California Politics Archives
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Here's a run-down of stuff that's in the news that you, dear readers, have already seen and which, in in the interest of, er, blatent self-promotion and subscriber loyalty, are worth pointing out.
Steve Westly is running for California governor and no less an authority than celebrity Republican Dan Schnur notes that Westly's attempt capture the political middle ground is great for the general election but probably not that great for the Democratic primary. Dan's a regular reader – or he says he is, anyway – and it shows, huh?
Sen. Deb Ortiz has lost her show-down with the stem cell folks at the California Institute of Regenerative Medicine but the stem cell folks have decided to um, give careful and full consideration to her comments – almost a ballot initiative – on their conflict-of-interest rules and their open meetings. Looks like someone, someplace has decided to start playing their politics a little more smartly. Finally. The last thing state Democrats needed was a show-down over stem cells which, along with the parental notification initiative expected to be on the November ballot, could have brought out a rash of conservative voters to defeat the anti-union measures designed to weaken Democrat's strong-hold over state government.
Maybe the reason the FBI is so focused on harassing teen-agers is because the folks in charge don't know anything about terrorism? Looks that way, no?
Salon is getting wackier and even more isolated than ever. Marc Cooper joins me in wondering what they're drinking down on 4th Street. I've been wondering about the editing for a while now, even since the site ran a breathless piece by former San Francisco Weekly writer Peter Byrne. In that story, Byrne (whom I have criticized before) repeatedly – and I think inaccurately – said that Gov. Arnold Schwarzenegger had "invested in" Goldman Sachs, the investment bank, and that Gov. Terminator's investment presented a conflict-of-interest with the bank's state bond business.
I'm not so sure. It's more likely that the governor, like a lot of wealthy men (including Steve Westly) has invested in funds, trusts, REITs and other money-making vehicles managed, run and yes, backed by the bank. That's not the same – and it's not the same conflict of interest -- that Byrne tried to draw in his story. To my business-reporters' eye, Byrne didn't seem to know the difference between buying stock in the bank (from which Schwarzenegger would, in fact directly benefit if he gave Goldman the state's bond business), investing with the bank in various vehicles it has established (a less direct involvement) and investing alongside the bank's funds in third-party entities (even less direct). These may seem like differences without distinction to the average checking-acount Joe. But that's exactly the point and it's more evidence of the weak editing that Cooper is decrying on his site.
Rich folks invest their money – that's how they stay rich and while Byrne and Salon are right to keep an eye on Schwarzenegger, that story, like the recent piece on the coming Democratic Party revival (as if) lacked any sort of substance in the laundry list of allegations. Will Byrne or Salon ask the same questions about Westly, also a Goldman Sachs client because of his status as an eBay employee - or his equally wealthy rival for the governor's seat, Phil Angelides?
Bet they don't.
Mon 02:15 PM | permalink | printer-friendly version | email this article
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Oh, goodie. California Democrats are going to get the primary they deserve. And everyone should watch this. It's going to be important for the state and for the party.
Controller Steve Westly has written a $10 million check to his potential gubernatorial campaign. That's as close to a declaration as we're going to get until his scheduled announcement in mid-June, according to Beth Fouhy at the AP.
So it's Westly, the Progressive libertarian from Silicon Valley v. State Treasurer Phil Angelides, a traditional union-loving, Schwarzenegger-baiting Democrat from Sacramento. Now, Westly will quibble. He's a real Democrat. But he's really a business candidate; that's why he worked with Schwarzenegger on the budget initiatives last year. And while Angelides is also a wealthy man, the political territory he's staked out is to Westly's left working most visibly to use the power of the state's enormous employee pension funds into Wall Street oversight agencies.
Continue reading "Gentlemen, Start Your $10 Million Engines"Tue 10:55 AM | permalink | printer-friendly version | email this article
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Bill Lockyer, California State Attorney General, ain't running for governor. He's going to run for state treasurer, the job that Phil Angelides – who is running for governor – currently has.
This is why I hate term limits. It makes musical chairs of political offices.
Thu 05:58 PM | permalink | printer-friendly version | email this article
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Oh, we may be in for a very hot summer.
