I’ve been reading Thomas Sowell for about 35 years now. He’s one of the few economists who can write in clear prose. Check out his columns and “The Thomas Sowell Reader.”

Or spend a month of evenings on his trilogy on global cultures. He spent several years traveling the world, analyzing what he saw. In modern America, especially on university campuses, “diversity” is used as a way to turn us against one another, with the government taking over greater portions of our lives.

But for Sowell, diversity represents the delightful variety of humanity, and is something to be enjoyed. The keys to tolerance are freedom and limited government.

Sowell has lived in California for a couple of decades and has an office at the Hoover Institution. I was delighted  to meet him about a decade ago when he stopped by our offices at the Orange County Register, when I was an editorial writer there with my colleague Steven Greenhut, to promote a book. Sowell is a true social and economic genius. He has a cheery affinity for California.

Jerry’s Choo-Choo

Sowell writes today about California’s absurd Jerry Brown and the governor’s obsession with the equally absurd California High-Speed Rail authority: “California has a huge state debt and Washington has a huge national debt. But that does not discourage either Governor Jerry Brown or President Barack Obama from wanting to launch a very costly high-speed rail system.

“Most of us might be a little skittish about spending money if we were teetering on the brink of bankruptcy. But the beauty of politics is that it is all other people’s money, including among those other people generations yet unborn.”

He writes about how Spain’s system is supposed to be a model for California’s bullet train. But he notes the the Iberian high-speed rail is subsidized by the Spanish government, which in turn is subsidized by the European Union.

He continues: “Someone once said that government is the illusion that we can all live off somebody else. Spain’s high-speed rail system is not even covering its operating costs, never mind the enormous costs of setting up the system in the first place. One reason is that half the seats are empty in the high-speed trains in Spain.

“That is what happens when you don’t have the population density required for passengers to cover the operating costs. You would need the hordes of Genghis Khan riding the high-speed rail system to cover the additional costs of the rails and the trains.

“An economics professor at the University of Barcelona says that Spain ‘has not recovered one single euro from the infrastructure investment’.”

Japan’s Train

Sowell points out that Japan’s bullet train between Tokyo and Osaka carries 130 million passengers a year. “But Tokyo alone has more than three times the population of San Francisco and Los Angeles put together.”

I would add that Japan’s population density is 873 people per square mile. But California’s is just 242 per square mile. That’s less than a third as much. So the ridership, and the productive population to support the infrastructure, is much smaller.

He notes that the first leg of the rail network supposedly will be laid between Fresno and Bakersfield, away from the state’s major population centers. “The only reason for even thinking about building a high-speed rail line between Fresno and Bakersfield is just to get the project underway with federal money, making it politically more difficult to stop the larger project for a similar rail line between San Francisco and Los Angeles.

“In other words, they are going to start wasting money out in the valley, so that they will be able to waste more money later on, along the coast. This may not make any sense economically, but it can make sense politically for Jerry Brown and Barack Obama.

“An old song ended, ‘You’ve been running around in circles, getting nowhere – getting nowhere very fast.’ On high-speed rail.”

What a joke the whole thing is, beginning with Gov. Moonbeam.

But I dug out a YouTube of the song Sowell mentioned. It’s by the great Irving Berlin. Here’s a version by Der Bingle, Bing Crosby, another Californian:

Feb. 1, 2012

There is a problem with this plan however, at the moment, it’s a good problem – cap and trade is not actually up and running yet.

Whew!

As I wrote last week, the High-Speed Rail project received yet another another report very critical of the High-Speed Rail Authority’s most recent attempt at a business plan. The State Auditor’s office released a second report in two years, which found that the high-speed rail project relies on uncertain funding sources and that “the program’s overall financial situation has become increasingly risky.”

Removing any lingering doubts that the High-Speed Rail project is a humongous farce, even several state agencies have warned lawmakers not to proceed.

Assemblywoman Diane Harkey, R-Dana Point, released a list of the of the officials, entities and agencies which have cast doubt on the high-speed rail project. The list includes:

-California High-Speed Rail Peer Review Group

- California State Auditor

-California State Treasurer

-Legislative Analyst’s Office

-Local governments including Tulare County, Madera County, Kings County and the City of Palo Alto

-Several Democratic and Republican state legislators and US Representatives

-UC Berkeley Institute of Transportation Studies.

And since the High-Speed Rail Authority, the Legislature and the Governor have not put the kibosh on the nearly $100 billion train plan, Harkey introduced AB 1455, to halt state debt funding for the high speed rail project. The bill would address the unprecedented project cost overruns and cut off spending.

