Pat Brown is rolling over in his grave: The Wrong Way to Rebuild California

Pat Brown (0.00 / 0)

I completely agree with you that Pat Brown is spinning in his grave, and let's look compare Pat Brown to now:

Pat Brown: Debt service was 2.2% of the General Fund
Now: Debt service is > entire UC budget

Pat Brown: <$1,500 per capita spent (inflation-adjusted)
Now: >3,000 per capita spent

Pat Brown: $700 million deficit (inflation-adjusted)
Now: $6 billion deficit

Apparently we have a paradox: record levels of borrowing, record levels of spending, and for some reason don't have enough money to have a decent road system, to educate our kids, and protect our families from criminals

How do YOU think Pat Brown was able to spend much less and produce much more? How do you think we've gotten to this paradox? I would like an answer for once

The Silent Consensus

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by: thelibertariandemocrat (VF2005) @ Fri Oct 26, 2007 at 16:55:51 PM CDT

Since you bring it up indirectly (0.00 / 0)

I'd like it if you could briefly explain from where you get the idea that people are obligated to respond to you.

I proudly work to re-elect Barbara Boxer

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by: Lucas O'Connor @ Fri Oct 26, 2007 at 19:47:48 PM CDT

[ Parent ]

Except (0.00 / 0)

I didn't say anything that implies people are obligated to respond to me. I said I would like it.

The reason I said that was that I have made this point over and over again, and people continue to ignore it and say something that directly disregards/contradicts it. I don't care if people think a point I make is crap, but say that, don't pretend I never said it and say something that flies in the face of it.

Nothing to do with them being obligated to. Not responding (or responding and disregarding it) doesn't just demonstrate an absence of knowledge, but the refusal to acquire it

The Silent Consensus

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by: thelibertariandemocrat (VF2005) @ Fri Oct 26, 2007 at 19:59:09 PM CDT

[ Parent ]

Halliburton (0.00 / 0)

Another thing, if you want people on the fence to consider what you are saying, then cut out the extremism of equating all private companies to Halliburton. To equate all private companies to Halliburton is like equating all priests to child molesters, all Muslims to terrorists, and all Mexicans to illegal immigrants, all college students to drinkers, and all gun owners to murderers

The Silent Consensus

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by: thelibertariandemocrat (VF2005) @ Fri Oct 26, 2007 at 17:15:32 PM CDT

Thanks for this (0.00 / 0)

I didn't catch this op-ed when I scanned SFGate this morning (there is an advantage to reading a paper copy, I suppose). It's an important op-ed, because momentum for this kind of crap has been building for a while. Donna Arduin, Arnold's old finance director and former adviser to John Engler and Jeb Bush, came to CA promoting these kinds of projects. We've escaped the worst of it, for now, but it is disturbing to see Gray Davis signing onto this (they're using him to give it a bipartisan sheen).

Their argument is riddled with too many holes to cover. So I'll just examine a few.

The first is the critical one - public infrastructure is public for a damn good reason. As California knew all too well, when vital transportation infrastructure is in the hands of private companies, they WILL use it to screw lower- and middle-income people and small and medium-sized businesses. The Southern Pacific railroad was the primary example here in CA - and to protect their cash cow they turned the State Legislature into a wholly owned subsidiary. They made the current system of corporate contributions look positively clean.

Because of SP's many faults, Californians in the 20th century insisted that the road network they were developing (a network that barely existed in 1900) be owned by the public. This was a universal sentiment across the state. Hell, even the reactionary LA Times led the fight for a publicly-owned port (which is why the Port of Los Angeles is at San Pedro and not Santa Monica as originally planned).

By paying for infrastructure out of tax dollars, you can provide the kind of network that a modern society needs to function without causing ruin to the poorest and most vulnerable members of our society and parts of our economy. Additionally, by providing for infrastructure on an as-needed basis instead of on a "what will make us money" basis, every part of California gets to benefit from the public transportation system, even if they are poor or sparsely populated.

Going down the privatization road is a path that will ensure some wealthy areas have great infrastructure, and everyone else has squat, because private companies will see no incentive to build rail to South LA or rebuild sewers in east Oakland.

Second, the authors claim:

What has become all too apparent is that federal, state and regional governments no longer have the financial capacity to fund all of our critical infrastructure needs.

