Mark DeSaulnier has had a rapid ascent through the state legislature and now, potentially, into Congress.  Within three years, this former restaurant owner won elections to the State Assembly (in 2006) and the State Senate (in 2008), with a Congressional primary scheduled for September 1.  Prior to that, he was a 3-time member of the Contra Costa County Board of Supervisors and the California Air Resources Board.  A former liberal Republican in the mold of Edward Brooke, DeSaulnier switched parties several years ago and compiled a liberal voting record in the State Legislature.  His first ad of the campaign covered the topic of health care, and I asked him about this and several other issues in an interview conducted last week.  Having taken place before the crucial budget vote, I spent a good deal of time asking DeSaulnier about that, and you can see his responses here.  Depending on your perspective, he either did or did not fulfill the promise to vote against “most” of the budget, by the way, voting no on 11 of 26 bills, including all of the more controversial ones.

I’ll pick up with a paraphrased transcript of the rest of the interview below:

DD: So, other than the budget, how’s it going with your campaign?

Mark DeSaulnier: Well, this is a tough campaign, with a big field and a lot of good candidates.  The polls we’ve done show us winning.  We’ve got 70% of the money that we need to compete, and a lot of great endorsements.  I would say we have the most local endorsements inside the district.  And we’re going to be able to put together a great ground campaign, with people I’ve worked with for 20 years in the district.  I think we’re going to be concentrated in Contra Costa County, where we can post a big number.  I think we’re putting ourselves out there as the local candidate, who has represented the district for a long time.  And we have people out there walking and phoning, putting forward that message.

DD: As long as we’re on California, obviously you’ve seen the dysfunction at the local level.  What do you think you can do at the federal level to remedy this situation?

MD: You know, I read a lot of Paul Krugman, and I agree with him that we’re going to need a second stimulus package.  And I think we need it sooner and not later.  I think we can take what’s been learned from the stimulus package that we’re doing now.  I think the problem is that the banks like Citi and Bank of America aren’t lending, and so we need to require the banks to lend, with relief for the credit worthy who are falling behind on their payments, and more money out to the credit unions who have done a better job handling this crisis.  Next, I think we have to do some sort of fiscal stabilization.  I see it in this state, people who need to access the safety net go up when the economy goes down.  And so we have to break that cycle, and I think we can by providing some relief.  Finally, we should say that we can do things more efficiently.  There shouldn’t be this silo mentality.  I’ll give you an example.  We put together these “one-stops,” places where you can go for unemployment and job training.  And people tell me that you have to get out of one line and pick up a phone in the office to get your unemployment benefits.  That just doesn’t seem like good government to me.  And I think we have an opportunity to make government work better.

DD: Let’s move on to health care.  Seems to be a big issue for you.  What are the principles you carry in this debate?

MD: To me, the gold standard is single payer.  We have the problem of getting health care to those who need it, and also how we get control of costs.  I think the public option is the first step, and if we do it right, it could be, and really I think it should be, single payer.  The question is what are the Democrats willing to give up to get moderates on board, and I think there have to be some lines we cannot cross there.  In the end, it has to be about flexibility and more choice.  That’s the way you’re going to sell this thing.  It’s telling that the moderates want firewalls in their plan, they don’t want the people to have more choice, they want to preserve something for the insurance companies.

DD: Will you commit to not vote for anything that doesn’t have a quality public plan available on day one, not a trigger, open to everyone, and with the kind of rates necessary to force the insurance companies to compete?

MD: Yes.  I think as liberals, as progressives, something we don’t do a lot but which we can learn from Republicans, sometimes we’ve just got to say no.

DD: Congress has started to debate the regulatory reform ideas put forward by the Obama Administration, and they’re getting a ton of pushback from the banking industry, particularly on the concept of the Consumer Financial Protection Agency.  It’s the same way on a lot of these issues, the banks just won’t relent.  How do we solve this problem?

MD: Honestly, the politics will never get totally fixed without a public finance system in this country.  And then people say, “why should we pay for elections?”  The truth is that the average American is paying disproportionately already, when the giveaways to businesses and corporations are factored in.  They buy elections fairly cheaply, and they get the rewards.  So that’s something we have to pursue.  As far as your question, yes, I think we need a Consumer Financial Protection Agency, in fact I think it should be cabinet-level.  A Secretary of Consumer Protection.  The point to all of this is that if middle income people don’t have wealth, democracy ends.  That’s just the bottom line.  And one way to ensure that is by protecting consumers, so you don’t see all their wealth go into someone else’s pockets.  Inequality is just killing us right now.  Kevin Phillips wrote about this years ago, in Bad Money, and he was very prophetic.  I also think that you can’t reform the financial system without holding people accountable.  And so I would involve the Department of Justice right at the beginning.  That’s the only way to really ensure it doesn’t happen again.