Political dominos, California style, has never been trickier for either side of the equation. It's one big fat "on the other hand" involving the ambitions of two men who personify the differences within the Democratic Party, a Republican celebrity governor who thrives on being underestimated – the Democratic Party's current attitude – and some hot-button social issues that could backfire.
Here's one hot-button: An initiative requiring doctors to notify parents when their daughters seek abortions. If the signatures submitted last week are all verified, the initiative will appear on the next statewide ballot. That will bring social conservatives – the state's inland counties – to the polls in droves. When? Depends.
The earliest state-wide balloting could be in the fall. That's if Gov. Arnold Schwarzenegger decides that his pet reform projects won't make it through the legislature. Since the two easiest to understand measures - a change in the way teachers, members of the state's most powerful union, are paid and a new way to draw lines for Congressional and legislative districts - are blows to Democrats, it's unlikely Schwarzenegger will get everything he wants.
Continue reading "They All Fall Down"Mon 12:34 PM | permalink | printer-friendly version | email this article
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Yet another sign Gov. Schwarzeneger's redistricting plans are gonna fly: Today's New York Times where Adam Nagourney says there are battles to change the way Congressional and state legislative districts are drawn almost everywhere. Oh, and Sen. John McCain's name is in the mix as endorsing Schwarzenegger's plan. That oughtta seal the deal.
But wait! There's more.
The San Francisco Chron weighs in and lets everyone wring their hands over the number of initiatives that could join redistricting on the November "special" election ballot. I don't see what so special about this California election. I'm getting used to voting seasonally.
More seriously, it's unlikely -- given the high voter turnout the state has seen in recent elections -- that all these measures will quailfy. There are deals to be cut between the governor and the legislature, for starters. And the signature requirement is based on prior turn out; for the presidential election it was about 60 percent.
Mon 03:37 PM | permalink | printer-friendly version | email this article
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Well you knew former Secretary of State Kevin Shelley's days were numbered when he was forced – by the thundering silence emanating from his party since his legal troubles first started – to float the conditions under which he would be resigning with the San Francisco Chronicle's political columnist Matier & Ross.
The boys informed the world that Shelley would quit if he 1)had a job and 2) got immunity. It was laughable. One, that Shelley would shop for federal immunity in the pages of his hometown newspaper – the one that's fighting with the local US Attorney's office -- and two that M&R would give credence to the idea which Shelley clearly dialed in himself.
Continue reading "Buh-Bye, Kevin. Send a Postcard!"Fri 06:57 PM | permalink | printer-friendly version | email this article
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It is getting harder and harder to ignore the coming split between labor unions and the Democratic Party. The split has started in California cities where hairline fractures are becoming cracks and it's going all the way to the top of the ticket.
When all is said and done, there's a good chance that the Golden State may not be a reliable Democratic stronghold because it is labor that provides Democrats with money and muscle during elections.
The signs are pretty much everywhere. But let's start in San Francisco, long home to some of the West Coast's most powerful unions. First, despite it's pre-Christmas strikes, the union lost its bid to make all contracts with San Francisco's hotels run on the same national timetable.
Continue reading "Fading Unions"Mon 12:35 PM | permalink | printer-friendly version | email this article
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There's been a lot of chat recently about Democrats getting angry, standing up and fighting back. But there is such a thing as much of a good thing. For an illustration, let's turn to the California Democratic Party.
Last week, Democrats stood up and told Gov. Arnold Schwarzenegger they weren't going to take it any more. But they didn't pick their battle very carefully.
To demonstrate their independence, the legislature declined to re-appoint Reed Hastings to his seat on the state Board of Education. Hastings, said the legislature's Latino caucus wasn't as supportive of bi-lingual education as he should be. The Netflix CEO, appointed by former Gov. Grey Davis, is in favor of charter schools, long a teacher-union-busting tactic. And – what's worse – he's a Democrat appointed by a Republican. My God! The Horror!
Continue reading "Golden State Warriors"Tue 10:18 AM | permalink | printer-friendly version | email this article
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We get a highway on stilts. But the Greeks, Norwegians, Chinese, Malaysians and Brazilians get big beautiful bridges at least one of which – the Greek span – is earthquake resistant.
We'll leave the French out of it for now but look at the photos of all these marvelous works of human engineering and think about what the state of California is building on one of the most beautiful sights in a state filled with beautiful sights. It's a sad metaphor.
