“I Am Not A Health Reform” appears in today’s New York Times, an op-ed by two Harvard professors of medicine and members of Physicians for a National Health Program, a group of doctors working for single-payer health care. In it, they explain that the “individual mandate” approach that Speaker Núñez has now caved to is by no means a new or untested idea – that it has failed everywhere it has been tried. And it’s been tried many places:

IN 1971, President Nixon sought to forestall single-payer national health insurance by proposing an alternative. He wanted to combine a mandate, which would require that employers cover their workers, with a Medicaid-like program for poor families, which all Americans would be able to join by paying sliding-scale premiums based on their income….

In 1988, Massachusetts became the first state to pass a version of Nixon’s employer mandate – and it added an individual mandate for students and the self-employed….In 1988, 494,000 people were uninsured in Massachusetts. The number had increased to 657,000 by 2006.

Oregon, in 1989, combined an employer mandate with an expansion of Medicaid and the rationing of expensive care….The number of uninsured Oregonians did not budge.

They go on to describe how Minnesota, Vermont, Tennessee, and Washington all passed various forms of mandated insurance in the early 1990s, only to see the number of uninsured fail to decline and in many cases continue to rise. They then turn to Massachusetts’ reform, which is failing:

As governor, Mitt Romney tweaked the Nixon formula in 2006 when he helped devise a second round of Massachusetts health care reform: employers in the state that do not offer health coverage face only paltry fines, but fines on uninsured individuals will escalate to about $2,000 in 2008….Yet even under threat of fines, only 7 percent of the 244,000 uninsured people in the state who are required to buy unsubsidized coverage had signed up by Dec. 1. Few can afford the sky-high premiums.

Why has this failed?

Each of these reform efforts promised cost savings, but none included real cost controls. As the cost of health care soared, legislators backed off from enforcing the mandates or from financing new coverage for the poor. Just last month, Massachusetts projected that its costs for subsidized coverage may run $147 million over budget.

Hmmm…no cost controls, rising costs of care, and a deficit that limits the availability of subsidized coverage. Sound familiar?

The Núñez-Schwarzenegger plan does not appear to have ANY firm cost controls in place. The 5% out-of-pocket maximum, which previously applied to families up to 300% of FPL, now only applies to 250% of FPL, which for 2007 was $34,225 for a family of two (my fiancee and I make twice that) and $51,625 for a family of four. The California median income as of 2004 was $54,385 – meaning over half the population would have NO statutory protection from crippling out of pocket costs. Their only recourse would be to plead their case to the MRMIB, which would be a daunting and discouraging challenge for most Californians, who have no idea how to go through such a process.

Further, the minimum “creditable” coverage for the mandated plans will NOT be guaranteed in law. As Sal Roselli pointed out, this is a bad approach. Similarly, SEIU’s Jeanine Meyer Rodriguez, quoted by Matt Lockshin, agreed that having MRMIB determine the minimums was bad policy:

As a matter of policy, the bill must be amended to require that a specific and appropriate minimum benefit package, such as a standard HMO package plus prescription drugs, be available to an individual for less than 6.5% of their income in order for them to be mandated to carry coverage.  Allowing MRMIB to define this minimum benefit package rather than specifying it in statute could result in middle income Californians being compelled to buy coverage that they can’t afford to use if the deductibles and out of pocket costs are too high.

So we have a plan without firm cost controls for over half the population, no reliable guarantee of a minimum, useful coverage for these mandated plans (as I read the text of the amended bill, “health insurance plan” is specifically defined to exclude vision and dental). Further, it’s by no means clear that federal courts will uphold the employer mandates, or that if they did, that CA’s fate would be any different than the six states that already tried this. Finally, MA is already running deficits in the funding of their subsidized coverage, which suggests that CA’s $14 billion deficit is even more relevant to this issue than we had previously realized.

The PNHP op-ed’s conclusion about these kinds of plans seems appropriate in our context:

The “mandate model” for reform rests on impeccable political logic: avoid challenging insurance firms’ stranglehold on health care. But it is economic nonsense. The reliance on private insurers makes universal coverage unaffordable.

We’ve seen this train wreck before. This time, maybe we should think about not letting this train even leave the station.

I’m on my way over to Salinas for the “First Presidential Primary in the Nation” (a local straw poll event), but I thought I’d share with you an op-ed I have in today’s LA Times: “Why won’t The Times talk tax hikes?”

Obviously you’ll have to go to the link to read the whole thing, but the basic point is that the Times has, in its recent reporting, been framing the budget crisis as a problem on the spending side, while not being sufficiently attentive to structural revenue deficiencies. If we’re really going to fix the state budget without using this crisis as an occasion to further gut badly needed public services, we need to understand the entirety of the problem, not just one dimension of it.

Last week I took Santa Cruz County to task for proposing a transportation sales tax that would fund roads and not rail. Unfortunately Monterey County has decided to follow in their footsteps with a truly reckless plan that would spend over $1 billion for roads but provides nothing for rail projects that have been in the works for a long time:

A Caltrain rail extension is no longer on a list of projects that Monterey County transportation officials hope a sales tax will help fund over the next quarter century.

On Wednesday, the Transportation Agency for Monterey County board approved a 25-year improvement package wish-list that boasts more than 20 road and transit projects at a cost of $1.8 billion.

TAMC is working to place a half-cent sales tax on the November 2008 ballot that would generate an estimated $980 million. The county would seek matching state and federal funding to pay for the rest of the work.

