Posts Tagged ‘bankruptcy’
Tuesday, January 19th, 2021
In a follow-up to last week’s story about the NRA declaring bankruptcy and reincorporating in Texas, John Richardson of No Lawyers—Only Guns and Money sent me a link to this piece, in which bankruptcy lawyer Adam Levitin analyses the gambit, and brings up several potential pitfalls in carrying it off.
This is going to be one heck of an interesting case. There are already so many glaring issues (or should I say “targets”?): venue, good faith filing, disclosures, the automatic stay the trustee question, fiduciary duties to pursue claims against insiders, executory employment contracts, the fate of Wayne LaPierre, and the generally overlooked governance provisions of the Bankruptcy Code. I’ll take quick aim at these all below.
Venue. Right off the bat, there’s a question of what the heck the NRA is doing filing in Dallas. The answer is that the NRA is engaged in one of the most blatant forum shopping maneuvers I’ve seen. The NRA is a New York non-profit corporation with its headquarters in Virginia. The NRA is claiming Dallas venue on the basis of an affiliate’s previous filing in the district. In other words, venue is only proper for the NRA if the venue is proper for the affiliate.Therefore, the propriety of the affiliate’s venue is what matters.
The affiliate is a sole-member Texas LLC called Sea Girt LLC that was only created 52 days ago, on November 24, 2020. Sea Girt’s bankruptcy petition indicates that it has less than 49 employees, under $50,000 in assets and between $50,000 and $100,000 in liabilities. Note that the petition form does not have an option of listing “zero” employees. Sea Girt’s petition does not include a completed Form 204, which would list is largest non-insider unsecured creditors. But I’m going dollars to donuts that Sea Girt does not have any outside creditors other than perhaps its law firm, and that it does not actually carry on any business.
Now the bankruptcy venue statute prescribes the appropriate venue as being the district in which the “domicile…of the entity that is the subject of such case [has] been located for one hundred and eighty days immediately preceding such commencement, or for a longer portion of such one-hundred-and-eighty-day period than the domicile … of such person were located in any other district.” So even though Sea Girt LLC has not been in existence for 180 days, the statute still provides for a Texas venue. But the venue here is so obviously contrived and the NRA has no particular connect to Texas, so I expect there to be an attempt to have the case transferred to SDNY.
Good faith filing. A second immediate issue seems to be whether the NRA (and Sea Girt) filed in good faith. Every circuit including the 5th) has a good faith filing doctrine. The doctrine in a nutshell is that if a bankruptcy case does not have a “valid reorganizational purpose,” it should be dismissed “for cause.” Attempting to evade liability in litigation is not a “valid reorganizational purpose,” and the NRA’s press release seemed to me a version of the press release in SGL Carbon, the leading 3rd Circuit good faith filing doctrine case. In SGL Carbon, the debtor foolishly said that it was filing for bankruptcy just to stiff a competitor that had an antitrust suit against it and assured its other creditors that they would be paid in full. That sounds an awful lot like “dumping New York” while saying that all valid claims will be paid in full. (My students might recall me cautioning them that a debtor’s attorneys should insist that they get to sign off on all press releases and communications related to the bankruptcy for just this reason…) Now, the NRA isn’t looking to avoid paying NY. Instead, it is looking to escape NY’s jurisdiction. But that seems a distinction without a difference. It isn’t hoping to use bankruptcy to reorganize its finances, but to get out of the lion cage.
Snip.
Disclosure. Filing for bankruptcy is a bit like entering a fishbowl. Everything is on display. First, creditors are entitled to conduct an “examination of the debtor” under oath at the initial meeting of the creditors (the “341 meeting.”) Additionally, an individual creditor may under Bankruptcy Rule 2004 undertake an examination of the debtor. (And that includes creditors who are creditors by virtue of by claims–that could include gun-control groups among others.) There’s certainly room there for questions that get to the reasons for filing, namely whether there was any financial reason for filing.
Automatic Stay? Another issue is whether the bankruptcy filing will in any way stop the NY AG’s action to dissolve the NRA. At the very least, the automatic stay should not. There is an exception in section 362(b)(4) from the stay for regulatory actions that are not seeking money from the debtor, and the NYAG suit seems squarely in that exception. It’s possible that the NRA will seek a supplementary injunction from the bankruptcy court, however.
Trustee or Conversion. While I would expect a venue motion or a motion to dismiss the case, I would also expect a motion for appointment of a trustee or conversion to chapter 7 (which would trigger a trustee). The NRA seems like a classic case for this—there are credible allegations of serious financial impropriety involving the current management (namely executive VP Wayne LaPierre). That both fits into the “fraud, dishonesty, incompetence, or gross mismanagement” route for a trustee’s appointment, or into the “best interests of the creditors” route. Two key things if a trustee is appointed. First, the trustee will hold the NRA’s attorney-client privilege, not Mr. LaPierre. Mr. LaPierre will not be able to claim privilege for any conversations he had with the NRA’s attorneys. Second, a trustee has every incentive to pursue all of the NRA bankruptcy estate’s claims, including against Mr. LaPierre. That brings us to the next topic, the debtor in possession’s fiduciary duties.
Fiduciary duties. The NRA as debtor in possession is a fiduciary for all of its creditors. That means, among other things, that if the NRA has potential claims against Mr. LaPierre or others, including fraudulent transfer claims, it must pursue them. Mr. LaPierre as EVP cannot decide whether to litigate against himself. If he’s too conflicted, that will mean that the court will either have to appoint a trustee or let a creditors’ committee pursue the claims.
Snip.
The fate of Wayne LaPierre. Putting aside Mr. LaPierre’s employment contract, he’s got another problem. The NY AG suit isn’t just against the NRA. It’s also against Mr. LaPierre and some of his lieutenants. LaPierre and his lieutenants have not filed for bankruptcy, and even if the NRA is able to convert to a Texas corporation, the NYAG’s suit against Mr. LaPierre can still proceed. The NYAG is seeking restitution from LaPierre as well as a bar from his ever soliciting funds for a nonprofit in NY (not just for a NY nonprofit). Moreover, if NY is successful, it might well create problems for LaPierre serving as an officer of a nonprofit in another state. All of which is to say that the NRA fleeing to Texas doesn’t address Mr. LaPierre’s problems.
Once again, LaPierre is the millstone dragging down the NRA. The best outcome would be for the NRA to successfully reincorporate in Texas…but without LaPierre and his cronies bleeding the organization dry.
Tags:Adam Levitin, bankruptcy, fraud, Guns, New York, NRA, Texas, Wayne LaPierre
Posted in Guns, Texas | 2 Comments »
Saturday, January 16th, 2021
This news broke Friday night:
The National Rifle Association announced Friday that it has filed for bankruptcy and will move out of New York and restructure the organization as a nonprofit in Texas.
The nation’s leading gun rights advocacy group said that the move to Texas will enable the group to “exit what it believes is a corrupt political and regulatory environment in New York.”
“By exiting New York, where the NRA has been incorporated for approximately 150 years, the NRA abandons a state where elected officials have weaponized the legal and regulatory powers they wield to penalize the Association and its members for purely political purposes,” the NRA said in a statement.
New York Attorney General Letitia James filed a lawsuit seeking to dissolve the NRA in August, alleging that senior leaders of the group misused tens of millions of dollars, diverting the funds for personal use and other illegal purposes.
The NRA denied the allegations and filed a lawsuit of its own against James, accusing her of violating the group’s free speech rights and requesting that her investigation be blocked. The move to Texas and restructuring of the group could prevent the New York attorney general from seeking the dissolution of the group.
The group filed Chapter 11 petitions in U.S. Bankruptcy Court in Dallas, listing assets and liabilities of $100 million to $500 million.
There are a lot of good reasons for the NRA to move from New York to Texas apart from the lawsuit (though that’s a pretty big one), but it won’t be restored to a fully functioning organization until Executive Vice President Wayne LaPierre is gone.
The NRA has been in crisis for over a year because LaPierre has engaged in what appears to be systematic looting through contracts to media company Ackerman McQueen and other entities that seem very, very chummy with LaPierre:
This 100-page document…contains unprecedented disclosures of where the money categorized as expenditures for “fund-raising” and “public relations” actually went. For example, it was revealed for the first time the Mercury Group, an Ack-Mac subsidiary run by LaPierre’s closest confidant, Tony Makris, received $5.8 million from NRA in that year; another Makris-run company, Under Wild Skies, got $2.6 million. Meanwhile, NRA has nearly exhausted its $25 million credit line (secured by a mortgage on its headquarters building), liquidated $2 million from an investment fund, borrowed close to $4 million from its officers’ life insurance policy and extracted about $5 million in office rent and overhead from the NRA Foundation.