DD: You mention inequality, it’s something Democrats don’t talk about enough.  A recent Wall Street Journal story talked about the top 1% earning 35% of all the compensation in the country.

MD: It’s stunning.  And our tax structure, by the way, rewards the accumulation of wealth, not work.  This happens when you get a financial services economy, which is completely not sustainable.  We don’t have manufacturing, we just have this financial services giant, and it trades in bubbles.  So one way to reduce that inequality is to retool the financial services sector, make it smaller, make it more boring.

DD: OK, last question.  I wanted to ask you about SB375, the smart growth measure that you played a big part in passing last year.  This bill doesn’t get a lot of attention, but it really offers a blueprint to how to achieve smart growth policies with the statewide authority working in concert with local communities.  Do you plan to scale that up if you make it to Congress?

MD: Oh, absolutely, and this is where I think my background really suits me to replace Ellen Tauscher.  I chaired the Transportation Committee in the Assembly as a freshman, I think the first person to do that.  I spent ten years on the California Air Resources Board, and I co-authored SB375.  I’m pretty sure there’s a companion bill in Congress right now.  Doris Matsui (CA-05) is carrying it right now.  I have honed in throughout my career on the changing transportation and mobility side of the energy issue.  We accomplish this, in part by reducing miles, and also finding new energy sources for transportation.  We need more transit, and a move away from single-occupancy vehicles and long commutes.  It’s about bringing the work space closer to the living space, and creating livable communities.  So I think I’m naturally suited  for such a task.  I’d like to get on the Transportation Committee if I get to Congress.

DD: Thanks for your time today.

MD: No problem, thank you.

We have less than 50 days until the special election in the 10th Congressional District to replace Ellen Tauscher, who resigned to take a job at the State Department.  The candidates include local members of the legislature, the state’s Lieutenant Governor, and several candidates with interesting resumes.  There’s even word that New Age guru and Oprah pal Marianne Williamson may get into the race, although she doesn’t have much time to make her decision.  The 2nd quarter fundraising totals revealed some interesting outcomes, and the campaign staffs have debated who has the most local support and the most endorsements.  There’s even a burgeoning controversy about Ellen Tauscher’s presence on Sen. Mark DeSaulnier’s mailers, which may violate the Hatch Act now that she works in the State Department.

We’ve heard a lot about strategies, funding and endorsements, but a little less so about where the candidates stand on the issues.  So I’m making an effort to interview all the Democratic candidates in the race, to discuss their views on the type of vexing problems that the country faces which they would be expected to deal with in Congress.  The first candidate to respond was Adriel Hampton, the former Political Editor at the San Francisco Examiner and an investigator in the SF City Attorney’s Office.  What follows is a paraphrased transcript of the interview I conducted last week.

DD: Thanks for taking some time to talk with me.

Adriel Hampton: Thank you for contacting me, this is great.

DD: How are things going with the campaign?

AH: Things are good.  I kind of feel on the razor’s edge here, where I could either do really well or crash out.  Obviously, (Anthony) Woods and I are the underdogs, while the elected officials are duking it out.  Woods focused on fundraising and did a pretty good job, while I focused on building a volunteer organization.  I’m working on voter ID in a distributed way using volunteers, and I’ve dropped 8,000 pieces of literature, half of it myself.  I have two little kids, and I’ve been canvassing basically every night after they go to sleep since April.  I got a designer in Los Angeles to deliver sharper literature, with a better printer, and I’m starting some targeted PAC fundraising among peace groups and progressive organizations.  I think Anthony and I are running a bit to the left of the field.  And then you have the possibility of Marianne Williamson getting in, and she has a major public profile as well as having worked with Kucinich in the past.  I think she takes votes from everybody a bit, but certainly (Assemblywoman Joan) Buchanan.

I’ve just been trying to build a consistent presence on the ground, through appearances and volunteer events.  The other campaigns have big staffs, especially (Lt. Gov. John) Garamendi.  (Sen. Mark) DeSaulnier has the Democratic club circuit down, and Garamendi is kind of running an air war.  But the poll he put out showed an 80% name ID and only 24% of the vote.  I’ve been campaigning everywhere, all over the district, and we’ll see how it goes.

DD: Let’s get into the issues.  I’ve been looking at your 12 ideas to change the nation, and right at the top is economic reform.  Could you talk about that a bit?

