A voters’ guide to California’s 5 ballot measures

The unvarnished truth about the propositions on Tuesday’s ballot.

 

By George Skelton, Capitol Journal in the Los Angeles Times

June 3, 2010

From Sacramento —

It’s time again for some head-scratching and eye-glazing.

There are five propositions on Tuesday’s state ballot. And they run the gamut from a no-brainer to some efforts at Sacramento reform to a special-interest scam.

Here’s my voters’ guide, untainted — unlike those slick campaign mailers — by payoffs from politicians and predators.

Taking the measures in numerical order:

*Prop. 13 is only a distant, calm cousin of its namesake, the revolutionary property tax-cutter born 32 years ago.

This measure would allow earthquake retrofitting of all types of buildings without their owners ultimately being assessed higher property taxes because of the improvements. The structures would be reassessed only when sold.

This would create jobs and could save lives. What’s not to like?

*Prop. 14 would significantly change state elections by creating an open, more voter-friendly primary, called a “top-two.”

There would be only one ballot, open to all candidates and voters. The top two vote-getters, regardless of party, would advance to the general election, similar to the way local officials are elected in California. No party primaries. No party nominations. But candidates could list their party affiliations.

The goal is to force candidates to appeal to a wider range of voters than just the ideologues in their own party. Hopefully some pragmatic moderates would be elected, particularly to the Legislature, which is now polarized by partisanship. At the least, primary voters would be given a wider selection of candidates.

Power would be taken from the party pooh-bahs and given to the public. That’s one reason they fear it.

Politicians also complain that in some heavily Democratic or Republican districts, they might be required to run against a fellow party member in November, meaning real competition. That may be inconvenient for them. But it’s a better deal for voters, providing them with a more meaningful choice of candidates.

The only reason to vote “no” on Prop. 14 is if you’re satisfied with what has been happening in Sacramento. If you’d like to shake things up and try something different, vote “yes.”

*Prop. 15 would create a pilot program for public financing of state campaigns. It would apply only to candidates for secretary of state and just for the 2014 and 2018 elections.

The financing really wouldn’t be public. It would be unfair — tapping only lobbyists, their firms and the interests they represent. They’re easy targets.

But the most important element of this measure is not the pilot project. It’s repeal of the law that bans public financing of state candidates. The ban also applies to counties and most cities.

This measure would authorize the Legislature and the governor to enact public financing without further voter approval. Same with boards of supervisors and city councils.

The only way to rid the Capitol of special-interest dominance is for the public to finance the politicians’ campaigns. When the public doesn’t buy the politicians, the interests do.

This measure is a small, hesitant step along a path worth following.

*Prop. 16 is a Pacific Gas & Electric Co. scam. Pure and simple.

Its purpose is to lock PG&E customers into the utility’s grasp without any realistic opportunity of ever escaping to an electricity provider with cheaper rates. The San Francisco-based utility is trying to assure itself a monopoly on current Northern and Central California ratepayers.

This measure erects a practically impenetrable barrier for local governments or public utilities to start up or expand electric service, or contract with a provider other than a private utility.

It does this by requiring a two-thirds vote of the electorate. PG&E’s advertising is disingenuous because the utility equates its proposed two-thirds requirement with what’s needed for most local tax increases.

But Prop. 16 has nothing to do with taxes. We’re talking about ratepayers who most likely are being gouged for more money than they’d be paying a public utility for the same or better service.

Anyway, people already have the right to vote whether they want to be served by a public utility. But that’s not good enough for PG&E, because only a majority vote currently is required for approval.

This proposition would apply to the customers of any private utility, such as Southern California Edison or San Diego Gas & Electric. But only PG&E is paying the campaign freight, nearly $50 million.

There are many opponents — public utilities, local governments, irrigation districts, farmers, developers — but there’s very little opposition money. Public entities are prohibited from spending money on political campaigns. And that’s why they’d never be able to muster a two-thirds public vote to escape PG&E’s clutches.

This insidious measure is the epitome of what ails California’s initiative system.

*Prop. 17 is another special-interest offering.

The bankroller, Mercury Insurance Group, is trying to change auto insurance law to increase its market share. It wants to steal customers from other insurers by allowing motorists to bring along their continuous-coverage discounts.