This, in the same year that NRA’s 10 highest-paid executives received compensation aggregating over $8 million.
Unfortunately, the NRA is structured so that LaPierre has more institutional power than the NRA’s elected President, something Oliver North found out. The NRA needs LaPierre out and a forensic audit to uncover past abuses before gun owners give it another dime. I’ve let my membership lapse because of the crooked self-dealing on display by LaPierre and his cronies, and I suspect there are millions of other gun owners like me. Instead I joined Gun Owners of America, because I know my membership fees won’t be going to line Wayne’s pockets.
No Lawyers – Only Guns and Money has been following every twist and turn of the NRA/LaPierre problems for years, so go over there and start reading if you want all the deep background on the situation.
Tags:Ackerman McQueen, bankruptcy, Guns, Letitia James, New York, NRA, Texas, Tony Makris, Wayne LaPierre
Posted in Guns, Texas | 8 Comments »
Friday, June 19th, 2020
Welcome to another Friday LinkSwarm! We start off with two pieces I meant to include in this piece, but sorted the links to the wrong topic…
You know who else doesn’t want to defund police? George Floyd’s brother.
Indeed, black people oppose defunding the police by a 20 point margin.
A map of all the places the Antifa/#BlackLivesMatter riots damaged in Minneapolis. “On Wednesday, the city reported that no fewer than 700 buildings were damaged, burned, or destroyed in the riots. It also released a map showing just how widespread the looting, vandalism, and arson spread.” (Hat tip: Stephen Green at Instapundit.)
So what did it take to turn spineless lefty Portland Mayor Ted Wheeler into a law-and-order guy? Trying to create an “autonomous zone” on his own street. “By 1 a.m., elaborate barricades had been erected. But in the early hours of Thursday morning, police moved into the area, declaring it an unlawful assembly. Portland Police estimated about 50 people were in the area when they dispersed the autonomous zone.”
Trump is winning the Antifa War:
It’s certainly frustrating to watch a pack of reeking leftist scumbags declare a portion of an American city an “autonomous zone” – what is it with Democrats and their secession fetish? – but do not get frustrated because Donald Trump has not sent the 101st Airborne in to powerwash the human grunge from Seattle’s feces-bedecked streets.
That’s what the Democrats want. And Trump – a better strategic thinker than all the media geniuses, hack politicians, and Afghan War-losing generals who cry about him – is not only not going to give them the victory they crave. He’s going to jam their cheesy plan down their throats.
The libs’ plan to win in November corresponds to Trump’s plan to crush them yet again. Skeptical? Consider this. In the five years since he rode down that escalator bringin’ hell with him, how many times have they come at Trump and won? Zero. He’s spent half a decade on the edge of doom and he’s still here. Why would you think that the walls are suddenly closing in now? You shouldn’t.
Let’s understand the strategic scenario. The long-term strategic objective of the leftists is to turn the United States into Venezuela, and they want to be Maduro. The major strategic objective that will put them in position to do so is victory in the November elections. Everything happening right now is part of their overall strategy to achieve that objective. But what kind of operation are they using to achieve that objective? There are two types of operations relevant here – kinetic and information. A kinetic operation is actual warfare. It’s violence designed to defeat the enemy and cause his surrender by either physically destroying him or occupying his territory and compelling surrender. An information operation is designed to affect the perceptions, and thereby the actions, of the target. Kinetic ops tend to do something to the enemy; and info op tends to get the target to do something to himself.
Elections are usually information operations. They attempt to build a narrative and play on perceptions and cause the target to take the action that will lead to victory. That is, get the target (the electorate) vote for the candidate the info operator wants elected.
Okay, so what is the 2020 elections, with the rioting, vandalism, violence and occupations?
This still an information operation, not a kinetic one.
They want to convince us we are powerless, that everyone else supports their commie agenda, that we cannot win. Their tactics are designed to create that impression and crush our morale. These include the 24/7 media hype, the outright media lies, the movie stars with their dumb PSAs, the staged statue attacks, the corporate solidarity proclamations, the social media cancellations, and the craven kneeling by people who are supposed to stand up for us. But another tactic, familiar to any student of insurgencies, is to provoke an overreaction by those in power in order to undermine its moral authority. They want is to make us (including the president) think this is a kinetic operation, and get our side to make fundamental strategic errors by failing to recognize the true nature of the threat. They hope that such a mismatch between perception and reality will then lead to gravely damaging blunders. One of those would be Trump succumbing to his legit frustration and sending in a bunch of federal troops to crack skulls in Seattle.
Defining this insurgency as a kinetic operation supports the leftists’ information operation goal of making Americans perceive the situation as out of control, of there being chaos, and of making the election of Grandpa Badfinger being the only thing that will resolve the situation. But there is no kinetic situation to resolve – at least none that is strategically significant in a kinetic sense. Despite the hype, the protests may have involved a peak of 2 million people across the country – out of 330 million. That’s nothing kinetically; it’s significant informationally because it is pushed by so many cultural influencers. The scurvy scumbags of Antifa hold essentially no ground except the turf they are physically standing on at the moment, and that is minuscule. Even the hilarious Road Warrior Republic of Seattle is not even a rounding error of a rounding error in terms of US territory. It’s significant only in the context of an information operation.
Many of us cons are furious that Trump is “doing nothing.” This is the wrong thing to think. Trump is only doing nothing if this is a kinetic operation; because this is an information operation, not going kinetic (sending in the troops) is doing something. And in fact, Trump is employing the law enforcement component of his kinetic assets by having the feds wait and arrest Antifa types after the protests end, and hitting them with hardcore federal rioting-related charges. Previously, they would get ticketed and released; now, looking at a five-to-ten stretch, the lawyers their daddies hired to get these sunshine anarchists out of their beefs are going to be advising them to roll over so they can start back up at Cornell in September and not at Leavenworth.
(Hat tip: Instapundit.)
Who benefits from American disorder:
Who benefits then from our national nervous breakdown that never seems to end?
It is the globalist elites who still govern most of our society today, despite the invasion of Donald Trump.
And those elites wish to continue that rule through what they fervently hope will come as the outcome of these demonstrations—more government control, particularly government control that helps them.
They have seen it done elsewhere with results they might want to emulate, at least until recently.
Call it China Envy.
The Chinese Communist Party has, over the years, found a way to regulate their society to an extraordinary degree via a form of communism that maximizes profits and power for those (party) elites while holding the masses largely at bay.
No wonder our elites are jealous.
People call ours “globalists” but they’re not really global. They’re selectively global, but actually just greedy and power-hungry, like the ChiComs.
Whether planned or not, or partially planned, the current confluence of catastrophes has offered them an opportunity to advance their cause against their natural adversary, Mr. Trump.
In macro, that is the landscape of election 2020—the globalist elites represented, for the moment anyway, by Joe Biden versus the American people, represented by Donald Trump.
Many of those American people, heavily influenced by the media and repelled by the president’s rhetoric, do not realize that he is representing them, but he is. Ignorant, often willfully, they oppose him tooth and nail.
An equal number, or possibly larger, as the one million plus requesting tickets to his Tulsa rally indicates, supports Mr. Trump.
We are in the midst of a Battle Royale for the soul of our nation, whether it remains more or less the democratic republic the Founders envisioned or becomes an Americanized version of what has been evolved by the CCP.
If the latter, ironically, then such groups as Black Lives Matter (BLM) and Antifa will be kicked to the curb once victory has been achieved and secured.
(Hat tip: Ed Driscoll at Instapundit.)
Business Class vs. First Class:
It’s always the same thing: Our newspapers are full of intense interest in Harvard’s admissions standards but have very little to say about New York City’s dropout rate. People can’t help being fascinated with themselves and their peers. If you want to know what is on the minds of the leaders of the American ruling class, it’s no secret. They’ll tell you, if you ask — and if you don’t.
George Floyd is still dead. Jacob Frey is still mayor of Minneapolis. Medaria Arradondo is still the chief of police. More than a third of black students will drop out of high school in Milwaukee. But Forbes has announced a change in its in-house stylebook and will henceforth honor the woke convention of uppercase Black vs. lowercase white. And George Floyd is still dead. Jacob Frey is still mayor of Minneapolis. Medaria Arradondo is still the chief of police.
