All posts by David Dayen

Food Stamp Increases Can Provide Economic Boost

The rollout of the American Recovery and Reinvestment Act continues with this very good piece of public policy.

California food stamp recipients will receive 13.6% more benefits thanks to the federal economic stimulus package, the state Department of Social Services announced Wednesday.

The increase, effective immediately, was included in the American Recovery and Reinvestment Act, approved by Congress and signed by President Obama in February.

John Wagner, the state social services director, said in a statement that the increase “will dramatically help families, while also boosting California’s economy in ways that benefit grocers, food manufacturers and growers.”

The average monthly food stamp benefit received by about 2.5 million Californians will increase from $300 to $341 per household. State food stamp rolls are expected to increase by 300,000 this year, officials said.

The federal stimulus package also provided $22 million in administrative funding for the state food stamp program, and 10 million pounds of food for food banks and pantries that serve low-income Californians through the federal Emergency Food Assistance Program.

Food stamp money is almost immediately spent.  It’s among the most effective forms of stimulus there is, with each dollar generating $1.73 in economic activity.  Combined with the one-time $250 payment to anyone in the Social Security system, which is also very likely to get spent, these actions will provide a short-term boost to the economy, especially in California, which has an older population than other states.

Gloria Molina is trying to extend the benefit to those who have lost their jobs:

Earlier this week, in an effort to help unemployed middle-class workers who do not qualify for government aid, L.A. County Supervisor Gloria Molina proposed that the county pursue temporary state and federal waivers of eligibility requirements for cash aid, food stamps and housing benefits.

“As more and more people lose their jobs and search in vain for new ones in a shrinking job market, many families are finding themselves, often for the first time, with inadequate funds to pay their rent or mortgage, keep their utilities and provide food for their children,” Molina said Tuesday, citing an article in The Times last week.

Molina noted that each month, food stamp applications are denied for more than 19,000 county residents, and 7,000 applicants are denied benefits under CalWorks, a welfare program for families.

The middle-class needs for aid have gone up dramatically in the state over the past six months.  Particularly in our areas in Depression, the crisis is very wide and broad.  Until the economy recovers, and as a means for it to recover, these actions at the federal level can at least cushion the blow.

Ending The Special Election Merry Go-Round

Assemblyman Ted Lieu, who joined us at Calitics yesterday for an online town hall, has an op-ed with Gautam Dutta of the New America Foundation arguing for an election reform he will soon combine with a bill, to institute instant runoff voting for all special elections in California.

Here’s the root of the problem. On March 24, 2009 barely 6 percent of registered voters showed up for a special election to fill a vacancy for California’s 26th Senate District. In an area with almost 1 million residents and 400,000 registered voters, only 23,000 civic-minded citizens decided who would replace former State Senator Mark Ridley-Thomas (newly elected to the Los Angeles County Board of Supervisors).

How much did this special election cost? A whopping $2.2 million of our tax dollars – nearly $100 per voter – according to the Los Angeles Registrar-Recorder / County Clerk.

Unfortunately, we’re not even close to being finished. Since no candidate won a majority, we must hold a second election that will cost even more money. Because this is a heavily Democratic district, it is certain the Democratic nominee, Assemblymember Curren Price, will win. Yet Mr. Price must wait two months for a second election before he can be sworn in as State Senator.

Far from being “special”, special runoff elections cost millions of tax dollars to administer – at a time when governments have been forced to lay off schoolteachers and workers.

Obviously, the Assemblyman is making the fiscal responsibility argument for combining low-turnout special elections through IRV.  But there’s another crucial argument to be made – the irresponsible delay in proper representation in the legislature.  Mark Ridley-Thomas was elected to the LA County Board of Supervisors in November, and his replacement won’t take office until May.  That’s unacceptable, and especially so in California, where the Yacht Party uses the conservative veto to hijack the budget process.  With a faster resolution of the Ridley-Thomas seat, for example, Republicans would have one less vote to use as leverage for the budget.

And this is more acute in the case of special elections for Congress in CA-32 and CA-10.  Imagine, for example, if Sen. Gil Cedillo wins the Solis seat.  He could be replaced by a sitting Assemblymember, which is the logical scenario.  Then THAT Assembly seat needs to be filled.  By the time all the special elections and runoffs are complete, we’re well into 2010.