Mon 02:54 PM | permalink | printer-friendly version | email this article
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"FBI Presence Shadows Legislature's New Session" is one hell of a headline. Particularly if you don't live in Louisiana.
The LATimes, God love 'em, is finally taking notice of the legal woes – and possibly the pending indictments of – Sen. Don Perata, recently elected Senate Majority Leader, and Secretary of State Kevin Shelly. Both have legal problem which, taken together, spell high-profile political vulnerability for the party that runs the state Assembly.
Continue reading "Paging Earl Long*"Mon 01:55 PM | permalink | printer-friendly version | email this article
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Wednesday’s LA Times took a look at California demographics and came up with some interesting insights about how and why the state votes.
Basically, we’re a red state with blue trim.
Inland, California votes Republican. But there aren’t many people there. Out here on the edges, we’re Democrats. And there are a lot of us.
The Times also highlighted one of my favorite themes: The increasing popularity of unaffiliated voters. The fastest growing group of registered voters in the state is “none of the above.” Independent voter registrations grew by 2 percent over the past four years. And you see this the most, of course, where population is most concentrated, here on the coast. Where the Democrats are.
Fri 11:40 AM | permalink | printer-friendly version | email this article
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Over at Tapped, The American Prospect magazine’s web site, young Matthew Yglesias has a post with some interesting implications for all you California anti-taxistas.
Yeah, you. And you, too. Yes, we – particularly those of us who are self-employed and cash out the occasional shares of, er, Google – get hit and hit hard on cap gains and income and all sorts of other tuff. But saying that means the state is "overtaxed" is using anecdote to devise policy. Silicon Valley’s self-employed money managers are in the minority. And yes, you pay more because you make more – that’s how it works. And yes, it's as much as your Dad made in a year. You would prefer something different? 'Cause that's possible....
Continue reading "California Dreamin’"Tue 05:07 PM | permalink | printer-friendly version | email this article
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Maybe the problem with writing about Enron is that it’s not a business story. Maybe it’s a political story.
Maybe that’s why it – and a host of other corporate scandal stories – aren’t sinking in the way they should. There’s precious little outrage. That’s partly because we know live a Wal-mart nation: it’s every man and woman for themselves and, in business, we kinda sorta expect people to behave badly. We understand that they’re motivated by profits and money and greed so when greedy guys get caught no one is hugely surprised.
Continue reading "Chinese Wall"Tue 03:46 PM | permalink | printer-friendly version | email this article
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As soon as the dust settles here in San Francisco, the state’s political junkies will, once again, turn their attention to Gov. Arnold and his budget woes.
Schwarzenegger’s scuffling with the Democratic state legislature hasn’t gone well. He wants to put an initiative before voters authorizing a $15 billion bond measure as a way of managing the state’s massive debt. It’s an idea, let’s put it that way. And it’s one that’s going to draw some very funny lines, lines that are going to be important in the future.
Two men who would be Governor, Treasurer Phil Angelides and Steve Westly are on opposite sides of this issue. Westly, from Silicon Valley, Arnold country, has been cautiously supportive. Angelides, a traditional Democrat, thinks Schwarzenegger’s plan is a bad idea.
Watch this space. These guys are playing for keeps and their contest could very well turn into another fine illustration of the ways in which the Democratic Party is remaking itself. It’s Westly, who more and more embodies the ideas of his fellow tech entrepreneurs, an independent but business-minded crowd of Progressive Liberatarians, versus Angelides’ traditional little guy v. goliath corporate interests.
A look at how high the stakes might become is in the Dec. 22 Fortune. Non-subscribers have to pay to read on-line, but this magazine in particular, with stories about Schwab and Google and the challenges both these influential San Francisco and Silicon Valley companies have ahead of them is pretty much required reading.
Sun 01:11 PM | permalink | printer-friendly version | email this article
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He's from Omaha and he really was here to help. Too bad the Wall Street Journal got in the way.
Warren Buffett doesn't like the way in which the WSJ portrayed his Prop. 13 comments and he's fighting back. On Total Recall election day, Buffet wrote to the Journal and complained about the story that made Gov-elect Schwarzenegger say (probably with less humor in private) that he's ordered the Omaha billionaire to do 500 sit-ups for his ill-timed remarks about the state's screwy tax system.