And why isn’t rail included? From yesterday’s Monterey Herald:

Over the summer, officials from the Monterey County Hospitality Association and the Monterey County Farm Bureau withheld their support from an earlier draft sales tax proposal, arguing there wasn’t enough focus on highway and roads projects that would benefit their industries. They also complained about proposed spending on a Caltrain rail project included in the earlier draft.

But after TAMC officials eliminated the rail spending, both groups sent a letter last month indicating they would back the sales tax effort.

This is madness. The TAMC proposal is reckless planning and poor public policy – locking Monterey County into a roads-only future for the next 25 years puts our economy at risk and will cause us to miss out on leveraged funding opportunities. We can become nationwide leaders in sustainable tourism and sustainable agriculture, but not if we believe against all available evidence that the 20th century dependence on roads can be continued for much longer.

image from TAMC

As I explained last week there are two fundamental reasons why rails, not roads, need to be emphasized in any new transportation plan: global warming and peak oil. Freeway widening projects produce significant amounts of carbon emissions, something that supposedly environmentally-conscious Monterey County residents should not be promoting. Peak oil is the name given to the end of cheap oil as supplies begin to shrink and demand continues to rise globally. The peak, which many researchers believe is either already here or just a few years away, is already manifesting itself in sky-high gas prices.

These phenomenon both suggest environmental, economic, and physical factors that should lead us to prioritize rail over roads. Even a “mixed” funding package with some road widening as the cost of a fully funded Caltrain extension and light rail on the Monterey spur line (a line TAMC owns) would be worth it, as Monterey County has a stronger need than most other places of alternatives to the car. 100 miles long, Monterey County would be crippled in the event of an oil shock, either in the form of supply disruption or even more dramatic price increases. In either event the ability of workers to get around, tourists to come to the region, and agricultural products to get to markets, would be negatively impacted.

On that basis alone, dropping rail funding is a truly reckless act. But it gets worse. The proposed sales tax would last for *25 years*. Not until 2033 would we be able to realistically return to voters with a new funding package. By that point it will be too late – peak oil and climate change are already unfolding. This specific package shackles us to our cars at the exact moment when alternatives must be developed.

Further, there is political movement at the regional, state and federal levels for rail. TAMC’s Caltrain plan has been in the works for many years. Caltrain is willing to provide service to Salinas, but only if TAMC can upgrade the track, secure trackage rights, provide new cars, and guarantee that Caltrain will not be financially exposed. The cost of meeting all these requirement has been put at $90 million – less than a tenth of the overall cost of the transportation package. Democrats in Sacramento have long been supportive of rail, and the Democratic Congress has moved to create a federal matching funds program for local rail, similar to that which has long existed for highways. To abandon rail now is to ensure that Monterey County will miss out on these new opportunities to help defray the cost of providing badly needed sustainable transportation.

And then there is the opposition of the Hospitality Association and the Farm Bureau. That TAMC would bow to the pressure of these two groups is itself a disturbing sign. But let’s question the sanity of these groups. By throwing a fit on rail, they are actually hurting their own industry quite significantly.

Monterey’s tourism industry owes its life to rail. In the first decades after the American conquest, Monterey was an isolated town, hard to reach (it took a day just to travel here from Hollister). That all changed in 1880 when the Del Monte Express began service to Monterey from San Francisco. The rail line enabled the rapid growth of the tourist industry here on the Monterey Peninsula. The Del Monte Hotel, the Pacific Grove Methodist retreat, and by the early 20th century, Pebble Beach were all products of rail.

The last Del Monte train ran in 1971, when Californians wrongly assumed that cheap oil would enable automobile-based transportation to meet our needs for many years to come. Now that we face the end of cheap oil, Monterey’s future as a viable tourist destination depends on rail. Without it, we WILL lose tourist dollars as the cost of getting here becomes too expensive for Northern California families and visitors from around the country.

And we would be missing out on a perfect opportunity to take the lead as an environmentally sustainable tourist destination. Much of Monterey’s value as a destination is based precisely on environmental preservation, from the Monterey Bay Aquarium and the Monterey Bay National Marine Sanctuary to the forests, coastline, and dramatic beauty of Big Sur. Rail would allow tourists to get here in a carbon-neutral, or even carbon-reducing manner, complementing the mission and values of our region. TAMC already owns the tracks from Castroville to downtown Monterey, so all that’s needed is investment to rehabilitate the tracks and buy the rail equipment. And it would take pressure off of Highway 1, which can get congested at rush hour.

It’s not as if the Hospitality Association hasn’t been told this. Just last week, Monterey hosted a conference on sustainable tourism. Speakers from around the nation met with local stakeholders and, from the reports, all agreed on the importance of sustainable tourism:

Many local businesses and agencies employ environmentally conscious practices, said John McMahon, president of the Monterey County Convention and Visitors Bureau.

“A lot of these things being discussed are already going on,” McMahon said. “This is a catalyst to solidify that and to bring together all the entities with an interest in sustainable tourism.”

McMahon said the Monterey area is viewed by potential visitors as a spiritual and environmentally friendly retreat.

“Now it’s being able to validate that viewpoint. We can easily be a capital for green tourism,” he said.