Enough.  Instant runoff voting is a perfectly acceptable way to divine the will of the people without the need for a separate runoff election.  The aforementioned Mark Ridley-Thomas has called for a feasibility study into IRV for these special elections.  Lieu and Dutta explain:

With IRV, voters get to rank their choices, 1, 2, 3. If your first choice cannot win, your vote automatically goes to your second (i.e., runoff) choice. It’s like conducting a runoff election, but in a single election. If IRV had been used last night, the election for the Senate district would be finished.

IRV has already been adopted by San Francisco, Oakland, Minneapolis, Memphis, and Santa Fe. Currently, Louisiana, South Carolina and Arkansas all use IRV for overseas voters. A number of prominent leaders have endorsed IRV, including: President Barack Obama, Senator John McCain, California Controller John Chiang, California Secretary of State Debra Bowen, and former Los Angeles Mayor Richard Riordan. Influential civic groups also support IRV, including: Los Angeles Area Chamber of Commerce, Los Angeles League of Women Voters, Los Angeles County Federation of Labor, Asian American Action Fund, Southwest Voter Registration Education Project, and New America Foundation.

This is not only a budget issue, it’s the right reform for California.  Let’s end the special election merry go-round.

Striking For The Right To Pollute

Gas station owners in California have had FOUR YEARS to change over their pumps to comply with a new state law controlling toxic vapor emissions that leak from car fueling.  They waited and waited and found themselves, at the last minute, staring into a deep recession without the ability to get credit to pay for the new capital expense.  So they’ve done the sensible move by engaging in civil disobedience.

James Hosmanek, an ex-Marine, has operated his San Bernardino Chevron station for 21 years, patiently installing equipment to control gasoline emissions, even as the region’s air grew smoggier.

Now he says he can’t, and won’t, obey the latest mandate: a state order to buy sophisticated nozzles and hoses to capture more of the vapors that cause respiratory disease and cancer. “It may be necessary to protect public health,” he says. “But it’s unaffordable.”

I find it hard to weep for these owners who knew exactly when this deadline was coming for years and failed to make the necessary investment.  But Arnold Schwarzenegger, of course, feels their pain.  The so-called “green governor” wants the legislature to delay implementation of the rules.

Gov. Arnold Schwarzenegger wants California’s air-pollution fighters to delay a new rule that requires thousands of gas stations to beef up their pump nozzles so that less fuel vapor escapes into the atmosphere when drivers fill their tanks.  The governor also asked the Legislature for a “one-year enforcement holiday” for the stations.

The new rule, scheduled to take effect Wednesday, requires the nozzles to block 98 percent of fuel vapor, up from the current regulation of 95 percent.

But the Republican governor late Friday asked Air Resources Board Chairwoman Mary Nichols – an appointee of the governor — to postpone the regulation by six months or a year because “significantly more time is needed before it can be successfully enforced without significant negative effects on our state economy.”

Contrary to what the article says, the Governor has engaged in slow-walking and blocking environmental legislation for years, as long as the Chamber of Commerce calls for it.  He forced the last Air Resources Board Chairman to resign due to meddling in the agency’s affairs.  And in February, he rammed into the budget a provision allowing construction firms to delay a changeover from diesel bulldozers into more energy-efficient equipment.  He has always been terrible on the environment, and nobody should let the greenwashing fool them.

Meanwhile, Dave Cox (Yacht Party – Fair Oaks) seems to be taking the sober tack:

In the Legislature, Assemblyman Martin Garrick (R-Solana Beach) and Sen. Dave Cox (R-Fair Oaks) are leading the charge to delay enforcement. On Monday, Cox called for the resignation of state Air Resources Board Chairwoman Mary D. Nichols for being “recalcitrant” in refusing Schwarzenegger’s request for a delay.

Mary Nichols should definitely resign for having the temerity to schedule a deadline four years in advance when she knew full well there would be a recession, thanks to her time machine.