Sure they do. They just aren't willing to use it. If we raised taxes on big businesses and wealthy Californians we'd have more than enough funds to pay for our growing infrastructure needs. They make a conscious political decision seem like some immovable force of nature.

Third, they point to British Columbia's P3 projects as if we're supposed to ooh and aah. Instead these projects have been extremely contentious, cost FAR more than originally anticipated, and caused a massive corruption scandal when the RCMP (the Mounties) raided the BC Legislature and found evidence that companies bribed government officials to win the privatization of BC Rail. A Canadian public employees union sums up the flaws of P3:

•P3s are being aggressively pursued in BC in spite of a lack of evidence that they are a superior option.
•P3s are less cost-effective, timely and transparent than traditional government procurement.
•Partnerships BC, whose mandate is both to promote P3s and evaluate whether they are appropriate for use on specific projects, cannot adequately protect the public
interest.

Government can do infrastructure better, cheaper, and more efficiently than private enterprise - IF we are willing to make the investment. These three ex-governors, none of them particularly effective stewards of California's infrastructure, were not and are not interested in making the investment. Their proposal is little more than turning public property and services into cash cows for politically connected corporations. It will accomplish little improvement in services and carries major political and corruption risks.

In short, it's a disaster.

You can check out any time you like but you can never leave

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by: Robert Cruickshank @ Fri Oct 26, 2007 at 18:34:57 PM CDT

If that's the case (0.00 / 0)

"Government can do infrastructure better, cheaper, and more efficiently than private enterprise"

Then why are you so afraid of competitive bidding?

The Silent Consensus

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by: thelibertariandemocrat (VF2005) @ Fri Oct 26, 2007 at 19:35:03 PM CDT

[ Parent ]

a 19th century look at the effects of public-private railroads (8.00 / 1)

and the way they dominated the political landscape of 19th century california makes it clear both where the right wingers (bipartisan) want to take us back to, and why we should resist them at every turn.

surf putah, your friendly neighborhood central valley samizdat

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by: wu ming @ Sun Oct 28, 2007 at 16:55:17 PM CDT

[ Parent ]

I think it's woth noting (0.00 / 0)

that there are 2 kinds of PPP.

1) Where current assets are sold for long term lease agreements, generally 70 to 100 years for a large lump sum.  This was done in Chicago with the Skyway Toll Bridge where they sold a 99 year lease for $1.83 billion.

2) Where a new project is built from scratch with private funds.

I think there's a difference both practically and politically between the two.  In California we'd never do option 1, but option 2 is one that is worth looking at.  What is the harm in allowing a private entity to build something that wasn't there before?  At the end of the day, the asset goes back to the state at the end of the lease term.

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by: modem @ Fri Oct 26, 2007 at 19:20:49 PM CDT

Lease-Leaseback (0.00 / 0)

I'm fine with that

The Silent Consensus

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by: thelibertariandemocrat (VF2005) @ Fri Oct 26, 2007 at 19:35:43 PM CDT

[ Parent ]

That's a failing model (0.00 / 0)

The closest CA has come to it was the Orange County toll roads, which are chronically financially insolvent. Yet the methods used to build the 241, 261, and 73 toll roads are essentially those proposed here - have private companies raise the money for the initial capital costs, build it, and then return it to the state after the initial costs are recouped.

It has utterly failed in OC. It will fail elsewhere in the state. An urban planner from Austin, TX explains the basic problem, at least in terms of toll roads:

The major factors that are going to cause the toll road bonds to default are:

  1. Declining regional growth in the suburbs of affluent folks who will pay daily road tolls. The growth has been previously mostly based on high tech, or state government, or a cheap pleasant place to retire (but now Sun City can't sell their homes) and Austin/regional growth has plummeted.

  2. The scale of the toll road network built with borrowed money, which is already about $3.5 billion and that is before the RMA builds even more toll roads at the urging of TxDOT. This is all being driven mostly by the roadbuilding and real estate interests who want to make money as opposed to contributing their own money. One glaring example of this madness is Perry's 50 year $175 billion Trans-Texas corridor Plan.

  3. The sudden realization that there is not enough gas has taken the marketplace by surprise, although it was predicted years ago by the better petroleum and gas geologists. Oil will peak within the decade (it may be peaking now) and then suddenly get a lot more expensive according to supply and demand, killing the toll roads built with borrowed money. There are now many scientists and energy experts that have caught on that the marketplace is blind when it comes anticipating a resource shortfall and the politicians and bureaucrats tend to be in denial of bad news (just as the fishing industry failed to heed warnings and has collapsed ocean fishing stocks).