Emily Reilly, former Santa Cruz mayor and candidate for the Democratic nomination in AD-27, who has championed sustainable transportation planning, discussed the importance of collaboration:

“It seems there’s a knee-jerk reaction by cities and counties of ‘what’s in it for me’ when someone else decides to do something different,” said Santa Cruz Mayor Emily Reilly. “I think we’re really at a point here of getting over that.” [quoted in the Monterey Herald article linked above]

For the Hospitality Association to not have gotten this message is, to me, a stunning failure on their part to envision the future needs of our region and to grow their own business. Someone at the TAMC or on the Monterey County Board of Supervisors should have sat down with them and explained the vital role of rail in providing for a viable 21st century Monterey County.

The same holds true for the Farm Bureau. The Salinas Valley, salad bowl to the world, is well positioned to benefit from an improved rail corridor to the Bay Area. Agriculture is especially vulnerable to peak oil, as Cuba discovered in the early 1990s. As fuel costs soar and with the possibility of supply disruptions, every aspect of agriculture – from getting workers to the fields to powering the tractors to producing fertilizer to getting food to market – is imperiled.

The money spent rehabilitating the rail line between Salinas and San José would, even though initially intended for passenger rail, have obvious benefits for agriculture. With the massive population of the Bay Area needing a stable, local food source, as well as offering port facilities tying the region to a world market, expanded rail infrastructure would help secure local agriculture’s future.

Unfortunately, we the people are going to have to educate our leaders and civic groups about this. I wasn’t able to attend yesterday’s TAMC meeting, but there is another in January where the sales tax package will be finalized, and I plan to voice my concerns there.

We have other opportunities to help prevent this disaster. Each city in Monterey County must vote to approve the proposal, and then the Board of Supervisors must do so as well – those votes will take place later in 2008. The city of Monterey has signed the US Mayors Climate Protection Agreement and UN Urban Environmental Accords, which are a good starting point for reminding city leaders of the need for a more balanced plan. These votes could be used to push TAMC to restoring at minimum Caltrain funding.

There is, of course, the possibility of voting against the plan itself in November 2008 – the 2/3 rule for tax votes applies here, and a similar transportation plan in 2006 received 57% support, short of the 67% needed for passage. And while that may ultimately be the only way to stop this bad plan, it would be much more preferable to work with county residents and officials to educate them on the need to provide rail and then go to voters in November with full funding for rail.

It is long past time for California to abandon the 20th century fantasy that cars and roads alone can meet our transportation needs. Let’s get Monterey County moving in the right direction.

As you may have noticed from recent posts, I’m a big fan of Naomi Klein’s new book The Shock Doctrine. It’s one of the best books published this decade, and provides perhaps the best overview of the last 30 years yet offered. Her argument is essentially this:

The shock doctrine, like all doctrines, is a philosophy of power. It’s a philosophy about how to achieve your political and economic goals. And this is a philosophy that holds that the best way, the best time, to push through radical free-market ideas is in the aftermath of a major shock. Now, that shock could be an economic meltdown. It could be a natural disaster. It could be a war. But the idea, as you just saw in the film, is that these crises, these disasters, these shocks soften up whole societies. They discombobulate them. People lose their bearings. And a window opens up, just like the window in the interrogation chamber. And in that window, you can push through what economists call “economic shock therapy.”

She also links this to torture – quoting from CIA interrogation manuals that explain how the application of shock can open a window in which the subject is weakened and suggestible, a window that torturers or free market economists can use to push through a radical agenda that might otherwise be resisted. This works on individuals, societies…and labor unions.

It’s in this context that two recent posts from the United Hollywood blog should be understood. In it, they explain the basics of management, union-busting strategy – that a successful anti-union strategy relies on precisely these tactics of terror, disorientation, and shock to destroy worker solidarity. That the writers appear to understand this could give them a powerful advantage in their ongoing strike, and these insights not only suggest how unions can win, but how the shock doctrine and union busting are inextricably tied together.

Details over the flip…

First is a post excerpting an e-mail from Tim Lea regarding AMPTP strategy:

The AMPTP strategy…is to gain control over ‘New Media’ by breaking the unions. First us, then the rest. Then the Internet will be a non-union town.

In his book Confessions of a Union Buster, Martin Jay Levitt details the techniques he learned in his many years attacking unions. A key element is the demoralization of the union members during any industrial action against the company. Taking away people’s hopes, their aspirations for a quick resolution to any labor dispute – that was Levitt’s job. “If you can, make the union fight drag on long enough, workers…lose faith, lose interest, lose hope.”

According to Robert Muehlenkamp, an SEIU Local 1199 organizer at Harper Grace hospital in the 70’s, where Levitt was hired to consult management:

“Union busters wield great power through a program of terror and manipulation – people don’t, can’t possibly know what’s going on and who’s telling the truth…. The first time this happens to regular people, they’re terrified.”

And terror is the goal. The union buster hopes to control employees by employing terror.

This is, of course, precisely the situation we find ourselves in today. We are the example that is being used to intimidate the other unions. The studios want the actors, the directors, the Teamsters, IATSE, all to look at our struggle and see us lose. See us fractured and divided. With the hope that they will be frightened by what they see, and accept whatever deal the studios offer.

The emphasis is mine, and it reminds me EXACTLY of what Naomi Klein is describing in the shock doctrine. Terror and manipulation…”the first time this happens to regular people, they’re terrified” – that is the exact phenomenon that Klein believes has been repeatedly employed over the last 30 years to push through radical neoliberal economic policies. Whether it was Pinochet’s coup against Allende, the September 11 attacks in the US, the collapse of the Soviet Union, or Hurricane Katrina, the result is the same – societies are terrorized because they are experiencing something alien, frightening, something they never expected they’d face.

