Random thoughts on recent news

First of all, justice has been done, sorta. Bernie Madoff, was sentenced to 150 years in prison. Madoff is 71. Try to do as much of it as you can Bern!!! Some in the media hailed this sentence as a get tough warning to Wall Street. Heifer dust! No one at AIG, Lehman Brothers, Citigroup, Goldman Sachs or any of the other financial corporations the United States partially owns have been indicted for frauds related to the financial meltdown. The bond rating agencies, who were accessories abetted the fraud by giving AAA ratings to all of the mortgage backed securities have not even been given a slap on the wrist.

Carolina Governor Mark Sanford continues to provide the press with more details of various infidelities, actual and mental. Gov. Sanford fib about "hiking the Appalachian Trail," is now a euphemism for sneaking of to meet your mistress. Swampland's Michael Scherer is starting to lose sympathy for the errant governor:
Every time he talks about the pain in his heart, that organ, as seen through newsprint and cable news, seems somehow to shrink. Each new round of confessed aches and longing, every Biblical allusion, all the vagaries of his non-coital betrayals, of his dance floor marriage therapy, his electronic soul mate, his South American crying, the Hamptons tryst--all of it makes him look smaller and less significant. I don't care about his private pain.

I have a funny feeling that Gov. Sanford may soon be the butt of divorce barbie type jokes. The divorced Barbie joke? Q: What comes with the new Divorced Barbie Doll? A: All of Ken's Stuff. Q: What happens if your wife finds out you've been "hiking the Appalachian Trail?" A: She might let you keep the tent.

Alaska Gov. Sarah Palin stated in the August 2009 issue of Runner's World Magazine that she'd beat President Obama in a Marathon race. Good for you Gov. Palin. The only reason I looked at the story was that the Huffington Post and other online media outlets had a headine saying that Palin could be Obama. The headline made you assume that Gov. Palin was referring to the 2012 election, when actually she was referring to racing Obama in a Marathon. Unfortunately Sarah Barracuda was the subject of an unflattering article in Vanity Fair, by Todd S. Purdum. Gov. Palin, is not a Wasilla hockey mom, but

a political novice with an intuitive feel for the temper of her times, a woman who saw her opportunities and coolly seized them. In every job, she surrounded herself with an insular coterie of trusted friends, took disagreements personally, discarded people who were no longer useful, and swiftly dealt vengeance on enemies, real or perceived.

Finally, I want to congradulate the California State Legislature and Gov. Arnold Schwarzenegger for failing to pass a state budget by June 30. They should be proud this is political incompetence at the highest level. The governor and the Republicans are refusing to countenance any increase in taxes. Unfortunately, there is no way to balance the state budget without some tax increases. This idiocy and unwillingness to compromise is bringing calls for a new California Constitutional Convention, which is probably the only way that state government effectively for all the people instead of for corrupt special interests and the intellectually challenged Sacramento politicians they support.

Capitano Tedeschi

30

hoist w/ our own petards

Hamlet:

There's letters seal'd, and my two schoolfellows,

Whom I will trust as I will adders fang'd—

They bear the mandate, they must sweep my way

And marshal me to knavery.

Let it work;

For 'tis the sport to have the enginer

Hoist with his own petard, an't shall go hard

But I will delve one yard below their mines

And blow them at the moon.

Hamlet Act 3, scene 4, 202–209

Well finally, it looks like the scofflaws in Sacramento, also known as the California Legislature is on the cusp of passing a budget.

It's only taken 14 months and during that time the state's budget deficit grew from approximately $18 billion for one year to over $40 billion for the next 17 months. Balancing what passes for the state's books will require the following revenue increases according the an article in the Feb. 11 Sacramento Bee.

Increasing the state's sales tax by 1 cent on the dollar.

Increasing gasoline taxes by 12 cents per gallon.

Raising the state's vehicle license fee from the current 0.65 percent of a vehicle's value to 1.15 percent, with 1 percent going to the general fund and local law enforcement getting 0.15 percent.

Increasing the personal income tax across the board, either by assessing a surcharge on tax liability or increasing the tax rate.

Ouch. That's right, "Ouch" is what I said to myself when I read the above proposal. Then I remembered that on Jan. 11, I had advocated a reform of Proposition 13, which was fancy way to say that I supported increase state taxes to balance that state's budget. One month of ago I was in favor of the legislature raising taxes in California. Then I read that taxes would be increased and I wasn't as pleased as I probably should have been. Civic virtue isn't as much fun when it comes with a price tag. I was as, Shakespeare would say, "hoist with my own petard."

My dismay at my pending impoverishment the State of California, was eased somewhat when I remembered that our beloved Govinator Arnold Schwarzenegger had been elected in 2003 by advocating repealing recent increases in the "hated car tax." According the Orange Juice Blog, Back in 2003 Schwarzenegger was campaigning against Gray Davis and had this to say about the car tax

“All they have done is spend, spend spend, and when they realize they spend money they don’t even have, then it is tax, tax, tax.” He added “how crazy is that going to be to come up with this crazy idea to raise the car tax by 300%. We’re not going to let it happen. Let me tell you something…it’s going to hurt the person who is a low income person who makes $15,000 to $20,000 a year. The person who is struggling to make ends meet. A person who is struggling to put food on the table for their family.

But my schadenfreude over Arnold's flip-flop from repealing the "Car Tax" to increasing the hated Car Tax, could not sustain me for long. California's fiscal situation is too grim.

The current budget only papers over the problem a few months. According to the Pubilc Policy Institute of California (PPIC). California is one of the few states in the nation to debt finance its public debt. State debt averages out to $4679 per person. New York comes next with a state debt of $2600 per person. Despite this massive state debt, PPIC states that California "will continue to have a 'structural deficit' with spending far exceeding revenues" for years to come.

The only way to avoid this expensive, time-consuming and wasteful state of affairs is to restore sanity to the state budget process. That can be done by eliminating the mandate that a supermajority of 66% of the legislate be required to pass a state budget. Then comes the hard part. According to PPIC

Fiscal responsibility requires getting future spending in line with future revenues and making touch choices about limiting spending as well as seeking additional revenue sources. Reducing expenditures could be achieved through limiting cost-of-living adjustments on current programs, rolling back recent expansions, and reduing benefit levels. Additional revenue sources might include increased use of user fees, limiting tax credits, broadening sales tax coverage, and raising tax rates.

That's more pain in the future. But the fiscal irresponsibility caused by Californians' desire for government services and their unwillingness to properly finance those services needs to come to an end. Tough choices need to be made, taxes will increase and government services will have curtailed. Action needs to be taken now or the annual budget farce will some day have tragic consequences.

Capitano Tedeschi

30