ANALYSIS
Power Failure in California
Profiting from 'Crisis' in the Golden State.

By R. McFadden

LOS ANGELES -- July 30, 2003 -- A closed-door strategy meeting among 11 Democratic Assemblymembers on July 21 that was mistakenly broadcast via "squawkbox" throughout the Capitol in Sacramento, revealed that some legislators proposed forcing a "budget crisis" this summer to improve Governor Joe "Gray" Davis' chances in the recall election scheduled for this October 7.

"The folks that are heading up the anti-recall effort think if you don't have a budget, it helps Democrats in the recall effort," said Fabian Nuñez (D-Los Angeles). Primarily, however, creating a "budget crisis" by temporarily laying off state workers and cutting back state services would show the people that the "the system is broken" and that everyone must allow whatever tax increases the politicians see fit.

Democrats and Republicans in the Senate and Assembly appear to have agreed to slap a band-aid on the budget situation for another year, when they'll duke it out once more. A nifty $5 billion in tax revenue from the increase of the state's car tax will be enough for the state -- for this year, that is. This "compromise budget" of bonds and loans and "complex tax schemes," really only delays a true resolution of the issue (again) till summer 2004.

But this special caucus caught on tape, the Democratic Study Group, bills itself as more "progressive" than your average Dem, and considered making the "crisis" on their own terms. Assemblymember Jackie Goldberg (D-Los Angeles) floated the idea of pushing for a "crisis" to be sooner so that the politicians' beloved tax & fee increases would take effect in a perfectly odd-numbered year like 2003, when they don't have to run for re-election and working people can't really talk back.

Goldberg summed up the possible strategy, saying that, "Some of us are thinking that maybe people should see the pain up close and personal, right now."

But, much like the "electricity crisis" of 2001, or any of these interchangeable "dire" situations the newsman tells us about with concern, the current "budget crisis" is an invention of politicians and spinmeisters to obscure the fact that the government is searching for the best way to break the news that they want/need to start taking more money from independent working people. If the politicians are not allowed to raise the state sales tax, and gouge Californians to pay even more in work tax, there's gonna be trouble -- there's going to be "crisis."

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J'accuse

A wise older fellow at a protest by the Westwood Federal Building in 2000 once said that he saw American society as composed of three distinct sorts of men: "There's makers, there's takers --- and there's fakers."

The State of California in 2003 is largely bankrupt because of the prodigious expenditures advocated by the most organized grouping of "fakers" in the country, the Democratic Party.

Democrats have held sway over virtually all state institutions in California for five years, and the incredible budget deficit and simultaneous removal from office of Gov. Gray Davis through "recall" petition together make California 2003 an obvious, indisputable demonstration of the failure of Democrats in the state.

With foolish overreliance on capital gains revenue raked in by the state throughout the Roaring '90s, Gov. Davis & Co. spent all kinds of money, expanding the state machine here and there to reward powerful donors. In the 1998-2001 period, the Democratic-controlled government of California increased total spending by 35% and added 25,000 new state employees.

The Democrats, and Governor Davis in particular, also bear responsibility in squandering the state's money to benefit a key donor to Gray Davis, electricity giant Southern California Edison. The state's purchase of unprofitable assets and long-term power contracts, and its rush to commission new fossil-fuel burning power plants, exhausted a treasury that only months before had been bursting with "surplus revenue."

An October 2001 decision by the Davis-appointed Public Utilities Committee was the clincher though, as the state relented and allowed Edison to crank up the electrical tab on consumers and businesses. Governor Gray Davis' "solution" to the "electricity crisis," transferring billions in public money to Edison, is only the most insulting example of a party of politicians-for-sale.

The Democratic Party's "progressive" agenda must face reality, that being this: They have created a huge, expensive, expansive state machine, a Leviathan who now stands on a dangerous precipice, with no balance and a threatening abyss in sight below. The Governor, who rode gaily on the shoulders of this beast formerly, debased the giant's powers to pay off greedy political "investors," pulling away whatever pillow of reserve that might have cushioned the monumental fall of this bloated beast. At a moment like today, when the politicians want working people's money more than ever, but fewer people even have employment, the beast is bound to fall and crush those that shamelessly depend on him.

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Balancing the Beast

"There are fewer working, and each is earning less, true. But if we increase their work-tax - up-size their contribution to the State Unity Fund, we might say - oh, well, then we could balance the beast. Californians just need to bear down a bit, and we'll have the beast bear down upon them in equal measure."