Mercury claims most drivers would get reduced premiums. Opponents contend premiums actually would rise because rates would go up for the previously uninsured.

It’s much too complicated for an average voter who isn’t in the insurance biz. It’s one of those issues best left to elected representatives.

I’m inclined to agree with opponent Harvey Rosenfield, founder of Consumer Watchdog, who says: “When was the last time an insurance company spent $13 million to save you money? The answer is never.”

In fact, Mercury has spent $14.6 million to promote the measure.

Mark me down as suspicious.

george.skelton@latimes.com

Buying Insurance? Know the Company doing the Selling

Considering buying some new insurance?  Before you do, you need to know if the insurance company will be there when a claim is placed.  That goes for auto, health, and life insurance.  Consumer Reports directs its subscribers to TheStreet.comJust enter the company name and the insurance you are considering.  You may be delighted or dismayed.  I received both good and bad information.  Insurance companies have been known to go out of business.

Houston, We Have a Problem!

The tragic Gulf oil disaster of the past five weeks finally focused Congress’ attention on the serious safety problems with offshore drilling.  But why does it take a national disaster to get their attention?  

A bill to make our food safer has been sitting in Congress, near final passage, for a year. It would increase inspections and help food companies catch contaminants before the food gets to our local supermarkets.

Both the U.S. House and Senate passed Wall Street reform bills, but now a final bill must be worked out between them – and the lobbyists will be pressing for loopholes!

The Obama administration says the federal government payroll will grow to 2.15 million workers this year.  This number includes the military.  There will be 1.43 million civilian workers on the payroll in fiscal year 2010.  More surprising is that this number does not include postal workers.  My source for this data is a Washington Times article dated February 2, 2010.

Despite this enormous staff our government has failed to provide the health and safety, protection for our wild life, or the security we desire. 

The Food and Drug Administration has not protected society for a laundry list of errors caused by both food processors and drug manufacturers.  A recent good example is Yaz and Yasmin.  There are issues about its safety but the product is still being sold.  Remember the Peanut Corporation of America?  That company was selling contaminated product and was shutdown only after the spot light of the news media was focused on the issue.  Just today there is concern about children’s over the counter Tylenol and other child medications.

The Securities and Exchange Commission had data warning about Bernie Madoff but did nothing to stop his Ponzi scheme.  More recently the news reports that members of the SEC staff have been spending their days looking at internet porn sites.  There has been no effort to ensure the accuracy of bond rating agencies.

The President fired his chief coordinator for terrorist tracking as the result of the stumbles that have occurred.  The Christmas Day bomber failed as the result of his incompetence.  The Fort Hood massacre plan went undetected.  The Times Square bomber failed as the result of his incompetence.     

Now we have the Minerals Management Services Department of the Department of the Interior that clearly has not carried out its responsibilities in the Gulf Of Mexico.

Are Americans supposed to have confidence in their government?  Of course, but we do not.  Is it likely that another president could do a better job?  It’s not likely because the bureaucracy is too big.  If the government can’t do the job then why are we paying those high taxes?

Steps to Solve the Immigration Problem

NBC is devoting a significant part of today’s programming to the immigration issue.  Doug McIntyre is a columnist in the Los Angeles Daily News.  This column appeared on May 22, 2010 on the front page.  I agree with most of what is written here.  This well written article deserves everyone’s attention.

The debate over immigration has degenerated into idiocy, with dueling boycotts and pickets outside basketball games. When Phil Jackson becomes Hitler it’s time to pull the plug on the stupidity and solve the problem.

Extremists demand either open borders or mass deportations. Tragically, our cowardly or pandering leaders have allowed the extremists to set the tenor of the debate by ducking the issue for decades. Here are the 10 points I believe would actually solve the problem:

One: Build a fence. Not a flimsy chain-link job we all hopped as kids, but a 1200-mile, Gulf-to-Pacific double fence with a road down the middle patrolled by ICE agents.

A physical barrier is essential. You can’t reform it if you don’t control it.

Two: It’s time for a tamper-proof national ID card. One third of illegal immigrants come here through our airports. They’re students, tourists and guest workers who simply vanish when their visas expire. Like it or not, we’re all going to have to “show our papers.”