Oh, but they got James Bennet, the opinion editor at the New York Times. And surely that is something? It is, indeed, a very useful illustration of the E-Class vs. S-Class divide. Bennet was fired after purportedly endangering the lives of black Times staffers — a charge no mentally normal adult actually takes seriously — by publishing a guest column about the riots and the Insurrection Act by Senator Tom Cotton. The campaign to end Bennet did not come from America’s poor black communities as the workers of the world looked up, stunned, from page A24 of the New York Times — the venom came straight and undiluted from 620 Eighth Avenue, New York, N.Y., with Bennet’s underlings and juniors more or less putting him on an ice floe and pushing him out to sea.
Bennet was pushed out on behalf of marginalized black Americans, which necessitated that Bennet immediately be replaced by . . . a well-off white woman who went to Georgetown and Columbia and won a Pulitzer Prize for writing about that great loathsome theater of American middle-class anxiety: restaurants. (“The real price of inexpensive menu items,” the Pulitzer people summarized.) Well-off white women from elite colleges run the diversity-and-sensitivity racket like the 17th-century Dutch ran the tulip racket, like the De Beers cartel used to run diamonds. Big Caitlyn is getting paid. Affluent white women are the main E-Class beneficiaries of the current headhunting project to clear a little room at the top, just as they have historically been the primary beneficiaries of affirmative-action programs, contracting set-asides, and other programs to help out the poor disenfranchised Georgetown alumni out there in the cold and dark.
The political logic of President Donald Trump’s executive order on policing:
- Tie his opponents to the worst excesses of anti-police activism in major cities, all of which are controlled by Democrats.
- Ensure that Trump’s support for law and order is coupled with sensitivity and practical measures to limit excess force.
- Adopt shared ideas for police reform, make them his own, and leave Democrats backing only more controversial ones.
(Hat tip: Stephen Green at Instpundit.)
“Police, Fire Reportedly Refused to Respond to Crime in Progress in Seattle’s Breakaway CHOP.” “This is where ‘defund the police’ will lead not just in Seattle, but wherever it’s thoughtlessly implemented. Probably not all the way to the segregationist, secessionist CHOP, but to crime-ridden streets into which police and fire are more circumspect about intervening.”
An overdraft of white guilt will result in a Trump landslide in November:
these riots and their associated melodrama might most accurately be called the Nov. 3 riots. It’s the prospect of the election, especially the possibility that President Donald Trump will be reelected, which provides the fuel for the current hysteria.
But Simon is right. A solid majority of voters are disgusted by what they see. There is a large overdraft on the country’s budget of white guilt. Expect a foreclosure on the account Nov. 3. Yes, yes, the situation is fluid and a week, as Harold Wilson once observed, is a long time in politics. But a biopsy of the body politic in mid-June 2020 doesn’t bode well for the old man in the basement or scriptwriters Nancy Pelosi and Chuck Schumer.
The longer this madness continues, the more likely it is that the president will enjoy a victory of historic proportions.
China kills 20 Indian troops in border fighting.
In light of that, India is looking to reduce imports from China.
Another caveat about all those “Oh my God, Wuhan coronavirus cases are spiking in Florida,” etc. stories, take a look at these statistics. Assuming they’re accurate (a big assumption), new cases are going up (not spiking per se), but deaths are going down. It really looks like cases aren’t spiking, we’re just detecting milder and milder cases of it thanks to widespread testing.
Enjoy a list of the latest forbidden thoughtcrimes.
“Vermont School Principal Placed on Leave for Criticism of Black Lives Matter.” Thou Shalt Not Question The Holy Black Lives Matter.
How does burning down a Wendy’s help anyone’s lives?
Instead of #BlackLivesMatters, how about actually defending black lives? “National African American Gun Association (NAAGA) Membership Grows as Members Purchase Ammo in Record Numbers.” Good. (Hat tip: Say Uncle.)
All the statues that #BlackLivesMatter/#Antifa have vandalized in the latest spree. (Hat tip: Director Blue.)
They even came for The Great Emancipator himself, Abraham Lincoln. Well of course they did. He’s a Republican.
Texas Governor Greg Abbott caves to big city mayors on mandatory masks.
Good news in a sea of bad: Austin Police Chief Brian Manley is not getting the axe. Finally, a scalp the radical left didn’t take.
Antifa members arrested in Austin for looting. “Lisa Hogan, Samuel Miller, and Skye Elder were arrested last week and charged with various state jail felonies after they smashed into a boarded-up Target, destroyed and ripped out surveillance cameras, and looted the store, stealing and damaging over $20,000 in property.” The mugshot:
Exactly the sort of Antifa winners you would expect to loot a Target
Comandante Zero, RIP.
Duck walks into pub, downs pint, fights dog.
“Aunt Jemima to be replaced by edgier and cooler Ant Eefa.”
“New Program Helps People Of Color Adopt A White Liberal To Speak On Their Behalf.”
“Democrats Clarify That Black Lives Will Only Matter Until November.”
“Strong Link Found Between Watching Soccer, Being Incredibly Bored.”
Hungry?
Tags:#BlackLivesMatter, 2020 Election, 2020 Presidential Race, 24 Hour Fitness, antifa, Atlanta, Austin, bankruptcy, black, Brian Manley, China, Chuck-E-Cheese, Communism, coronavirus, Crime, Democrats, dogs, ESPN, explosion, Florida, Foreign Policy, Georgia, Greg Abbott, Guns, India, Kevin D. Williamson, Kurt Schlichter, LinkSwarm, Lisa Hogan, Minneapolis, New Zealand, Nicaragua, Obituary, police, Portland, Roger Simon, Samuel Miller, Skye Elder, soccer, Social Justice Warriors, Vermont, Welfare State, Wendy's
Posted in Austin, Crime, Democrats, Elections, Foreign Policy, Guns, Social Justice Warriors, Welfare State | 1 Comment »
Thursday, May 24th, 2018
Remember Democratic State Rep. Ron Reynolds? The one whose barratry conviction was overturned, only to be retried and convicted again?
Well, he’s finally going to jail:
After being denied a review of his 2015 misdemeanor conviction by the Texas Court of Criminal Appeals, Democratic State Rep. Ron Reynolds (Missouri City) will likely serve a one-year jail sentence for illegal solicitation of legal services.
The sentence stems from a scheme in which chiropractic firms would persuade patients to unwittingly sign contracts rendering Reynolds their legal counsel without either his presence or even a physical examination. He was found guilty of 5 misdemeanor charges in 2015, after which he appealed his conviction to the Court of Criminal Appeals.
The kicker?
Although Reynolds will likely serve jail time, he is not required under Texas law to resign his Texas House seat, as the Texas Election Code only requires resignations in the case of felony convictions. Reynolds won his Democratic primary election in March with over 60% of the vote and faces no Republican opposition in November.
Someone in the state GOP fell down in the recruiting department…
(Also, I missed this: Rep. Reynolds had to file for Chapter 7 bankruptcy in 2016…)
Tags:bankruptcy, Crime, Democrats, Ron Reynolds, Texas
Posted in Crime, Democrats, Texas | No Comments »
Wednesday, February 7th, 2018
If you just emerged from bankruptcy, part of your plan to stay solvent probably doesn’t include “handing out free money,” but that’s precisely what the city of Stockton, California is going to try.
Michael Tubbs, the 26-year-old mayor of Stockton, California, thinks handing out $6,000 a year to low-income residents (with no strings attached) is the way to lift people out of poverty.
“Stockton is absolutely Ground Zero for a lot of the issues we’re facing as a nation,” Tubbs told CBS San Francisco (video below). “Ideally, I would like to serve 100 families for 18 months at $500 a month.”
Stockton is experimenting with a welfare program called “universal basic income,” which gives low-income residents $500 a month, no questions asked. The money is coming from a private grant.
The California city, which went bankrupt in 2012, has recently made strides to become more economically viable, but is still struggling.
Mayor Tubbs, who was endorsed by Barack Obama, took office in January 2017. He is Stockton’s first black mayor, and its youngest-ever at age 26.
You may remember Stockton from such hits as “Hey, let’s give lots of money to a downtown developer for 14 units of affordable housing,” “Even though we went through bankruptcy, we didn’t address our huge underfunded pension liabilities,” and “our mayor was arrested for embezzling from a kids club.” Mayor Tubbs owes his office to the last scandal involving previous mayor Anthony Silva.
