What I’m hearing from grassroots progressives in this state is basically unadulterated anger at the craptacular budget deal passed.  If they’re not out in the streets they’re calling representatives and finding every opportunity to make themselves known.  Karen Bass posted a statement on her Facebook page about the budget deal and it has been hammered by critics.  Some negative comments have been deleted.  I’m getting practically an email a minute from some progressive group or another talking about stopping this budget.

I think what we have here is, to analogize, a union shop steward bargaining without the support of its rank and file.  Whether that will matter to the legislators who vote on this on Thursday is unclear.  But if you took the pulse of the activist community, they would argue for one of three things:

(1) send the leadership back to the negotiating table with the mandate that this deal isn’t good enough.

(2) send new leadership back to enforce that message, fire Steinberg and Bass

(3) only agree to a deal if Republicans ensure every one of their members will vote for it, so they can own the policy

I don’t want to really speculate on what will happen.  But I can pretty confidently say that the movement which has become engaged over this budget fight will not be likely to shut up if the Democratic rank-and-file goes along willingly with the leadership and votes this budget into law.  They will want to fight and it will probably be those same rank-and-file lawmakers that bear the brunt of it, perhaps even with primary challenges.

As I’ve said repeatedly, the current structure of government in the state is designed to produce bad outcomes.  We can get mad about it, we can mourn the real suffering this will extend throughout the poor and middle class, or we can organize.  And the desired end state, IMO, is not just to get a marginally better near-term budget, with maybe an extra billion for an oil severance tax here, or a reduction of borrowing to local governments there, but to get a far better structure inside of which to run government responsibly.  I don’t think that can possibly end with a fight on this budget, though it may begin with it.  Because at some point, progressives do need to reject being taken for granted.

Anyway, thought I’d open it for discussion.

…here’s Dave Johnson arguing for option #3, which I think is among the best practices.  We have this assumption that any deal must be voted on by all Democrats, with just enough Republicans for passage slinking along.  That’s not etched in stone.

In addition, let me remind everyone that this budget does NOT require a 2/3 vote.  The budget has already been passed; revising it requires only a majority.  However, that means it would take effect after 90 days, and only a 2/3 vote will allow it to take effect immediately.  Obviously, delaying by 90 days reduces the savings of the deal.  But we’re probably coming back to this soon enough anyway.  And without all Republicans in support, I think you have to allow some Democrats to vote their conscience.  

(In addition, budgets are voted on in various multi-bill packages, so any one vote could go down as well.  That could be a consideration.)

Karen Bass, on a budget deal that closes a $26 billion dollar deficit with deep cuts, local government raids, gimmicks and offshore drilling, without any new revenues:

“I would characterize this budget as shared pain and shared sacrifice”

Yes, it sounds shared to me.

Arnold Schwarzenegger, talking about a budget that will bankrupt localities, treat the elderly, disabled and blind like common criminals, throw millions off of children’s health care and temporary assistance and ensure public education’s status as the worst-funded in the nation:

“We accomplished a lot in this budget agreement,” said Schwarzenegger, adding that negotiations at times were “like a suspense movie.”

Fun!

This flag was seen in Southern California yesterday.  That’s a distress signal.  I share the sentiment.

UPDATE: I forgot this quote from Planet Reality:

“This is the biggest step back from protecting and investing in vulnerable Californians in a generation,” said Frank Mecca, executive director of the California Welfare Directors Association.

After witnessing enough of these budget negotiations, I’ve finally found the formula, under this broken system, to get the best of any deal.

Whoever cares the least about the outcome wins.

If you don’t care whether children get health care, whether the elderly, blind and disabled die in their homes, whether prisoners rot in modified Public Storage units, whether students get educated… you have a very good chance of getting a budget that reflects that.

If on the other hand you claim to care, you will concede and concede and concede so you can at least play the responsible part and say at the end that you didn’t completely eliminate the social safety net, though what you did get in return will be totally unclear.

And you will do it every single time.

How anyone in public service who claims to care lives with themselves under this current system, then, when your proportion of caring is inversely related to the proportion of care your constituents will receive, is baffling to me.  You’d think at some point over the last 31 years, someone would cry “Stop!”