Three: Sanctuary city laws have to go. Local law can’t undermine Federal law. Special Order 40 should be nullified.

Four: Employers who knowingly hire illegal workers should be jailed. A few CEOs doing the perp-walk will send a powerful message – we respect and protect the value of labor.

Five: Eliminate birth right citizenship. It’s hard to imagine the authors of the 14th amendment ever intended it to reward law-breakers by creating a loophole for anchor babies.

Six: Once the Federal Government has demonstrated actual control of our borders, we need a top to bottom reform of the legal path to citizenship. It shouldn’t take years and cost many thousands to come here. We also need to be picky about who we let in – for both security reasons and for the economic health of the country. Talent and skill should be a priority.

Seven: Children who were carried here by their parents, often as infants, should be allowed to go as far in life as their ability and ambition can take them. Children shouldn’t suffer for the actions of their parents.

Eight: Create a guest worker program that’s enforceable – that means a way to verify a worker actually leaves the country at the end of his or her contract.

Nine: Immigrants have to make a commitment to be American. You are not a traitor to your race when you embrace the land you have voluntarily entered – a country that takes you in, protects your rights and offers boundless opportunities. A little gratitude goes a long way.

Ten: Only after the first nine steps have been taken should we grant amnesty. Allowing illegal immigrants to remain in the country under some kind of sub-citizen designation would create second-class citizenship. We all have to be in this together.

Doug McIntyre’s column appears in the Los Angeles Daily News on Wednesdays and Sundays. You can reach him at dncolumnist@dailynews.com.

Summary Of Key Provisions Of Senate Financial Overhaul Bill

I wanted restoration of the Glass-Steagall Act.  It was the most far reaching of any financial control law in American History.  The new law may be an improvement but I fear the details will provide loopholes that will not fulfill American needs.

Following is a an abridged summary found on Morningstar.

-NEW REGULATORY AUTHORITY: Gives federal regulators new authority to seize and break up large troubled financial firms without taxpayers bailouts in cases where the firm’s collapse could destabilize the financial system.

-CONSUMER AGENCY: Would create a new Consumer Financial Protection Bureau within the Federal Reserve, with rulemaking and some enforcement power over banks and non-banks that offer consumer financial products or services such as credit cards, mortgages and other loans.

-DERIVATIVES: Would require the vast majority of all derivatives trading be executed on a public exchange as opposed to between banks and their customers as many contracts are currently written.

-FINANCIAL STABILITY COUNCIL: Would establish a new, nine-member Financial Stability Oversight Council, comprising existing regulators charged with monitoring and addressing system-wide risks to the nation’s financial stability.

-OVERSIGHT CHANGES: Would eliminate the Office of Thrift Supervision, but an attempt to strip the Fed of its oversight of thousands of community banks in the bill was reversed with an amendment.

-FEDERAL RESERVE OVERSIGHT: Calls for a one-time government audit of all of the Fed’s emergency lending programs from Dec. 2007 onward, including facilities used to help deal with the collapse of Bear Stearns & Co. and the program to stabilize asset-backed securities markets.

-BANK CAPITAL STANDARDS: Under an amendment adopted unanimously with little fanfare, the bill would force banks with more than $250 billion in assets to meet higher risk- and size-based capital standards.

-CREDIT RATING AGENCIES: The bill will establish a new self-regulatory organization for credit rating agencies designed to eliminate a conflict in the current system where an institution pays for its rating and, at times, shops for the best rating it can get for the lowest price.

-INVESTMENT ADVICE: Several Democrats had hoped to tighten regulations for broker-dealers who give investment advice, but they weren’t given a floor vote on their amendment despite near constant lobbying from consumer groups.

-MORTGAGE RISK: Would require firms that securitize mortgages and other loans to hold a portion of the risk on their own balance sheets, but–under an amendment added on the floor–also would direct regulators to establish a category of less-risky mortgage products– primarily fixed-rate, fully amortizing loans–that would be exempt from the risk-retention rule.

-HEDGE FUNDS: Would require hedge funds that manage more than $100 million to register with the SEC as investment advisors and disclose to the agency information about their trades and portfolios.

-CORPORATE GOVERNANCE: Would give shareholders of public corporations a non-binding vote on executive pay, and would give the SEC the authority to grant shareholders proxy access to nominate directors.

