but unaffordable anti-gubment hysteria, the state is helpless when it is clear that government is going to be needed more than ever--and these fires are Exhibit One.

First of all, look at them. These are very powerful fires. And as this eloquent diary attests, this is not even yet fire season. These fires aren't supposed to happen in August, not in southern California. But the entire southwest is parched, in the midst of a multiple year drought. The Climate Crisis is coming to get them, and it's not going away.

Just as these fires threaten the air, the water, the business and public resources of the region and beyond, California's economic tailspin will affect the rest of America and the world economy. But the Terminator plus the perfect storm of a helpless state government and a total leadership vacuum in the state, together forestall much hope that California can fix itself any time soon.

California's Inept Deal with the Devil

The LA Times has a revealing story on how the California budget was passed in the state legislature:

" The power of Sacramento lobbyists was only one of several factors threatening to bring the Legislature to a halt. Steinberg turned aside the proposal from Intuit's representatives. But lobbyists for major interest groups were present throughout the night, seeking to influence the process. With hundreds of pages of legislative language passed with little time available for review, few knew what the fine print might contain.

Early proclamations that the cash crisis had forced lawmakers to transcend pettiness and partisanship devolved into hallway deal-making. Over and over, legislators with designs on higher office balked at measures that could be used in campaigns against them. Legislative leaders, inexperienced in their jobs, repeatedly found they could not deliver the votes of their caucuses.

Term limits have made this batch of lawmakers among the most inexperienced in decades, and many legislators, their attention focused on their next elected office, spent the night watching the moves of real or prospective opponents in upcoming primaries."

All this sordidness might be excused if they had passed a sane budget, with sane cuts and sane revenue increases. But even though they saved posh Santa Barbara beaches from oil rigs and maybe let localities fill some potholes this year, the budget forced on this hapless legislature by the cunning and shameless macho image-making of the Terminator will cost the poor, the sick, the old and the young in suffering as well as dollars, as well as stop any sort of economic recovery in the state for the forseeable future.

For this temporary respite (a few weeks vacation before they have to work on the next budget in October) they will reap the whirlwind: multiple lawsuits, costly court judgments and possible if not likely strikes by various public employees.

First stop: a spike in California's unemployment and a further decline in consumer spending, as the effect of state layoffs and income cuts ripple out. Count on it.

Coming soon: two crippled state university systems, damaging California and the United States' ability to compete economically, as well as consigning more students to dead end futures.

Taking Sides

It's pretty obvious who is going to pay for the California budget crisis by class: the rich and near rich reap the benefits of intact programs and corporate subsidies, while programs for the poor and the working middle class are cut or killed.

The winners and especially the biggest losers are divided by age: the very young whose nutrition and health programs are cut, the young whose education is shortchanged, and the elderly who may see home health care killed entirely.

But the losers are also visible by race, that most obvious and ugly remnant of how America apportions its bounty. This is not only because the social and health programs being cut and killed disproportionately affect blacks, Latinos and Native Americans. It's because cuts to education also deprive them most directly. Education is their path to a better life, that the well off already have.

But in taking sides, the Terminator is deeply wounding the state of California, and the country's future. Every layoff by the state is lost revenue as well as lost talent. California cannot prosper without good schools and an educated population. But schools from primary through college are in state-caused chaos, as well as suffering from decades of neglect. That California is close to becoming a majority non-white state, a mainly black and brown state, makes these decisions destructive to education all the more racist.

As for the national economy and the nation's future, President Obama made this point in his stirring address on the 100th anniversary of the NAACP:

"The state of our schools is not an African American problem; it is an American problem. Because if black and brown children cannot compete, then America cannot compete... We used to rank number one in college graduates. Now we are in the middle of the pack. And since we are seeing more and more African American and Latino youth in our population, if we are leaving them behind we cannot achieve our goal, and America will fall further behind -- and that is not a future that I accept and that is not a future that the NAACP is willing to accept."

But it a future that the Terminator's California is not only willing to accept, but a future it invites.