Asm. Ira Ruskin (D-Redwood City) is carrying a bill that would offer $8 million dollars in grants to gas station owners who have not ordered the new equipment.  That’s kind of pitiful, but Californians could at least breathe a sigh of relief.  And when I say that, I mean they could breathe.

KQED Radio has more.

Campaign Update: CA-Sen, CA-Gov, CA-10

A few campaign items that will hopefully tickle your fancy this morning.

• CA-Sen: According to the San Jose Mercury News, former HP CEO Carly Fiorina is “seriously considering challenging” Barbara Boxer for the US Senate.  Yeah, that would be challenging, wouldn’t it?  What a fearsome figure she casts, as a failed corporate CEO who got a $25 million dollar golden parachute while laying off half her company!  Who was 20 points down to Boxer in the last poll!  “Corporate CEO who got giant bonus for bad work” doesn’t seem to me to be the profile of a political challenger anytime soon.

I’m still holding out the possibility that this is an April Fool’s Day joke.

• CA-Gov: When you are having major staff problems 14 months before the primary, I’d say your gubernatorial campaign is in trouble.

Lt. Gov. John Garamendi is saying goodbye to his senior adviser today. And whether he likes it or not, he is saying hello to speculation his upstart gubernatorial bid is struggling.

Senior campaign adviser Jude Barry, who formerly managed the 2006 gubernatorial campaign of then-state controller Steve Westly, let his new boss know that he would resign to pursue other opportunities on March 31.

On his Facebook page, Barry thanked Garamendi but didn’t exactly offer an upbeat assessment of the campaign.

“I like John Garamendi and appreciate the opportunity to have worked with him and many other good people on his team, both on the campaign and in the lieutenant governor’s office,” he wrote. “But at this point, I’ve done all I can to help him. It doesn’t feel right to just hang around the campaign. I wish John and the campaign good luck.”

According to CalBuzz, Garamendi has yet to find campaign co-chairs or finance co-chairs, and we all know that winning statewide costs a ridiculous amount of money and essentially a two-year campaign, if not longer.  I’m toying with the idea that California ought to have a slate of regional gubernatorial primaries, to encourage retail campaigning and keep costs down in the near term, to allow a greater multiplicity of views.  Otherwise we will keep getting the same old hacks and rich people running for these seats.  The state is big enough so that it makes a decent amount of sense.

• CA-10: Mark DeSaulnier continues to marshal institutional support for his presumed run for Congress replacing Ellen Tauscher, earning the endorsement of Senate leader Darrell Steinberg.  Though he hasn’t formally announced, DeSaulnier announced plans to walk districts as early as this week.  That’s probably a good idea, because a new poll shows that nobody has a decent name ID in the district.

A poll commissioned by potential Democratic congressional candidate and former BART Director Dan Richard shows state Sen. Mark DeSaulnier in statistical dead heat with Assemblywoman Joan Buchanan (15 and 13 percent respectively) and Richard trailing at 7 percent.

The poll showed DeSaulnier with a 19 percent favorable approval rating compared with a 9 percent unfavorable while 23 percent did not know. The remaining 49 percent said they had never heard of him. Ouch.

Buchanan received similar numbers: 16 percent favorable approval, 8 percent unfavorable, 29 percent didn’t know and 47 percent had never heard of her.

We just saw a special election in upstate New York where over 150,000 people voted.  This special election, like most in California, will be lucky to get half that many.  

State Senate Passes Tougher Renewable Energy Standard

SB14, which would require utilities to receive 33% of their energy from renewable sources by 2020, passed the state Senate today.  This would be a more stringent standard than the federal bill introduced today by Henry Waxman, which called for 25% from renewables by 2025.  So this is a very aggressive standard that was championed by Darrell Steinberg.

Senate President Pro Tem Darrell Steinberg (D-Sacramento) said the bill, which now goes to the Assembly, would help pave the way to a more environmental friendly future.

“The green economy is the economy of the future,” Steinberg said. “The environment and the economy go together.”

Mod Squadder and corporate-friendly Sen. Rod Wright, along with Lou Correa, voted no.  For Wright, who said he is “concerned that this bill is moving too fast,” the vote is particularly inexcusable, as his district is witness to the ravages of greenhouse gas-emitted pollution.  The final vote was 21 aye, 16 no.  Tony Strickland, who pretended to be an environmentalist during his campaign, predictably took a walk on the vote.  What a coward.