“Universal basic income” is the latest repackaged welfare state socialism, and its been tried before in the SIME/DIME “negative income tax” experiments. The results, as anyone not on the left could have predicted, were disasterous: people worked less and families broke up more often.
Those who can’t learn from the mistakes of others are doomed to repeat them. We have plenty of evidence that guaranteed income rewards idleness and discourages work. Combine that with California’s legal cannabis, and you have the Full Subsidy for Potheads to Play Video Games All Day Act. The only question is whether its a sincere (doomed) attempt at implementing a socialist fantasy, or a cynical ploy to payoff off supporters under the guise of “guaranteed income.” Either way, it’s destined for failure, and will help lay the groundwork for Stockton’s next bankruptcy.
Tags:bankruptcy, California, Democrats, Michael Tubbs, socialism, Stockton, welfare, Welfare State
Posted in Democrats, Welfare State | 1 Comment »
Monday, May 22nd, 2017
We’re in the home stretch of hammering out the Texas biannual state budget, which has to be completed by May 29. Until then, enjoy another Texas vs. California roundup:
Stop me if you’ve heard this before: Texas is once again ranked the best state for business, while California is ranked the worst. (Hat tip: Will Franklin’s Twitter feed.)
California’s big-government model eats its young:
In this era of anti-Trump resistance, many progressives see California as a model of enlightenment. The Golden State’s post-2010 recovery has won plaudits in the progressive press from the New York Times’s Paul Krugman, among others. Yet if one looks at the effects of the state’s policies on key Democratic constituencies— millennials, minorities, and the poor—the picture is dismal. A recent United Way study found that close to one-third of state residents can barely pay their bills, largely due to housing costs. When adjusted for these costs, California leads all states—even historically poor Mississippi—in the percentage of its people living in poverty.
California is home to 77 of the country’s 297 most “economically challenged” cities, based on poverty and unemployment levels. The population of these cities totals more than 12 million. In his new book on the nation’s urban crisis, author Richard Florida ranks three California metropolitan areas—Los Angeles, San Francisco, and San Diego— among the five most unequal in the nation. California, with housing prices 230 percent above the national average, is home to many of the nation’s most unaffordable urban areas, including not only the predictably expensive large metros but also smaller cities such as Santa Cruz, Santa Barbara, and San Luis Obispo. Unsurprisingly, the state’s middle class is disappearing the fastest of any state.
California’s young population is particularly challenged. As we spell out in our new report from Chapman University and the California Association of Realtors, California has the third-lowest percentage of people aged 25 to 34 who own their own homes—only New York and Hawaii’s are lower. In San Francisco, Los Angeles, and San Diego, the 25-to-34 homeownership rates range from 19.6 percent to 22.6 percent—40 percent or more below the national average.
California continues to slouch toward socialized medicine. “California’s current system relies in large part on employer-sponsored insurance, which is still the source of health care coverage for tens of millions of people. That coverage would disappear under SB 562. Instead of receiving coverage financed by their employers, working Californians would see a tax increase of well over $10,000 per year for many middle-income families.” (Hat tip: Legal Insurrection.)
“If you live in California, have a job and pay taxes Governor Jerry Brown would like you to know that you’re a freeloader and he’s tired of your complaining.”
“Congratulations, California. You keep electing these same Democrats over and over again. and then you act surprised when they make you one of the most heavily taxed populations in the country. And when you finally raise your voices to protest the out of control taxation and spending, the state party’s titular leader is brazen enough to come straight out and tell you what he really thinks of you.”
Has the Democrats latest gas tax hike created an actual tax revolt in California? (Hat tip: Ace of Spades HQ.)
One lawmaker is the target of a recall petition over the tax hike: “Perceived as the most vulnerable of the legislative Democrats who passed Gov. Jerry Brown’s gas and vehicle tax package by a razor-thin margin, freshman state Sen. Josh Newman, D-Fullerton, faced an intensifying campaign to turn him out of office, potentially depriving his party of the two-thirds majority that allowed them to pass Brown’s infrastructure bill in the first place.”
Vance Ginn’s monthly summary of Texas economic data. Lot’s of data, including the fact that all major Texas cities created jobs in 2016 except Houston, which was down just a smidge.
San Bernardino could go bankrupt again.
Buying a house in Southern California is insane. (Hat tip: Stephen Green at Instapundit.)
California starts selling bonds for the doomed “high speed rail.”
40-60 “youth” flash mob robs passengers on Oakland BART train. The complete absence of descriptions or pictures cues the astute modern American reader in to the ethnic makeup of the mob. (Hat tip: Ace of Spades HQ.)
“Gov. Jerry Brown and state Treasurer John Chiang have a plan to help cover the state’s soaring pension payments: Borrow money at low interest rates and invest it to make a profit. What could go wrong?” I can see it now: “Come on seven! Baby needs a new High Speed Rail!” Also this: “The problem was exacerbated because Brown’s so-called pension “reform” of 2012 failed to significantly rein in retirement costs. Statewide pension debt has increased 36 percent since his changes took effect.” (Hat tip: Pension Tsunami.)
“Riverside utilities dispatcher triples salary to nearly $400,000 with state’s 10th largest overtime payout.” (Hat tip: Pension Tsunami.)
And speaking of California public employees working overtime:
The time cards Oakland city worker Kenny Lau turned in last year paint a stunning, if not improbable, picture of one man’s work ethic.
Lau, a civil engineer, often started his days at 10 a.m. and clocked out at 4 a.m., only to get back to work at 10 a.m. for another marathon day. He never took a sick day. He worked every weekend and took no vacation days.
He worked every holiday, including the most popular ones that shut down much of the nation’s businesses: 12 hours on Thanksgiving and eight hours on Christmas.
In fact, his time cards show he worked all 366 days of the leap year, at times putting in 90-plus-hour workweeks. He worked so much that he quadrupled his salary. His regular compensation and overtime pay — including benefits, $485,275 — made him the city’s highest-paid worker and the fourth-highest overtime earner of California public employees in 2016.
(Hat tip: Pension Tsunami.)
The Los Angeles Unified School District has decided it can break federal immigration laws at will. “No immigration officers will be allowed on campus without clearance from the superintendent of schools, who will consult with district lawyers. Until that happens, they won’t be let in, even if they arrive with a legally valid subpoena.” There’s no way such a genius decision could possibly backfire on them… (Hat tip: Director Blue.)
How California hurts the poor by jacking up traffic fines. (Hat tip: Pension Tsunami.)
“San Diego using loophole to hand out large raises during pay freeze.” It’s a blatant attempt to evade Proposition B.
An auditor funds the University of California President’s office of Janet Napolitano had a secret slush fund:
- The Office of the President has accumulated more than $175 million in undisclosed restricted and discretionary reserves;
as of fiscal year 2015–16, it had $83 million in its restricted reserve and $92 million in its discretionary reserve.
- More than one-third of its discretionary reserve, or $32 million, came from unspent funds from the campus assessment—an annual charge that the Office of the President levies on campuses to fund the majority of its discretionary operations.
- In certain years, the Office of the President requested and received approval from the Board of Regents (regents) to
increase the campus assessment even though it had not spent all of the funds it received from campuses in prior years.
- The Office of the President did not disclose the reserves it had accumulated, nor did it inform the regents of the annual undisclosed budget that it created to spend some of those funds. The undisclosed budget ranged from $77 million to
$114 million during the four years we reviewed.
- The Office of the President was unable to provide a complete listing of the systemwide initiatives, their costs, or an assessment of their continued benefit to the university.
- While it appears that the Office of the President’s administrative spending increased by 28 percent, or $80 million, from fiscal years 2012–13 through 2015–16, the Office of the President continues to lack consistent definitions of and methods for tracking the university’s administrative expenses.
An Ex-Obama Administration official with a secret slush fund? What are the odds?
Texas continues to attract net in-migration from every region.
California wants to tax rockets launched from California into orbit, based on miles traveled away from California. I’m sure many of Texas own spaceflight companies will welcome any business California drives out…
Speaking of spaceflight, Elon Musk’s Space X, just like Telsa, is more emblematic of subsidies and special favors than the free market:
Tesla survives on the back of hefty subsidies paid for by hard-working Americans just barely getting by so that a select few can drive flashy, expensive electric sports cars. These subsidies were originally scheduled to expire later this year, and Tesla is lobbying hard to make sure that taxpayers continue to pay $7,500 per car or more to fund their business model. Tesla even tried to force taxpayers to pay for charging stations that would primarily benefit their business. That is not what Musk’s high priced image managers will tell you, but it’s the truth.
