California's Train to Oblivion

I recently listened to a (perhaps disingenuous) pitch from my Congressperson, Nancy Pelosi, to the effect that budgets are important in that they reflect moral choices of society. I then listened to a group of California Democrats (and even a few Republicans) praising California's high speed rail project which will cost somewhere between $70 and 100 billion dollars in capital over the next two decades. How to reconcile the two?

A bit of background:

- In 2008 the state's voters approved a $10 billion bond measure to start a $40 billion project to build high speed rail (200+ mph) between Los Angeles and San Francisco by way of the Central Valley. By 2012 the cost had escalated to $100 billion; the federal Stimulus Plan had kicked in $ 3.3 billion; Governor Brown had been elected; and the project was downsized to a $70 billion connection between upgraded commuter rail systems in Los Angeles and the Bay Area. The long term vision remained the same, but it would be built in stages - the first being a non-electrified stretch roughly between Bakersfield and Fresno; a few billion would be spent upgrading the bookend commuter systems.

- At this point there are a few weak spots in the plan:

-- Passengers will have to change trains to make the full trip - but just until 2028;

-- The claim is that ridership fares ($ 81) will cover the operating costs, but similar systems in Japan and Europe require subsidies at twice the fare rates and higher ridership;

-- California has agreed to take $ 3.5 in Stimulus funding turned down by other states, and $10 billion in voter-approved state bond funding. The remaining $55 billion is to come from an unidentified mix of federal and state funds, diversion of funds to be taken from utilities and industry in the voter-approved "cap and trade"system to go into effect by 2020, and private investments. The presumption is that once started, the federal and state authorities will be unable to turn it off. (Implicitly, the Democrats will regain control of the US House and hold the presidency.)

- And the trade-offs that California's political class is making:

-- The current state budget has reduced the k-12 school year from 180 to 175 days; next year it could be reduced to 160.

-- Tuition in the state university system has doubled in the past five years. Next year state grants for high achieving, low income students will be reduced by a 18%.

-- The prison system is being realigned by pushing thousands from state facilities to county jails (without commensurate funding). Funding for the court system is down 24% in the past four years and will be cut another $544 million in the next budget.

-- The governor is proposing increasing the state sales tax to 7.5 % - the highest in the nation - and the top income tax rate to 13.3 %. Gas taxes are already the highest in the nation. California ranks 50th in business climate according to Chief Executive Magazine.

-- And the social safety net is being shredded - MediCal; job training; children services; everything.

So, why the train? And what lessons can be drawn by folks in other states?

1. Trains are cool. My grand-kids love Thomas. If they can run on electricity derived from solar and wind power they are uber ecological.

2. Politics are messy. "Free" seed money leads to addiction. Local politicians can be bought by a few construction contracts and the promise of a local station. Construction industry companies and unions are powerful everywhere. In a one party state, nobody crosses the machine.

3. Californians still dream of the era when they were national leaders. Prior generations - including the current governor's father - built roads, water systems, and airports. Current leaders want a legacy.

While others wait for June answers to the Supreme Court Obamacare decision, the Wisconsin recall outcome, and the euro Greek eviction notice, out here on the Left Coast we wait to see if the Democratic state senate and the Democratic state assembly are willing to cross the Democratic governor and go with the non-partisan Legislative Analyst's Office and effectively pull the plug.

 

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This week's video (provided by a vigilant reader) has two parts, a trailer for "2016", a political movie to be released this summer, and a speech at the Conservative Political Action Conference by writer Dinesh D'souza which explains President Obama's inner compass as pursuit of his father's anti-colonialism.

Comments

[Bill McCormick]

MORE TROUBLE in Syria as more signs of slaughter including shootings on the UN monitors. If you were Assad and you saw what happened to SADAM,Qaddafi,Bin Laden and Mubarak would you do as Hillary asks and turn over the reins to someone else? Let's cut the BS. With the "new good" guys: Russia and China joining one of the Axis of Evil: Iran in opposing UN (US) military intervention Obama stands by as the slaughter continues. Can this guy be President between now and November--or just stall,campaign and fund raise?

[Bill McCormick]

DEFENDING CLINTON. Yesterday CNBC's Maria Bartiromo delivered a blistering defense of President Clinton. Responding to the White House's criticism of the President's messages in her interview the day before Maria basically said The Ex President was relaxed, thoughtful and fully discussed the economic situation of the country and the world in her interview clearly expressing his ideas for solutions that in some cases were clearly diferent than President Obama's. She chastized the White House for trying to force Clinton to change his words in much the same way as they had done previously when Clinton defended Romney's role at Bain and when Democratic Mayor Booker defended Capitalism and US business from the White House attacks. She in effect called upon the White House to stop trying to control what others think and say. (much as they try to deamonize Fox and any other person who has different ideas than they do.)

SYRIA--killed another 108 yesterday. Secretary Clinton called upon Assad to turn control over to--? Who--the killers?

BAILOUT NEARS? Yesterday the President called German and Italian leaders to express concern over the EU situation. How close are we to dumping $1T freshly printed dollars into the IMF for a bailout? Yesterday's market rally was fueled in part by reported large sums of cash coming in from overseas. Meanwhile Spanish Banks continued to buy Spanish bonds. How's that for kicking the can? It is estimated by analysts that it will take 600 Billion Euros to recapitalize the Spain's banks.

[Bill McCormick]

MORE FOR THE PRESIDENT---

CLINTON yesterday on CNBC declared the US to be in a recession.