Sen. Doug LaMalfa, R-Richvale, also authored a bill to deal with the out-of-control train. SB 985 asks the voters if they want to proceed with California’s proposed $98.5 billion high speed rail project. “Voters have been misled about the true costs of High Speed Rail from the start, said LaMalfa in a written statement today.  “The costs have tripled since 2008 and every objective observer has said this project it too expensive and is unlikely to be completed. “

“The state’s cap and trade program is not yet in operation and revenue estimates of $1 billion per year are unreliable and unsubstantiated,” Harkey said in a press statement today. “Relying on projected revenues that fall short is the key reason why our state deficit continues to explode year after year.  To rush this project forward, just using up the $3.5 billion of Federal funds, with the hope of an additional funding mechanism based on guess work is irresponsible. The federal government provided 3 percent but will not be as eager to help fund the additional 97 percent.”

La Malfa noted that the California Supreme Court ruled that the ballot language for Proposition 1A, the High-Speed Rail Act of 2008, was not only misleading, but the High Speed Rail Authority admitted to using government funds to lobby Congress and the State Legislature. “Congress has withdrawn future funds from the project, the Legislative Analyst Office has called into question the legality of the financing for the proposed first leg of construction, and the High Speed Rail Peer Review recommended not building the project,” said La Malfa.

“Moving forward with just the first $2.7 billion in bonds to fund the ‘train to nowhere’ section of rail will cost California taxpayers $180 million a year just to service that debt.  That is less than 3 percent of the total cost to build the project,” continued LaMalfa.   “Are the supporters of this project willing to layoff teachers, cops and firefighters to pay for an unusable section of track?”

“It is time the voters got a do over,” said La Malfa.  ”If the legislature acts quickly this measure can be on the November ballot and voters can have their say – real costs in hand.”

The “excitement and anticipation of the future of rail travel?” Really?

Good Day Sacramento was the sponsor of this disgusting, pandering, advertisement for High-Speed Rail in California. The print version ad asks for contestants to create a 30-second music video about train travel using the theme, “Where will your ticket take you?” The commercial video is HERE.

Are they kidding? Who is paying for this publicly funded enterprise? And what a cheapo way to get desperately-seeking rock stars to do the commercials for publicly-funded rail travel for free.

The official rules say that the contest is sponsored by the  San Joaquin Regional Rail Commission and the ACE Train, also known as the Altamont Commuter Express train. The daily commuter train has 3,700 riders.

3,700 riders?

The Altamont Commuter Express, managed by San Joaquin Regional Rail Commission, with operations contracted to Herzog Transit Services, (founded in 1993, right before rail agencies were created in many states) currently provides commuter rail service between Stockton and San Jose and apparently takes “2 hours and 10 minutes end-to-end,” with eight stops. Really? A train commute between Stockton to San Jose takes two hours? This is Northern California, not Los Angeles – we can drive to so many locations in the North state within one hour easily, and with very little traffic.

California’s High-Speed Rail Authority was created in 1996.

High-Speed Rail Contracts

“On August 19, 2011, Caltrain announced a staff recommendation to sign a five-year, $62.5 million contract with Missouri based TransitAmerica Services, a subsidiary of Herzog Transit Systems, after taking proposals from three other firms, including Amtrak, which has provided operating employees since 1992, the San Jose Mercury News reported.

But the motivation is more complex. With public approval by California voters in the toilet for High Speed Rail, and the Fresno to Bakersfield segment under intense public scrutiny, it appears that the  Altamont train advocates are hoping for a shot of the Proposition 1A public funding for the existing rail system. But, there is no way that this segment could be “high-speed.” And, there is already an existing train system. Why build a new one right now?

As mandated by Proposition 1A, the California High Speed Rail Authority is beginning the  process of studying the Altamont Corridor alignment. Have a look at their announcement newsletter for details. ”The project corridor is defined as San José to Stockton, with a possible spur to Modesto.”

The census of 2010 claimed that Stockton had 291,707 residents; San Jose had 945,942.  And the train between the two cities of 1.3 million people has 3,700 riders?

Altamont Express train revenues “as of 2006-07 generated $4 million, about 30% of the $13.3 million operating and administrative cost. That breaks down to $3,513 per rider, $270 per month, if there are really 3,700 riders.” And, they are upside down $9 million. The riders, the shortfall and the costs don’t add up.

The inside baseball story is that this train line has been a failure since the Dot.com crash in Silicon Valley. The rail line ostensibly was created to handle the commuters into Silicon Valley during the boon. But once Silicon Valley crashed, there were not nearly the number of daily commuters traveling between San Jose and Stockton as planned – and it hasn’t rebooted.

Grammy Connection

The advertisement for the Grammy awards show is really interesting. The tags on the advertisement are, high speed rail, CBS, Grammy Award Trains, contest, awards, HSR and BART. It would be interesting if any of the links directed you to the correct sites – instead they take you to “youtube” sites advertising each of the subjects.

Could this be a scam?

You can read all about this contest on the Altamont Commuter Express Facebook page - but is the page maintained by public employees? 