Private companies want to make money, not sink their own capital into these things. As we enter a deflationary period where credit is very difficult to get, what makes anyone believe the private sector can do this alone? The reason public bonds were used to build major infrastructure in the 20th century was that no private enterprise could marshal that kind of capital or credit. Only in the last 10-15 years has that seemed possible, but it was only the product of an ephemeral and ruinous credit binge we are unlikely to see repeated.

Pat Brown had the right idea. His approach hasn't failed - it's that subsequent generations have been unwilling to continue the investment he helped to pioneer.

You can check out any time you like but you can never leave

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by: Robert Cruickshank @ Sat Oct 27, 2007 at 00:46:59 AM CDT

[ Parent ]

And again I ask (0.00 / 0)

if the government is so much more efficient than the private sector, then why are you afraid of competitive bidding?

"Pat Brown had the right idea. His approach hasn't failed - it's that subsequent generations have been unwilling to continue the investment he helped to pioneer."

Yes they have, but not due to a lack of revenue. Revenues have always been there, what's changed is public policy. Pat Brown spent a fraction of what we spent, the debt service was 1/3 of what ours is, and his deficit was only $700 million in inflation-adjusted dollars. And he bought a lot of great things. I assure you, if he was still alive, he would be asking, "Why aren't you buying the same stuff with $40 billion, and what the hell are you doing with the other $60 billion?"

That's a good question. You tell me why you think the Pat Brown days are fantasized about instead of reality

The Silent Consensus

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by: thelibertariandemocrat (VF2005) @ Sat Oct 27, 2007 at 01:15:53 AM CDT

[ Parent ]

cost is not the only measure (8.00 / 2)

of how well a program works. most private companies succeed in looking efficient by socializing the costs of suppressing wages, doing shoddy work, and skimming a whole bunch off the top for profit.

merely looking at the bidding process is not the whole picture.

surf putah, your friendly neighborhood central valley samizdat

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by: wu ming @ Sun Oct 28, 2007 at 16:58:06 PM CDT

[ Parent ]

Stereotype (0.00 / 0)

"socializing the costs of suppressing wages, doing shoddy work, and skimming a whole bunch off the top for profit."

That's a stereotype and you know that.

It should be simply: they competitively bid, government picks the best service at the lowest price (and if government saves money doing it all themselves, then so be it), and they have to finish the work conscientiously, or they don't get paid

The only reason we don't hear stories about private companies doing a better job for the fraction of the costs is the media won't report it because it's not interesting. But private company fuckups? Yeah, they'll report that

And by the way, back in the Pat Brown days, we didn't have to pay unskilled labor $25/hour. The guy holding the "slow" sign at a construction site could very well be making that much, when a private employer could find someone to do that for $15/hour. If that's suppressing wages, then you're damn right and I'm proud to support it

The Silent Consensus

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by: thelibertariandemocrat (VF2005) @ Sun Oct 28, 2007 at 17:03:03 PM CDT

[ Parent ]

using dollar amounts to compare with the 60s (0.00 / 0)

is disingenuous. i find it telling that you're so opposed to working class public employees making living wages, while totally mum on private executives making stratospheric salaris, far beyond the rate of inflation, be it real or government phony lowball numbers.

back in the pat brown era, people could make a decent living on minimum wage, compared to today. inflation ande cost of living alone would have minimum wages far, far higher than you would be willing to allow.

surf putah, your friendly neighborhood central valley samizdat

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by: wu ming @ Sun Oct 28, 2007 at 18:09:43 PM CDT

[ Parent ]

See the forest for the trees (0.00 / 0)

Seriously, by looking at the specific example and not the larger principle, you are missing my point. Back in the Pat Brown days, we didn't have to pay unskilled labor far more than they cost

And second, you committed straw man. "i find it telling that you're so opposed to working class public employees making living wages, while totally mum on private executives making stratospheric salaris, far beyond the rate of inflation, be it real or government phony lowball numbers."