Buffet's complaint? That the reporter with whom he spoke neglected to include a discussion of a third Buffet property in the story he wrote. That, says Buffet was the point of the conversation which, by the way, sounds like a classic set-up that the WSJ could have managed a bit better. The mishandling gave the charitable souls on the Journal's edit page a chance to vent their spleens about tax and spend billionaires. That wasn't good for the Schwarzenegger campaign and it embarrassed Buffett.
The third property, a house on which Buffet pays about $12,000 a year in property taxes, provide a better example of the inequites within the state's tax system, Buffet tells the Journal. And that -- not the difference between Omaha and Laguna Beach -- is the point.
Buffett maintains -- and he's right -- that this is the state's biggest problem. You can -- and you should -- go to Berkshire Hathaway's website to check out all the fine points. But here, as Andrew Sullivan likes to say, is the money quote:
"Simply correcting extreme inequities in the imposition of those taxes would provide much additional revenue for the state." Buffet writes to the WSJ. "This return to fairness could be done in a manner that protects homeowners with limited incomes, living in homes whose values have soared. Several proposals include such protection."
Political Message: Property tax reform is still on the table The Terminator is setting in Sacramento. Why haven't you seen that story anywhere? HUH?
Credit (along with a gently raised eyebrow of quiet stock-owning outrage) to The Merc's Dan Gillmor who got a copy of the Berkshire Hathaway stuff right off and posted it double quick along with uh, the notation that he's a Berkshire Hathaway shareholder.
Tue 11:27 AM | permalink | printer-friendly version | email this article
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The Chron asks a good questions: How hard is it to do business in California?
The answer: A rousing "it depends."
But more and more, as you listen to the candidates, particularly Schwarzenegger, you get the feeling that their objections to California's business climate have more to do with their personal fortunes than their corporate holdings.
In the world of the self-employed, and the quickly self-made -- the California flavor of the American Dream -- it's easy for rich people to confuse corporate holdings and their individual earnings. It's all their money, isn't it?
The state recently increased their personal income tax for its wealthiest citizens. Lt. Gov. Cruz Bustamante is talking about even more of that which annoys the well-off, particularly those who see workman's comp costs and health insurance headed through the roof. If you run you own show -- or you're in an LLC or partnership with others as a lawyer or venture capitalist -- you feel the state's squeeze in two different directions and it's on your wallet, no one else's.
Fri 03:56 PM | permalink | printer-friendly version | email this article
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State Treasurers are doing to the New York Stock Exchange what the attorneys general did to Microsoft, pinning it down and kicking it hard until it begs for mercy. They've had some luck, too.
This could be just the beginning of a very interesting series of negotiations, some of which are certainly being conducted with an eye on the next California governor's race. The one scheduled to start next year, not next month.
California Treasurer Phil Angelides is leading the charge on much of this public corporate reform stuff. It's served New York Attorney General Eliot Spitzer very well, hasn't it?
Also on Angelides to-do list? A look at venture capital funds and their long-established habit of keeping their returns private. It's probably not a coincidence that puts him on a collision course with Silicon Valley's own Steve Westly. Westly, California's controller, is also eyeing a run for Davis' job in '06.
Wed 02:20 PM | permalink | printer-friendly version | email this article
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California now has the strongest anti-spam legislation in the nation. Send an unsolicited email and you can be fined as much as $1 million.
Will it work? Who knows? The nature of the Internet is diffuse so it's unlikely that the bill will have anything more than an symbolic effect. Besides, there are carve-outs for the likes of Microsoft which has this very annoying habit of pulling computers to its "update" sites whenever it feels you have the need to screw up your machine.
To really do something, the feds have to get involved. That's the lesson that's being taught in Washington as Congress pretty much guts the much-praised privacy legislation Gov. Gray Davis signed into law earlier this month. That do-not-call registry everyone loved so much? It's got troubles, too.
The longest journeys start with one step And politics is often about symbols. Craig Newmark and Dan Gillmor have the insider's perspective on spam and privacy along with some words on fighting the good fight.