WGA West Board of Directors member Tom Schulman provides details about how union busters employ the shock doctrine in negotiations in a post, also from yesterday, in which he took copious notes from a chief negotiator for management in another sector of the entertainment industry:

Tactics:

* Lower the expectations of the other side, divide and conquer.

* Raise and lower the expectations of the other side, divide and conquer.

* Do everything possible to destroy the credibility of the other side’s leadership, divide and conquer.

* Use confidants and back channels to go over the heads of the stronger leaders to the softer targets. Divide and conquer.

* When you figure out the other side’s bottom line, offer a fraction. It’s surprising how many times that stands.

Sound familiar? If you examine the recent “leaks,” comments, and press releases from the other side, you’ll realize this is exactly the strategy the Companies are employing against us today. And why not? It’s worked for them for the last 20 years! They are putting us on an emotional roller coaster by raising and lowering our expectations, attacking our leaders, trying to pit the town against us, refusing to move on the issues that matter to us, bragging about their generosity when the opposite is true, fear mongering and claiming we’re going to ruin this industry – hoping we’ll splinter, lose faith in and attack each other, negotiate against ourselves, and cave.

Again the emphasis is mine, and hopefully you can see what I saw – a link to the “terror and manipulation” described above. These negotiating tactics are primarily designed to shock the rank and file, and the coaliton that supports the strikers. The act of rapidly raised and dashed expectations, of dramatically dividing workers and coalition partners, are all aimed at producing a moment of shock that will allow management to gain the upper hand and conclude negotiations on favorable terms – or to break the union entirely.

Schulman went on to write:

But this time, in every way possible, we must let them know we’re on to them and their strategy won’t work. We understand their game, our solidarity and resolve are greater than ever, and we’re going to stay strong – and reasonable – until we get a fair deal.

And sure enough, soon after Schulman’s post, Carlton Cuse – showrunner for Lost – came along to put to bed rumors that he was going to break solidarity, instead announcing he was ceasing any and all work on his show to stand in unity with the writers.

The key to beating the shock doctrine is to understand what is coming, to not let a disorienting event damage your unity and defense of your values, and to understand that the shock always wears off. As long as the writers do those things, they will have that much better a chance at victory in what will still be a long and difficult struggle – and perhaps point the way forward for the rest of us.

Sure, we all laughed when Atlanta prayed for rain to help end its drought, and many Californians probably shook their heads at a red state’s reckless growth that helped produce the crisis.

But what’s that they said about stones and glass houses? California’s drought is becoming worse by the day. The State Department of Water Resources estimates NorCal will only be able to export 25% of usual water supplies to SoCal in 2008 – less than the 60% exports that were made in 2007. The Sierra snowpack barely exists, and the Colorado River drought has shown little sign of easing. Despite weekend rainfall here on the Central Coast and in SoCal, it’s not enough to ease drought concerns.

Already local water agencies are beginning to plan for rationing, such as in Santa Cruz and Riverside. The Monterey Peninsula Water District is even considering cloud seeding for the Carmel River watershed (don’t laugh, apparently it works).

Meanwhile, conservation activists are fighting to prevent the state from abrogating the 1960 promise that the State Water Project would give urban users priority in a drought. In 1995 the state tried to eliminate this guarantee, but the amendments were temporary, and this week the DWR is holding hearings about whether or not this should be made permanent or the original promises restored. Written comments can be submitted by January 14.

Certainly California has long-term concerns regarding overuse, sprawl, and global warming’s impact on water supplies. But we also have short-term concerns; only the unusually wet spring of 2006 has staved off disaster. We treat wet years as “normal” years and dry years as abberations, but perhaps it’s better we look at it the other way around, and begin to adjust our lifestyles and civilization to make do with less water.

As anyone who’s had the misfortune to be stuck in a traffic jam on Highway 1 in Santa Cruz County knows, there’s a major traffic problem on the northern end of Monterey Bay. High housing costs in Santa Cruz have spurred growth over in Watsonville, where homes are (relatively) more affordable. When combined with the job engine of Silicon Valley just over the hill, this means there’s a LOT of traffic on Highway 1.

So what should be done? Widen the freeway? Take advantage of the rail line that connects Watsonville to Santa Cruz to provide commuter rail and take the pressure off of Highway 1?

Highway 1 widening has been very contentious – a 2004 plan to widen the freeway was shot down by voters – and so it is somewhat surprising to see that a Santa Cruz County transportation tax force has suggested trying again in November 2008, with another 1/2 cent sales tax that would largely go toward an additional freeway lane and only a pittance for rail.

Environmentalists and transit advocates, led by Friends of the Rail Trail and former Santa Cruz mayor and Democratic candidate for AD-27 (should Prop 93 fail) Emily Reilly, have denounced the proposal and vowed to fight for transportation alternatives.

What I want to do here is explain why they are right, why Santa Cruz needs to seize this opportunity to lead the state into a more sustainable and effective transportation future. Instead of trying in vain to keep the 20th century alive, we need to realize our limits and embrace a more sensible vision for the 21st century.

flickr photo by richardmasoner

In November 2004 a 1/2 cent sales tax was put to voters that would have provided some funding for public transit, but was largely about widening Highway 1 with an additional lane between Watsonville and Santa Cruz. The measure only got 43% support, as a combination of anti-tax, anti-development, and anti-roads voters rejected it. Although the county transportation commission believes voters will support this, it’s not clear this will fare any better now than it did in 2004.

