California won't be ready for that discussion until most of them wake up hungry

Submitted by Prometheus 6 on April 18, 2005 - 12:45pm.
on |

Don't Be a 'Girlie Man'
As long as California is projecting a potential $10-billion deficit, governor, now is the right time to reconsider Prop. 13. Come on . . .
By Lee Green
Lee Green last wrote for the magazine about the U.S. Forest Service.
April 17, 2005

OK, you've been in office nearly a year and a half now, and we've yet to see any evidence that you're willing to curl, thrust, jerk, bench press or even touch one of the heaviest issues in California's political weight room. As Warren Buffett famously hinted during your campaign, it's time to do some heavy lifting, governor.

In fact, let's go back to that Buffett thing. Here's a man who knows finance better than Einstein knew physics, and who manages money better than California does. Actually, everyone manages money better than California does, but Buffett has proved to be especially adept so adept that you cast him as an economic advisor during your campaign. He had barely warmed his chair, though, when he did something frowned upon in politics: He spoke the truth.

Buffett's truth, you'll recall, concerned California's property tax-limiting Proposition 13, the most famous ballot initiative in American history. He casually mentioned that a system enabling today's homeowners to pay property taxes based on what their houses were worth when the Bee Gees topped the charts "makes no sense," particularly for a state barely clinging to solvency. In a blink he had done the unthinkable: tarnished the Holy Grail we call Proposition 13, the state constitutional amendment that California voters overwhelmingly approved in 1978.

What were we to make of such blasphemy? If you landed the governor gig, would you step out of character, wander off script and take a hard, open-minded look at Proposition 13 and all of its consequences? Your spokesmen immediately assured us that you would not. "Warren Buffett is speaking about his own philosophical position," one declared, suggesting that you weren't about to be swayed by opinions you didn't already hold. "Arnold Schwarzenegger has supported Prop. 13 for 25 years. He will be a fierce protector of Prop. 13."

"My position is rock solid in support of that initiative," you confirmed. More memorable, though, was your rebuff of Buffett, the world's second-richest Homo sapiens: "I told Warren if he mentions Prop. 13 one more time he has to do 500 sit-ups."

At this point you're probably wondering why I'm dredging all of this up again. After all, that was nearly two years ago.

Here's why: Buffett was right.

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Submitted by dwshelf on April 19, 2005 - 2:33am.

There are 40,000 bureaucrats in California who need to be put off the state payroll such that they can find something useful to do. There'd still be far too many left over.

$10 billion is peanuts compared to the legalized fraud committed by fire and police officials in California: they retire "disabled" in their mid '50s, and collect fat pensions tax free.

$10 billion is peanuts compared to the amount of money poured down the drain labled "public transportation", in a state where private transportation almost always works vastly better. We need to stop such subsidies.

The entire pension system needs to be converted to a pay-as-you-go, defined contribution system. Businesses sorted this out 15 years ago, and those which did not sort it out now are largely bankrupt or otherwise defunct, and yet California continues the gravy train. Paying generous pensions only works when you have young company. It can't go on after the pensioners outnumber active workers unless you have some really stupid people with a whole lot of money who see pensioners as worthy of such gifts.

California sets the tax rate at the highest people will pay, and spends a bit more. Californians pay among the nation's hightest income and sales taxes, as well as special burdens such as expensive, special gasoline. We aren't going to pay any more.

The solution is to lower the revenue to the State of California by about 40%, leaving them no choice but to clean up their act. Eliminating the state income tax would be a good start.

Submitted by Prometheus 6 on April 19, 2005 - 8:02am.

The entire pension system needs to be converted to a pay-as-you-go, defined contribution system.

Sounds like Social Security.

Submitted by James R MacLean on April 19, 2005 - 10:31pm.

$10 billion is peanuts compared to the amount of money poured down the drain labled "public transportation", in a state where private transportation almost always works vastly better. We need to stop such subsidies.