Democratic legislators now chit-chat and breezily calculate the "revenue" the state will enjoy with increased tobacco tax, higher vehicle license fees (among other fees), increased sales tax, and of course, further personal work tax.

Only three years ago, the state enjoyed a record budget surplus. Where did the money go? Could it be that the Democratic politicians who created this quagmire in the high-rolling dot-com years by recklessly spending EVERYONE's MONEY are now trying to throw the burden of their errors on working people, just to avoid cutbacks in their inflated pet programs that have ballooned in size in the last five years?

In May 2000, at the apex of the Democratic spending frenzy, the Governor of the shining silver-GRAY poof found himself drowning in $12.3 billion in "unexpected" cash (the famous, elusive "budget surplus"). Davis immediately poured $4 billion into funding of government education and "free" healthcare ("The faker transferring the wealth from the makers to the takers.") In total since 1998, the Democrats upped education spending by 30% and increased the Medi-Cal "Healthy Families" (Familias Saludables) Program to provide health insurance to 1,000,000 children.

It is apparent that the government youth/adult education system expanded and that billions in money from "makers" was transferred into the consolidating hospital system. But were they the only ones who got all the goodies, who received the political payoffs, from this massive waste of the people's hard-earned money?

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Profiting from "Crisis"

Southern California Edison, heroically rescued by the Governor in 2001, may be the donor who picked up the greatest return on its investment in Joe Davis, Politician.

The electricity pricing problem that Edison faced in California in 2000-01 was unique in the country. It arose because of a 1996 law passed by the state legislature (successfully promoted by lobbyists of Edison), that allowed the company to sell its power plants for billions in profits. SoCal Edison would only be responsible for delivering the electricity to consumers, and would purchase the power from the same plants they had recently sold.

All went well until sometime in 2000 when energy prices skyrocketed. Plant owners short on available power during hours of peak usage (early morning & early evening) began marking up the prices that Edison paid at these critical times. SoCal Edison had been squirreling away billions in profits to its parent conglomerate, Edison International, but these rising costs began cutting severely into its profit margin, until by the end of 2000, the company was really seeing red in the free market of "deregulated electricity." Executives soon realized they needed the help of their "friends" in Sacramento to correct this unforecasted pricing pitfall.

Southern California Edison launched a public relations and political war to get Californians to pay for the company's own business errors with their declaration in December 2000 of a "statewide power emergency." Edison paid for messages on TV and radio in which the CEO himself took a moment to alert the public to the "crisis" in the electricity industry in California, and called for immediate legislation to stop the hemorraging of greenbacks plaguing SoCal Edison.

Edison also warned that, at any time when it would be too expensive to buy electricity from the power plants owned by mean ol' Texas companies, there would be temporary "rolling blackouts." "But do not be alarmed and know that when you experience a rolling blackout, you're saving us money." It was Christmastime, electricity was suddenly an issue, a grave concern. California looked to the Governor to solve a problem of such statewide proportions.

The Governor picked up his marching orders from Edison and hastily began to work to deliver as much taxpayer money to the stumbling giant as possible. Davis first depleted the entire budget surplus garnered during the epoch of blissful dot-com delusions -- paying off SoCal Edison's debts ("Loans") and having the state (EVERYBODY'S MONEY) sign long-term electricity purchasing contracts so Edison would no longer be losing the money. The unprofitable venture of electricity production in California was now everybody's business.

For months, Davis pushed for state legislation to directly transfer money ("bail out") from the state to his big political donor. By August 2001, it was clear that, because of Republican and some Democratic opposition, the bail out was not going to happen through democratic means.

But Edison's measly $350,000 investment in Gov. Davis finally paid off in October 2001 (while attention was diverted?), when Davis-appointed Public Utilities Commission (PUC) chairman Loretta Lynch "settled" a lawsuit filed by Edison against the state, and agreed to allow Edison to raise electricity rates and reap over $3.3 billion in additional revenue from consumers. The crisis was ended.

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The 'Unswerving Drive'

After all this, Gov. Davis ran for re-election in 2002 with the entire Democratic Party machine at his service. Davis was "unswerving" in his quest for re-election in 2002, and collected donors' money with ease. The Governor's flawless hair puff, shimmering smile, and toothy style seemed to be enough to pull off this win.