Wed 02:07 PM | permalink | printer-friendly version | email this article
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We haven't got enough to think about. ABC's The Note Notes that a Capital Hill newspaper, The Hill, is already looking at next year's Senate race, the one that could be against Sen. Barbara Boxer.
"Look for a Boxer-Jones match-up come 2004. The former California Secretary of State Bill Jones says he is leaning strongly toward challenging the Democratic senator and is waiting to see whether Arnold relocates to Sacramento.
"As for the White House, Jones says, "They've made it very clear to me that they are supportive. Obviously, it would be helpful if they wanted to help before the primary. That's probably not going to be the case."
Another right-wing conspiracy in the works…
Wed 02:12 PM | permalink | printer-friendly version | email this article
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San Francisco's business community has a right to be nervous about Green Party Mayoral candidate Matt Gonzalez and his staunchly "Progressive" agenda. But there's more trouble ahead -- in Sacramento. The Bee's Dan Weintraub does a nice, comprehensive run-down of Sen. John Burton's SB2, a bill that would, essentially, require businesses with more than 20 employees to provide health care.
The Burton bill's requirements aren't going to matter to huge companies like Chuckie Schwab or SBC. They already dole out for health insurance. But to small business, the very ones that pols like Gonzalez are trying to preserve, health insurance is an enormous expense.
In an nutshell, that's the fight that San Francisco's left has on its hands: The disparity between how Liberals treat corporate interests.
Increasingly, in a city like San Francisco where so many people are self-employed, working at small start-ups, or simply business-oriented, attacks on business are taken personally. This is a bit of a hold-over from dot.com mania where employees really were actually invested in the places where they worked. It remains an emotional chord for many; just take a look at supporters for SFSOS or Plan C, both of which are pushing more conservative (moderate in the rest of the world) agendas for San Francisco.
But these are the same folks who think Gonzalez is right when he talks about banning Starbucks and keeping Home Depot out of Bernal Heights. That effort is designed to preserve one of the city's many charms, its small businesses, the same small business that will be devastated by Burton's health care measure.
Wed 01:11 PM | permalink | printer-friendly version | email this article
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San Francisco financier and general all-around big deal Warren Hellman is such a macher, as they say back in the old country, that he get two, count 'em two, reports of his falling out with soon-to-be-ex-Gov. Gray Davis in today's paper.
Dave Lazaras weighs in on the Chron's business section with a nice interview that tells you what you need to know.
Matier and Ross (they're back!)gild the lily.
Wed 04:29 PM | permalink | printer-friendly version | email this article
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He's says it's coincidence "great minds and all that" but the hardest working columnist at The Chron, Dave Lazaras used his Sunday column to echo some familiar thoughts about Prop. 13, Warren Buffett and Arnold Schwarzenegger.
He's From Omaha. He's Here to Help. Really Help. And all that.
In the meantime, the Wall Street Journal has weighed in with an editorial decrying Buffett as a "tax and spend" billionaire. Ya gotta loves those guys; they're so predictable. They probably still huddle in a circle, smoke cigars, eat red meat and chant "Lower the Rate, Increase the Base."
It's an important piece, however, since it could just as easily serve as an outline Prop. 13 reform bargaining chips including income tax rates for the state's wealthiest residents, the workman's compensation debacle and, of course, the bond crutch.
The whole brouhaha makes a nice curtain-raiser for the "Economic Recovery Council" that Newsweek says Schwarzenegger has scheduled for Wednesday at UCLA. Tax reform, total tax reform, is on the table for anyone and everyone who has an idea, underscoring just how much businessman politics is behind this race. It's going to get more so when Peter Ueberroth media tour kicks off. He's going to talk to political and business writers.
That's because, while he doesn't like to talk about it, Ueberroth's campaign manager, the ubiquitous and garrulous Dan Schnur spent a little time with the state's newest and wealthiest business community, Silicon Valley, where he got a up-close and personal look at the minds of billionaire businessmen bent on political reform.
Mon 04:48 PM | permalink | printer-friendly version | email this article
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As expected, Warren Buffett has told the Wall Street Journal that he thinks Prop. 13 is unfair. He bases this among other things, on the $12,000 difference he pays in property taxes in California and Nebraska. The lower bill, about $2,300, is for his Laguna Beach property.