Terminator Lies

Pushing his suddenly rabid right agenda, the Terminator (who is currently governor of California) is lying about fraud and abuse, demonizing a program to help the elderly and confined by asserting that a quarter of its funding is wasted. His own administration's study says it's more like 1%.

Rabid Right shock doctrinaires are trying to scare investors etc. by claiming that California's businesses are leaving in droves. It's not true. Neither are the rich. And why would they? What is true is that the rich are avoiding any responsibility or payment for the budget crisis, while the poor and the middle class state employees are paying everything, including their health.

The poor can't do anything about it, although some courts are defending them and state employees. But the middle class state employees can at least strike.

The Terminator

As California continues to sink financially, economically and with social consequences accruing for a long time to come, it's clear who is responsible now: Governor Arnold.

The legislature, the voters, the system, are all culprits in the larger problems, but on this specific budget crisis, it is the Terminator's recalcitrance and attempts to shock doctrine the situation that's the sole reason California doesn't have a budget.

It could have happened weeks ago, but the Terminator refused to consider any new revenue streams, which legislators proposed along with cuts, to avoid the Terminator's catastrophic cuts.

Then Democratic legislators gave up their revenue additions, and the governor appeared to give a little on cuts. But since then he has demanded additions to the deal that he couldn't get passed otherwise, and that have little or no bearing on the current budget.

His destructive stubborness finally led to Assembly Speaker Karen Bass shutting her door to his blather. Until the Terminator actually negotiates, there's no point in holding negotiations. So far the governor has apparently been winning the perception game, but maybe now the truth of it is clear: he is single-handedly terminating California, and dismantling the lives of countless Californians.

The Terminator's California Shock Doctrine

Governor Terminator and his Republican minions are ignoring the efforts of the Democratic majority in the California legislature to address the state budget with a mix of cuts and new revenue, which is just simple sanity. The Terminator is trying to force deeper and more extensive cuts, with no new revenue. Today he is succeeding a little more.

At least one writer at Caltics is now using "shock doctrine" as a verb, as in the Governor is shock doctrining the budget. And it's all too apt. Naomi Klein's book, The Shock Doctrine, shows how the political forces of predatory capitalism used economic and other major shocks in one country after another--causing some, taking advantage of others--to institute severe measures that benefit them, but that the people would not allow under ordinary circumstances. We saw the Bushites institute their own Shock Doctrine after 9-11, leaving us with a legacy of torture, the Patriot Act, a wrecked economy after billions returned to the rich, and billions more flowed to the contractors who profited from Iraq and the war on terror.

The Terminator is bringing the Shock Doctrine to California. And the message he and the Republicans are sending is clear: when times are tough, take it out on the poor. The Terminator wants to balance the budget on the backs of the poor, the sick and the working middle class.

Like other shock doctrine changes, it is self-defeating and massively destructive in the long run. In this case, the state will be pissing away billions in federal funds, and tying the state up in court cases for years, many of which it will lose, as it has already. There are laws against penalizing the poor and the sick to such an extent. Everyone loses from deteriorating public health and education, part of the community's basic infrastructure.

These are days of shame for California, in uncountable ways. Self-destruction, which began slowly with Prop 13 a generation ago, is accelerating. There is no solution in sight.

California Nightmaring

Update: Caltics uses--gasp!--facts to show that "the May 19 special [election] was not a tax revolt and that people will actually vote to raise revenues for services." The evidence is several recent ballot measures in which SOUTHERN CALIFORNIANS (the supposedly most rabid anti-tax place) voted for tax increases to fund services such as education.


The Nightmare continues. Voters rejected the recent ballot propositions purporting to fix the California state budget for all kinds of reasons--some of them specific (universities would be locked in to inadequate spending levels long after the current crisis) and some general (agreeing on a sensible budget and running the state is the least of what we elected the gov and the legislature to do--why don't they do their jobs?) But Governor Terminator sees only one message: no tax increases, and so he rejects a budget compromise that includes some new revenue instead of just draconian cuts that hit the poor the hardest.