This isn’t just bad politics. It’s an example of completely misplaced priorities. Santa Cruz has been trying to develop a commuter rail line to connect to Watsonville, paralleling Highway 1 and potentially clearing up the traffic problem without adding new freeway lanes. To do this, the county needs to buy out the Union Pacific line that runs alongside Highway 1, an effort that has been stalled in negotiations for several years, as the county believes UP is asking too high a price given the renovations that will be needed to make the route viable for passenger rail.

Supporters of the plan point out that Santa Cruz County is well positioned for rail:

“Half of the population in Santa Cruz County live within a mile of the rail corridor,” says Micah Posner, co-founder and board member of Friends of the Rail Trail.

“Two thirds of all trips in Santa Cruz are under five miles and one-third are under three miles,” Posner continues. “It’s amazing just in terms of global warming alone that a rail trail has the potential to solve all our problems.”

Friends of the Rail Trail have produced letters of support from private rail operators that suggest a passenger rail line would be profitable. One of them, Sierra Railroad Company, is led by Mike Hart, who further explained why Santa Cruz County is so well suited for rail:

Hart summed up Santa Cruz County’s readiness for public rail with three Cs: “concentration, combination and culture.”

He argued that the concentration of the county’s 250,000 residents around the rail corridor overcomes the overall population number, which is regarded by opponents of passenger service as too low for a viable service. “Combination” stood for his company’s proposal to continue freight service – mostly for the Cemex plant in Davenport – by creating a system that wouldn’t necessitate running freight only at night. “The overhead, logistics, insurance and planning all need one organization running it to be efficient enough,” Hart said.

Hart’s final key, culture, proved he knew his audience. Having already received applause for his statement that Sierra Railroad operates its trains only with biodiesel, he said, “The Santa Cruz County mindset is, if we can help the environment by using a train, we will. When you figure the overall cost benefit, you can’t just figure the people riding the train instead of their cars. You also need to take into account the thousands of people who will walk or ride their bikes to get where they need to go.”

Left unsaid is the historical connection. Both Monterey and Santa Cruz were products of passenger railroads. As anyone who’s been to the Santa Cruz Boardwalk knows, it is situated right alongside the rail line, which carried weekend visitors down from San Francisco and provided the transportation lifeline that made Santa Cruz viable. Same for us in Monterey – the Del Monte Express was critical in bringing visitors to one of the state’s first tourist destinations, as well as bringing supplies to town and providing regional business access to market.

For most Californians, rail stopped being a vital part of life after World War II, when cheap oil made us all believe that personal automobiles and freeways, not trains, would solve our needs. We let our excellent rail transportation network fall apart – from the Pacific Electric cars in SoCal to the end of the Del Monte Express in 1971. The 20th century California Dream emphasized cars and cars alone; the Beach Boys never sang about trains.

As I’ve explained before, that 20th century dream is dying, and it is time to redefine the California Dream for the 21st century. One reason that dream is dying is because the era of cheap oil that made the 20th century dream possible is drawing to a close. Peak oil and sky-high gas prices mean that driving will no longer be able to be the basis of our transportation system. Already Californians have started buying less gas, and Amtrak California ridership sets records every month.

Clearly the desire for new kinds of transportation is there. So is the awareness of climate change and the need to move away from global warming emissions that highway projects produce, as explained by Seattle’s Sightline Institute.

But roads supporters in Santa Cruz County prefer to ignore all of this. When the transportation task force approved the Highway 1 widening tax proposal, they also rejected a resolution that would have required an overall reduction in carbon emissions and that each project funded had to be carbon neutral – a rejection Emily Reilly rightly found to be “shocking.”

A small but vocal group of residents in Capitola and Aptos, which lie along the rail line, also oppose the passenger rail plan, concerned that it would hurt their property values. Friends of the Rail Trail believe that in fact, a combined rail line and bike/walk trail would help property values, as well as keeping local economies afloat and easing traffic congestion.

Ultimately, the opposition of these few homeowners and the transportation task force to a rail solution is a sign that they still believe, against all evidence, that the 20th century can continue. Maybe Highway 1 widening would have made sense in the 1980s or 1990s. Not now. With scarce public revenues, soaring gas prices, and the need to get serious about climate change, spending $300 million to widen a freeway is an insane waste of money. Santa Cruz County needs to instead embrace a more sensible future – a passenger rail future.

And in any case, the 1/2 cent sales tax for a freeway project is doomed to fail. Santa Cruz saw this in 2004. Earlier this month Seattle rejected a massive roads and transit project when anti-tax activists and those opposed to 180 miles of new roads combined to sink the plan. In 2004 Denver voters approved a massive rail and transit only plan, FasTracks, and this year Charlotte voters gave 70% approval to a light rail plan. Will Santa Cruz be left behind?

The campaign to turn California’s public infrastructure over to private profit is gathering steam. Today’s LA Times reports on a new push by Arnold for privatization of public resources:

Gov. Arnold Schwarzenegger signaled a major push today to engage private companies in the construction and management of state and local infrastructure, adopting a strategy employed in Canada, Britain and elsewhere…

The Schwarzenegger administration is contemplating a plan, probably requiring state legislation, to create a California agency to oversee state and local public-private partnerships, aides said. Modeled after one in British Columbia, it would be staffed by professional financiers and other experts who could oversee the structuring of deals by both state and local governments.