I am NOT so opposed to working class employees making living wages, I just happen to believe overpaying is possible. I'm not mum on private executives making stratospheric salaries, and I don't know why you think I am. And as I have said before, whenever someone commits straw man, I call them out on it, and then I'm done responding to that subset

The Silent Consensus

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by: thelibertariandemocrat (VF2005) @ Sun Oct 28, 2007 at 19:26:55 PM CDT

[ Parent ]

not a straw man (0.00 / 0)

when you call for private contractors to pay workers less than they currently make to cut costs, and do not breathe a word about those private CEOs and executives making incomes that are without exception higher than their public counterparts, that is exactly the argument that you are making.

it simply requires a higher wage than you are prepared to pay for any working person to make a living in this state, much less raise a family on. as long as you're honest about not giving a damn about them, that's fine. but you can't praise lower wages and privatisation and still rpetend that you give a damn.

because those sign holding guys standing in front of traffic breathing in the hot asphalt fumes do have families, and they do try to make a living in this state. and of all the workers in this economy of ours, they are far, far, far from being either overpaid or the root of the problem.

surf putah, your friendly neighborhood central valley samizdat

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by: wu ming @ Sun Oct 28, 2007 at 22:08:36 PM CDT

[ Parent ]

And again (0.00 / 0)

you commit straw man. You are still misrepresenting me. I am only arguing that public employees should not be paid more than they'd get in the private sector for doing the same job. Saying I believe anything beyond that is a misrepresentation, a straw man, or as Penn & Teller would say: bullshit

The Silent Consensus

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by: thelibertariandemocrat (VF2005) @ Sun Oct 28, 2007 at 22:18:26 PM CDT

[ Parent ]

I reckon you ought to try to at least... (0.00 / 0)

...have some impartial information regarding the financial success of the OC Toll Roads.  What you cite as proof looks to me like nothing more than PECG propaganda.

Many would argue the toll roads are a success. 

Regardless, these were new roads built with no capital outlay by Caltrans.

I would never argue that PPP is the cure-all or a panacea.  I would, however, suggest that PPP should be considered as another tool for getting transportation projects built.  There's no reason to take a viable option off the table.

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by: modem @ Sat Oct 27, 2007 at 01:48:43 AM CDT

[ Parent ]

Exactly (0.00 / 0)

"I would never argue that PPP is the cure-all or a panacea.  I would, however, suggest that PPP should be considered as another tool for getting transportation projects built.  There's no reason to take a viable option off the table."

Total agreement

Toll roads per se are not a problem. The problem with some of the toll road proposals in Sacramento is this: Only way to attract private capital is for the state to agree not to expand the adjacent public highway, or to reimburse the private toll road company for "lost revenues" if the adjacent public highway is expanded. As long as those two things aren't a condition, I'm fine with it

The Silent Consensus

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by: thelibertariandemocrat (VF2005) @ Sat Oct 27, 2007 at 21:11:52 PM CDT

[ Parent ]

P3: Partnerships with whom? (0.00 / 0)

Can you give me your take on "assessment district" formation? In San Diego, for example, there is an incredibly large effort, and quite unreported and very below the radar, to subvert the intent of  Prop 218 to create Property-related Business Investment Districts (PBIDs) and Maintenance Assessmentment Districts (MADs), sometimes called Special Benefits Districts. There is a Business Investment District (BID) Council, sort of the the mother of the BIDs, which is working with the city's blessings and help, to convince property owners that the city cannot provide enough infrastructure services, so property owners in prescribed local areas must vote to assess themselves for "enhanced services." The real agenda, though seems to be privatization, and local nonprofits are allowed to manage the tax fund, issue private contracts for services, and take a 15% cut on top of the city's 4% cut. Because of the terms of Prop 218, the services are limited to landscape and lighting in public rights of way or sidewalk scrubbing, banner display, sidewalk tree planting/upkeep, and private trash service, all for business areas, not for residential areas. The voting process is not democratic and is weighted and easily rigged by keeping the whole process as hidden as possible. The Economic Development Quarterly (2007; 21; 278, DOI: 10.1177/0891242407302325) had an interesting article on this. I view the process as being implemented in San Diego as a means to privatize, and our general fund is being deprived of much-needed taxes while, in area after area, property owners are souring on the new assessments, which are ill-spent and never go into the general fund for roadway, sewer, or other infrastructure needs. Your thoughts?

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by: cc @ Sun Oct 28, 2007 at 10:56:58 AM CDT