Is this what our California public agencies are now using taxpayer funds for? I am still researching which Public Relations firm(s) is pushing this deceptive campaign. The roots run deeply when it comes to rail and High-Speed Rail contracts.

Side note: Apparently there is a problem with onboard Wifi – “They are currently testing their on-board Wi-Fi internet service and hope to get it restored soon.” How sophisticated. But they want a free commercial, and will probably get plenty from Hollywood-wanna be saps.

JAN. 24, 2012

Ahhh. SMUD wants to prepare rate payers for the future. I know that I feel better about my $370 electric bill.

This is the garbage bureaucrats think will pass muster with rate payers. Last year at this time, my electric bill was about $100 less. The same has happened with my PG&E bill – both are inexplicably higher, and during a much warmer, dryer winter.

For your reading pleasure, I’ve copied the entire “2012 Rate Restructuring: frequently asked questions.” I’ve added a few of my own thoughts and comments (in red), where the SMUD creative writing surpassed even Harlequin Romance novel standards.

Reader Warning: Be careful – you may need a barf bag before you finish. I hope SMUD didn’t pay a PR firm to write this drivel.

“Rate Restructuring,” in the words of SMUD:

Why is SMUD proposing to restructure its rates? 
SMUD wants its rates and charges to better align with the costs they are meant to reflect, including the cost of electricity and the cost of maintaining the infrastructure that supports a reliable power-delivery system. Proposed changes would move charges closer to that ideal. The “ideal” of a reliable power delivery system involves proposed changes that involve higher rates. I get it. 

For small commercial customers, a key part of the proposed restructuring is to have rates better reflect the cost of electricity when it is used. This would encourage customers to reduce usage during the summertime hours of peak demand, when electricity is most expensive. Read the general manager’s report on rates and services.

The small commercial customer will take the biggest hit – as usual. They don’t have high-paid lobbyists or big unions to fight back. And don’t forget the rate payers in higher socioeconomic zip code areas.

Given all of the subsidies, discount programs and free government stuff to low-income households, the middle class neighborhoods are probably bringing home a great deal less – especially since we are taxed on our earned income.

Is SMUD doing this to increase its revenues?
No. (Of course not) The proposed restructuring is designed to be “revenue neutral” for SMUD. It would not be a general rate increase, and it would not produce any increase in SMUD revenues. However, the restructuring could impact some customers because components of the rates are changing. SMUD has done it this way, and used this creative language so that no one will notice that they are not subject to CPUC oversight with a general rate case hearing… not that anyone should ever be subject to CPUC oversight…

“Revenue neutral” is secret code language for we are hiding the increase elsewhere, but rest assured, we will eventually collect. 

What are the most significant elements of SMUD’s proposal to restructure rates?
SMUD is proposing small increases in fixed monthly service charges to recover a higher proportion of the total infrastructure costs associated with providing service to residential and small commercial customers. These costs include equipment such as wires, poles, transformers, and substations. (Medium and large commercial customers already pay closer to their proportionate share of these fixed costs in monthly charges that don’t depend on how much electricity they use.) You won’t notice a “small increase,” right?

To offset the increase in the fixed service charge and minimize impacts on residential customers, SMUD would slightly reduce its kilowatt-hour prices for electricity usage. In addition, SMUD would shorten the summer billing season from six months to four months (June through September). Rates per kWh will continue to be higher in the summer billing season than the rest of the year, reflecting market costs. Only a utility bureaucracy can “shorten the summer billing season.” Even Mother Nature can’t do that.

For all small commercial customers, SMUD is proposing “time-of-use” rates. Customers would be charged more for power between the peak usage hours of 3 and 6 p.m. on weekdays in summer, when electricity is most expensive. SMUD would shorten the summer billing season and reduce the kWh price of electricity on all “off peak” hours.
SMUD proposes to institute a late fee of 1.5 percent on the current amount due if SMUD does not receive full payment within three business days of the due date on the bill. And if you don’t pay within 3 business days, Rocko and Guido might make a collection visit. 

How would rate restructuring affect customers’ bills? Duh – the bills are going up, and  some by as much as 50 percent. Just ask those small commercial customers…
Most customers would see very little change in their electricity bills on an annual basis, and SMUD rates would remain more than 20 percent lower than PG&E’s electricity rates on average.

SMUD projects that in 2012 the average bill impact for approximately 90 percent of all residential customers will be less than $2 a month. Some residential customers would save money on an annual basis. Eighty-seven percent of residential customers who have electric heat would see bill changes averaging less than $2 a month. Who will save money? Low-income rate payers? Solar customers? Government offices? 

Seventy-five percent of small commercial customers (drawing 21 to 299 kilowatts) and 7.5 percent of very small commercial customers (drawing less than 21 kW) would save money in 2012 under the proposed changes. For 95 percent of the very small commercial customers, bill impacts would be less than $10 a month on an annual basis. My husband owns several small commercial warehouses – his SMUD rate just went up this billing cycle by 50 percent, and one-half of the buildings are empty. 