SpaceX is even worse — its business model isn’t to invest its money developing competing space products that meet the same safety and reliability standards as the rest of the industry. Instead, its business model is to get billions in taxpayer money and push, bend, and demand regulatory special favors. Then, it produces a rocket that is more known for failed launches, long delays, and consistently missed deadlines.
How California’s air emission rules went to far.
“California may end ban on communists in government jobs.” (Hat tip: Ace of Spades HQ.)
“Bachrach Clothing Stores File for Bankruptcy Protection in Los Angeles.”
“California solar installer HelioPower filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Nevada.”
Hudson Products relocating from Tulsa to Rosenberg, Texas.
“Bay Area bookseller Bill Petrocelli is filing a lawsuit against the state of California, hoping to force a repeal of the state’s controversial ‘Autograph Law.’ The law, booksellers claim, threatens to bury bookstore author signings under red tape and potential liabilities. Petrocelli, co-owner of Book Passage, filed Passage v. Becerra in U.S. District Court for the North District of California, pitting the bookstore against California State Attorney General Xavier Becerra.” As a bookseller on the side, I can tell you that California’s law is particularly asinine and is completely ignorant of the signed book trade.
Tags:Bachrach Clothing, bankruptcy, BART, Border Controls, California, Chuck DeVore, Communism, Crime, Elon Musk, flash mob, fraud, gas prices, HelioPower, Hudson Products, Janet Napolitano, Jerry Brown, Josh Newman, Los Angeles, Los Angeles Unified School District, Oakland, pension crisis, Proposition B, Regulation, Rosenberg, San Bernardino, San Diego, solar power, Taxes, Texas, Texas Public Policy Foundation, unions, University of California, Vance Ginn, Welfare State, Xavier Becerra
Posted in Border Control, Budget, Communism, Crime, Democrats, Regulation, Texas, unions, Waste and Fraud, Welfare State | No Comments »
Wednesday, October 19th, 2016
Time for another Texas vs. California update! Included here are several links from City Journal’s special “Texas Rising” issue.
Texas cities continue to kick ass economically:
Texas’s spectacular growth is largely a story of its cities—especially of Austin, Dallas–Fort Worth, Houston, and San Antonio. These Big Four metropolitan areas, arranged in a layout known as the “Texas Triangle,” contain two-thirds of the state’s population and an even higher share of its jobs. Nationally, the four metros, which combined make up less than 6 percent of the American population, posted job growth equivalent to 30 percent of the United States’ total since the financial crash in 2007. Within Texas, they’ve accounted for almost 80 percent of the state’s population growth since 2000 and over 75 percent of its job growth. Meantime, a third of Texas counties, mostly rural, have actually been losing population.
Texas is sometimes described as the new California, an apt parallel in terms of the states’ respective urban geographies. Neither state is dominated by a single large city; each has four urban areas of more than 1 million people, with two of these among the largest regions in the United States. In both states, these major regions are demographically and economically distinct.
But unlike California, whose cities have refocused on elite priorities at the expense of middle-class occupations, Texas offers a complete spectrum of economic activities in its metros. Another key difference is that Texas cities have mostly embraced pro-development policies that have kept them affordable by allowing housing supply to expand with population, while California’s housing prices blasted into the stratosphere due to severe development restrictions. Texas cities also benefit from favorable state policies, such as the absence of a state income tax and a reasonable regulatory and litigation environment. These factors make Texas cities today what California’s used to be: places to go in search of the American dream.
More on how Texas cities are growing:
Though some east/west coastal cities—notably, San Francisco—have enjoyed vigorous growth of late, none has been nearly as proficient in creating jobs in the new millennium as Texas’s four leading metros. Overall, Dallas–Fort Worth and Houston have emerged as the nation’s fastest-expanding big-city economies. Between 2000 and 2015, Dallas–Fort Worth boosted its net job numbers by 22.7 percent, and Houston expanded them by an even better 31.2 percent. Smaller Austin (38.2 percent job-base increase) and once-sleepy San Antonio (31.4 percent) have done just as well. New York, by way of comparison, increased its number of jobs in those years by just 10 percent, Los Angeles by 6.5 percent, and San Francisco by 5.2 percent, while Chicago actually lost net employment. And the Texas jobs are not just low-wage employment. Middle-class positions—those paying between 80 percent and 200 percent of the national median wage—have expanded 39 percent in Austin, 26 percent in Houston, and 21 percent in Dallas since 2001. These percentages far outpace the rate of middle-class job creation in San Francisco (6 percent), New York and Los Angeles (little progress), and Chicago (down 3 percent) over the same period.
Snip.
Among 52 American metropolitan areas with more than 1 million residents, San Antonio had the largest gain in its share of middle- and upper-income households—that is, the percentage of households in the lower-income category in the city actually dropped—from 2000 to 2014. Houston ranked sixth, Austin 13th, and Dallas–Fort Worth 25th in the Pew survey.
Snip.
In 2015, unemployment among Texas’s Hispanic population reached just 4.9 percent, the lowest for Latinos in the country—California’s rate tops 7 percent—and below the national average of 5.3 percent.
Texas Latinos show an entrepreneurial streak. In a recent survey of the 150 best cities for Latino business owners, Texas accounted for 17 of the top 50 locations; Boston, New York, L.A., and San Francisco were all in the bottom third of the ranking. In a census measurement, San Antonio and Houston boasted far larger shares of Latino-owned firms than did heavily Hispanic L.A.
In Texas, Hispanics are becoming homeowners, a traditional means of entering the middle class. In New York, barely a quarter of Latino households own their own homes, while in Los Angeles, 38 percent do. In Houston, by contrast, 52 percent of Hispanic households own homes, and in San Antonio, it’s 57 percent—matching the Latino homeownership rate for Texas as a whole. That’s well above the 46 percent national rate for Hispanics—and above the rate for all California households. (The same encouraging pattern exists for Texas’s African-Americans.)
California and Texas, the nation’s most populous states, are often compared. Both have large Latino populations, for instance, but make no mistake: Texas’s, especially in large urban areas, is doing much better, and not just economically. Texas public schools could certainly be improved, but according to the 2015 National Assessment of Educational Progress—a high-quality assessment—Texas fourth- and eighth-graders scored equal to or better than California kids, including Hispanics, in math and reading. In Texas, the educational gap between Hispanics and white non-Hispanics was equal to or lower than it was in California in all cases.
Though California, with 12 percent of the American population, has more than 35 percent of the nation’s Temporary Assistance for Needy Families welfare caseload—with Latinos constituting nearly half the adult rolls in the state—Texas, with under 9 percent of the country’s population, has less than 1 percent of the national welfare caseload. Further, according to the 2014 American Community Survey, Texas Hispanics had a significantly lower rate of out-of-wedlock births and a higher marriage rate than California Hispanics.
In California, Latino politics increasingly revolves around ethnic identity and lobbying for government subsidies and benefits. In Texas, the goal is upward mobility through work. “There is more of an accommodationist spirit here,” says Rodrigo Saenz, an expert on Latino demographics and politics at the University of Texas at San Antonio, where the student body is 50 percent Hispanic. It’s obvious which model best encourages economic opportunity.
Chuck DeVore explains how SB1234, a bill that establishes the California Secure Choice Retirement Savings Trust, a state-run retirement fund for 7.5 million Californians, is actually a mechanism for forcing taxpayers to bail out public pensions:
Per section 100004 (c) of the new law: Moneys in the program fund may be invested or reinvested by the treasurer or may be invested in whole or in part under contract with the Board of Administration of the Public Employees’ Retirement System or private money managers, or both, as determined by the board. What is the California Public Employees’ Retirement System or CalPERS for short? It’s America’s largest public pension fund with some 1.8 million current and retired government employees.
But, as with many public retirement systems around the nation, CalPERS is grossly underfunded. Including the California teacher retirement system and smaller local government systems, the unfunded liability for future retirement payouts is about $991 billion, according to the Stanford Institute for Economic Policy Research’s Pension Tracker run by Joe Nation, Ph.D., a former Democratic member of the California State Assembly.