UPDATE by Brian: I just wanted to add a simple link to meetnori.com, the site that produced that video. To say it is powerful is an understatement, but when you get the full background of Nori’s story, you’ll feel depressed all over again. Sorry…

You may have heard this by now, but we have a deal.  The #cabudget hashtag should get you your fix.  The topline stats:

$15 billion in cuts, no new taxes, $11 billion in gimmicks and borrowing

$4-5 billion in local government raids

only an $800 million reserve (initially the talks were for a $4 billion one)

$6 billion in reductions to public schools, but an $11 billion dollar payment somewhere down the road though not in writing

yes, there’s new offshore drilling in this deal, going around the Lands Commission, and without an oil severance tax for the producers

$1 billion assumed for the sale of the State Compensation Insurance Fund, which is not only unlikely but would really crush small businesses if sold

no suspension of Prop. 98

basically a reinvention of state government, more austere, and precisely when folks need the opposite.

Story here.

…three furlough days a month for some state employees still in place for the rest of the year

$500 million in cuts to Cal Works

smiles all around from Dem leg. leaders as they cheer that “we did not eliminate the safety net for California.”  Poking a big hole in it, apparently, qualifies as A-OK.

…we’re also cutting $1.2 billion to corrections without releasing any prisoners, as per the actual politics as usual.  The only way you can do that is by cutting every treatment or rehabilitation program in the prisons, or eliminating overtime for corrections officers.  In other words, we’re turning prisons into Public Storage units.

UPDATE by Robert: The main takeaways here:

• Arnold and the Republicans got everything they wanted – a cuts-only budget that protects their wealthy allies and the big corporations from having to pay their share and that makes everyone else suffer.

• California’s government is functioning as intended – producing right-wing outcomes despite large Democratic majorities. I will continue to blame specific legislators for agreeing to this shit, but lasting change will only happen when we press the reset button on state government.

UPDATE by Dave: Just to state the obvious, only the Republican leaders have agreed to this.  We still aren’t through the process where individual Yacht Party members have to be bribed for their votes.

Of course, we aren’t through the process where progressives just say “no we’re not voting for that, try again,” but I’ve never seen that process come into play.

UPDATE by Robert: More elements of the deal, from John Myers at KQED CapNotes:

• Background checks for IHSS providers

• Fingerprinting of workers and clients (so if you are disabled and cared for at home, you will be treated like a common criminal merely because you need assistance)

• “Some state parks will close” even though parks generate more tax revenue than they cost

• OC Fairgrounds to be sold

• Integrated Waste Management Board to be abolished, despite the fact that its annual cost is statistically negligible

The February deal was bad, but this is far worse.

…CalPERS reports $56 billion loss. Local governments are going to have to make up part of this shortfall – but with what money? The legislature has guaranteed mass bankruptcies for local governments with their raid on local funding, which was probably the point of Arnold’s insistence on such raids.

The latest Big Five meeting is underway, and we could see a yay deal as soon as tonight. Digby, who I’m lucky enough to call a colleague over at Hullabaloo, has a great post about the budget debacle and the collective lack of perspective in politics.  She references the 2003 special election freak show and how the media became seduced by marketing and reality-show gamesmanship into cheering on the “Who Wants To Be Governor Of California” spectacle (side note – I actually almost worked on the actual “Who Wants To Be Governor Of California” TV show produced at the time by Game Show Network).  And while turning the recall into a game, everyone forgot about the insanity of the associated issue:

The “issue” that supposedly precipitated this little tantrum was the required restoration to earlier higher rates for car registration, brought about by a weakening of the economy. The media went wild, even friends of mine who know absolutely nothing about politics pretended to be enraged that they would be forced to pay $30.00 more a year and they all went out and voted to recall the Governor and replace him with The Terminator.

That recall was a political sideshow of epic proportions, featuring porn stars, Gary Coleman and even Arianna. It was great fun. Standing in line to vote that day — the longest line I’d ever experienced at the ballot box — was like being at an American Idol party.

But check it out. In an otherwise terrible George Skelton column, he does make one interesting observation:

Schwarzenegger had campaigned full throttle against Gov. Gray Davis’ “outrageous” raising of the vehicle license fee. His favorite stunt was using a wrecking ball to smash an old jalopy that symbolized the tax.

Davis really had only bumped the fee back to its historic level: to 2% of a vehicle’s value, rather than a recently enacted 0.65%.