For information on projected bill impacts beyond 2012, see Addendum 2 to theGeneral Manager’s Report and Recommendation on Rates and Services.

What types of customers are apt to have higher electric bills under the proposal?
Small and very small commercial customers who use a lot of power during the peak hours of 3 to 6 p.m. on weekdays in the summer billing season (June through September) – when electricity is most expensive – could have higher bills on an annual basis unless they shift power consumption to off-peak hours. What about certain zip codes, and small business owners with empty buildings? 

Residential customers who have gas heat and use very little electricity may pay slightly higher bills because of a proposed increase in the fixed monthly charge, which is designed to recover more of the fixed costs of the infrastructure for the power delivery system.  For these customers, the maximum impact in 2012 would be $2.80 a month. Brilliant! Penalize customers who use less electricity.

Eighty-seven percent of residential customers who have electric heat would see bill changes averaging less than $2 a month.

To encourage energy efficiency, customers on the Energy Assistance Program Rate (a discount rate for qualifying low-income residents) will pay the standard rate for electricity use that exceeds their “base usage” plus 600 kilwatt-hours a month. (Base usage is 700 kWh in the summer billing season and 620 kWh the rest of the year for customers with gas heat.)

How would low-income customers on the Energy Assistance Program Rate be affected by the proposal? blah blah blah blah blah
SMUD projects that 90 percent of these customers would save money in 2012, while the 10 percent who have energy use that exceeds the discount cap will see their bills go up if they don’t reduce their power usage. Of course they will save because I am going to be paying a bigger part of their share, along with very small and small businesses.

Customers on the low-income rate would continue to get a 35 percent discount on base electricity usage and a 30 percent discount on up to 600 kWh of additional (“base-plus”) electricity usage in any given month. Hey! I am a member of the historically low-paid media… what about a discount for us? For electricity usage in excess of that, customers would pay the standard residential rate. This proposal was designed to encourage energy efficiency. (Base usage is 700 kWh in the summer billing season and 620 kWh the rest of the year for customers with gas heat.) These customers would see no change in their fixed monthly service charge of $3.50 in 2012.

Beginning in 2013, the fixed monthly charge would increase $1 each year, topping out at $8.50 in 2017, and there would be a corresponding decrease in kwh charges for electricity use. For information on projected bill impacts beyond 2012, see Addendum 2 to the General Manager’s Report and Recommendation on Rates and Services.

Skip this section – this will only make you crazy.

Overall, proposed changes in Energy Assistance Program Rates would be “revenue neutral” for SMUD, meaning the changes would neither increase nor reduce the revenue SMUD collects from this group of customers.

Will SMUD do anything to help customers who might have higher bills as a result of rate restructuring?
SMUD encourages customers to take advantage of its wide range of programs to improve energy efficiency. For all residential customers, SMUD has – among other things – a comprehensive, whole-house solution called the Home Performance Program, rebates on energy-efficient appliances, and loans for investing in improvements such as dual-pane windows. For qualifying low-income customers, SMUD also offers special efficiency programs such as home weatherization, in addition to discounted rates.

For commercial customers, SMUD offers energy audits, product rebates, energy tracking services and help with retrofit projects, among other things. For more information, click here. And you can finance the upgrade and energy retrofit costs – for a small fee, of course…

SMUD Loan terms (link here)… 

• We offer secured financing at a fixed interest rate of 8.75 percent. (Wow! calling Rocko and Guido…)
• We charge an application fee of $200 per loan. We will return this fee if we decline the application. 
• Generally, we make loans for up to 10 years or, the remaining term of any senior lien…

How is SMUD letting customers know about the proposed rate restructuring? 
Complete information on the proposal is posted on smud.org. In addition, SMUD is conducting a public outreach campaign to explain the proposal to customers. 

The campaign includes approximately 100 presentations for business associations, civic organizations and neighborhood groups. (To request a presentation, contact Rosanna Herber at SMUD, 916-732-5850 orrherber@smud.org.) Media outreach, print ads and bill inserts are part of the effort. Contact Rosanna Herber? The bumptious, browbeating, Sacramento activist Rosanna Herber? I’ve been a party to a few of Herber’s presentations … I don’t see the soft-sell approach here. (local knowledge disclaimer)

How can customers comment on the proposal or get answers to their questions about rate restructuring?
SMUD welcomes feedback from customers. Customers may submit written comments through Aug. 4 to rates@smud.org or to Rates Administrator Rob Landon, Mail Stop A451, SMUD, P.O. Box 15830, Sacramento, CA 95852-1830. Dear Rob, *$!!@*%$? … Sincerely, Katy

Customers who have questions or would like to request a hard copy of the General Manager’s Report and Recommendation on Rates and Services may call the rates hotline, (916) 732-6222, or e-mail rates@smud.org.