Um, Sir, "private transportation" for California means paving everything that doesn't move so Californians can drive SUVs over it. See, I come from there and I know about boosters for "private transportation like St. Sen. McClintock. They drove the Golden State into a ditch.

Submitted by dwshelf on April 20, 2005 - 12:22pm.

Um, Sir, "private transportation" for California means paving everything that doesn't move so Californians can drive SUVs over it. See, I come from there and I know about boosters for "private transportation like St. Sen. McClintock. They drove the Golden State into a ditch.

If we're into ditch metaphores, McClintock was putting up guard rails.

I'm not exactly sure what your beef is with CA's transportation system. Since you're from Ca, you know that "paving over everything" is hyperbole.

Cars go from where you are to where you want to be. They do it when you're ready to go, and they allow you to change your destination mid-route. In a historic analysis they're certainly luxurious, but this luxury is available to pretty much anyone with a job.

Against this highly functional system are aligned a curious array of totalitarians and utopians. The totalitarians view cars as evil, and want the government to take them away. They tend to describe all cars as "gigantic SUVs". The utopians visit Tokyo, London, and New York, and wish for what they experience to appear at home. What they don't experience on vacation is the transportation lives of locals. A typical commute in Tokyo/Yokohama is well in excess of an hour, and two hours is not uncommon. Commutes in London and Paris aren't much better. The vast majority of Californians spend less than 1/2 hour between their home and work.

There do exist corridors where competition to the automobile will eventually prevail. SF<->LA seems obvious, but as density rises, as the Great California Suburb converts into a real city, subways will become effective competition for cars. When that occurs, they won't need any subsidy.

Submitted by James R MacLean on April 20, 2005 - 7:40pm.

I'm not exactly sure what your beef is with CA's transportation system. Since you're from Ca, you know that "paving over everything" is hyperbole.

…They tend to describe all cars as "gigantic SUVs"

I own a car, DW, and it really is not an SUV. And while "paving over everything" is indeed hyperbole, you may have seen Los Angeles from the air. It's quite an astonishing landscape of pavement.

This reflects a vast amount of capital investment by the state. Roads are expensive, and “studies” purporting to show they’re better value per dollar ignore two things: one, the opportunity costs of road-only transit (which render large cities less efficient) and two, the fact that roads are one possible mode that works best in combination with other modes.

Cars go from where you are to where you want to be. They do it when you're ready to go, and they allow you to change your destination mid-route. In a historic analysis they're certainly luxurious, but this luxury is available to pretty much anyone with a job.

Oh, I like luxury. However, there’s a notion out there that “highways are for freedom-loving humans, while trains are for squalid fascists and stalinists.” I’m not setting up a straw man, DW, that’s what you said.

Against this highly functional system are aligned a curious array of totalitarians and utopians. The totalitarians view cars as evil, and want the government to take them away. They tend to describe all cars as "gigantic SUVs". The utopians visit Tokyo, London, and New York, and wish for what they experience to appear at home.

Actually, you are stuck defending the propositions that Japan, the UK, and the East Coast of the USA are (a) governed by Communists and (b) London and NYC are popularly cited examples of public transit admired by totalitarian wingnuts like me. The first point can be dismissed in a respectful manner by merely pointing out that roads are costly, require significant urban planning, are more likely to require significant application of imminent domain, and inflict opportunity costs that make them more expensive over the long run. If it were up to me, I’d use administrative strategies designed to reduce the long-term intrusiveness and cost of government, so I could cut your taxes and balance budgets at the same time.

The second proposition is merely silly. Amateurs who admire the cities of Europe aren’t going to impose a fascist regime and raise your taxes; they aren’t even going to vote for increased taxes to pay for trains. Public transit is a mess in this country because the people who actually get bills passed, do so as a pork barrel measure to benefit developers. That’s really a shame, because even if you adore cars and hate trains with a purple passion, urban planning is still done (I used to work in the solidly conservative, militantly anti-tax City of Hayward city planning department. These guys thought Rep. Ron Paul (R-TX) was a Communist), and it still requires an integrated plan. A bad design is going to cost more and have to be replaced or supplemented. Period. London, NYC, and Tokyo are not anyone’s prototype.