Schwarzenegger’s canceling of the fee hike actually amounted to the single biggest spending increase of his reign. That’s because all the revenue from the vehicle license fee had gone to local governments, and Schwarzenegger generously agreed to make up their losses by shipping them money from the state general fund.

The annual drain on the state treasury was $6.3 billion until February. Then the governor and Legislature raised the fee to 1.15% of vehicle value, saving the state $1.7 billion. But it will revert to its lower level in two years.

Cutting the car tax plunged the state deeper into debt just as Schwarzenegger was taking the wheel. To cover it — at least temporarily — the new governor went on a borrowing binge. It didn’t take much to persuade the Legislature and voters to authorize $15 billion in “economic recovery bonds.”

Passing those bonds and a companion spending “reform,” the governor promised, would mean “no more deficit financing.” They’d live within their means. Sacramento would “tear up the credit card and throw it away.”

The only thing thrown away was all the bond money, spent long ago on daily expenses — the equivalent of borrowing to buy groceries.

I’m not saying the car fee issue is the reason the state is currently in chaos. It’s far deeper and more complicated than that. But I do believe that the simplistic, downright silly approach Americans take to politics is largely to blame. It long ago became more about marketing and entertainment — and preening, shallow self-gratification — than serious consideration of responsible governance.

I would be remiss if I didn’t total up the $6.3 billion a year in lost revenue from the vehicle license fee, along with the interest on those needless economic recovery bonds, and note that the total is surely more than the current budget deficit or even the last two combined.

But Digby’s main point is correct.  When the media in this state bothers to pay attention to politics, it’s as a freak show, and they ascribe the same kind of reporting available in the sports section rather than give anyone the information they need to make serious choices about what kind of state they’d like to live in.  The so-called “car tax” was the kind of populist pitchfork-fest that was perfect for Schwarzenegger, and he repeated enough movie quotes and manipulated enough emotions to prevail.  Along the way, almost nobody challenged the thesis, nobody provided the truth about the VLF, nobody slid the debate from the zaniness of the recall – porn stars! – into the serious business of a government that works.

Digby thinks that “we are going to have to reform more than the state constitution to fix things. We need to reform politics itself somehow, convince people that it isn’t American Idol or the World Series, or the ruling class will always be able to afford to put on a show whenever they need to manipulate the folks and the folks will probably fall for it.”  And I agree with that to an extent: for one, the system cannot be reformed without a responsible citizenry understanding the reasons why.  But I’m enough of a goo-goo to believe that enough people can become energized by taking back their government so that the seriousness and the structure will be injected back into California’s system.  That’s why I believe sweeping constitutional reform is in the end the only option – because a status quo system will only empower the types of shenanigans that brought us both the Governator and hundreds of thousands if not millions of residents left with no help and no hope.  To get the circus out of town, we must offer an alternative to the sideshow that is our government.  If enough of us wish to be a laughingstock no more, it can be done.

Chris Kelly, who thinks he’s running for Attorney General next year, has responded to my criticism of his perpetuation of fearmongering “tough on crime” policies with an email to supporters:

The politics-as-usual crowd is attacking my opposition to the early release plan — even saying that “Chris Kelly is making a fool out of himself” for standing up for safe California communities.  Well, releasing 20,000 convicted felons early might be Sacramento’s idea of prison reform, but it isn’t one that will keep California safe — and it won’t save a single dollar in the process, which was the whole rationale for doing it in the first place!

I’m apparently part of the “politics-as-usual” crowd for arguing against the mentality that has produced 1,000 sentencing laws in the last thirty years that increased sentences.  But some facts throughout this would help.  First of all, the 20,000 number from the Governor came in part from releasing all imprisoned undocumented immigrants to Immigration and Customs Enforcement, a provision that was long ago scaled back, since ICE showed no interest in taking the responsibility, and the Governor circumscribed that proposal with so many caveats that only 1,400 of the more than 18,000 undocumented qualified.  In reality, the scale of release will be lower than initially proposed.  So Kelly is engaging in the familiar tactic of arguing against something that won’t happen so he can post a “win” after the fact.  

But the real danger of Kelly whipping up opposition to this is how it impacts any sensible sentencing or parole reform.  Here, Kelly shows that he has no idea what he’s talking about with respect to criminal justice policy:

Instead of protecting California communities, the politics-as-usual crowd ignores the fact that early release of more than 10% of the state prison population won’t just include “terminally ill, nonviolent drug offenders and people returned to prison for the crime of technical parole violations” — many dangerous felons will be back on the streets too.

