The CA-32 race to replace Labor Secretary has less than six weeks to go until the primary.  We know about the two major candidates; Board of Equalization member Judy Chu (not to be confused with Betty Chu, who will appear directly above her on the ballot and surely cause some errors among voters) and State Senator Gil Cedillo, whose extreme spending of campaign contributions on shopping, meals and lavish hotels made the LA Times this weekend and caused a stir.

Somewhat less remarked-upon has been the candidacy of Emanuel Pleitez, a product of East Los Angeles and Woodrow Wilson High School, who matriculated at Stanford, joined the advisory board of Voto Latino (a group that encourages voter registration and engagement for the Latino community), worked for Democratic lawmakers like Antonio Villaraigosa, Tom Daschle and Hillary Clinton, and worked on the Obama transition team at the Treasury Department.  On Friday I had the opportunity to chat with Pleitez about his life experiences, the financial crisis, housing policy and a host of other issues.  A paraphrase of that conversation follows.

(As a side note, this story about one of the volunteers on the campaign, who traveled all the way from Santiago, Chile to work on it, is pretty amazing.)

Calitics: Tell me about your experiences that have brought you to this run for Congress.

Emanuel Pleitez: You know, after college and working in the private sector at Goldman Sachs, I was able to travel a lot.  And I think visiting 27 countries gave me a new perspective on what the challenges are out there in the world.  When I would go to South Africa or India, China, Brazil, I would visit the universities, and the slums, and see their struggles, and it really made me think about the issues of global poverty.  I even drove a taxicab in Myanmar!  And what I took away from all that is that the best way to create change is to start in your own backyard.  And that’s what we’re doing in this campaign.

Calitics: So how are things going?

EP: Well, we have 25 full-time staff working every day.  And our main focus is door-to-door, face-to-face contact.  We’re out canvassing every day.  A lot of people tell me that they think we’re the only candidate in the race, because we’re the only one they see.  So we feel pretty good about our position.

Calitics: Now, you worked on the transition in the Treasury Department, and one central concern that a lot of people have had with Treasury is the lack of staffed positions at the undersecretary level, and the belief that Tim Geithner has basically had to go it alone over there.  How should people look at the transition’s performance in that respect?

EP: I agree with that criticism of Treasury.  I had nothing to do with personnel, I worked in other departments.  But there are many reasons for the lack of senior staff, and I wouldn’t discount the ability and importance of the career civil servants working in the Department, who are doing a fantastic job.

Calitics: This week, the Congressional Oversight Panel released a preliminary report on the TARP program and Treasury’s performance, and they were highly critical of the lack of transparency and clarity over some of these programs, as well as a lack of accountability for the big banks.  How would you assess the various programs offered to this point?

EP: I don’t have all the details of the COP report.  My inclination is to defend Secretary Geithner, but I want people to be critical.  I think what he’s trying to do is return confidence to the markets and get credit flowing again, and we’re seeing signs that the plans are starting to work.

Calitics: How would you approach the situation with the banks.  Would you just recapitalize them forever, or seek a Swedish-style receivership or a liquidation of the insolvent firms?

EP: I would consider a receivership, but I wouldn’t make that the first thing on the table because of the expense involved and the danger to the markets.  But clearly, recapitalization alone won’t work, that’s just making capital disappear.

Calitics: What’s the biggest problem in the economy that we’re facing at this point?

EP: The biggest problem is the foreclosures right now.  Some of them are in rural districts are suburbs and they’re second, third and fourth homes, but for families in urban districts like mine, a foreclosure means the loss of everything you’ve got.

Calitics: Would you support bankruptcy judges being able to modify the terms of a primary loan for borrowers?  Isn’t there a problem with modifying securitized loans, in that the people holding the securities that have been modified can sue the loan servicers for illegally changing the terms of the security?

EP: That is a problem.  But as I understand it, cram-down is more of a threat to incentivize loan modifications and keep people in their homes.  Which is what we have to do.  Investors will get hurt anyway if the loan forecloses.  Somehow, the lenders and the investors and the home-owners have to come to an accommodation, and in that process the primary goal should be keeping people in their homes.  I wasn’t initially open to principal write-downs, but I am more so now, because we’re seeing that the interest-only modifications are not working, and people are being forced into foreclosure just a few months later.

Calitics: What are some of the other challenges facing the economy that you want to deal with in Congress.

EP: Obviously, we still need major stimulus to save jobs and transition into a new economic future.  A large part of my district is at or near the poverty rate, and we need help in these tough economic times.  I expect another trillion dollars to be spent by the government.  In my district, we need investments in public transportation and clean energy programs to reduce emissions and create manufacturing jobs.  There’s a program here called “La Causa,” which targets the high school dropout rate, and gets those kids into vocational programs for green jobs, whether it’s solar panel installation or something like that, so that they can be prepared for the 21st century economy.  We need more of that.  And we need investment in education, because any dollars spent get the greatest return in education.