Capitol Weekly has more.  This is a big win for Sen. Steinberg, and while the bill is certain to be amended (the “cap and trade” style appearance of “renewable energy credits” that utilities can pass to one another to get inside the 33% standard seems ripe for gaming the system), a strong claim on a very progressive priority gives us hope that progressives won’t be stiffed for this entire session.

In a related development, Rep. Jerry McNerney introduced three very good energy bills at the federal level, including the Smart Grid Advancement Act, which would develop a smart electrical grid that could help reduce energy use during peak times, the Vehicles for the Future Act, which would build out the electrical infrastructure for plug-in hybrids and EVs, and the GREEN Act, which would provide $100 million in grants for developing career and technical training in green jobs.  The three bills are explained here.

Mickey Kaus Is An Uninformed Hack, Pt. 4,425

Mickey Kaus, last seen publishing the contents of a private email list for his own amusement, has now come up with a new idea (he gets one a year that have nothing to do with “let’s destroy teacher’s unions”); he wants to see a newspaper covering the Westside of Los Angeles.  It actually starts off rather good:

Over a million people live here. Affluent people. People semi-obsessively concerned with local issues like crime, traffic, development, city and state politics and ill-served by the magisterial L.A. Times in far off downtown, which has to cover all of Southern California and seems to think paying attention to the West Side is somehow elitist, if not racist. … You could hire five reporters–cheap, these days–and you’d have about four more reporters covering the area than the Times has. If they’re the right reporters it shouldn’t be that difficult to steal the Times’ richest readers and the advertisers who want to reach them. (Many of those readers already get the New York Times for its national and international coverage. You would be the local supplement.)

There’s no question that the LA Times is too big and too poorly mismanaged to pay proper attention to the many communities of Southern California.  And it’s also true that cuts to staff at local papers leave the country open to political trickery at the local level.  So there’s a lot to like about a niche-marketed local paper serving a fairly well-off community that would pay for the privilege.  Instead of newspaper bailouts, fostering increased competition at the local level makes sense.

Which leads us to what Mickey Kaus, a guy who is somehow a paid writer, thinks is a good use of local resources for a new newspaper:

We want to know whom Mayor Villaraigosa is dating, and we want to see her picture. And if John Edwards visits his mistress at the Beverly Hilton and gets chased into a bathroom by National Enquirer reporters–hey, you know, maybe that’s a story! (The LAT didn’t think so.) By covering politics in a way that got at least a few hundred thousand readers to pay attention, you could take the first, big step toward changing the apathetic culture of Southern California (the culture that lets Democratic interest groups fill the void and call the shots).

That’s right, Mickey’s conception of a paper that would change the apathetic culture of Southern California is one that is essentially a tabloid with a selective bias toward people Mickey Kaus hates.  Amazingly, he thinks that would be a big seller!  I’d bet they could call it “The Things Mickey Kaus Obsesses Over Tribune” and print tens of copies!  What a well-informed citizenry that would engender!  Maybe a free pair of panties (perfect for sniffing) could come with every edition!

Since Kaus apparently Googles his name repeatedly and has emailed me in the past when I’ve called him out on his nonsense (and a guy who links to random Tumblr pages on his own site seems to have a real sensitivity to this kind of thing), I’ll repeat to him what he said to Ezra Klein: “All communications are on the record.”

Bundles Of Money On The Yes Side For The Special Election

Despite the recent PPIC poll on the May 19 ballot initiatives, nobody should be confident in which direction this election will go.  Though the polling position for the “Yes” side is increasingly untenable, it’s clear that they will have far more resources to draw from leading up to the election, and will bombard the airwaves with their message (probably a message of fear).  Just yesterday, another $1.5 million dropped into the Yes campaign’s coffers.

A. Jerrold “Jerry” Perenchio, former chair of the largest Spanish-language media company in the United States, has donated $1.5 million to back two May special election measures.

