The last big thing was green tech – from wave-power generators to the smart grid. Hyped in the bipartisan stimulus bill, it promised gobs of jobs, billions in revenues, and untold riches. Private investors plowed in billions too. It ended up in a massive pileup of capital destruction. Fatalities were everywhere.
Entries in California Daydreaming (55)
Contributed by Chriss Street: The Eagles got it right with Hotel California: “You can check out any time you like, but you can never leave!” The San Jose City Council, facing huge budget deficits, tried to terminate life-time pension benefits for Council members. Turns out, ending wildly expensive benefits may be wildly more expensive than staying in the plan.
Contributed by Chriss Street: US Bankruptcy Judge Christopher Klein ruled in the Stockton, CA, municipal bankruptcy case that public employee pension obligations are nothing more than a “garden variety creditor.” As Barrack Obama, after winning the Presidency in 2008, had put it: “At this defining moment, change has come to America.”
That state and local government pension funds are going broke isn’t a new problem. That it’s much worse than reported by those pension funds isn’t a new problem either. Last June, Moody’s determined that the already dizzying unfunded pension liabilities were actually three times higher than reported. To top it off, trustees are blowing a bunch of retiree money on an exotic boondoggle.
Contributed by Chriss Street. State tax collection beat Governor Brown’s Budget by $4.3 billion, or 39.1%, last month—due to two one-time events that took place by December. But in what should be very disturbing to giddy state politicians and lobbyists who are cranking up for a new spending spree, January sales taxes plunged by $582.7 million, or 27%.
The California Division of Occupational Safety & Health just slammed Chevron with massive, record-breaking penalties related to the refinery in Richmond—the one that ended up in a fireball last August and caused 15,000 people to seek medical treatment. Purpose: to teach the mega-company an excruciatingly painful lesson. Alas....
Contributed by Chriss Street. With California running new deficits even after raising income taxes to the highest in the nation, homeowners should be prepared for politicians to try to overturn Proposition 13 that for 35 years has limited property tax rate increases.
Contributed by Chriss Street. State Controller John Chiang announced that revenue for November fell $806.8 million, or 10.8%, below budget. Democrats thought they could hammer “the rich” by convincing voters to pass Proposition 30 to create the highest state income tax in the nation. But it appears high-income earners have “voted-with-their-feet”, resulting in a $1 billion shortfall in taxes, and the beginning of a new financial crisis.
Contributed by Chriss Street. When President Obama met with the new President of Mexico, Enrique Pena Nieto, the press focused on the Administration's talking points on issues ranging from energy to climate change. But the Mexican economy is outperforming the U.S., and the real immigration concern is Americans illegally moving to Mexico.
Rarely has a city council received so much worldwide attention as San Francisco’s Board of Supervisors. Yesterday, accompanied by booing and heckling and shouts of approval, they voted 6 to 5 to ban public nudity. A close decision, after months of hot debate. And protests, when it wasn’t too cold, by naked people outside City Hall. “Ban” in the San Francisco sense.
Career Education, when it reported its quarterly results, shed light on an industry that had ruthlessly taken advantage of the American way of funding higher education, and that had preyed on gullible prospective students who were trying to better their lives. Then it handed the tab to the taxpayer. A perfect scam. Now the industry is in a vise between government crack-downs and reluctant students.
Contributed by Chriss Street. Support for Proposition 30, the income and sales tax increase touted by Gov. Brown, has fallen below 50%. Now public employees’ unions are spending fortunes to get voters to rescue their lifestyles. Meanwhile, state politicians have increased deficit spending this year by more than the $6 billion Prop 30 might bring in—and Gov. Brown is threatening with a doomsday scenario if it fails.
Contributed by Chriss Street. President Barack Obama has not had to campaign in California; he is leading by 15 points. But what if all 55 of California’s Electoral College votes were awarded to whoever wins the national popular vote? That almost happened as Governor Jerry Brown signed the National Popular Vote bill. Can you imagine the shock if the “Left Coast” were responsible for electing Mitt Romney President?
Despite the current hype about the recovery in California, the manufacturing index suddenly collapsed. And with the star of California, Venture Capital, facing a “dismal fundraising climate,” funding for startups might soon dry up.
Contributed by Chriss Street. Atwater, California, a town with 28,000 residents, just admitted it did not have the cash flow to make a $2 million municipal bond payment due in November and may have to file for Chapter 9 municipal bankruptcy. The 4th in a soon-to-be tidal wave of local government failures.
Contributed by Chriss Street. California State Controller John Chiang announced that the cities of Milpitas and Morgan Hill illegally converted hundreds of millions of dollars of real estate, cash, and investments that were required to be turned over to the State of California after legislation was passed that terminated all municipal redevelopment agencies. While a home run for the state, Chiang’s charges are a financial nightmare for cities and counties.
Radioactive Contamination On San Francisco’s Treasure Island: A Tale Of US Government Obfuscation & Willful Ignorance
On Treasure Island, a former naval base in the San Francisco Bay, there's a spot the Navy calls “USS Pandemonium Site I,” occupied by multi-family housing units. Potential contaminants: Radium-226 and cesium-137. Contamination, according to the Navy, is “unlikely.” But the Health Department finds 93 spots where radiation is up to 2.7 times the normal exposure level. In one area, it's 4,380% above the annual dose limit.
Contributed by Chriss Street. Rural Northern California has always been the great bastion where conservative Republicans go to escape the Democrats’ nanny state. Political discourse is focused on family values, support of agriculture, gun rights and a visceral loathing of crony capitalists like Al Gore. That’s why the shenanigans of Shasta County Supervisor Glen Hawes are about to give the Republican Party such a black eye.
Contributed by Chriss Street. During the “Great Recession,” the California private sector was forced to slash employment and spending, but the public sector made only modest cutbacks. Much of this state and local spending was funded by selling municipal bonds to elderly investor who were told the “muni” market was safe because the default rate was very low. But a Federal Reserve study debunks that myth and accuses the credit ratings agencies of “luring investors” into buying these bonds.
Contributed by Chriss Street. According to a SEC regulatory filing, Berkshire Hathaway Inc. managed by world famous investor Warren Buffett, dumped half of its $16.5 billion investment in the municipal bond market. The Wall Street Journal described the huge secretive sale of munis by such a dominant investor as a "red flag." The quick sale - and willingness to take a big loss - just before negative news was disclosed is highly suspicious.