When will the SMUD Board of Directors decide on restructuring, and when will changes take effect?
The SMUD Board is expected to vote on rate restructuring on Thursday Aug. 4 at at 6 p.m. in the SMUD Headquarters Auditorium. Most of the changes will go into effect on Jan. 1, 2012. When was that meeting? I don’t recall the “public outreach” on that one… did I miss the memo, or the notice in my bill, or the public meeting with my neighborhood association which removed me from its email list?

Why is SMUD proposing to increase the monthly service charge?
SMUD needs to increase the fixed monthly service charge for residential and small commercial customers because the current charge does not cover the true cost of maintaining the infrastructure that enables reliable power delivery through a robust electric grid. This includes the cost of poles, wires, transformers, and substations, which must be covered even if an individual customer is not using any electricity. ”A robust electric grid” which the Legislature and Governor have just sliced and diced with the Renewable Portfolio Standard, requiring 33 percent renewable energy from wind, solar, biomass, and geothermal. Hey Al Gore – the planet does not have a fever… it’s leaders have a spending and a serious B.S. proble

Okay – I am not going to subject you to the rest. If you are a glutton for punishment and have no life, here is the link to the rest of the drivel.

However, I could not resist the final question:

Why is SMUD changing some of its terminology for rates?
SMUD is changing some of its rate terminology in an effort to better define for customers what they are paying for and why, to introduce customers to some new concepts, and to prepare for the future. (Because, rate payers are too dim to understand a rate increase if SMUD doesn’t use the flowery lingo.) This part of the rate restructuring is called the SMUD Clear Terms^SM Initiative… but there is no link to read this clever-sounding “initiative.” 

However, the downtown Sacramento Sierra Curtis Neighborhood Association (home-away-from-home to many legislators) has information. And, this is the same neighborhood association which Rosanna Herber served as President for several years, and she is currently a member of the Curtis Park Energy Stars Steering Committee. Hmmm.

JAN. 23, 2012

Spain also has wasted money on a high-speed rail boondoggle, one they actually built. The Bee ran an article on it that tried to make the Iberian choo-choo sound better than it is. But the facts still were there.

The Bee: “U.S. Transportation Secretary Ray LaHood voiced admiration for the Spanish network when he visited Spain last summer, calling it a ‘state-of-the-art system.’

“President Barack Obama touted it as a model for American high-speed rail plans when he announced billions of dollars in federal investments in April 2009.”

So, Spain’s train clearly is a model for California’s.

Lessons? “Top among them is how hard it is to be self-sufficient, even when conditions seem ideal, as they have in Spain.” That is, it doesn’t make money, but chews up tax money. Just like California’s California High-Speed Rail Authority.

The Bee: “Despite popular and political support from the very start, the AVE rail system faces a tougher future due to Europe’s financial crisis.

“Service between some smaller cities has been cut because too few people ride the trains. Some wonder if it is anything more than a luxury commuter service.”

Basically, tax money is short because of the financial crisis gripping the PIIGS countries: Portugal, Ireland, Italy, Greece and Spain. Although Spain’s debt crisis isn’t as bad as that in Greece or Italy, it’s still plenty bad, like California’s budget crisis.

Bad Priorities

The Bee: “‘They haven’t prioritized which lines are most important, so a lot of money has been spent on lines that aren’t as important,’ said Jacinto Calvillo, a passenger waiting to board an AVE train in Valencia.”

The CHSRA is trying to jump-start construction with a slow-speed rail running from Fresno to Bakerfield, one of the least populated areas in the proposed network.

The Bee: “Even the enthusiastic Spanish officials are curious about the logic of starting in the sparsely populated middle of California. The environmental benefits won’t be realized, they said, if the cities along the first line don’t have enough people to generate ridership.”

“‘You need to have either Los Angeles or San Francisco,’ said Pedro Pérez del Campo, environmental policy director for ADIF, Spain’s Administrator for Railway Infrastructures. ‘They should build it where it will have an impact so that people will support it’.”

The Bee: “Since the late 1980s, Spain has spent about $60 billion to build and equip its high-speed network.”

The latest estimates for the CHSRA are $99 billion and counting. But let’s look at the demographics. Spain’s population density is 231 people per square mile. California’s is 242 per square mile. So they’re about the same. In both cases, there just aren’t enough people to justify such a project.

The population growth rate in California is about 1 percent per year. In Spain, about 0.57 percent. So that won’t change much over the coming decades.

The Bee: “Spain’s system, however, was launched in different conditions than California is experiencing today. Political unity, a thriving economy and the spotlight of international events — a world exposition in Seville and the Olympic Games in Barcelona — provided impetus for Spain to embark on its high-speed journey….

“It has rapidly expanded to become Europe’s most extensive high-speed network — third only to China and Japan’s systems worldwide — while facing remarkably little of the NIMBYism, farmer opposition or politics fermenting throughout California.