Since cash is amazingly fungible in government hands, dragooning some 7.5 million Californians into a retirement system that supports 1.8 million state government workers by levying what amounts to a 3 percent payroll tax is going to go a long way towards ensuring CalPERS’ short-term solvency while, perhaps more importantly, building public support for bailing out CalPERS’ looming trillion-dollar shortfall.
7.5 million Californians will be made to care about CalPERS fiscal health.
(Hat tip: Pension Tsunami.)
California wants to offer ObamaCare to illegal aliens. (Hat tip: Director Blue.)
Governor Bush’s education reforms were a lot more successful than President Bush’s. “Educational outcomes overall have continued to improve in Texas.” A long article that points out the need for more reform.
Meanwhile, California’s teacher’s unions are trying to destroy charter schools.
“The Redding Police Department’s net personnel costs in fiscal 2007-08 were $21 million for 173 employees; in fiscal 2015-16 the costs were $22 million for 131 total employees. In fiscal 2015-16, the Redding Police Department is paying $47,500 per employee more than in fiscal 2007-08. The increase is to pay its unfunded pension liability.” (Hat tip: Pension Tsunami.)
San Jose voters to vote on compromise pension reform that rolls back real pension reform passed four years ago. (Hat tip: Pension Tsunami.)
“Former [Orange County] Public Works administrator and convicted felon Carlos Bustamante, who served jail time this year for his sex crimes against county workers, lost a chunk of his pension benefits Monday after he was stripped of credit for the years he worked while committing the crimes.” But he’ll still get a pension. Also: “The board’s decision also means Bustamante is owed the nearly $56,000 he paid into the system during the 2 1/2 years he was committing crimes – meaning he’ll be refunded nearly $32,000 but will collect lower pension payments moving forward.” (Hat tip: Pension Tsunami.)
Los Angeles is suffering from a housing shortage. So naturally there’s a ballot initiative to make housing construction more expensive through requiring union kickbacks.
Here’s a long piece in City Journal by Watchdog.org’s Jon Cassidy. It’s a very balanced assessment of both the strengths and weaknesses of Texas’ governmental structure.
The good news is that the benefits of the Texas model, overseen by its part-time legislature, are impossible to ignore. From 2000 to 2014, Texas created some 2.5 million nonfarm jobs, more than a quarter of the U.S. total for the period. In 2015, amid free-falling oil prices, Texas still managed to finish third among states in job growth, thanks to booming health care, education, professional services, manufacturing, hospitality, warehousing, and light industrial sectors. Construction is doing well, too. Wondrously cheap housing and pro-growth land-use policies draw people and business to the state. None of this diversification was centrally planned. It’s the product of an economy that’s wide open to foreign trade and immigration. Immigration has boosted native Texans’ income by an aggregate $3.4 billion to $6.6 billion a year. Income inequality is up, too—but that’s just another way of saying that high-paying jobs are growing fastest.
To a large degree, the Texas model has worked because the Austin governing establishment is penned in, limited in the damage that it can inflict by a state constitution that not only keeps lawmakers from enacting new laws for one out of every two years but also severely restricts taxation and imposes budget caps. Texas has no state income tax, and instituting one would require voter approval. The legislature makes do with a sales tax, a handful of excise taxes, and an onerous gross-receipts tax that penalizes high-volume businesses. The Texas state government simply never has the money for bold new expansions of government. So it stays small, just as the original Texans wanted it. It’s not perfect and never will be, but the state is flourishing.
(Hat tip: Pension Tsunami.)
Texas state government has done a good job controlling debt. Local governments? Not so much. (Hat tip: Pension Tsunami.)
Police are under fire in Sacramento and Los Angeles.
The high speed rail project is uniting Californians! In opposition to it:
The rest of the story is the astonishingly widespread political opposition to the train by California voters these days, even though 53 percent of them approved the idea when it was on the state ballot in the November 2008 election. The opposition spans ideological left and right and demographic rich, poor, and middle-class: from wealthy Silicon Valley technocrats horrified that the ultra-fast rail lines, with overpasses only every 10 miles or so, would wreck their leafy, bicycle-friendly upscale-suburban neighborhoods, to Latino-majority working-class towns in Southern California’s San Fernando Valley that would be split in half by the train corridors, to equestrians in the San Gabriel Mountain foothills who would see their horse trails destroyed and environmentalists concerned about wetlands destruction in Northern California and threats to wildlife and endangered plant species in Southern California’s Angeles National Forest, through which several of the proposed train routes would plow.
Hat tip for the above to Amy Alkon, who also notes:
The analyzed per mile rate would make a one-way SF to LA ticket cost about $190.5 Therefore, if the CHSRA’s assumed private operator must charge enough to break even, four tickets for a LA/SF round trip would cost at least $1,520. Conclusions: California’s 2009 median household income was $42,548.6. For a middle class household to ride the train LA-SF once would cost them about 4% of their annual pre-tax income.
San Francisco to city of Brisbane: “Build housing in your city so San Franciscans can enjoy it…or else!”
CalPERS tries to stick 700 person town of Loyalton with a $1.6 million bill as punishment for dropping out of the system…for four retirees. (Hat tip: Pension Tsunami.)
The Bay Area Air Quality Management District needs more money so employees can enjoy more expensive junkets to New Orleans.
Want to sell signed books in California? A newly passed law requires you to issue a certificate of authenticity for any item over $5, including your name and address, even if it came from the publisher pre-signed. No COA? “You can be liable for TEN TIMES damages, plus attorneys fees. Call it a cool half mill, because you didn’t know you were supposed to issue a COA.” Word is they’re planning to change this idiocy, but that doesn’t excuse passing it in the first place.
Another California idiot law: A man can’t display historical Civil War paintings at the state fair because they have confederate flags in them. More here.
Did California just legalize child prostitution? Snopes says no, but I’ve seen California impose more tendentious readings on other laws. (Hat tip: Director Blue.)
“Jerry Brown Just Signed a Tough-on-Rape Bill That’s So Bad, Even Feminists Hate It.” (Hat tip: Instapundit.)
Voters in Apple Valley, California push for initiative to force voter approval on debt spending. Naturally the City Council puts their own initiative on the ballot to continue “eminent domain acquisition efforts unencumbered by another election.” Plus they illegally spent taxpayer money advertising in favor of their own initiative. (Hat tip: Pension Tsunami.)
Harrison County in east Texas has been enjoying industrial gains.
Dallas has become a big hub for philanthropy. (Hat tip: Pension Tsunami.)
California passes a hide an actor’s age upon request law. I sincerely doubt this will pass constitutional muster on first amendment and equal protection clause grounds. Plus, IMDB’s servers are in Washington state…
“Verengo Inc, the largest installer of residential solar systems in southern California, filed for Chapter 11 bankruptcy protection on Friday as it seeks to sell itself after defaulting on a bank loan.”
“The San Diego-based Garden Fresh Restaurant Corp., which owns the Souplantation chain, has filed for chapter 11 bankruptcy protection…Court papers show that Garden Fresh pins its troubles on declining sales, higher minimum wages, and higher employee benefit costs.”
DentalOne is relocating its headquarters from Ohio to Plano.
Tags:Apple Valley, bankruptcy, Bay Area Air Quality Management District, Border Controls, California, California Secure Choice Retirement Savings Trust, California Teacher's Association, CalPERs, Carlos Bustamante, Chuck DeVore, Democrats, DentalOne, education, Garden Fresh Restaurant Corp., Jon Cassidy, Los Angeles, Loyalton, Mario Loyola, ObamaCare, Orange County, Redding, San Jose, SB1234, Texas, unions, Verengo Inc.
Posted in Border Control, Budget, Democrats, ObamaCare, Texas, unions | No Comments »
Wednesday, September 14th, 2016
Time for another Texas vs. California update:
Vance Ginn makes the case that Texas is still kicking California’s ass:
After descending into a deep valley during the recession, California’s economy has recently grown at a faster rate than in Texas, where the drop in oil prices and higher value of the dollar have negatively affected the mining and manufacturing sectors. However, during the last decade, the productive, real private sector growth has increased by 13.6 percent in California compared with a robust 29.1 percent in Texas.
This growth translates into output per person in Texas increasing almost four times more than in California in that period, meaning economic output has far outpaced population growth.
Although contemporary economic growth in California has led to a higher annual job creation rate than in Texas since April 2015, this only tells part of the story.