Calitics: Do you plan on joining any ideological caucus in Congress?

EP: I haven’t really given it much thought, but I don’t think so.  I think all political is local, and I’d rather focus on helping my local community and responding to the concerns of my district.  Maybe I’ll join the Congressional Hispanic Caucus, that should be safe for me.  (Laughs.)

Calitics: Well, thank you for talking to us today.

EP: Thank you.

Despite the numerous statements from President Obama, the media hasn’t yet really grasped the concept that spending is stimulus.  As the President said, “that’s the whole point.”

Yet, today we get the Washington Post passing off some press releases from a few anti-tax groups as original research and “news.”

The compromise stimulus bill adopted by House and Senate negotiators this week is not free of spending that benefits specific communities, industries or groups, despite vows by President Obama that the legislation would be kept clear of pet projects, according to lawmakers, legislative aides and anti-tax groups.

The deal provides $8 billion for high-speed rail projects, for example, including money that could benefit a controversial proposal for a magnetic-levitation rail line between Disneyland, in California, and Las Vegas, a project favored by  Senate Majority Leader Harry M. Reid (D-Nev.). The 311-mph train could make the trip from Sin City to Tomorrowland in less than two hours, according to backers. (WaPo 2/13/09

I don’t know if any of these anti-tax zealots have been on I-15 between Las Vegas and the LA area, but it’s a mess. An absolute cluster&*$%.  Trips that should take four hours, at most, take six or seven hours.  People end up just sitting on the freeway for hours at a time.  And it happens every. single. weekend. Every Friday, going from LA to Vegas is impossible.  And every Sunday the trip back is just as bad.  I just did a search on Google Images and I got a slew of images of people stuck in traffic. I liked this one best because people were just kind of hanging out in the middle of the highway. Here’s a flickr search for the same topic with similar copious results.

When I spent a summer in Orange County a few years back, I made the trek up to Vegas.  It’s not a bad ride. I mean, it’s pretty if you like desert and dusty mountains.  Gets kind of repetitive after a while, but the asthetics are quite striking.  You really are driving through the middle of the desert, with nothing really around. When an accident occurs, you get massive delays. Anybody who has ever done the trip understands why relaxing on a train would be a boon to the travel industry.

While there are other projects as worthy of support as this one, this one certainly will be a good investment.  It will save and create jobs now, and it will create jobs for the long-term.  The amount of time wasted on the 15 is an incredible inefficiency. It discourages people from traveling between the two tourist regions and spending money.  Building this project will be an enormous job boon.

After all this is what this is about right? Jobs? Or can you not see past your ideological blindspot. Infrastructure = jobs = economic stimulus.  And this project is a perfect example of that.  It’s just too bad that the Washington Post didn’t bother to actually, you know, think about why the project is necessary rather than transcribing anti-tax talking points.

The fallout from Gov. Schwarzenegger’s demeaning comments about small-town Californians continue to reverberate.  Chairman Torres weighed in, and noted that rural Californians don’t exactly use a horse and buggy to get around, and some of them even have the teevee and the Internets!

“The Governor’s comments are insulting,” Torres told PolitickerCA.com today. “California does not have villages. This is not Austria, this is California. Voters in Central California and others from small towns have more on the ball than Arnie!”

State Senator Dean Florez, from the small Central Valley town of Shaffer, went a step further, introducing a resolution to have the Governor take the high school exit exam.

Like every other kid around the state, small town students take the same graduation tests as big city kids to show competency. Rural kids can make the grade. Given the Governor’s distasteful comments, what’s unanswered is whether he can make the grade.

That’s why, today, I’m introducing a senate resolution asking the Governor to take the high school exit exam. If the Governor fails the test, then we certainly have a capable Lt. Governor who can assume his duties until the Governor successfully passes the exam.

I hope that he accepts this challenge and that he doesn’t cower behind some excuse. This is a serious effort to bring attention to the divisiveness of placing labels on people based on who they are, how they live or where they come from — or even how well they do on a test.

If it is a good enough test for our twelfth graders, then certainly it is a good enough test for the Governor to demonstrate his competency.

And after he takes the exam, maybe he’ll think twice about the massive cuts to education funding he’s proposing — he just may have to return to school to brush up for the test.”

I would pay money to sit in while Arnold fills in the bubbles on the Scan-Tron sheet.  Can we get this on television?  It’d be the first time local news covered state politics all year!

I almost get what the Governor was trying to say, but the fact that it was a proud endorsement of lobbyist-paid junkets, as well as the demeaning stance toward small-town Californians, doesn’t come off well:

Gov. Arnold Schwarzenegger on Wednesday encouraged lawmakers — especially those from small towns — to do more globe-trotting on the dime of special interests.