WALKER and the Conservatives delivered a warning to labor unions and politicians who count too heavily on them for survival. Riding the tide of disatisfaction with union pension funds working class Americans making $50-$90k in Wisconsin voted for Walker. Ironically, in a state where 50% of the public union members when given freedom to choose decided not to be in the union, the blue collar voters also truned to Walker. Perhaps it is not just the "rich" who feel abused by pension promises and entitlements we cannot keep. A message Romney should ride on. Christie in New Jersey and Walker in Wisconsin are proving that no one cares what party you are in if you attack the problems and do something to solve America's problems. Leadership is guts and action. Not "smoke and mirrors" excuses and promises.

MORE CALLS FOR US BAILOUT of Europe. More and more voices climbing aboard the lets bail them out wagon. Not Clinton, however, he says lets see if they can handle it first. By the way WE bailed out ourselves with TARP. The ECM is bigger economically than the US. They can print money. The Germans are one of the richest economies in the world. Spain's economy is close to that of California. Funny, isn't it, that both are the "green" economies--both flat broke. What we have in Europe is a kind of financial civil war where the rich "states" are going to have to decide if they are going to band together and save the ECM or let it fall apart. If they won't do it then why should we? We fought our civil war and came together. But, then we had great leaders on both sides and they knew when it was time to end the fighting and come together. Where is that leadership today?

[Bill McCormick]

HOW'S KICKING THE CAN DOWN THE ROAD working out? As the G7 meets Europe continues to kick the can down the road. With Greece a foregone conclusion focus now turns to runs on the bank, massive unemployemnt and higher interest rates in Spain, Portugal and Italy.
As France and Germany kick the can back and forth some analysts at CNBC are calling for a massive US infusion of cash into the ECB through the IMF. Sure why not just print another $1 Trillion dollars for our friends in Europe? After all they never paid for WWI or WWII or the reconsturction after the war or the 50 years of the Cold War protection from the Soviets. So why not have Uncle Sam pay the bill one more time while Germany makes more profits manufacturing in those factories capitalized by the USA taxpayers? After all we understand that Socialism with it's massive government employment and entitlement programs are the way it should be. Here in the US we are modelling ourselves after that program. 50% pay no Federal Tax, after two years as a Representative in Congress you can retire with a lifetime salary of around $120k necessary for the sacrifice of those in public service, unemployment, food stamps,welfare, medicare,medicaid, free education,free roads,free police protection, free fire protection, free emergency rooms if you don't have health insurance are just the fundamental rights of all at the expense of the other 50%. And, if we don't have the money to pay for it we'll just print more money or borrow it from the poorest nations in the world: China and India where people work for practically nothing. Forgive me if I don't by it. Let the Europeans do it themselves this time. America is amazingly close to the same mistake we are watching in Europe.

MORE DEFECTIONS: Long time Clinton Democrat Artur Davis, a Black Alabama Representative has decided to become a Republican. Here's his reason:

Davis writes, “I have regularly criticized an agenda that would punish businesses and job creators with more taxes just as they are trying to thrive again. I have taken issue with an administration that has lapsed into a bloc by bloc appeal to group grievances when the country is already too fractured.”

[Bill McCormick]

CLINTON defends Romney on Bain. NY Times:

On Thursday, Bill Clinton once more telegraphed that he considers Obama a lightweight who should not have bested his wife. Bluntly contradicting the Obama campaign theme that Romney is a heartless corporate raider, Clinton told CNN that the Republican’s record at Bain was “sterling.”

Last week was not a good one for the President as he AVOIDED Wisconsin's recall election. I guess he did not want to be blamed for the loss likely coming tomorrow. Or was he avoiding those PUBLIC UNION workers who dropped out.

DON'T LOOK FOR ANY WORK FROM YOUR PRESIDENT today as the White House announced that today was a Campaign day with 3 fund raisers. What day isn't?

[DickG]

"50 % DECLINE"; THAT'S ASTONISHING news relating to the Public Employee Union membership in Wisconsin. THE TOTAL Public and Private sector membership loss was 62000 down to 22000, in one year.
The only thing more astonishing is the 'lid' that was kept on it.
Even yesterday's 'The Journal Editorial Report' on FOX with Paul Gigot only mentioned it casually in passing. "Hope does spring eternal".

[Bill McCormick]

ARE WE IDIOTS?

CANADA approves offshore drilling near Newfoundland for Exxon. The US denies the XL pipeline extension and off shore drilling. With massive debt and an economy in shambles the President continues his stonewalling policies on energy.

The SMOKE CLEARS and the real numbers on the economy are beginning to show up. More today. Job creation fell to 69,000 for May. Labor force particiapation grew 600,000. Unemployemnt rose to 8.2%. Interesting isn't it that at a time there are no jobs 600,000 people start to look again.Hmmm

AND THEN THE REVISIONS: March new jobs were revised from 154,000 down to an already revised 143,000 and April's number was revised from 115,000 to a paltry 77,000.

CHINA manufacturing declined 7.5%.

THE US ten year T Bill (as I write this) pays you 1.45%.German bonds have NEGATIVE interest rates. Meaning Germans are paying the govrnment to hold their money.

FIFTY PERCENT, yes 50%, of the members of the Wisconsin public employee union members have DROPPED OUT of the Union.

ROMNEY will soon surge in the polls as average Americans begin to desperately seek a new approach to helping American businesses.

[DickG]

AT LAST, SOMEONE STEPPING UP 'BIG TIME'; This FILM produced by the President of King's College in 'This Week's Video'; is HUGE ! California's [iresponsible] Budget is the perfect 'back-drop'. The 'TRAIN' and it's Subsidizer in Chief; riding us into OBLIVION