Since December 2007 when the last national recession started, total civilian employment increased in California by 1.2 million while it increased by 1.7 million in Texas, with a labor force two-thirds the size of California’s. This increase in employment in Texas constitutes about one-third of all jobs created nationwide — truly remarkable given recent headwinds!
This phenomenal job creation contributed to Texas’ unemployment rate (4.6 percent) being at or below California’s rate (5.5 percent) for 121 straight months, or since July 2006. But the official unemployment rate only accounts for those actually looking for work, a better gauge of labor force health would be the share of the population employed, which has been higher in Texas than in California since at least 2000.
More economic output and job creation over time in Texas has contributed to less poverty. The Bureau of Labor Statistics’ supplemental poverty measure, which accounts for the local cost of living, shows that Texas’ rate matches the national average while California has the nation’s highest poverty rate
Income inequality has also been higher in California than in Texas for years. For example, the average of total income held by the top 10 percent of income earners from 2000 to 2012 was 49.9 percent in California compared with 48.8 percent in Texas.
The results are pretty clear that California’s progressive policies of having the highest marginal personal income tax rate, cumbersome regulations, huge unfunded pension obligations, an out of control lawsuit environment, and other policies reduce economic opportunity.
(Hat tip: Pension Tsunami.)
High earners are leaving blue states like California for red states like Texas:
For generations, the Golden State developed a reputation as the ultimate destination of choice for millions of Americans. No longer. Since 2000 the state has lost 1.75 million net domestic migrants, according to Census Bureau estimates. And even amid an economic recovery, the pattern of outmigration continued in 2014, with a loss of 57,900 people and an attraction ratio of 88.5, placing the Golden State 13th from the bottom, well behind longtime people exporters Ohio, Indiana, Kentucky and Louisiana. California was a net loser of domestic migrants in all age categories.
Snip.
Much of the discussion about millennial migration tends to focus on high-cost, dense urban regions such as those that dominate New York, Massachusetts and, of course, California. Yet the IRS data tells us a very different story about migrants aged 26 to 34. Here it’s Texas in the lead, and by a wide margin, followed by Oregon, Colorado, Washington, Nevada, North Dakota, South Carolina, Maine, Florida and New Hampshire. Once again New York and Illinois stand out as the biggest losers in this age category.
Perhaps more important for the immediate future may be the migration of people at the peak of their careers, those aged 35 to 54. These are also the age cohorts most likely to be raising children. The top four are the same in both cohorts. Among the 35 to 44 age group, it’s Texas, followed by Florida, South Carolina and North Dakota. Among the 45 to 54 cohort, Texas, followed by South Carolina, Florida and North Dakota.
California just raised your food costs.
And agricultural producers are not happy:
The Governor signed this ag overtime bill in the same year that minimum wage legislation was also passed that will take California to the highest minimum wage as well as legislation forcing California to adopt additional greenhouse gas regulations for businesses in California.
California is the only state in the country subject to such regulations. Today’s signing occurred despite numerous requests by the agricultural industry to meet with the Governor to discuss our concerns. The message is clear. California simply doesn’t care.
Ca;ifornia companies have a hard time attracting workers:
More than two-thirds (70 percent) of organizations in California indicated that they have had difficulty recruiting for full-time regular positions in the last 12 months, similar to 68 percent nationally.
California organizations were more likely than organizations nationally to report competition from other employers (56 percent), qualified candidates rejecting compensation packages (28 percent), qualified candidates not being able to move to their local area (21 percent), or a relocation or a relocation package not being competitive or not being offered (12 percent) as top reasons for hiring difficulty.
Why California can’t build more housing. “Labor unions—which ostensibly stand for working class interests—will not stand for new construction unless it is accompanied by carve-outs and cronyist regulations that artificially boost their compensation.” (Hat tip: Instapundit.)
Stop me if you’ve heard this one before: “California’s unfunded pension debts may be larger than acknowledged.” (Hat tip: Pension Tsunami.)
“The biggest problem faced by the State of California is not ‘climate change’ or ‘poverty it is the overreaching power of California government itself, namely the California Legislature and Administration, and the threats that this Democrat establishment poses to California’s future, particularly with regard to the economy and individual liberty. California Democrats are celebrating the passage of new climate change legislation that provides California government with broad, sweeping new powers to drastically curb greenhouse gas reductions without regard to economic impact or the basic rights of businesses and individuals.” (Hat tip: Pension Tsunami.)
Palo Alto decides that they hate, hate, hate that golden goose.
Maybe that’s why some observers are telling people “If You Own A Home In Palo Alto, CA; Sell It Now.” As the median price of homes has actually started dropping, though from admittedly already insane heights…
“Case Study: How Politicians Motivate Companies to Leave California.”
Orange County clerk took bribes to make charges disappear.
Corrupt Oakland police sentenced. There are all sorts of real winners in this story…
“LAX Police Assistant Chief Resigns Amid Corruption Allegations.”
University of California hires India-based IT outsourcer, lays off tech workers. “The layoffs will happen at the end of February, but before the final day arrives the IT employees expect to train foreign replacements from India-based IT services firm HCL. The firm is working under a university contract valued at $50 million over five years.” This might be a good time to throw in a “How’s that $15 minimum wage working out for you, San Francisco,” but there’s another factor at work: “Joe Bengfort, the CIO for the UCSF campus, said the campus is facing ‘difficult circumstances’ because of declining reimbursement and the impact of the Affordable Healthcare Act, which has increased the volume of patients but limits reimbursement to around 55 cents on the dollar, he said.” So San Franciscans IT workers are losing their jobs thanks to ObamaCare.
“Texas has proven it’s possible to have both much lower crime and a lower rate of imprisonment. Indeed, Texas’ FBI index crime rate, which accounts for both violent crime and property crime, has fallen more sharply than it has nationally, posting a 29 percent drop from 2005 to 2014, the latest full year for which official data is available.”
“It turns out that the average property tax bill required to support BART’s proposed $3.5 billion bond measure on the November ballot could be as much as four times what the transit agency claimed…That’s because legal language in Measure RR allows BART to issue bonds at up to the state limit of 12 percent interest.” 12%? With 30 year U.S. Treasuries running under 2%? The fact they think they may have to go that high to attract investors suggests how worried bond traders are about the future of California’s economy…
Some are less than enthused about BART’s bond proposal:
BART officials want voters to trust them with another $3.5 billion of taxpayer money. But they’ve done nothing to earn that trust.
Instead, they have recklessly spent what they have, grossly understated how much their ballot proposal would raise property tax bills and devised plans to use money from the measure, intended for capital projects, to indirectly cover inflated labor costs.
Voters in Alameda County, Contra Costa and San Francisco should say no — hell no. They should reject Measure RR on the Nov. 8 ballot.
Despite the problems facing the transit agency, it makes no sense to approve five decades of extra taxes when Measure RR lacks a logical budget, a timeline for service improvements and provisions ensuring taxpayers and riders get what they’re promised.
The measure would authorize the district to borrow $3.5 billion through bond sales as part of a larger plan to upgrade BART’s infrastructure. The ballot wording conveniently omits that the district would tax property owners for 48 years to pay off the debt.
(Hat tip: Pension Tsunami.)
Speaking of California bonds: Proposition 53 explained.
California’s legislature passes extension of sexual assault statue of limitations mainly over Bill Cosby. Combine this with the trend of colleges redefining rape to “any sex a woman later regrets,” and suddenly the state has the ability to prosecute anyone who ever had sex in California…
Leprosy Scare in California Elementary School. “There are approximately 6,500 cases of leprosy in the United States, and 90 percent of the cases are immigrants from countries where leprosy is endemic.With the increase in illegal immigrants and refugees in recent years, diseases thought to be eradicated in this country — like tuberculosis, polio, measles and leprosy — have unfortunately reemerged in the United States.” (Hat tip: Ed Driscoll at Instapundit.)
Image Comics to move from Berkeley to Portland.
“Cow Fart Regulations Approved By California’s Legislature.” No, not an Onion piece.
Follow-up: Pacific Sunwear exits bankruptcy.
Tags:agriculture, bankruptcy, BART, Berkeley, Bill Cosby, Border Controls, California, Crime, Los Angeles, minimum wage, Oakland, ObamaCare, Orange County, Pacific Sunwear, pension crisis, Portland, Proposition 53 (California), rape, Texas, unions, Vance Ginn
Posted in Crime, Democrats, ObamaCare, Texas, unions | No Comments »
Monday, July 25th, 2016
Enjoy another Texas vs. California roundup:
June marked the 114th month that Texas was at or below the national unemployment average. Texas also created 246,600 jobs in the service sector.