-INSURANCE: Would create a new Office of National Insurance within Treasury to monitor the industry, recommending to the systemic risk council insurers that should be treated as systemically important, as well as coordinate international insurance issues.

Jobs, Jobs, Jobs, Jobs

Just two months ago (March 22) Republicans, especially talk radio and cable TV commentators, were banging the drum calling for repeal of the new health care plan.  It seemed that they had their cause for the November election.  As we move away from the passage of health care the focus has changed.  No wonder.  We have had the scare of the Times Square bomber, the BP oil spill, and the Greek financial crises to occupy our time along with a few other unusual occurrences.

Predicting the outcome of the November congressional elections would not be a worthwhile endeavor.  Yet, I must point out that there has been a lack of focus on the state of this economy.  The words “jobs, jobs, jobs” rings in my ears.  “It’s the economy, stupid” was a phrase in American politics widely used during Bill Clinton’s successful 1992 presidential campaign against President George H. W. Bush.  The words were coined by Clinton campaign strategist James Carville refers to the notion that Clinton was a better choice because Bush had not adequately addressed the economy, which had recently undergone a recession.

There has not been one plan enunciated by either political party offering a solution to our on going 10% unemployment situation.  We all know that the unspoken real number is 15%.  It has not been addressed.  Incentives to bring jobs back to this country are all mediocre.

Government’s failure to do its job is going to result in many incumbents in both political parties finding new jobs.

Wall Street Won’t Change

The set of characters who are publicly promoting or opposing bank reform are not really interested in any financial reforms no matter what they say.  The reason is simple.  There is a significant amount of money to be made keeping things exactly the way they are today.  All of these participants have developed perfect “poker faces.”  None become emotional even when they are caught in a lie or when defending their carefully determined strategy.

Senators Thomas Dodd (D) and Richard Shelby (R) were on last week’s Meet the Press.  Both acting very professional and directing there responses to host David Gregory, neither confronted the other even though it was apparent from their words that they have significant disagreements on what financial reform should look like.  Dodd is not running for re-election because of one major reason.  He has taken contributions from Wall Street and was the beneficiary of a specially designed loan from Country Wide Mortgage.  The progressive issue-advocacy group Americans United for Change (AUC) reports Shelby had received $5.3 million in contributions from the financial industry since 1998.  Of course both men deny these allegations.

Henry Paulson, Secretary of the Treasury in the Bush administration is a former CEO of Goldman Sachs.  He saw that his ex employer was protected but Lehman Brothers, a Goldman Sachs competitor, was allowed to go bankrupt.  Coincidence?  Not likely!

Alan Greenspan, the most famous chairman of the Federal Reserve, previously served as a corporate director for Aluminum Company of America (Alcoa); Automatic Data Processing, Inc.; Capital Cities/ABC, Inc.; General Foods, Inc.; J.P. Morgan & Co., Inc.; Morgan Guaranty Trust Company of New York; Mobil Corporation; and The Pittston Company.  He was appointed to that most important job by President Ronald Reagan.  In mid-January 2008, hedge fund Paulson & Co. hired Greenspan as an adviser on economic issues and monetary policy.  Paulson & Co. is the company that has been implicated in the Goldman Sachs case of allegations related to bets against mortgage derivatives which earned the firm billions of dollars last year and is now front page news.

John Paulson (founder and head of Paulson & Co.), age 54, a Harvard MBA whose personal wealth is estimated at $12 billion by Forbes magazine, is at the heart of the government’s fraud case against Goldman, Sachs & Co.  Newsweek magazine describes how he went from obscurity to “place alongside George Soros and Warren Buffett as an oracle of investing.”    

Ben Bernanke appears to be one of the few in government that has not been tainted by Wall Street.  However, his behavior is unchanged from that of Alan Greenspan.  Perhaps he has been infected too.

If you believe this cast of players will change their ways or the way Wall Street functions then you are in a dream world.

The president wins on the appearance front.  Nothing will really change.

Now for the Sales Pitch

BusinessWeek’s April 19, 2010 edition cover story is titled “THE HOT HAND OBAMANOMICS IS WORKING BETTER THAN YOU THINK.”  Newsweek’s April 19, 2010 edition cover story is titled “AMERICA’S BACK! THE REMARKABLE TALE OF OUR ECONOMIC TURNAROUND.”  