Speaking at a forum on global economics held by the nonprofit Milken Institute, the governor suggested lawmakers would be more willing to embrace his plans to privatize the building of roads, schools, high-speed rail systems and other public works if they could see how effectively it has worked in other countries.

“Some of them come from those little towns, you know what I am saying, they come from those little towns and they don’t have that vision yet of an airport or of a highway that maybe has 10 lanes or of putting a highway on top of a highway,” Schwarzenegger said. “They look at you and say, ‘We don’t have that in my town. What are you talking about?’

“So they are kind of shocked when you say certain things. So I like them to travel around.”

Remember, folks, it’s Barack Obama who’s the elitist.  Arugula!

What shouldn’t get lost here is that Schwarzenegger made this little comment to justify what he has done multiple times since entering public office – jetsetting around the world on trade missions paid for by shadowy interests who expect a return on their investment.

There’s a virtue and value in world travel, and the country could go a long way to fostering it by providing grants for international study, for example.  If he wants to build a program like the “overseas experience” they have in New Zealand for California’s young people, great.  But Schwarzenegger isn’t really endorsing that.  He just wants his secret free trips.  The “y’all are hicks” part is just frosting on the cake.

The most sickening thing about Paul Pringle’s excellent LAT story on Governor Schwarzenegger’s little non-profit scam is that we’re talking about a very rich man, one who prides himself on not drawing a salary for his public service, one who has boasted that he can’t be bought.  But yet he willingly sucks up all kinds of goodies and treats on the public dime.  I’m going to excerpt Pringle’s report on the flip, but first, a little story.  Plenty of people I’ve talked to in Santa Monica have encountered Schwarzenegger, and I honestly can’t say that even one reaction is a good one.  Of particular note is the story of one employee at a Starbucks in a ritzy area of town, one that receives celebrity customers all the time.  When Arnold came in and asked for a couple beverages, he scoffed at the notion that he would have to pay for them.  “I’m the governor,” he said.  The employee told me that he was pretty much the only celebrity customer that’s ever pulled that move.  But it makes perfect sense in the context of this article:

California’s larger-than-life governor is unabashed about living large, but keeping him in luxury sometimes depends on the same taxpayer subsidies granted to hand-to-mouth charities.

Arnold Schwarzenegger, a millionaire many times over, bills much of his overseas travel to an obscure nonprofit group that can qualify its secret donors for full tax deductions, just as if they were giving to skid row shelters or the United Way.

So rich donors give in to a fund that Arnold uses to finance his lifestyle, and the donors can both hide their identity and receive a tax deduction, robbing the state coffers of tax revenue.

Nonprofit watchdogs say using charitable write-offs to pay for sumptuous travel is an abuse of tax codes.

“Wow, that’s a problem,” said Daniel Borochoff, president of the American Institute of Philanthropy. “Why should our tax dollars subsidize his lavish lifestyle?”

Making matters worse, Borochoff and others say, is that the nonprofit that finances Schwarzenegger’s globe-trotting, the California State Protocol Foundation, could be a vehicle for interests that hope to curry favor with the governor.

By giving to the foundation, donors avoid having their identities made public, because charities are not governed by the disclosure rules that apply to campaign contributions. And they can donate unlimited amounts to the nonprofit, which is not subject to contribution ceilings the way campaign accounts are.

This is unbelievably wrong.  A multi-millionaire governor, first of all, shouldn’t be living large off of any kind of donation fund.  Second of all, it shouldn’t be a back door around campaign finance laws.  And the nonprofit that runs this fund refuses to open their books and disclose their donor lists.

But this is all too typical.  It’s the same sense of entitlement that a rich man uses to demand free lattes at Starbucks.

Here’s a fun anecdote about Schwarzenegger ripping off the Simon Weisenthal Center:

Schwarzenegger has tapped at least one other charity for some of his travel. The Simon Wiesenthal Center, celebrated for its Museum of Tolerance in Los Angeles and far-flung Nazi-hunting efforts, paid more than $51,000 to help send the governor to Israel in 2004, a year when the charity ran a deficit, records show.

The trip carried a steep tab because of the private jet, said people familiar with Schwarzenegger’s travel […]

The governor could easily pick up outsized travel bills himself, and a spokesman said Schwarzenegger does pay for his private jet when he flies domestically on state business.

But trips abroad are something else.

The argument Arnold always makes against this is that a foundation bankrolling his travel means that the public sector doesn’t have to.  That’s a load of garbage.  We all finance this travel through bad legislation and payouts to the donors who pay into this slush fund in secret.  In addition, by allowing these donors to write off their donations for hotel suites and Gulfstream Jets and caviar, taxpayers ARE footing the bill, at least in part.

All of this is to say that the Arnold of the “I can’t be bought” days was never telling the truth.  His outsized celebrity ego actually has instilled a sense that he shouldn’t operate under the constraints of, you know, having to pay for stuff.