“The project has been supported by both conservative- and Socialist-led governments.”

Spains “conservatives” sound like California’s Republicans during the Schwarzenegger Era.

Money Drain

However: “But with Spain and the rest of Europe mired in a lingering economic crisis, public attitudes may slowly be changing.

“Despite assurances from the Spanish government that the long-distance AVE trains operate without a public subsidy, academics and analysts don’t believe that even the busiest high-speed route — between Madrid and Barcelona — musters enough riders to cover its operating costs, much less the billions of euros spent on infrastructure over the past 20 years….

“Total high-speed ridership on the long-distance and regional trains peaked at nearly 17 million in 2009. Ridership has since tapered off as Spain, like the rest of Europe and much of the world, copes with economic troubles.”

The article also details how the system never has made any money. It’s always been a drain on the Spanish treasury.

The same with California’s High-Speed Rail boondoggle.

What I’d like to know is how much the money borrowed for Spain’s bullet train contributed to the country’s massive debt problem. Somebody should study that.

The housing crisis of recent years was caused by the government itself. The Federal Reserve Board — a quasi-private bank whose directors are appointed by the president — has debased the dollar while keeping interest rates artificially low. That caused the boom/bust cycle that wrecked the housing market.

Fannie and Freddie, the two giant quasi-private, quasi-government entities that provided millions of easy-money loans that made the boom even bigger, went bankrupt. And “affordable housing” is a scam to subsidize developers with tax dollars.

So, what are Gov. Jerry Brown and California Democrats demanding? Even more government involvement in housing!

Reported the L.A. Times:

Joining California’s congressional Democrats, Gov. Jerry Brown is calling on President Obama to appoint a new federal housing regulator, saying the acting director is “hindering California’s economic recovery and harming state efforts to promote clean energy.”

In a letter to the White House last week, Brown echoed the concerns of more than two dozen House Democrats, arguing that the Federal Housing Finance Authority under Acting Director Edward DeMarco has “ignored” the Golden State’s foreclosure crisis by “failing to exercise its full authority over residential mortgages underwritten by Fannie Mae and Freddie Mac,” the housing finance agencies seized by the government in September 2008 as mortgage losses mounted.

That’s like “helping” a drowning man by giving him a glass of water.

What California, and America, really need is for the government to get totally out of the housing business.

First, the Federal Reserve Board itself should be dissolved. Ever since it was imposed on us in 1913, it has inflated the currency, thereby effectively stealing people’s savings. And its inflationary policies cause the boom/bust cycles that devastate millions of people.

Second, Fannie and Freddie should be abolished, their assets auctioned off to the highest bidder.

Third, all tax-funded “assistance” to housing should be ended. As Wayne Lusvardi reports today on CalWatchDog.com, the free market itself is by far the best way to provide low-cost housing to Californians. Government only makes everything worse.

Jan. 17, 2012

Almost like the diligent vampire hunter who kills the eery bloodsucker at the end of the scary movie, Harkey has authored Assembly Bill 1455, to halt state debt funding for the high-speed rail project.

Vampire Hunter

Harkey says that so far, HSR has been in the works for three years and the cost keeps climbing. But there is nothing to show for the $800 million already spent – expect perhaps in the bank accounts of the many consultants tied to the High-Speed Rail Authority.

And at this moment, high speed rail is projected to cost California taxpayers more than $98 billion. Many say that is just the financial launching point for only one leg of the system from Bakersfield to Fresno, and costs can and will escalate.

Harkey said that a recent statewide Field Poll revealed that nearly two-thirds of the voters surveyed would like to re-vote on the issue. By nearly two to one, voters would reject the $9.95 billion bond to fund start-up costs for HSR.  The reality is that even those that originally supported the concept know they were deceived; Californians do not support high-speed rail at any cost.

That sounds like affirmative approval from the state’s voters that the plan should be put down, permanently.

But it’s more about having sour grapes – or lemons – now, once we discovered all of the escalating costs for the rail system that won’t seem to die. Californians were totally duped into voting from Proposition 1A by some really crafty campaign people, and have we paid for it.

Harkey’s office provided information about the controversial process to even get the High Speed Rail ballot initiative onto the ballot. The courts ruled that the analysis of the bond measure, Proposition 1A, was misleading, written in promotional language.

Who allowed the language on the ballot? Attorney General Jerry Brown, who clearly provided a title loaded with positives:

Ballotpedia reported that the ballot title was:

Summary

The official summary provided to describe Proposition 1A said:

• Provides long-distance commuters with a safe, convenient, affordable, and reliable alternative to driving and high gas prices.
• Reduces traffic congestion on the state’s highways and at the state’s airports.
• Reduces California’s dependence on foreign oil.
• Reduces air pollution and global warming greenhouse gases.
• Establishes a clean, efficient 220 MPH transportation system.
• Improves existing passenger rail lines serving the state’s major population centers.
• Provides for California’s growing population.
• Provides for a bond issue of $9.95 billion to establish high-speed train service linking Southern California counties, the Sacramento/San Joaquin Valley, and the San Francisco Bay Area.
• Provides that at least 90% of these bond funds shall be spent for specific construction projects, with private and public matching funds required, including, but not limited to, federal funds, funds from revenue bonds, and local funds.
• Requires that use of all bond funds is subject to independent audits.
• Appropriates money from the General Fund to pay bond principal and interest.