The critics seem to have forgotten that a man with a technical parole violation shot and killed four officers in Oakland just months ago, and they also conveniently ignore that releasing 20,000 prisoners will disproportionally impact some of California’s most vulnerable communities.

The ignorance of this comment is stunning.  As Berkeley law professor and parole policy expert Jonathan Simon illustrated a couple months back, the Lovelle Mixon shooting was an example of what’s WRONG with our parole system, not what’s right.  The incident has been used to raise the fear of crime and the dangers of releasing felons.  What is not mentioned is that Mixon’s violation of ridiculously stringent parole policy, which meant a sure trip back to jail, arguably CAUSED the shooting, as Mixon vowed not to return to prison and chose to shoot his way out of the problem.  That’s aberrant behavior, and using it to make any larger point about how frightening it is to release prisoners is Willie Horton-izing to the extreme.  But it’s a function of the extreme pressure of three years of supervisory parole on everyone who walks out of California prisons.

But unlike many other states that also eliminated early release through parole, California continued to require parole supervision in the community for all released prisoners. And that, I think, is a big part of what’s broken. People are sent to California prisons for a determinate amount of time, based upon the seriousness of their crime. After they’ve served this sentence, it’s neither justified nor effective to add up to three years of parole supervision for each and every ex-offender – without making any distinction between those whose criminal record or psychological profile suggest they’ll commit a crime that will harm the community, and those who pose no such threat.

So the parole system has little real capacity to monitor and protect us from those who pose a danger of committing serious new crimes. And it exposes ex-offenders – many of whom pose little threat of committing such crimes – to the likelihood of being sent back to prison. (This is a really big problem, when you think of our prison overcrowding and our budget crisis).

Parolees are required to consent to searches of their person and property. If officers stop a car in Oakland, and somebody in that car is on parole, police have a lot of leeway to disregard normal constitutional limits on search-and-seizure authority. They can use any evidence collected in this situation against the parolee – and also, of course, can attempt to use the coercion of plea bargaining to get evidence against other people in the car.

In recent years, as many as 70 percent of those on parole in California have been sent back to prison – only a small percentage of whom have committed a new crime (14 percent in 2007); more than half were sent back for what are called “technical” parole violations. These parolees are “returned to custody” by the Board of Prison Terms, very often for conduct that would not earn them (or other California citizens) prison time in a court. Turning in a positive drug test is an example; even missing an appointment with parole staff can result in re-imprisonment.

Kelly asked his fans of the Protect California Communities Facebook cause to comment on my post about him, which has yielded a whopping 0 negative comments.  Maybe that’s because his Cause has attracted an almost-as-whopping 225 members, clearly a social networking firestorm rippling through the state.  Actually that number wouldn’t be so bad if it didn’t come from a Cause promoted by THE FORMER EXECUTIVE FROM FACEBOOK.  The $175 raised on Facebook shows massive Web 2.0 acumen as well.

It’s also hilarious that Kelly thinks stopping release of nonviolent offenders harms public safety, not eliminating drug treatment and vocational training in prisons, or forcibly taking local government monies so they have to slash their public safety budgets, but that’s for another time.

Robert Cruickshank pretty well covers the disaster that will be the upcoming budget “deal” between legislative Democrats and Arnold Schwarzenegger.  By the way, this is BEFORE the Yacht Party tries to enact a few more goodies for the privilege of letting Democrats vote for $26 billion in cuts, gimmicks and raids on local government.  We’ll see a big sigh of relief from lawmakers over the next few days that will be wholly unwarranted.

Particularly galling is the targeting of city and county budgets to cover the state gap.  By siphoning off almost $1 billion in gas tax funds slated for cities and counties, not one pothole in California will get filled this year.  With the loss of $1.7 billion in redevlopment funds, not one project like affordable housing will get initiated.  And by taking $1.3 billion in local property taxes, lots of city and county employees, particularly in public safety, will end up out of work.  It’s really robbery on a pretty grand scale, and it will offset any economic recovery through stimulus funding throughout the state.

One of the major consequences of this cuts-only budget will be, paradoxically, higher costs for individuals and the state.  When you eliminate or severely restrict social services programs, those individuals who rely on them will have to go elsewhere for those services.  The alternatives are more expensive for everyone.