Perenchio’s donated the money to the Budget Reform Now committee, which calls for “yes” votes on Propositions 1A and 1C.

Proposition 1A would impose state spending restrictions, establish a “rainy day” fund for budget shortages and extend tax increases for two years. Proposition 1C allows the state to borrow $5 billion against future profits of a revamped state lottery.

I should note that Perenchio spent $1.5 million to back Arnold’s 2005 special election, too.  So he doesn’t have the greatest track record.  And it is not the case that the side with the most bucks wins the election.  See T. Boone Pickens’ Prop. 10 last year.  While special interests can spend lots of money and get their way in the California legislature*, that’s not always the case at the ballot.  But this disparity could be great, and that will move numbers a little.

Calitics will be offering endorsements on the May 19 election within the next couple weeks.

* – Please read that report by the Sacramento Bee, and this sidebar about the top 10 spenders in Sacramento and how well they did with their bills.  The money goes in and the favors go out, on a truly epic scale.  We have to take our state back with major structural reform.

Welcome To Mendota

This isn’t an article from 1933, it’s from 2009:

The customer seemed interested in a black blouse offered for $1 at the thrift store. But instead of buying it, she set it on the front counter.

Maybe tomorrow, she told the cashier, she would have the money. Or the next day. But not now.

“That is the way people are now,” said the cashier, Alicia Reyes, as she watched the middle-aged woman walk out of the store. “They just come in here and look. They just come in here to kill the time. And then they take off.”

Welcome to life in Mendota – the unemployment capital of California. With a 41 percent jobless rate, the town’s social fabric is tearing at the seams. Alcoholism and crime are on the rise. To save money, some mothers wash and re-use disposable diapers. Unemployed men with nothing to do wander the streets and sit on benches.

The irony is obvious: In a large swath of the nation’s most productive farming region, many struggle to fill their own cupboards.

There are many factors here – the economic meltdown and struggling economy, of course.  But the third year of drought conditions have devastated harvests, leading to less workers needed to pick crops.  This is the sad future of a dry California.  With housing cratered throughout the state, the fallback option of construction is closed off as well.  And as seasonal workers stay home, the businesses that support the economy have less consumers and suffer as well.

This is a disaster area, and the signs are it will only get worse.  The state jobless rate is projected to grow as high as 15% before subsiding, and will remain in double digits until the beginning of 2012.  The FDIC has issued warnings to at least six state banks, telling them to increase capital levels.  “Two-thirds of the state’s banks will be operating under cease-and-desist orders” by the end of 2009, according to one analyst.  And housing prices continue to fall off the cliff.

The Central Valley is in a Depression.  The rest of the state may not be as far behind as you think.

Richard Riordan Crushes The Special Election Ballot

In an op-ed in today’s LA Times, former LA Mayor Richard Riordan doesn’t hold back against what he calls California’s May ballot scam.  Being a Republican, some of the arguments are of the familiar anti-tax stripe.  But being a liberal Republican who endorsed Barack Obama for President, he makes some arguments from the Democratic side of things.

Then there’s Proposition 1D, with its clunky and dishonest title: “Protects Children’s Services Funding. Helps Balance State Budget.” How does it “protect” children’s services funding? By taking $1.6 billion currently committed to children’s health services and preschool and throwing it into the budget maw.

Proposition 1E, “Mental Health Services Funding. Temporary Reallocation,” is another travesty. It simply grabs $450 million that voters specifically directed to mental health services.

The May ballot leaves me with some questions for my fellow Californians.

First, to my liberal friends: Can you really support propositions that will drastically cut services to the state’s neediest — especially after legislators increased the state sales tax, a regressive tax that places a larger burden on the poor?

He then makes the discredited argument that rich people will move elsewhere if their taxes become too high.  And then he goes on about “restructuring state government,” echoing the rhetoric of Mr. Blow Up The Boxes, the guy who, uh, didn’t.  So it’s a mixed bag.