It sounded as if the perfect rail system couldn’t fail.

In addition, the original price tag of $33 billion has now escalated to $98.5 – $117 billion for Phase I construction. That’s more than inflation at work on those numbers.

We are talking about BILLIONS to build, and then billions to operate every year.

Cha-ching. Only the cash register is empty.

“Phase II promised from Anaheim to San Diego is not even being discussed, and neither is the cost to operate whatever is actually built. The voters were assured there would be “no state operating subsidy” and that the riders would pay for the system.  However, the analysis failed to mention hefty “construction costs” would be excluded, require financing, and repayment from the state’s General Fund (or tax-payer subsidy),” Harkey’s analysis showed.

Two More Blows Into The Heart

The CHSRA Peer Review Group is now advising the authority not to fund.

A December hearing in Washington, DC confirmed that Congress will not rescue California HSR plan if we are determined to become the Greece of the nation.

Constantly searching for strategies to improve our state’s dire financial situation that fall within the Legislature’s purview, Harkey wrote that she discovered:

 Article XVI of the California Constitution authorizes the Legislature, at any time after the approval of a general obligation bond act by the people, to reduce the amount of the indebtedness authorized by the act to an amount not less than the amount contracted at the time of the reduction or to repeal the act if no debt has been contracted.

“To recap, the voters were deceived; the project lacks sufficient private, public or debt funding to complete even a requisite operating segment, as required under Proposition 1A; the Environmental Impact Report is incomplete; California is struggling with long term deficits and debt; the Governor claims to need more taxes; our existing infrastructure is in dire need of extension and repair; and voters are suffering from buyer’s remorse,” Harkey reported.

What’s unclear? It’s time to drive the final stake through the heart of the boondoggle High-Speed Rail plan. If not, it could bankrupt California.

If Gov. Jerry Brown is already talking about automatic trigger cuts which will go into effect and cut K-12 school spending by $4.8 billion, state university spending by $400 million, and the state’s courts by $125 million, if he doesn’t get his ballot tax increase passed, how dire is the state spending? Why Brown keeps talking about his support of HSR is a mystery, but one mystery we may seen resolved is during the campaign for his ballot tax increase plan when it becomes clear to voters that as long as the High-Speed Rail is in existence, tax opponents will point to it as the Poster Boondoggle for government waste.

It is. In fact, it’s a gross example for boondoggle government waste, and will undoubtedly  now cast a pallor on even some of the more clever government waste plans. We can hope.

JAN. 10, 2012

New research proves global warming a fake. If this state had any sense, it would repeal Gov. Arnold Schwarzenegger’s AB 32, the Global Warming Solutions Act of 2006. It forces the state to cut greenhouse gas emissions, which supposedly cause global warming, by 25 percent by 2020. Thus severely damaging the economy.

Fred Singer is a notable climate and environmental scientist. Curriculum vitae here. He writes in a new article:

“In discussing the recent release of some 5,000 Climategate e-mails, blogger Anthony Watts uses the clever headline “They are real—and they’re spectacular.” He credits Jerry Seinfeld as the source. Following his example, I choose the headline “Fake! Fake! Fake! Fake!”—also taken from a Seinfeld episode—in discussing the surface temperatures generally reported for the latter part of the 20th century; they form the science basis for prosperity-killing international climate policy.

“Here I am using the word “fake” as an adjective, and not as a verb. I mean to say that the scientific conclusions derived from such temperatures are not real, but I don’t imply that the values themselves have been purposefully altered or adjusted. We simply don’t have any information to support such an accusation.

“But I do claim that the commonly reported and accepted warming between 1978 and 2000 is based only on thermometers from land surface stations and is not supported by any other evidence that I could find. Specifically, ocean data (from 71% of the earth’s surface) and global atmospheric data (as recorded by satellites and independent balloon-borne radiosondes) do not show such a warming at all. In addition, most proxy data, from non-thermometer sources such as tree rings, ocean sediments, ice cores, stalagmites, etc., show no warming during this same crucial period. (One has to be careful in this analysis since the year 1998 shows a major warming spike caused by a Super-El Niño. But by 1999 and 2000, temperatures had returned to pre-1998 values.)

“Now, I am well aware of the fact that the recent release of the temperature data from the Berkeley Earth Surface Temperature (BEST) project does show a warming trend from 1978 to 2000. Many would jump to the conclusion that this represents confirmation of the existence of global warming—or even of anthropogenic global warming (AGW). However, that would be an error in logic.