Meanwhile, the macro arguments go on. Sacramento Bee commentator Dan Walters insists all the economic arguments are flawed: "The entire deficit on which they are working, $24.3 billion including Schwarzenegger's desired reserve, is well under 2 percent of the state's economy. The lesser cuts and taxes they are debating would merely shift relatively small amounts of money from one form of spending to another, all within the state's economy, so the macro economic impact would probably be nil, no matter what they do.
The greater threat to our economic future would be a prolonged political stalemate, followed by enactment of another dysfunctional, gimmick-laden budget, thus providing more proof of our chronic inability to govern ourselves."

But others see more impact. Describing the findings of a new report: “These health and human service cuts are the worst of both worlds: they not only directly deny people the services that California families need, the cuts cripple our ability to get out of this economic downturn,” said Anthony Wright, executive director, Health Access California, the statewide health care consumer advocacy coalition. “The Governor’s cuts make no sense, since in order to save a few state dollars, California gives up a lot of federal dollars, for our health system, and our economy.”

The impact on education, and then on the California economy, and then on the U.S. economy, could be equally profound, both now and getting worse in the future. That is, these relatively few dollars can cause losses in both financial and human terms of much greater proportions, and much harder to fix when they become apparent.

But the most frustrating aspect of this crisis is the lack of balance. Those already suffering because of low income will suffer more. Those with higher income will not even be inconvenienced in the short term, although they and their children will be hurt by all of this in the future.

That's partly because the Terminator is insisting on only cuts and no new revenue, to the extent that he has promised to veto any tax increases proposed by the legislature. That's the way to come to agreements to deal with this crisis? Much of the problem is because the state's politicians are polarized and can't come together for the good of the state. You'd think that after at least a year of political posturing, and up against the wall of a very serious crisis, these bozos could come up with a package of cuts and revenue increases to deal with the budget in a more balanced and sane way. But apparently not. The Terminator is going to continue the insanity, and make it worse. And unfortunately, at present, the Democrats don't have a leader to stand up to him.

Economic Notes



Soaking up information and talk on my Pittsburgh/western PA visit, I can report that some real estate activity has picked up, but largely due to refinancing when rates bottomed out. Now people are starting to worry about inflation, due to the influx of federal money.


But Paul Krugman makes a persuasive case that stimulus must continue in his ironically titled column "Stay the Course" (think Bush and Iraq.) The column, which appeared Monday, says that inflation isn't going to rise a lot, because the influx of federal government money simply replaced the private money that wasn't there. And indeed, today's news is that inflation in May was below expectations. He also warns that stopping stimulus too soon is exactly why the Great Depression didn't end sooner, and Japan had such a dismal 90s.

Back in CA, things are grim. State government went begging to Washington and for now, got turned down, but this article sets out some of the stakes. Meanwhile, faculty at HSU were told to expect what amounts to a 12% pay cut. Twelve percent! And that's just the beginning.

The Terminator vs. the Helpless:With this photo of a demonstration against health care cuts in Los Angeles by health care workers and patients, the New York Times story about the California budget cuts: "The cuts Mr. Schwarzenegger has proposed to make up the difference, if enacted by the Legislature, would turn California into a place that in some ways would be unrecognizable in modern America: poor children would have no health insurance, prisoners would be released by the thousands and state parks would be closed. Nearly all of the billions of dollars in cuts the administration has proposed would affect programs for poor Californians, although prisons and schools would take hits, as well."

California Nightmare Passed

This is the budget the CA legislature finally passed that Governorahnold called "perfect" as described in the lede of the New York Times: After five days of intense, nearly nonstop negotiations over how to close a $41 billion gap, California state senators agreed early Thursday morning on a budget that raises taxes, cuts deeply into services and borrows far into the future, leaving nearly every person in the state scathed in some way.'

The Times quotes the governator: “Some special interests may not like this budget — but like I always say, what’s good for the people is not always good for special interests." So Ahnold still does comedy. The budget process for the last several months was nothing but bribing enough Republicans to pass it with special interest provisions, including the open primary that the last R wanted, and hefty corporate tax breaks for multinationals, in a budget that raises taxes for ordinary people and reduces services. To be fair, some Dems had to be bribed too. Politics is rarely uglier than at the level of state legislatures.

But yes, California lives to stew in its contradictions another day.