These are sales pitches telling readers how much the economy has improved.  Of course each article offers an array of graphs and art work to support their contentions.  It’s true that corporations have seen improved earnings.  That makes stockholders happy but most of us don’t own enough stock to experience any change in our lives. 

From the Investment Company Institute web site: The average 401(k) account balance moved up and down with stock market performance, but over the entire five-year time period increased at an average annual growth rate of 7.2 percent, attaining $86,513 at year-end 2008.

Another blog titled Bargaineering provides this data from the Employee Benefit Research Institute’s latest report on Individual Account Retirement Plans by age group (August 2009):  

  • < 35: $6,306
  • 35 – 44: $22,460
  • 45 – 54: $43,797
  • 55 – 64: $69,127
  • 65 – 75: $56,212
  • 75+: (sample size insufficient)
  •    

Some words of warning after you read this:  

  • Remember that this data is just data, you can’t draw any conclusions of what’s right or wrong from the statistics alone.
       

    If you’re “below average,” you shouldn’t feel bad about it. Age is not a good indicator of where you are in your life. Some people get a later start and others have a more inflated lifestyle, how much you’ve saved by when should only give you a bar to reach.

    If you’re “above average,” you shouldn’t rest on your laurels and think you’re doing great. Much like the words I wrote for those who are below, being above doesn’t mean you’ll have enough for retirement. You have a few years until retirement, a lot can happen then, so keep at it.

    Average doesn’t mean someone in their 20s that has more than $6,306 is set in retirement (or that someone with less is screwed). It’s estimated that you should spend about 4% of your nest egg each year. At 4%, your nest egg should last long enough. How does that 4% figure translate to your estimated yearly expenses? Divide how much you think you’ll spend by 0.04 and you have your target (based on that rule of thumb) – $50,000 a year requires a nest egg of $1.25M. 

  •  

Other web sites support the above data.  This translates to most of us DO NOT have sufficient savings to experience a consequential impact of a rising stock market.  
 
Since the week ending November 21, 2009 Weekly Initial Job Claims report from the U.S. Department of Labor have ranged from 432,000 to 496,000 people.  For the week ending April 10, 2010 those new claims were 484,000.  There has been no downward trend.  The same department reports that over 15 million Americans are unemployed.  The number of unemployed was just short of that number in August of 2009.  The numbers have not changed since then.  
 
 Why aren’t Tea Party demonstrators parading about this issue?  Apparently they are mostly White and well off! 

Hybrid Cars Are in Everyone’s Future

Hybrid care.com has gone overboard in their listings because they include diesel and high mileage internal combustion vehicles.  The owner of that web site needs the advertising revenue.  That makes the reliability of the data and opinions questionable. Motor Trend magazine, Popular Photography and other magazines that rely on manufacturers for survival cannot provide unbiased information.

News that UPS has expanded its fleet of alternative-fuel vehicles adds to the growing hybrid vehicle trend.  The number of auto manufacturers offering hybrid technology has grown substantially in the past few years.

I own  a 2001 Nissan Maxima.  It has a V6 internal combustion engine. On freeway and highway driving from Los Angeles to San Jose the mileage was 30 MPG.

Consumer Reports was a good resource for automobile reliability.  However, the error in not detecting Toyota acceleration problems has put the magazine’s reliabilty into question.   

                                                                  Combined
                                                                  MPG

Toyota Prius                                            50 MPG

Honda Civic Hybrid                                  42 MPG

Honda Insight                                         41 MPG

Ford Fusion Hybrid                                  39 MPG

Mercury Milan Hybrid                              39 MPG

Nissan Altima Hybrid                               34 MPG

Lexus HS 250h                                         34 MPG

Toyota Camry Hybrid                              33 MPG

Chevrolet Malibu Hybrid                          29 MPG

Lexus GS 450h                                         23 MPG

Mercedes S400 BlueHybrid                      22 MPG

Lexus LS 600h L                                      21 MPG

Hyundai Sonata Hybrid                           38 MPG

Hyundai Accent Hybrid                            n/a

Honda Fit Hybrid                                     n/a

BMW ActiveHybrid 7                               n/a