Submitted by James R MacLean on April 20, 2005 - 7:45pm.

Amateurs who admire the cities of Europe aren’t going to impose a fascist regime and raise your taxes; they aren’t even going to vote for increased taxes to pay for trains.

The reason I said this is, we've just been through an election cycle in my city where a train design was approved (again) by voters. The measure was fiercely debated on the radio and in the weeklies, and I digested as much as I could. I can assure you that no one IN FAVOR of the measure mentioned NYC or said, "It sure would be nice if this city had a rail system like Prague."

(Prague's system, BTW, is about the best I've ever seen. Heavily used. Switzerland, with its conservative, pro-business, anti-tax government, has an excellent mass transit system in its major towns as well.)

Submitted by James R MacLean on April 20, 2005 - 8:00pm.

Another misconception made by conservatives about transit is that, just because nearly everyone uses a car, a massive subsidy to use your car is therefore not market-distorting. Funny, they don't make the same mistake with anything else besides...NATIONAL DEFENSE!!!

This is an error. In California, there is a common misconception that, because some gas taxes or registration fees are spent on something other than highways or roads, therefore the motorist subsidizes the rest of the government. This is actually an article of faith. In reality, all funds paid by motorists in gas taxes, registration fees, parking tickets, and the lot summed to about $4 billion in FY2002. That same year, auto-related expenditures were in excess of $17 billion, plus a very large amount spent by local governments (the gas taxes are gross and include local gov't's take). That's a state subsidy of at least $13 billion, plus local gov't subsidy of some large amount I cannot remember.

In the early 1990's I calculated this motoring subsidy for the USA and got figure of >$200 billion (it was a school project). The Economist calculated a similar figure a few years later. Capital costs associated with total transit, per capita, are LOWER in EU member states than in the USA--both in absolute (PPP) terms, and as a share of GDP.

OTOH, the costs associated with commuting are higher in the USA (as measured by wear & tear on private motor vehicles, lost time, and productivity losses in the inner city.)

Submitted by dwshelf on April 21, 2005 - 1:37am.

Someone is subsidizing mass transit. Even ignoring construction costs, operating costs recovery from fares range below 25% in California.

If those who argue that automobiles are subsidized could avoid argumnts like assuming that all of the Iraqi war costs are such a subsidy, they might get my vote. I'm opposed to all subsidies.

Submitted by Prometheus 6 on April 21, 2005 - 3:03am.

James isn't saying the Iraq war costs are equivalent to a subsidy. He's saying oil/cars and war are the two things Conservatives don't mind subsidizing.

Submitted by dwshelf on April 21, 2005 - 11:37am.

I was trying to be helpful...If MacLean wishes to argue against subsidies, that's fine with me. I don't know how he calculated his subsidy estimate, but I know how lots of people do. They include pretty much any expense they feel like as being an automobile subsidy. It's not a convincing case.

Automobiles should pay their own way. That means that the costs of constructing and maintaining the highways should be paid from taxes or fees which are in large part related to how much one uses the highways.

Submitted by Prometheus 6 on April 21, 2005 - 11:48am.

Automobiles should pay their own way. That means that the costs of constructing and maintaining the highways should be paid from taxes or fees which are in large part related to how much one uses the highways.

I actually have no problem with that in theory. In practice it would haveto apply to corporate shipping and transport of products too. The increase in prices would have repercussions that would be interesting to watch.

That sort of thing would work fine if it had been in place from the beginning. Now, well, there's a lot of truth to the old punch line "you can't get there from here."

Submitted by dwshelf on April 22, 2005 - 11:38am.

Generous pensions are in the news yet again.

One of the surviving companies which hasn't addressed the issue is General Motors.