As Brian explained in his excellent Pat Brown is Rolling Over In His Grave post last month, this push is part of a broader assault on the public ownership and operation of our basic infrastructure. The LA Times does not quote a single opponent of privatization, instead casting opponents as merely greedy special interests wanting to protect their fief:

opposition from labor unions and from legislators reluctant to give up too much control over big spending projects.

One of Arnold’s financial advisors, David Crane, is allowed to declare that this is about innovation and progress:

Whereas we’re a very innovative state in many ways, when it comes to infrastructure we are less innovative, and the governor intends to bring public-private partnerships into our portfolio.

Read on to see why this is a dangerous idea…

In Naomi Klein’s new book The Shock Doctrine, she explains how the last 30 years of neoliberal economic policy, aimed at the transfer of wealth away from working people and toward a small elite, was implemented largely through the taking advantage of a crisis, a crisis usually manufactured by those same neoliberals. As she explained it to Democracy Now!:

The shock doctrine, like all doctrines, is a philosophy of power. It’s a philosophy about how to achieve your political and economic goals. And this is a philosophy that holds that the best way, the best time, to push through radical free-market ideas is in the aftermath of a major shock. Now, that shock could be an economic meltdown. It could be a natural disaster.

She went on to explain that Milton Friedman played a key role in articulating this idea:

He had a vision of society, in which the only acceptable role for the state was to enforce contracts and to protect borders. Everything else should be completely left to the market, whether education, national parks, the post office; everything that could be performed at a profit should be. And he really saw, I guess, shopping — buying and selling — as the highest form of democracy, as the highest form of freedom.

That digression is significant because David Crane, Arnold’s privatization guru, is a self-described follower of Friedman:

Crane’s economic philosophy sounds distinctly libertarian. He advocates against government intervention in private business and touts his admiration for conservative economist Milton Friedman.

“Governments don’t create jobs, and if they are not careful they can kill jobs,” Crane told an audience of business leaders at a San Francisco
luncheon last summer.

The Capitol Weekly profile that quote is taken from (linked above) goes on to detail Crane’s right-wing economic views, which hold that public pensions are “special privileges” and that the minimum wage hurts jobs. The Capitol Weekly claims his “abrasive” personality has alienated him from many Sacramento lobbyists and interest groups, which along with his right-wing economic views cost him a spot as a CalSTRS trustee earlier this year.

It’s not that Crane and his ideas are right-wing that is the problem. No, the real issue is that public-private partnerships (PPP or P3) don’t actually work in practice. Arnold is taking his cues from British Columbia, whose right-wing government has aggressively pursued P3. 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.

Another Canadian union has collected an extensive list of P3 problems. They note that in Ontario, a P3 hospital cost $300 million more than if it would have been publicly built.

Britain is also cited as having successful P3 projects. But in fact, their P3 projects and privatization have led to disaster and even deadly tragedy, especially on Britain’s P3 and privatized railways. As Christian Wolmar explains in his 2005 book On The Wrong Line: How Ideology and Incompetence Wrecked Britain’s Railways:

Britain’s rail privatisation has been one of the greatest political failures of recent history. A well-functioning industry was torn apart to satisfy political dogma and privatised in a way that not only compromised safety and wrecked performance but also resulted in financial melt-down…A decade after privatisation the railways receive more taxpayers’ money – over £6bn per year – than ever before. Yet there are still more late trains than in the days of British Rail which, though accused by the government of being inefficient and expensive, provided a better service and more investment on a fifth of today’s subsidies.

California is no stranger to P3 projects. In the 1990s a private company built the 91 Express Lanes – toll lanes in the middle of the extremely congested 91 freeway between Anaheim and Corona. Significantly, the private builders did not believe they could turn a profit without a “non-compete agreement” preventing Caltrans from widening the 91, even though such widening was sorely needed.

As it turned out, the 91 Express Lanes failed to ease congestion and was rumored to be financially insolvent (a charge never proven one way or the other because the books remained private). In 2002 the Orange County Transportation Authority, sick of the ongoing congestion, bought out the 91 Express Lanes at a cost of $207 million, so as to remove the non-compete agreement.

In Stockton, a deeply controversial water privatization was rescinded earlier this year after opponents successfully sued in federal court. As the Sierra Club noted, the privatization actually would lead to a serious decline in water quality and maintenance:

In fact, the city did no environmental review at all, despite evidence for potentially severe environmental consequences. At a time when the Sacramento Delta water system is already polluted and highly fragile, OMI-Thames declared a “Run to Fail” operating mode, consciously deciding to neglect management problems until resulting in harmful infrastructure neglect. The company proposed severe budgets cuts that would have undoubtedly affected quality of services in several arenas, including maintenance of systems, disposal of waste, dealing with vermin, odor control, and sewage over flows…

In Atlanta, for instance, after privatizing the water systems, the quality of the drinking water degraded to such a point as to make it undrinkable. Suez, the largest private water corporation in the world, operated the water systems, and as a result, the rates increased, the water became brown and people were advised to boil the water before drinking.

What, then, are the lessons of P3 around the Anglo world?

• Failure to actually save money – instead they actually COST taxpayers more than a publicly funded project
• Failure to provide efficient, quality services – instead they put people at risk
• Lack of public oversight
• Corruption

California should know better especially with regard to the latter point. 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.