Once again Texas ranks as the best state for business, and California ranks worst. (Hat tip: Fox and Hounds via Pension Tsunami.)
Elites watch while California crumbles:
The basket of California state taxes — sales, income, and gasoline — rates among the highest in the U.S. Yet California roads and K-12 education rank near the bottom.
California depends on a tiny elite class for about half of its income-tax revenue. Yet many of these wealthy taxpayers are fleeing the 40-million-person state, angry over paying 12 percent of their income for lousy public services.
Excessive state regulations and expanding government, massive illegal immigration from impoverished nations, and the rise of unimaginable wealth in the tech industry and coastal retirement communities created two antithetical Californias.
One is an elite, out-of-touch caste along the fashionable Pacific Ocean corridor that runs the state and has the money to escape the real-life consequences of its own unworkable agendas.
The other is a huge underclass in central, rural, and foothill California that cannot flee to the coast and suffers the bulk of the fallout from Byzantine state regulations, poor schools, and the failure to assimilate recent immigrants from some of the poorest areas in the world.
The result is Connecticut and Alabama combined in one state. A house in Menlo Park may sell for more than $1,000 a square foot. In Madera, three hours away, the cost is about one-tenth of that.
CalPERS suffers $30.8 billion annual loss. “CalPERS has notoriously minimized the annual pension contribution for its 3,007 government entities by fantasizing that its superior investments expertise will allow its investments to compound every year without loss for the next three decades at an annual rate of 7.5 percent.” (Hat tip: Pension Tsunami.)
CalSTRS isn’t doing much better: “The California State Teachers’ Retirement System [earned] 1.4% for the fiscal year ended June 30.” (Hat tip: Instapundit.)
Record tax revenues, yet somehow California is still broke:
California taxpayers are getting taken to the cleaners, but most of them are completely in the dark about how and why.
I will pose a quick question: Does it seem strange that California has recorded record revenue increases, yet we also see a record number of tax increases and bond issuances on the ballot?
In other words, the state’s tax system is collecting massive amounts of revenues, record amounts, yet politicians are still asking for a record number of new tax increases. For taxpayer advocates, it just doesn’t seem fair and seems very strange at first glance as to how this can even occur.
The truth of the matter is that California’s system of public finance is a complete train wreck and is set up such that no amount of tax revenues collected will ever be enough to satisfy “spending needs.” The so-called baseline expenditure increases are on autopilot and deficit projections are generated despite record revenue increases, a trend projected in the Governor’s May Revise.
(Hat tip: Pension Tsunami.)
“As we roll toward the November ballot, I’m reminded of H.L. Mencken’s quip that “Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” We always get it “good and hard” in California given the ever-expanding one-party rule. The worse it gets, the more voters from the GOP high-tail it to Nevada and Texas — and the worse it gets as political competition evaporates. It’s the political equivalent of a death spiral.” (Hat tip: Pension Tsunami.)
Lots of tax hikes are on the California ballot this November, for a variety of different ostensible reasons, but actually for a single reason: Pensions. (Hat tip: Pension Tsunami.)
Beaumont, California: “Seven former officials were arrested and charged with stealing nearly $43 million during the city’s development boom. Now, residents are learning that the town’s problems go much deeper than the criminal case.” (Hat tip: Gregory Benford’s Facebook page.)
“California’s high-speed rail project increasingly looks like an expensive social science experiment to test just how long interest groups can keep money flowing to a doomed endeavor before elected officials finally decide to cancel it.” $68 billion and rising. (Hat tip: Ace of Spades HQ.)
“Teachers union writes a $10-million check for income tax ballot measure.”
“Oakland police officer Malcolm Miller more than quadrupled his $107,627 salary to $489,662 with overtime, benefits and other specialty pays last year — making him Oakland’s highest paid employee for the third year in a row.” (Hat tip: Pension Tsunami.)
“C.C. Myers Inc., one of California’s highest-profile freeway builders, has filed for bankruptcy.”
Also filing for bankruptcy: California-based developer Criswell-Radovan, which owns the Tahoe Cal Neva casino Frank Sinatra used to own.
One tiny bit of dubious good news for the Bankruptcy Court for the Central District of California: Now they’re only the second in bankruptcy filings in the nation at 45,000, having been overtaken by the Bankruptcy Court for the Northern District of Illinois at 47,535 filings.
Nissan and Toyota battle over Texas. “Both automakers are zeroing in on Texas as a key growth opportunity.”
California’s Democratic State Controller Betty Yee fined $2,082 for violations during her 2014 campaign.
Rent a security robot for $7 an hour. How many human security guards will be left at California’s $15 an hour?
Old and Busted: Participation trophies. The New Hotness: California’s Democratic officials giving awards to their own family members.
“Judge throws out ex-L.A. County Sheriff Lee Baca’s plea deal, saying six months in prison not enough.” (Hat tip: Dwight.)
Tags:bankruptcy, Beaumont (California), Betty Yee, Budget, California, CalPERs, CalSTARS, corruption, Crime, Criswell-Radovan, Democrats, Frank Sinatra, high speed rail, Illinois, minimum wage, Nissan, pension crisis, Tahoe, Texas, Toyota, unions
Posted in Budget, Crime, Democrats, Regulation, Texas, unions | No Comments »
Wednesday, May 18th, 2016
When socialists run out of other people’s money, everything falls apart. In Venezuela, socialism is killing babies:
By morning, three newborns were already dead.
The day had begun with the usual hazards: chronic shortages of antibiotics, intravenous solutions, even food. Then a blackout swept over the city, shutting down the respirators in the maternity ward.
Doctors kept ailing infants alive by pumping air into their lungs by hand for hours. By nightfall, four more newborns had died.
“The death of a baby is our daily bread,” said Dr. Osleidy Camejo, a surgeon in the nation’s capital, Caracas, referring to the toll from Venezuela’s collapsing hospitals.
Also this: “At the University of the Andes Hospital in the mountain city of Mérida, there was not enough water to wash blood from the operating table.” With a picture to match.
(Hat tip: Althouse.)
Is this the point where the bankrupt socialist regime changes course and implements economic reform? Of course not. “Venezuelan President Nicolas Maduro announced a sweeping crackdown Saturday under a new emergency decree, ordering the seizure of paralyzed factories, the arrest of their owners and military exercises to counter alleged foreign threats.”
Naturally the democratically elected opposition refuses to knuckle under to Maduro’s unconstitutional decrees.
“Opposition leader Henrique Capriles also said the army must decide whether it is ‘with the constitution or with Maduro,’ a day before nationwide protests demanding the president’s ouster through a referendum.”
The Atlantic offers up a photo essay on how little food Venezuelans have to eat. (Hat tip: Instapundit.)
And all this has come to pass thanks to The Magic Power of Socialism™:
The government doesn’t just control the oil industry, imposing windfall taxes as high as 50 percent on the few private sector projects that remain. The government has nationalized rice mills, large producers of agricultural products, and expropriated millions of acres of farmland; it has acquired some banks and shut down others; nationalized the cement sector; tried to nationalize gold miners; nationalized the country’s largest steel mill and the country’s largest telecommunications company; expropriated the nation’s largest power producer (remember those rolling blackouts?), and more.
People close to the regime have benefited from many of those deals. Corruption has skyrocketed since the beginning of Venezuela’s “Bolivarian revolution.” According to the Cato Institute, $22.5 billion in public funds have been transferred from Venezuela to foreign accounts with no plausible explanation. Relatives of President Nicolas Maduro have been implicated in drug trafficking, with suspicions of drug money used to finance his campaign.
Oh, and Venezuela’s capital has earned the distinction of being the murder capital of the world.
All of these tragedies were avoidable. They are all the result of a mentality that sees only nails for the hammer of government control. Chavez and Maduro kept saying that everything that was wrong with Venezuela was the fault of markets and that if the government either eliminated or regulated those markets, things would get better. They implemented their agenda and it has been a disaster. This socialist brand of economic authoritarianism had the predictable consequence of political authoritarianism, corruption, and a breakdown of the rule of law.
How many more babies have to die before Venezuela abandons its failed socialist experiment?
Tags:bankruptcy, Budget, Crime, Henrique Capriles, Nicolas Maduro, socialism, Socialized Medicine, Venezuela
Posted in Budget, Communism, Crime | 1 Comment »