The Latest CA Hold-Up

Last night's deal fell apart early Wednesday, and by Wednesday night, there's another deal between one R legislator and the governator, though the Dems haven't signed on yet. The deal is for constitutional amendments added to the budget bill--that's not a typo and it's not clever enough to be satire--including one for open primaries.

Meanwhile, L.A. is considering water rationing this summer for the first time in twenty years, and a major cache of fossils was found in L.A. That's separate from the talking fossils destroying the state in Sacramento.

California Follies Update

Word just before midnight is that the one more R vote needed to pass the extremely compromised California budget has been obtained, at the possible cost of a coup in the R Senate leadership, with an uberwingnut replacing the "normal" wingnut as Senate minority leader.

But no vote expected tonight, so deal or no deal tomorrow.

Gandhian Hardball

Today's topic for meaningless chatter is bipartisanship. GOPers say the stim wasn't, the Obama folks insist the stim was: David Axelrod: "the package reflects the thinking of members of both parties. And I think that over time . . . there'll be a positive effect of just having dialogue, of just talking, which has not happened for a long time in this town."

On the other hand, President Obama told Clarence Page he thought the Republicans decided to make the stim a party line vote even before he first met with them. Andrew Sullivan sees it in stark terms--writing about Republicans: Their clear and open intent is to do all they can, however they can, to sabotage the new administration (and the economy to boot). They want failure. Even now. Even after the last eight years. Even in a recession as steeply dangerous as this one. There are legitimate debates to be had; and then there is the cynicism and surrealism of total political war. We now should have even less doubt about what kind of people they are. And the mountain of partisan vitriol Obama will have to climb every day of the next four or eight years."

The New Yorker's Hendrik Hertzberg has a creative take: "Fifty years ago, the civil-rights movement understood that nonviolence can be an effective weapon even if—or especially if—the other side refuses to follow suit. Obama has a similarly tough-minded understanding of the political uses of bipartisanship, which, even if it fails as a tactic for compromise, can succeed as a tonal strategy: once the other side makes itself appear intransigently, destructively partisan, the game is half won. Obama is learning to throw the ball harder. But it’s not Rovian hardball he’s playing. More like Gandhian hardball."

But given that all the steps Obama is taking and will take are going to take time to work, probably beyond the next election cycle in 2010, reinforcing political party support is going to be a topic (which should thrill the kids bidding each other up on the rec list at Daily Kos, with their adrenelin needs for contentious election campaigns.) The gossip on filling cabinet vacancies includes Kathleen Sebelius for HHS and Harold Ford, Jr. for Commerce. But these appointments would take two strong candidates out of contention for picking up Senate seats--much more of the moment for Sebelius, who is the only Kansas Democrat polling well enough to win in 2010. Not only the quest for the 60th Democrat is at stake, but the symbolism of Kansas is worth a lot in future inroads into GOPer territory.

But there are a lot of other uncertainties as well as other opportunities. Chances seem pretty good for a pickup in New Hampshire, but now the Dem seats in Illinois and perhaps even New York and Colorado are less than certain, with possibly contentious primaries ahead. On the other hand, if Charlie Crist runs for the Senate in Florida, given his support of Obama and the stim, there may be another R vote to join the lonely three. (Assuming Spector survives both a primary and a general in PA, which is not at all a sure thing. I'm not altogether sure he's even going to run.)

As ridiculous and repulsive as politics gets on the national level, it can't hold a candle to state politics. Right now California is working hard to commit suicide. Our legislature is full of fools and knaves, and the governator is so ineffective that people may begin to pine for Gray Davis. A budget deal, which gets worse by the minute, is only exceeded in awful consequences by no budget deal--and even if there is one, it may well be nullified by angry voters as early as May. In an apt if a little inside baseball analysis, there's this truth: The bill is coming due for 30 years of anti-tax zealotry and the belief that we can provide whatever citizens need without paying for it.The corporate tax breaks are really insulting, but the state's credit is zilch and it's estimated that delay will cost some $300 million simply in stopping and then restarting ongoing infrastructure projects. All in all, things are getting too big for such small politics.