Irene Steinlage has trouble walking, getting dressed, making her bed, taking a bath. She has stayed in her Folsom home with the help of a health aide, one that Gov. Arnold Schwarzenegger says the state can no longer afford.

The governor’s plan to take away such care is meant to save money. But it could end up costing California more by forcing the 85-year-old, who has Parkinson’s, osteoporosis and other ailments — and thousands like her — into nursing homes.

“I couldn’t possibly afford a nursing home,” Steinlage said. So the state could be saddled with a Medi-Cal tab that is triple the cost of her home care worker, who receives $10.40 an hour five days a week […]

Others say the experience of governments that have closed gaping deficits with deep program cuts suggests that the price of doing so is hefty.

“It’s pay now or pay later,” said Nicholas Freudenberg, who co-wrote a study of the long-term effects of service reductions made in the aftermath of New York City’s fiscal crisis of 1975.

His 2006 study, published in the American Journal of Public Health, found that less than $10 billion in cuts to healthcare, education and law enforcement in New York City over four years led to at least $54 billion in additional costs over a 20-year period, using 2004 dollars and adjusted for inflation. Consequences included higher rates of HIV, a worsened tuberculosis epidemic and a spike in homicides.

“Those potential epidemics that are being seeded by Gov. Schwarzenegger’s cuts will not come in his term or the terms of people who are making these decisions,” Freudenberg said. “It will be several years down the line.”

The sick thing is that the Governor, and maybe even some in the Yacht Party, know this.  The consequences of program cuts are easily seen.  Eliminating the Poison Control System, for example, means that people calling the emergency number (many of whom don’t need to see a doctor based on poison accidentally swallowed) will instead go to the ER, and many of those visits will be from people on Medi-Cal, leading to higher costs.  Cutting adult day care will send many into nursing homes, at a higher cost to the state.  Losing Cal Works welfare funding will send children into foster care, at a higher cost.  Cutting the meager drug treatment and vocational training in prisons almost assures an even higher recidivism rate, at a higher cost.

This is not a difficult calculation to make.  We fund social services programs not only because we have an obligation in a developed society not to see people dying on the street, but because we can create programs that get people back to self-sufficiency at a lower overall cost.  There is only one reason not to fund such programs – because an arrogant and entitled right wing refuses to fund these government obligations in the short term, preferring apparently to pay more in the long term.  There has been enough money in the last few budgets to produce massive corporate tax cuts, but not enough to get someone with a chemical dependency the treatment he or she needs.  There’s been enough money to protect California’s unique status as the only oil-producing state not to charge corporations for taking our natural resources out of the ground, but not enough to provide long-term care services that relieve the burden of nursing home funding over the long term.  There’s enough money to keep in place useless enterprise zones that create nothing but tax giveaways, but not enough to keep the state from becoming the first in the nation to put poor kids on a waiting list for affordable health insurance.

We hear about the “generous social services programs” in California that simply had to be cut, but they’ve been reduced to the point where they are almost unanimously the worst in the nation.  That depresses the business climate, that moves bodies out of the state, that alienates the public.  And Arnold Schwarzenegger knows this, and he did it anyway, to keep a promise to what little of his base he has left.

Ultimately, this system isn’t designed to produce good budgets.  Without a media that cares, no amount of activism or public pressure can be brought to bear on a shameless and unaccountable minority.  If you need proof of the need for a complete rethinking of how to structure government in California in the 21st century, look at the last seven months.

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.

Maybe it’s because their headquarters are on Montgomery Street in San Francisco instead of Wall Street in New York, but Charles Schwab Co. is telling investors that California is not about to go out of business.

In a rhetorical question-and-answer missive to investors, Schwab income planning director Rob Williams, says “California has severe financial problems, but we think it’s unlikely that the state will default on its general obligation (GO) bonds.”

Then he lists five reasons for reaching that conclusion, including constitutional guarantees; the fact the state can’t file for bankruptcy, and the fact that “states can’t just disappear.”

So does the firm see the state’s current travails as “a buying opportunity?” “No one can say for certain,” says Williams.

Here’s the document.  As Williams says, general obligation bonds are guaranteed by the state constitution, and only education is ahead of paying off these bonds.  Here’s a sample:

Many analysts point out that the state’s revenues are collapsing, its spending is out of control, and the structure of government prevents the state from ever being fiscally stable. Are these concerns valid?