AH: Absolutely.  I got into this race to discuss economic issues and taking on Wall Street.  In fact, I was strongly considering running a primary against Ellen Tauscher, I have been critical of her since her vote to authorize the Iraq war.  Then I learned about how she was one of Wall Street’s biggest friends.  I’m running as an economic progressive.  A big problem with the Democratic Party is that they consistently fail everyday citizens on economic issues.  In many ways, they’re just as corporate as the other party.  I was active in the grassroots against the Bush bailout.  Obama brought in some of the same people responsible for taking us down that road with Wall Street.  I supported the stimulus, and the opportunity for New Deal-type spending, but I think we need to go further and break up the political power of Wall Street.

DD: You mention supporting credit unions.  How exactly would Congress be able to do that?

AH: I think we can favor them with an FDIC guarantee, promoting them as an alternative to the global banks.  During the financial crisis, the banks outside the big national firms tended to do better.  And so I think we should encourage that more local approach.

DD: There’s been a lot of talk recently about bankslaughter, this idea that we could add a new crime to hold bank managers personally responsible for behaving recklessly or in a negligent way.  Do you support bankslaughter?

AH: I would tone down the name to enact popular support!  But you know, when you see someone like Angelo Mozilo, he certainly engaged in what I would call a dereliction of duty.  I don’t have a problem with holding bankers personally responsible for failing to hold to certain consumer protections.  What I’ve seen is that the grassroots folks who are not necessarily active in politics are very receptive to this.  They want to see some accountability.  And I don’t want to harp on Obama entirely about these issues, he needs a progressive Congress as well to push this through, it’s not all on him.

DD: OK.  Another one of your 12 issues I read kind of surprised me, it was about conscience clauses.  As it turns out, there was a federal ruling recently saying that pharmacies must dispense the Plan B pill and cannot use their religious beliefs to deny women legal medical aid that they seek.  How you do respond to that?

AH: I am not for restricting access to the morning after pill or abortion information.  All I’m saying is that there has been a robust system of jurisprudence around reasonable exemptions.  You cannot fire disabled people because they cannot perform one task in a job, you have to make an exemption.  If a pharmacist doesn’t want to provide those pills, some other pharmacist can in their place.

DD: But some people live in rural areas where they have no other choice but one pharmacist for possibly hundreds of miles.  If that person doesn’t want to provide legal services, shouldn’t he find another job?

AH: Well, I’m for reasonable accommodation, not blocking access to health care.  I believe in allowing people to exercise their individual liberties as long as they don’t infringe on others.  I’m willing to talk about the nuance of issues like this, to see if we can come to an understanding.

DD: The biggest issue in Congress right now is health care.  Where do you stand?

AH: Well, I’m for single payer.  Pete Stark, up here in the Bay Area, decided to vote against that cap and trade bill because it was too weak, and conservatives now love him for it.  But I don’t think that should come into account, and I don’t think the grassroots should give up.  Some of my opponents say we should get what we can get, but we might lose the momentum for reform if we do that.  But I understand that we have to treat those millions of people who are suffering right now without health insurance.

DD: Let me ask you this, would you agree to refuse to sign any bill without a robust public option that is available immediately and can use Medicare bargaining rates to drive down costs?

AH: You know what, I would.  I would not vote for anything that didn’t severely change the insurance system.  I’m not a violent person, but the system is so violent right now that I feel the need to do violence to it.  And the same with war funding efforts without drawdowns and timelines, I couldn’t vote for that.  I know that the ads would kill me, defying the President.  But I think it’s important to talk about the issues, meeting as many people as I can, going right to them and explaining myself.  There have to be lines in the sand.  We have a radical right-wing party in this country that is almost insane.  And the Democrats are playing down the center.  We need some organizing from the left.  Just imagine someone like me, a regular guy, expressing the beliefs of Lynn Woolsey and Barbara Lee.  I’m not afraid of the word socialist in certain respects.  I think there’s a role for government in equalization, to provide an economic bulwark against death, disease, and poverty.  And I get that regular people in the insurance industry may suffer, but are they worth the struggle of 47 million uninsured?  At least we can start these debates on the left, I think it would result in a better outcome.

DD: Obviously at Calitics we’re focused on the budget issues.  What help do you think the federal government could provide to help get some systemic reform here?

AH: Well, I voted all No on May 19, because I didn’t see any serious reform efforts in there.  One benefit of the problems now in California, which are tragic, is that I hope people are waking up.  There’s such a right-wing influence in the media and the popular consciousness.  As it turns out, California’s taxes are not progressive.  I just think there’s a rage on the populist level that can be tapped by progressives.  Everyone in this race is a strong liberal, but I think I’m the only progressive, fighting for progressive taxation and labor rights.