Glenn Reynold's editorial at MSNBC
and a more personal report here

Submitted by ptcruiser on April 24, 2005 - 10:13pm.
DW - How can you be opposed to all subsidies? There are very few aspects of American society, save the activities of marijuana growers in arid places like Butte Canyon, that aren't subsidized. The wealth of this nation was built on unrequited toil and government subsidies. You should just kick back and enjoy the ride. From the time this government was created people were feeding at the public trough. What you should do is figure out an enterprise that will justify the investment of public money.
Submitted by dwshelf on April 25, 2005 - 12:13am.
I imagined one of those faces which P6 puts up from time to time of a black man expressing various reactions. I'd put up a white man with a big grin PT, and he'd be looking you in the eye.
Submitted by dwshelf on April 25, 2005 - 12:33am.
Unless you simply hate her, here's a wonderful piece about Condoleezza Rice.

Yahoo story on Condi

I could have picked a dozen quotes. Here's one:

"I very often am asked questions about, `Do you act differently because you are a female or do you act differently because you are black?'" Rice told Korean bloggers recently. "I always say to people, 'I'm a package. I'm black and I'm female and me.'"

She's getting a 60% approval rating from the public at large.

This woman has an excellent chance to become the next president.

Submitted by James R MacLean on April 25, 2005 - 2:59am.
I never mentioned the Iraq War as a subsidy to motor vehicle usage.

I was trying to be helpful...If MacLean wishes to argue against subsidies, that's fine with me. I don't know how he calculated his subsidy estimate, but I know how lots of people do. They include pretty much any expense they feel like as being an automobile subsidy. It's not a convincing case.

DW, I would really appreciate it if you bothered to sustain even the pretension of making an argument. I told you where I found the cost of road maintenance and repair; you can look up the latest figures. Throw in rights of way. Now, subtract revenues from auto users. You know damn well what I'm talking about.

As of this writing, I think you'll get a figure of ABOUT 60% the total cost of roads, etc. are PURE SUBSIDY. That EXCLUDES negative spillovers to public health and sub-optimal urban design (lost productivity--measured as an opportunity cost). For some reason, conservatives invariably contrive to pooh-pooh public health spillovers, but they sue the ass off anyone who impinges on their health, or pollutes their property. Ironically, they don't dismiss opportunity costs when they apply to businesses created by polluting. The lives of the affluent have been acutely subsidized since biblical times. This makes the affluent conservative. In the fullness of time, subsidies only they can enjoy, become fundamental rights.

Submitted by Prometheus 6 on April 25, 2005 - 8:21am.
I could have picked a dozen quotes.

Seriously off-topic. Please don't do that. 

Submitted by dwshelf on April 25, 2005 - 12:50pm.

I told you where I found the cost of road maintenance and repair; you can look up the latest figures.

We're not all that far apart; I agree with you that we should stop subsidizing highway construction and maintenance. Why not stop right there?

When you start including basic societal things such as public health, or things like "sub-optimal urban design" (by whose criteria?), you lose me, along with a whole lot of other people.

The lives of the affluent have been acutely subsidized since biblical times.

You won't find me arguing that some $30k auto mechanic should be paying taxes so that a millionaire old guy doesn't have to pay his own medical bills while dying, such that his heirs will do better. I find it that transfer of wealth from the working middle class to the non-working wealthy to be completely repugnant. Medicare is the single most egregious example of forced transfer of money from the less wealthy to the more wealthy.

The first Google hit for "highway subsidies"

Can't get a real link anymore?

Submitted by James R MacLean on April 28, 2005 - 2:07am.
When you start including basic societal things such as public health, or things like "sub-optimal urban design" (by whose criteria?), you lose me, along with a whole lot of other people.