All of these statements may be true, depending on your political view. But these troubles don’t inevitably translate into default on California GO bonds, for all of the reasons cited above.

However, they do translate into serious concerns for other parties interested in the state’s solvency-of which there are many. The politics of the situation can also be noisy, leading to steady reporting of the budget drama and ebbs and flows in market sentiment, likely adding to uncertainty and reducing confidence among investors. As confidence drops, the prices of outstanding bonds drop, and yields rise.

The situation has also resulted in changes to the state’s bond rating, including a downgrade by Fitch Ratings to BBB on July 6 and Moody’s to Baa1 on July 15. These ratings are two and three notches, respectively, from “junk” bond status. The rating is also on negative “Rating Watch,” meaning that the rating will remain on review for additional downgrades “if institutional gridlock” persists.

While ratings alone should not drive an individual investment decision, comments in Fitch’s rating report are worth quoting: “The BBB rating indicates that expectations of default risk remain low, although the rating is well below that of most other tax-supported issuers. GO debt in California has a constitutional prior claim on revenues, although after education.”

In other words, diving into Fitch’s rating report, they essentially admit that their rating is bullshit.  They are dropping the ratings because of perceptions of crisis that don’t match constitutional obligations.  This is gouging.  It’s almost the textbook definition of it.

And if you don’t think that goes on, check out this investigative report from last November:

Goldman, Sachs & Co. urged some of its big clients to place investment bets against California bonds this year despite having collected millions of dollars in fees to help the state sell some of those same bonds.

The giant investment firm did not inform the office of California Treasurer Bill Lockyer that it was proposing a way for investment clients to profit from California’s deepening financial misery. In Sacramento, officials said they were concerned that Goldman’s strategy could raise the interest rate the state would have to pay to borrow money, thus harming taxpayers.

“It could exaggerate people’s worries about our credit,” said Paul Rosenstiel, head of the public finance division of the treasurer’s office.

That’s exactly what’s happening.  The big banks are sparking irrational worry over California’s ability to repay bonds to increase their yields.  The federal government needs to step in with a backstop, not just to save the state money, but to prevent the commission of a crime.

Far be it from me to agree so aggressively with my friend Steve Maviglio, but he’s absolutely right that Chris Kelly is making a fool out of himself by holding to outdated and dangerous Tough on Crime rhetoric in his campaign for Attorney General.  Kelly, the former Facebook chief privacy officer, has created a Cause called “Protect Our Communities.”  As Maviglio says, George Runner couldn’t have done it better himself:

Do you think the early release of 20,000 convicted felons will solve California’s budget crisis?  I don’t.

Please stand with me:  Click here to join my new “Protect California Communities” cause on Facebook and help me build grassroots opposition to this phony budget plan!

Our state is already more than $26 billion in debt and issuing hundreds of millions more in IOUs every week.

We need innovative solutions to get out of this mess. But a plan by Governor Schwarzenegger and some in the Legislature to early release nearly 20,000 felons from state prison is not one of them.

I’m all for prison reform — but this is surrender, not reform. Even if it would save us money — which it won’t — putting thousands of dangerous criminals back on the streets is a risk that California should never take.

Please stand with me: Click here to join my new “Protect California Communities” cause on Facebook and help me build grassroots opposition to this phony budget plan!

“Dangerous criminals” back on the streets include the terminally ill, nonviolent drug offenders and people returned to prison for the crime of technical parole violations, which eats up about 2/3 of total incarcerations in California in any given year.  This is the kind of absurd rhetoric that has our prisons full to bursting, that has created 1,000 sentencing laws passed by the Legislature in the past 30 years, ALL OF THEM increasing sentences, that has turned our parole policy and prison health care systems into a national joke and a federal crime, that has cost the state billions in overtime for prison guards and overall system costs, that has scared the public into passing really dangerous, pernicious laws like three strikes, that has nearly busted our Treasury, destroyed our corrections system and eliminated any possibility for rehabilitation.  

The Attorney General position can be one of leadership in producing alternatives to our prison crisis.  Kelly has forfeited any ability to call himself a leader by playing to the least common denominator.  He can go back now to devising schemes to strip privacy on social networking sites.