DD: So what reforms can we get out of Congress?  Some want the Feds to provide loan guarantees to the states, or they can condition a second stimulus to real budget reform, or even take Medicaid out of a state/federal partnership and into the realm of a purely federal program to smooth out outcomes throughout the country.  Where do you fall?

AH: Probably along the lines of more extreme reforms.  I appreciate Calitics’ reporting on this.  The loan guarantees sound like a good idea.  I could live with centralized funding of Medicaid with local administration.  And I’m for carrots and sticks in any stimulus funding, the idea that if you bail out a state, they have to have additional guarantees.  Overall, I’m for structural reform.  One of my opponents, Sen. DeSaulnier, is pushing a Constitutional convention.  But we all need to stay on top of that.

DD: One final question, with respect to Iran.  You wrote in your 12 points to change the nation that “I will oppose, by any means necessary, Iran’s acquisition of a nuclear weapon.”  Obviously, a lot has happened since you wrote that.  Are you revisiting this, and how can we engage with Iran now given the scenes of repression?

AH: Iran is one of the most difficult issues we have right now.  We shouldn’t forget the amazing turnout in their election, almost 85%.  What did we have for the special election, 25%?  We shouldn’t really be in the position of telling Iran what to do.  And you cannot give a state democracy, the people have to want it for themselves, things have to happen.  Military intervention in Iran right now would be terrible.  And we have to be careful, because the students over there are already being scapegoated as US puppets.  It’s also an open question whether Mousavi has clean hands, or if he’s just an outlet valve for the current system.  But I still believe we have to have negotiations.  I think Woods and I are the only two who said that at our last forum.  Garamendi was talking about banning the import of refined oil.  That would only hurt everyday people in Iran.  So I think we need diplomatic relations and a strategic dialogue.  I’m not happy about dealing with Ahmadienjad, but you have to play the hand you’re dealt.

DD: OK, thanks-

AH: Can I add one final issue?  I am the only candidate in the race who supports the full legalization of marijuana, I think Woods supports decriminalization.  We’re seeing a modern prohibition movement, and that leads to inefficient and dangerous outcomes.  We have a highly regulated alcohol industry, and I think we could do the same thing with marijuana.  I don’t smoke, but people like me, squares, need to say, “what is the policy benefit of continuing the drug war?”

DD: All right.  Thanks for your time.

AH: Great, thanks.

I’ve seen a bit of confusion in traditional media accounts of California’s budget situation, and whether or not the state should receive a federal bailout.  This seems to go toward the idea that without federal aid, California will default on its creditors and go bankrupt, and the federal government has a compelling interest in keeping that from happening.  You can argue whether or not it would actually make sense for the state to default – it certainly worked pretty well for Argentina, despite neoliberal fuming to the contrary.  And as noted by Peter Schrag in the above-linked entry, the Governor has never asked for any help of this kind, and given his status as a born-again Friedmanite, would probably reject it.  But Paul Kedrosky, who has read the relevant law, explains in a piece supporting default that California really cannot do so.

The root issue, of course, is that California is insolvent, and irritating people like S&P analysts keep noticing. The state — let’s call it Latvia by the Pacific — has a $24-billion budget gap that must be closed for it to continue operating (and I use that word advisedly). Without a clear sense of how that will happen rational creditors are going to be increasingly skittish about filling the hole. Now, does that mean California can’t sell enough bonds to backfill the gap this time? You bet it can, and it will. This is part Schwarzenegger/Lockyer Financial Theater, and partly a laughably transparent attempt to demonstrate budgetary semi-competency in hopes of a few basis-points of relief on the inevitable bond sale. That’s all.

Because California has $5.7-billion in debt servicing obligations. And while that will grow, debt occupies pride of place in California’s constitution — only education must be paid off before the next slug of cash goes to creditors. Get that? Healthcare, prisons, and other frivolities can all go to rack and ruin, but creditors must be paid, constitutionally speaking. That means, if you’re looking at this through the gimlet eyes of muni-bond ghouls, that California has something like $50-billion in budgetary space to make its $5.7-billion in payments. It’s pretty easy to calculate that California can make the payment nut, even if it has to close hospitals, release prisoners and stop patrolling the highways to do it.