But we’re going to go down that path not because we must, but because California politicians are not willing to properly fund public infrastructure. Taxes are never fun, but they are FAR more affordable to Californians and bring much better, effective services than privatized services.

Ultimately, it seems more and more clear that this is deliberate. Arnold is leading a California Shock Doctrine in which taxes are kept low, even at the cost of fire protection, in which higher ed is slowly but steadily privatized, closing off access to education, basic security, and opportunity to all but those who can afford it. He “solved” the previous budget crisis by gutting $6 billion in MVET revenue and borrowed to cover the rest, leaving the state vulnerable to a fiscal crisis that can then be used to sell off effective, affordable, productive public assets. Privatization and P3 is but the final blow.

The projected deficit for the state budget in 2008 is $10 billion and growing quickly. As the scope of the crisis becomes clearer, the state’s media is beginning to take notice and, as always, trying to spin the situation according to their own preconceived notions.

In that vein comes today’s article by Evan Halper in the LA Times. While the article would seem to boost us by laying the blame at Arnold’s feet, its primary argument is actually that the budget crisis is due to “voter-imposed budget constraints” that limit the legislature’s ability to slash spending when needed, and limiting the effectiveness of government.

It’s not a new claim, of course, and the article quotes Don Perata’s complaint about this that he made earlier in the year. But the politics of the budget crisis are shaped by the media coverage of it, and in that sense it’s not just significant how much the LA Times is playing up the locked-in spending, but how much they’re downplaying the lack of tax revenue.

If we’re going to prevent this budget crisis from seeing the death blow to the liberal state that Pat Brown helped build in the 1960s as well as from crippling our ability to respond to our own ecological and urban crises, we need to aggressively push back against the idea that spending cuts are the answer. California’s budget is in crisis not because we spend too much, but because we tax too little.

The LA Times article begins:

Gov. Arnold Schwarzenegger could soon come to regard the epic budget mess he inherited four years ago as a minor nuisance compared to the challenge he faces now.

As he prepares the budget blueprint that he will release in January, the governor is in a bind. There isn’t as much red ink this time, or an emergency cash shortage — at least not yet. But deals he made to keep the state afloat earlier in his tenure now hamper his ability to take on a rapidly swelling deficit that early projections show will hit at least $10 billion.

Those deals, made when the deficit was substantially larger, put a lock on billions of dollars. Large pots of money that lawmakers have tapped to patch past budget deficits are no longer available to them. The prohibitions are even etched into California’s Constitution, thanks to ballot measures championed by Schwarzenegger.

“There is no question this budget will be tougher” than when the deficit was $14 billion, said Mike Genest, the governor’s budget chief. “A lot of options we had before have been removed.”

The tone is set from the beginning – locked-in spending and prohibitions on cutting funding to schools or raiding local government coffers are going to make things “tougher” and are the basic problem the state faces in trying to resolve the deficit.

And of course, Mike Genest is being disingenuous when he said “a lot of the options we had before have been removed.” There’s nothing stopping you guys from reinstating the MVET, is there? No, to Arnold and his cronies, the only “options” are spending cuts that hurt the working and middle-classes, not tax increases that might capture some of the massive wealth generated by a small class of Californians.

The article quotes some Democrats as well:

We have just tightened the noose around our neck instead of figuring out how to get out of the noose in the first place,” said Hannah-Beth Jackson, a former Democratic assemblywoman from Santa Barbara who plans to run for the Senate next year. “We have all these spending requirements, and they end up working against each other. We can’t take from this, we can’t take from that; we’ve become immobilized.”

Of course, this noose analogy only works if you don’t include the possibility of tax increases. Prop 13 and the state budget rules form a noose as well around state budgeting, preventing legislators from enacting a fair and sensible tax system that pays for the state’s needs without stressing lower and middle income families. Perhaps she was quoted out of context here, but HBJ should know that legislative immobility on the budget has more to do with taxes than spending – and more importantly, as progressives we need to be pushing hard on the tax issue instead of arguing that the problem is an inability to cut spending.

These spending constraints were the product of an electorate angry at legislators for raiding necessary programs:

But legislators have played a role in creating the dilemma they face. Citizen ballot initiatives often draw on the public’s distaste for a Legislature perceived as financially incompetent and politically tone-deaf. Only 25% of likely voters trust state government officials to do what is right most or all of the time, according to a September poll by the Public Policy Institute of California.

Lawmakers’ slowness in addressing skyrocketing property tax bills led voters in 1978 to pass the landmark Proposition 13, limiting how much such bills can increase every year. In 1988, voters approved Proposition 98, which set aside about 45% of the state’s general fund for education programs and gave lawmakers complicated rules for allocating it.

“The reason voters lock in spending is because they don’t trust the Legislature to share their priorities,” said John G. Matsusaka, president of the Initiative and Referendum Institute at USC.

It seems that legislators have not, in fact, actually dealt with this lack of trust. It was lack of trust that created the political conditions in 1978 that helped pass Prop 13, and a similar lack of trust that has led voters to protect important services such as education. It was a lack of trust, exploited by Republican dirty tricks, that led to the recall in 2003 during a previous budget crisis.

So for legislators to complain that locked-in spending is the problem seems to me to be missing the point entirely. But it doesn’t help when the LA Times publishes an article so strongly reinforcing that point.

The real issue here is that in 2008 we face a crossroads in California. Will we continue to balance California’s budgets on the backs of our most vulnerable and needy people, on the backs of an already stressed middle class, so that the wealthy can escape their obligations? Or will we finally push back and work to restore the promises of the 1960s, AND face the crises of our own time?