“What the BEST result shows is that surface thermometers from the land area of the globe (about 29% of the earth’s surface) show a warming trend. But this is not global warming. And BEST director Professor Rich Muller explicitly disclaims that his trend results indicate a human cause.

“He also correctly points out that many of the weather stations used are badly distributed, mostly in the U.S. and western Europe, and possibly subject to local heating effects, such as urban heat islands. He cautions that a third of his monitoring stations show a cooling, not a warming. And that 70% of the U.S. stations are poorly situated and don’t satisfy the requirements of the U.S. Weather Service. It is likely that stations elsewhere have similar problems….

“As is evident from the Climategate e-mails, a small group of scientists, mainly in the U.K. and U.S., have managed to freeze out contrary evidence from being published in the scientific literature or in IPCC reports. The self-described “Team” members brazenly discuss strategies and action plans to further “The Cause.” Unfortunately, they have largely succeeded—and continue to influence publications, thanks to some key journalists and editors. In consequence of this evident conspiracy, it is hardly surprising that politicians, the media, and the general public are receiving entirely wrong information about supposedly catastrophic effects of a future warming.

“The just-concluded Durban conference, the 17th in an annual series, demonstrates clearly that the whole discussion is no longer about science, but instead is all about money. (1) How to assure continuing government careers for nearly 200 delegations, with annual vacations paid by taxpayers. (2) How to transfer $100 billion a year from industrialized nations to LDCs (or more precisely, to their kleptocratic rulers), using “climate justice” or “climate guilt” (depending on who is doing the talking). (3) How to gain a national advantage by setting differential emission limits of CO2—supposedly to keep the planet from reaching a “dangerous” level of warming.”

“Climate Guilt” — great phrase. That’s what Arnold and the other con artists pushed on us back in 2006. And that’s what Gov. Jerry Brown and today’s con artists continue to push on us.

But it’s all about them cashing in at our expense.

Singer:

“Within the United States, and also elsewhere, global warming scares have become a means of transferring taxpayer money to politically influential cronies. There is now so much “crony capitalism” that it would be difficult to reverse or even stop the ongoing subsidies, outright grants, tax breaks, and other transfers to privileged groups.

“Time is becoming short. We’re reaching a tipping point—not of the earth’s climate, but of the financial schemes that permanently divert funds from productive activities into wasteful ones, all in the name of “saving the climate.” The results are evident: higher levels of spending, deficits, or taxes; higher prices for energy and electricity and therefore for all manufactured goods; less productive activity; less employment; and more misery.

“It seems odd that all of this is essentially based on a fake—the data that seem to show a (nonexistent) warming. It will be difficult to overturn this notion, but we must keep trying.”

Yes, we must keep trying. Meanwhile, Arnold, Brown and the other Crony Capitalists will keep using the fake “global warming” scare to grift us.

– Jan. 9, 2012

Ding-dong, the stupid bullet train is dead.

It’s all over but the scrambling for a couple hundred million dollars of our tax money in various funds.

The California High-Speed Rail Peer Review Group yesterday issued a report condemning the boondoggle.

Will Kempton is chairman of the group. He’s also the head of the Orange County Transportation Authority and former director of CalTrans. He wrote, “We cannot overemphasize the fact that moving ahead on the (high-speed rail) without credible sources of adequate funding, without a definitive business model, without a strategy to maximize the independent utility and value to the state, and without the appropriate management resources, represents an immense financial risk on the part of the state of California.”

Rail authority board Chairman Tom Umberg replied, “What is most unfortunate about this report is not its analytical deficiency, but that it would create a cloud over the program that threatens not only federal support but also the confidence of the private sector necessary for them to invest their dollars.”

Whatever one thinks of this controversy, Umberg is right that the “cloud” over the boondoggle will kill off any private-sector interest — something that anyway was about the size of a run-over penny on a railroad track.

As with redevelopment — which last week was buried by the state Supreme Court — the key factor now is the state’s lack of money. It’s sinking in for everyone, even liberal Democrats, that there isn’t going to be a new boom any time soon. Which means there won’t be a new dot-com boom or real-estate bubble to goose revenues for a couple of years.

A tax increase — maybe more than one — will be on the November ballot. But that’s months away. And there’s no certainty voters will approve an increase.

No matter what, the first six months of fiscal year 2012-13, which begins on July 1, will not include more taxes. New taxes only would take effect on Jan. 1, 2013.

So, the state is going to have to live within its means for once.

Which means no money for such incredibly wasteful programs as the California High-Speed Rail Authority.

Gov. Jerry Brown says he still believes the train would save the state money. But he realizes that, even if that’s true, it wouldn’t save money for decades.

He’s governor now, not then, and there’s no money.

Jan. 4, 2012