Now, Kedrosky thinks this is theatrical and should not be rewarded.  I say it’s the perfect reason for California, and actually all states with this kind of constitutional arrangement, to receive those federal loan guarantees to stop gouging from Wall Street for short-term bonds.  Not only do Schwarzenegger and Lockyer know we have to pay back all out debt, so do the bondholders and the rating agencies.  It’s almost literally impossible for us to default on those bonds, short of the entire state’s residents spontaneously getting fired at once.  If those loans will obviously get paid back, the interest shouldn’t be set at payday-loan rates.  And the federal government could very easily remedy that situation, at no cost and probably at a profit, as they reaped from the loans to New York City in the 1970s.

Is it a problem that California operates at the mercy of its creditors?  In a sense.  Is there a remedy?  At the least, there’s a way to get some equitability into the process so that we aren’t blowing money on Wall Street firms who have been bailed out by those same Feds ten times over.  In addition, this kind of thing weakens the municipal bond market, and the federal government has an interest in keeping credit flowing through that.

…H/t to John Myers for tracking down the obviously dubious story about Washington rejecting California officials clamoring for a “bailout”.  Nobody was doing any such thing.  They were asking for loan guarantees, which they’ve been doing for months and months.  Horrible reporting from WaPo.  

The Senate passed the bailout bill, with 2/5 of the DeFazio plan embedded – the raising of FDIC insurance limits, which was long overdue, and the ability for the SEC to suspend mark-to-market accounting, which is some kind of fairy tale.  It also includes all kinds of other legislation, like a tax package which is mainly focused on renewable energy tax credits, the only – I repeat, only – provision through all of this which could grow the manufacturing sector and reindustrialize the country (which is, you know, the key to America’s economic survival).  It actually RAISES taxes for oil companies as well.  I don’t think “Exempt from excise tax certain wooden arrow shafts for use by children” needed to be in there, but hey, it’s Congress!

The Senate jammed the House pretty good on this one, and I think they’ll eventually comply.

My Senators, Boxer and Feinstein, both voted for it, which shows that this cuts across ideological lines.  And yet I can’t argue with a word Russ Feingold says here:

“I will oppose the Wall Street bailout plan because though well intentioned, and certainly much improved over the administration’s original proposal, it remains deeply flawed.  It fails to offset the cost of the plan, leaving taxpayers to bear the burden of serious lapses of judgment by private financial institutions, their regulators, and the enablers in Washington who paved the way for this catastrophe by removing the safeguards that had protected consumers and the economy since the great depression.  The bailout legislation also fails to reform the flawed regulatory structure that permitted this crisis to arise in the first place.  And it doesn’t do enough to address the root cause of the credit market collapse, namely the housing crisis.  Taxpayers deserve a plan that puts their concerns ahead of those who got us into this mess.”

This is all true, and this was ultimately a bad plan, but I respect the opinion of hold your nose caucus as well.  I would have preferred a short-term fix with a vote giving a popular mandate to the solution.

Because right now the public opinion situation is very muddled.  People absolutely believe this is a crisis and they might not want to bail out Wall Street but they are adamant that something be done.  This is acute in California.  The state, with its emphasis on selling bonds and borrowing, is currently unable to pay its bills.  Bonds for highway construction, schools, housing and water projects cannot be sold.  The credit crunch has real-world effects.  This is why the Governor wrote the Congressional delegation and urged passage.  This is also why you don’t run a government based on borrowing, but there you go.

And so you have the fascinating and strange situation where Democratic challengers in Congressional races are hammering their incumbent opponents for voting yes AND voting no on the House plan.  On the side of “how could you vote for this” are Bill Durston (who rushed out an ad hitting Dan Lungren for voting yes) and Ed Chau (who slammed Gary Miller in a press release).  On the side of “I can’t believe you didn’t vote for this” are Nick Leibham, who couldn’t have been more exercised about Brian Bilbray’s no vote (calling it “totally irresponsible”) and Charlie Brown, who defended the need to do something against nutjob free market fundamentalist Tom McClintock.

And then you have Russ Warner, who cited David Dreier’s hypocrisy while saying he would have voted for the bill as well:

Warner’s campaign pointed to a conflicting statement on Dreier’s website, where the 13-term incumbent writes, “I believe we need to empower families to make sound economic choices and avoid taxpayer funded bailouts.”

While Warner says he would have voted for the bailout bill as well, his campaign attacked Dreier for changing his position.

The point is that no politician has any idea what the people want, and the decision-making process is exceedingly complex.  Those who are taking principled stands are likely to be rewarded and those taking political ones punished, but even that is unclear.  I would steer clear of making definitive statements about the public mood; chances are they don’t even know what they think.