Further quotes from Arnold’s budget man suggest that they’re going to try the former route, with gusto:

Genest said the governor has no regrets….

Now is the time, Genest said, for hard decisions.

“The governor made these deals fully aware that the day would come when some of us would say we wish we had more options,” he said.

That suggests to me that Arnold is “fully aware” of what those spending constraints would lead to – an overwhelming desire to gut state services in the next budget crisis. It’s the shock doctrine for California – gin up a crisis and then use that crisis to push through a deconstruction of the liberal state, privatizing government services in the name of ending the fiscal crisis but in fact merely enriching a small coterie while the vastly inferior privatized services set most Californians even further behind.

Sound a bit overstated? Consider who was in Mike Genest’s position when these spending limits were made: Donna Arduin. As I explained in my article “The Plot To Privatize Public Education”:

And it is a deliberate privatization. ALL of this is in fact quite deliberate. It is not a reaction to a fiscal crisis. Instead it is a carefully planned effort to destroy mobility and access for the mass of Californians in order to allow those who have already prospered to keep their wealth while shutting the door behind them to those who wish to follow.

It goes back to Donna Arduin. Brought in as Arnold’s finance director in 2003, she is an ardent advocate of privatization. In order to “balance” budgets in Michigan, New York, and Florida under Republican governors, she advocated the gutting of social and educational spending so as to prevent a tax increase. As [an earlier] LA Times article notes, she took a similar approach to higher ed in CA:

Her budget plan for UC and CSU called for hundreds of millions of dollars in cuts for the third consecutive year, major student fee hikes, a reduction in enrollment and a plan to steer thousands of students to community colleges instead of the universities.

With Arduin as his very own Milton Friedman Arnold has maneuvered California into a crisis, and hopes to use that crisis to finish off what remains of California’s liberal promises of equality and opportunity for all its residents.

Will Democrats go along with this? With the media stoking Arnold’s fires, the prognosis is not good.  If we are to prevent this crisis from gutting not just our egalitarian heritage, but our ability to respond to our own crises – water, energy, food, transportation, renewed accessibility for higher ed, and health care – all these will require new state spending. There’s simply no way around it.

The only time the LA Times article gets even close to discussing the revenue problem is at the end:

Others are hopeful voters will see that the state lacks the funds to provide all the services they expect, and a tax increase is not unreasonable.

State Treasurer Bill Lockyer says that at minimum, that is a healthy debate to have. And one long overdue after years of the state spending more than it brings in and papering over deficits by shifting funds around from accounts that now cannot be touched.

“The constraints limit our flexibility, but they do not cause overspending,” Lockyer said. “The real problem is tooth-fairy budgeting.”

No, Bill, the real problem is a lack of revenue. It’s really that simple. Since 1978 California has decided to protect a small group of homeowners and the wealthy at the expense of everyone else. A 25-year increase in real estate values and wealth took place and the state saw hardly any of that money because of the unchallenged system of Prop 13. As our needs grew, and as the wealth to help address those needs grew, politicians such as yourself did nothing to tap those resources, preferring “tooth-fairy budgeting” to actual measures to put California on a long-term stable financial footing. Lockyer WAS in the legislature, after all, in the 1980s and 1990s.

Lockyer, you’ll remember, is also the person who recently kicked around the idea of privatizing UC outright. wu  ming delivered a classic smackdown of this idea, but it’s worth remembering that to Lockyer, the only viable solutions are neoliberal solutions. We should cut and gut state services, he counsels, but god forbid we actually consider fixing our tax crisis.

Already, 30 years of state budget cuts brought on by legislators’ unwillingness to challenge Prop 13 has led to what the California Budget Project called A Generation of Inequality, where Californians increasingly are stuck in low wage jobs while the wealthy few enjoy most of what remains of the California dream. Health care costs, housing costs, energy costs, and education costs play a primary role in that inequality – and the state can, with proper tax and spending priorities, help alleviate those problems.

The California Tax Reform Association has proposed a series of reforms that would raise upwards of $17 billion for state government – and that doesn’t even include restoring the MVET, which would add another $5-6 billion. If we also rejected wasteful spending like the ridiculous $9 billion prison bond, or the $3 billion in dams that Republicans demand, that’s another $12 billion in bond capacity we could use to help build badly needed infrastructure, like high speed rail or a revitalized Delta, without straining the general fund even further.

But to undertake any of these sensible reforms requires confronting squarely the dominant political assumptions of the last 30 years in California. And it’s important to note they are assumptions. Yes, California has straitjacketed itself on taxes as much as it has on spending – but why assume that the solution is to break the spending rules, and not the tax rules?

Orange County conservatives were hammered in the court of public opinion in recent weeks over their opposition to a 2005 tax measure that would have helped fund fire responses that were found lacking in the recent firestorms. An October LA Times poll showed voters are willing to tax themselves for health care. The opportunities to fight back against the neoliberal assumptions that have ruled California ARE there, to anyone willing to act on them.

And so we face a crossroads. Will we sit back and let Republicans and the media shock doctrine us into giving up what remains of equitable, accessible, broadly prosperous California, and eliminating our ability to tackle the multifaceted crisis of the 21st century? Or will we fight back and finally challenge these assumptions, that we should look to spending cuts before tax increases, and finally put California on a sound financial footing by giving us the resources we need?