However, there’s no question that many of the ballot propositions, particularly 1A, would drastically cut services to the state’s neediest.  In a new report, The California Budget Project shows that 1A would not impact the continuing revenue shortfall in the state budget, and would in fact exacerbate it:

Proposition 1A would not address California’s existing structural shortfall – the gap between revenues and expenditures – that exists in all but the best budget years. The state’s two long-term budget forecasts, issued by the Legislative Analyst’s Office (LAO) and the Department of Finance, both identify an ongoing gap between revenues and expenditures. Moreover, the Department of Finance’s forecast projects a significant ongoing gap even taking into account the continuation of the spending reductions outlined by the Governor in his proposed 2009-10 budget.

The revenue forecast amount established by Proposition 1A, which limits spending from the state’s existing tax base, would be significantly below the Governor’s “baseline” spending forecast, a forecast that assumes that the cuts proposed by the Governor in his New Year’s Eve budget release continue.  For example, in 2010-11, the first year when the Director of Finance would be required to calculate whether the state has received “unanticipated revenues,” the revenue cap would be an estimated $16 billion lower than the Governor’s “baseline” spending estimate for the same year. The gap would widen in 2011-12 and 2012-13 to $17 billion and $21 billion, respectively.

By basing the new cap on a level of revenues that is insufficient to pay for the current level of programs and services, Proposition 1A would limit the state’s ability to restore reductions made during the current downturn out of existing revenues. Had Proposition 1A been in effect during the late 1990s, for example, it would have diverted “unanticipated” revenues from the General Fund  in 1995-96 and 1996-97, years when the “expenditure forecast” amount, the test used to trigger the shift of monies out of the General Fund, was below the LAO’s 1995 “current services” forecast for the same fiscal year.

Even in years with budget shortfalls, the so-called “rainy day” fund would need to be enhanced.  Considering that we have an aging population in California, with the age group 65 and older projected to grow the fastest over the next decade, anything that dramatically lowers state spending, and nullifies the ability to restore that spending even in a good budget year, will slash services which will only grow more needed in the years to come.  

Then there are the other goodies in 1A, like the ability for the Governor to make unilateral mid-year spending cuts.  And the fact that the spending formulas are based on estimated and not actual revenues (you’ve seen this year how they fluctuate wildly).  Bet you won’t see that on the ballot language.

The May 19 ballot will feature a tiny universe of the state’s voters.  If this small a subset of the population can make these kind of drastic changes to California’s future, we should all be ashamed.

DiFi’s Dishonest Spin on Employee Free Choice

At The Plum Line, Greg Sargent takes a look at Dianne Feinstein’s lack of support for the Employee Free Choice Act.  She remains the only Congressional Democrat from California not to co-sponsor the bill, and according to her spokesman, she’s looking for the mythical bipartisanship pony.

“I have thought for some time that the way to approach this issue is by trying to see if there can’t be a compromise between the business community, the agriculture community and labor. This is an extraordinarily difficult economy and feelings are very strong on both sides of the issue. I would hope there is some way to find common ground that would be agreeable to both business and labor.”

This is complete nonsense.  Employers are firing workers who try to organize.  They intimidate workers into voting against their better interests.  One out of every four unions elections were marred by illegal firings in 2007.  I don’t know how you can possibly reconcile the two sides given that scenario.

Furthermore, the invocation of the “difficult economy” is another red herring.  Sen. Tom Harkin has already done away with this nonsense by pulling out his history book.

The bill’s supporters are pointing to the downturn as the ultimate proof of their arguments that labor’s decline has helped put the economy out of balance and that only by restoring workers’ purchasing power can the nation return to broadly shared prosperity.

“In 1935, we passed the Wagner Act that promoted unionization and allowed unions to flourish, and at the time we were at around 20 percent unemployment. So tell me again why we can’t do this in a recession?” said  Sen. Tom Harkin (D-Iowa), invoking the pro-labor changes of the New Deal. “This is the time to do it. This is exactly the time we should be insisting on a fairer playing field for people to organize themselves.”

Because of Sen. Specter’s announced opposition, the Employee Free Choice Act faces an uphill battle.  But at the very least, Californians should expect that all of their representatives in Washington would understand the need to strengthen unions as a means to strengthening the overall middle class, increasing wages and BOOSTING, not hurting the economy.  Feinstein has a choice to make, and you can sign this letter from the Courage Campaign to let her know you’re watching her.