If your neighbor goes into business "disposing" of used motor oil by dumping it in his backyard, that's going to ruin your property. That's why it's illegal. If he operates a smudgepot instead (these burn used motor oil and were used in the '20's and '30's to prevent orange groves from freezing), then that will pollute your air and poison your offspring. That, Sir, is a negative spillover. The more egregious ones are usually illegal in the 1st world. Traditionally, conservative economists like Ronald Coase proposed to arrange a system in which either pollutees compensated polluters to not pollute (or polluters paid to pollute; as the poison got more dangerous, the economic activity would become prohibitively expensive). The problem, as Coase acknowledged, is to establish property rights--including the especially valuable one, your health. Sub-optimal: personally, I have eccentric tastes I would not wish to inflict on others. However, opponents of public transit spending complain about the cost. If that's the essence of the objection, then my reference to "sub-optimal" is obviously economic: cities reliant on private transit suffer from congestion and cease to expand past a low level of economic density. Transportation bottlenecks are killing the major cities of the USA and with it, the industrial core of our way of life. Europeans suffer a far milder case of this problem.

Submitted by dwshelf on April 28, 2005 - 11:38am.

While I'm a libertarian JR, I see the need to criminalize some types of polluting behavior, including the ones you describe.

 cities reliant on private transit suffer from congestion and cease to expand past a low level of economic density.

That's correct, and while I live in the Great California Suburb,  I agree with you that real cities have a lot of benefits.  However, most people, given a choice, choose suburbia.  For most people, the automobile gives them a freedom they would otherwise be denied.  They choose benefits other than those available in high density cities.  There is no logical way we can conclude that these benefits add up in a way which indicates a subsidy for automobiles.

Transportation bottlenecks are killing the major cities of the USA and with it, the industrial core of our way of life. Europeans suffer a far milder case of this problem.

Hmm. Can you cite a city which is being killed?  I catch a bit of Letterman now and then, which shows NYC doing just fine.  I heard news of a serious taxi crash, which I took to indicate that the taxi had enough space to gain some speed.

Europeans, depending on how you calculate the value of "benefit", could be said to pay tremendously for their dissing of cars.  The typical European commute exceeds the typical California commute by almost twice.  Now maybe you or they don't value that kind of time, but many people including many Europeans do. People all over the world envy the ease with which Americans can travel.

Submitted by James R MacLean on May 2, 2005 - 4:19pm.
I catch a bit of Letterman now and then, which shows NYC doing just fine.

Didn't you just cite NYC as a widely-cited example of stalinesque public transit? Seriously, though, please observe how people commute to work there. Have you ever attempted to park in Manhattan?

Also, Manhattan is not NYC. Queens has some vibrant quarters, thanks to a colossal immigrant community that doesn't object to gruelling work hours. Moreover, NYC generally is a center of global finance and corporate management. Not many metropolitan areas can duplicate that (HK is a center of cartels like Jardine & Mathison, HSBC, et al.; it has capitalized well on near-unique access to Chinese markets, esp. VAR*).

So Manhattan illustrates my point that density still matters. Cities that are engineered to allow a high physical proximity of enterprise will tend to generate the very highest levels of value addition, but such concentration requires a "public goods market." My view is that public goods markets should not be despised. Please observe they are generally more successful in economies that have deepened private markets, than in places like the PRC that do not.

_________________________
*VAR=value-added retailing. J&M is a merchant banking group famous for UK-gov't backed opium smuggling during the Q'ing Dynasty. Hutchison Whampoa is a more recent merchant banking outfit.

Submitted by dwshelf on May 3, 2005 - 12:38am.

Didn't you just cite NYC as a widely-cited example of stalinesque public transit?

I don't recall Stalin crossing my mind.

I haven't spent enought time in NYC to understand it, so I'm neither praising it nor ridiculing it.  I simply note that it seems to be doing ok, not in some automobile induced coma.  You and I agree, there are benefits to high density.  I've never lived in a big city, I'm somewhat infatuated by them, perhaps enough to move to one.  I'd like to exprerience life in high density without a car.  I'd like to be able to walk to a choice of a dozen restaurants, and to do business, maybe play some backgammon, or just talk with people nearby. Downtown.

I'm not willing however to declare that I know better than the unwashed masses who choose otherwise.  The masses who prefer a detatched house with a large yard, and an automobile in the driveway ready and willing to carry them to their chosen destination with no notice or planning at all. It's a tradeoff eveyone should make without government coercion.