The campaign moved quickly to knock out of the race Richard Riordan, the ex-mayor of Los Angeles. Riordan was considering donning Republican garb in a run for the Governorship, and had the muted support of Team Bush back in Washington, DC.

Dick Riordan had gained acclaim in the mid-1990s as the man who "saved LA" from the morass that resulted from Mayor Tom Bradley's twenty year reign over the city.

The Davis campaign ran of torrent of ads which questioned whether Riordan, a fellow West LA pro-abortion limousine liberal, was really as pro-abort as he claimed to be now. With scary music in the background, the ads cited quotes from ten years back in which the candidate said abortion was murder.

With so much money thrown against Riordan, a man who hadn't even secured the Republican nomination, big time rich dork Bill Simon was able to step in and pick up a victory by default in the primary.

The big winner in this primary, however, was Democrat Gray Davis, who had now cherry-picked the inexperienced, horribly uncharismatic William Simon to be his opposition in the general election.

Simon appeared to sit out the campaign for months after the primary win, before being thrust into headlines when a company he owned was sued for what journalists described as "Enronesque" abuses. A judge threw out the suit as frivolous, but the Simon campaign moved quickly to entangle itself in controversy yet again when, in response to a questionnaire from the Log Cabin Republicans, Simon voiced support for homosexual "domestic partnerships" and joined in celebrating Gay Day 2003. With cries of betrayal from traditional values groups, Simon went on AM talk radio in Los Angeles and claimed he had never seen the questionnaire and the views expressed on it were not his own.

While Bill Simon wasted his breath defending his "strong stand for family values," the Governor, Joe Davis, made himself look busy. Throughout the summer, Davis signed "important bills" and took advantage of the 2002 American social climate to defend people against terrorists, securing major bridges against threats based on "credible intelligence," and grabbing headlines with calculated press conferences in which the campaigning Governor assured Californians that he was still there, night and day, defending everyone against "evildoers."

After the state increased taxes by $2.4 billion in 2002, Davis topped off his campaign by announcing a projected budget shortfall of "only" $12 billion. With this final assurance that the state wasn't doing as badly as the Republicans cried, and that Governor Fundraiser had this whole "budget situation" under control, the election was his. And it wasn't even close. Davis sailed to victory over pathetic Bill "Clark Kent" Simon, a candidate who never was able to find that special telephone booth and burst out like a real Superman against the Davis Money Machine.

A few days after re-election, Davis admitted that, after further review, it was discovered that the state was actually $35 billion over budget. But, no matter. The election was done.

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Conclusion

"Gray" Davis, Governor of California, once thought a great talent in Democratic Party circles, has proven to be just the greatest faker of them all. Primarily because of his extraordinary aptitude in the science of "raking dough" into his campaign coffers, Joseph Davis, Viet Nam veteran, managed to get himself elected Governor of California in 1998, and re-elected in 2002.

But less than a year later, California voters, with the financial backing of Republican politician Darrell Issa, have amassed in calling for a "recall" of the Governor, meaning Joe "Gray" Davis, will have to run for re-election again. Will this unfortunate Joe from West Los Angeles, Calif., succeed in reclaiming the top office in the state for a third time? For the beast's sake, one can hope.

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An Aside :
The Budget Accountability Act

With the "impasse" on the budget, some Dems are proposing lowering the minimum necessary agreement for passing the annual budget from a two-thirds majority to 55%. This is certainly a foolish and imprudent proposition.

In the world of politics, where compromise is a virtue, not a "step backwards" like so many zealous pro-tax activists cry, it is reasonable that a threshold to hold upon of two men in support to one opposed, is a just proportion when determining how to spend money that comes from ALL.

This gigantic quantity of dinero known as the "State Budget" is reaped from everyone and is EVERYONE's money. Everyone's working taxes, licenses, fees, fines, citations, court costs -- a grand collection of revenue that belongs in part to every person in the state who has had to contribute for state services. This vast chunk of change it is that our Assemblymembers every year vote upon, and allot to their favored state enterprises. Absolute unanimity in the decision would be impossible, but it is of utmost importance that there be at least general consensus in such an enormous matter.

If you lower the bar, and do not require a wider level of consent when spending the state's revenue (EVERYONE'S money), you leave yourself open for a tyrannical bare majority to pass poorly conceived budgets opposed by a large minority that will harm and unfairly burden the people.

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