California Insider Dan Weintraub offers up the usual political bromides saying that yes, maybe, it's time Prop 13 were amended. But, as is often the case when political reporters talk to businessmen, he misses the point. More and more, Total Recall is not about politics; Total Recall is about reforming politics as it's currently practiced in California and elsewhere.
As part of that strategy, Buffett's job is to suggest, as only he can, that California's tax structure is broken and needs fixing. He's not speaking to the average homeowner, but to the state's business community. He's calling on their sense of fairness as only he, a self-made billionaire who wants to pay higher taxes, can. Besides, to address Weintraub's worries, once you have agreement on tax reform, it's not that hard to legislate protections for low-income and elderly homeowners. Florida, for example, does it with a 'homestead' exemption that protects your primary residence but not your million dollar beach house or the office park down the street.
There's something else going on here: Schwarzenegger has positioned himself as the anti-politician but, so far, he's demonstrated some pretty shrewd and sophisticated maneuvering. It's leaving most of the state's political know-it-alls scratching their heads.
Fri 01:00 PM | permalink | printer-friendly version | email this article
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The best person to tell you about Warren Buffett is Bill Gates. But Gates is kind of hard to get a hold of.
Luckily, the second best person to tell you about Warren Buffet is a business reporter, Fortune writer Carol Loomis. The two are pals. She even helps edit Berkshire Hathaway's annual report to shareholders.
So, if you want to gauge the effect that Buffett will have at Schwarzenegger Central, take a look at her reporting. And make no mistake, this is a serious thing, this Buffett advisory role. There are way too many formal statements, press leaks and other quasi-official positioning maneuvers to think otherwise.
Loomis had a now-famous talk with Buffett about cleaning up Solomon Bros., the investment bank that was crippled by scandal in the 1980s. And their interview about the stock market in 2001 is worth a look.
If you're not already a subscriber, Fortune will make you pay to read these articles. But, if you really want to measure the Arnold effect, it's probably worth the money. Because it's looking like A.S. is going to be the businessman's candidate. And in California as we know it now -- particularly Northern California and Silicon Valley -- a business-like approach to politics is baked into the soil. Remember, they grow Libertarians here.
The Oracle of Omaha likes clear, straight-forward accounting and bookkeeping. He thinks rich people should carry their fair share and that's not a euphemism for reducing corporate taxes. He likes the estate tax. He thinks the Bush Administration's tax cuts were a bad idea. He's big on public accountability. That's why the companies he runs are run well. They're run clean. They're run fair.
With Buffett signed on, the Schwarzenegger/Wilson camp has got to be looking at an overhaul of the state's tax system. California's tax code is everything Buffett hates. It's confusing. It's arbitrary and, more importantly, it does not work. It's reliance on sales and income taxes is regressive and short-sighted. Among other things, it encourages commercial development and discourages housing construction. The paltry amounts of money the state is able to raise in property taxes go to Sacramento and disappear in the haze. The reliance on piecemeal bond issues to do things like pay for school construction is ridiculous. And that's before you consider the shell game accounting that was used to construct this year's state budget. California the feel of a semi-corrupt down-at-the-heels former colony, not the world's fifth-largest economy and, for the most part, its tax structure is to blame.
Thu 02:11 PM | permalink | printer-friendly version | email this article
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Here's some more on the important and often overlooked difference between Progressives and Populists from SFWeekly's always-smart Matt Smith.
Lots of people have called Hiram Johnson, the pol who brought us recall politics, as a Progressives. But, as Smith documents, they're wrong. Johnson was as much a political opportunist as anything else.
And if you're not reading SFWeekly -- which is free -- you're missing something, specifically smart, well-done coverage of city news and events as Smith, once again this week, demonstrates.
Sat 06:49 PM | permalink | printer-friendly version | email this article
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Think about this: San Francisco has passed a budget. The state hasn't. And just in case you thought government and business had nothing to do with one another -- and there are plenty of you out there -- take a look at these three stores. One, on the state's falling bond rating. These days, it's junk. Two, California's trade offices are going to be closed. Given the amount of business California does with Asia alone, this can't be good news. It all adds up to this: Budget woes aren't just bad for people who hold elected office. They're bad for everybody.
Tue 06:08 PM | permalink | printer-friendly version | email this article
