We talk about the recent peace deals in the Middle East, in particular the deals between Israel and UAE and Bahrain. We also discuss the Hayes Production code and how that is similar to a recent dust up with JK Rowling. We end by talking about John Barton, a California dad who said CPS took his three year old son under dubious circumstances and it appears his son may be being abused in care.
Finally we talk about the new recordings in the Rucki case; they shed light on how the local Fox affiliate reporter Trish Van Pilsum scored an interview with the Rucki girls days after they went missing on April 19, 2013.
A California man says he three-year-old son was taken
haphazardly by local Child Protective Services (CPS), and now, his son may be
abused in foster care.
John Barton said his three-year-old son was taken by Child
and Welfare Services (CWS) in Humboldt County, California, on July 31, 2020.
Barton and his wife are both products of foster care when they were growing up, and he told me he thinks that does make him a target when dealing with CWS.
He said at a recent supervised visit after his son was
taken, he noticed bruises. Barton shared two photos; one is too graphic while
the other is below.
Barton said his wife is an alcoholic and he called CWS in
July for help getting her into treatment, but this set off a chain of events,
and he believes his son is being abused in his foster home.
Barton noted
that while he has been homeless, and he constantly struggles with housing, this
was not a reason given for taking his son.
“In
California all you need is an umbrella for the rain. But they cannot take your
children for homelessness,” he said in an email.
However, in this case, CWS certainly suggests his
homelessness is part of a pattern of abuse and neglect.
The Set
Up
According to the warrant which Humboldt CWS filed, both Barton
and his wife were mentally unstable and a danger to their son.
“The Department is concerned the parents are using
substances, have mental health issues, and are engaging in domestic violence in
front of {their child}. There is also concerns that {their child} and the
parents are living in unhealthy conditions,” the warrant seeking Barton’s son’s
removal stated.
According to the warrant, in December 2019, there was a
referral for physical abuse, and the family was kicked out of housing because
Barton’s wife’s alcohol problem.
“On or about 12/16/2019, Child Welfare Services received a
referral of physical abuse and emotional abuse of {Barton’s son} by his mother
and father,” the warrant stated, “the mother stated the family had been kicked
out of PACT housing and their friends put them in a hotel for the evening.”
Barton said the only involvement CWS had at the time with
his family was when he needed housing after they got kicked out of this low-income
housing program, PACT.
He said CWS helped with temporary housing, but he thought
the matter was closed after that.
The social worker in charge tracked down the director of a
homeless mission where Barton and his wife were staying in January.
According to an employee of this homeless shelter, “they
were no longer welcome at the mission due to hygiene and cleanliness issues. Ms.
Freeman said that mom’s arm pits stink and her personal care was not good. Ms.
Freeman stated that Ms. Payton was a good mom. Ms. Freeman stated that the mother
was loving and takes good care of {their son},” the warrant stated.
The warrant now states that Barton and his wife fled
California to escape the burgeoning investigation, but the investigation
stopped and did not start again until May.
Barton told me they did not flea but that COVID made housing
in California impossible and they needed to go to another state for a while.
The May
Encounter
In May, Humboldt CWS again investigated the family again.
“On or about 5/15/2020, the Butte Interagency Narcotic Task
Force had a referral alleging general neglect of {Barton’s son} by his mother
and father.” The warrant stated. “The referral alleged the parents and {their
son} were seen at the emergency room in Butte County for bed bugs. {Their son}
had bite marks and some scratches. {Their son} was clean.”
Barton told me they did go to the emergency room in May for
bed bugs which were found in the housing they were staying at the time; they
have since moved into another hotel.
It appears that this report was later determined unfounded.
“It was noted on the referral that the family did not have
any substantiated referrals and the 5/15/2020 referral was evaluated out,” the
warrant stated.
The July
Encounter
In July, Barton told me, his wife’s drinking became uncontrollable.
He initiated a phone call, he told me, on July 23, 2020, to CWS to get her into
treatment.
The warrant says something similar, “The father expressed
wanting to have the mother at Waterfront Recovery Services but did not have a
plan for that and it is unknown if the mother was in agreement.”
Barton’s wife has since entered treatment.
But the warrant said more, “On or about 7/23/2020, CWS
received a referral of emotional abuse of {Barton’s son} by his mother and
father.”
Humboldt CWS decided to take the child eight days later,
7/31/2020.
There are reasons to be skeptical of this narrative.
A Staffer
Responds
I spoke with a staffer at the Motel 8 where Barton and his
wife were staying when this referral was made and the staffer painted a much
different picture, saying much of the information was misleading or lies.
“He showed me somethings in the report stating that the
Motel 8 had called them- the social workers- to tell them they were leaving
their child alone for long periods of time, and that’s completely untrue,” the
staffer said, “We will call social workers if we see something like that. We
never saw anything like that.”
“I never saw that kid unattended,” the staffer also stated.
The warrant also stated, “The referral alleges the mother
and father fight daily and almost every night. The father could be heard
threatening to punch the mother. It is unknown if he did punch the mother. It
was reported that the father will go outside the room to yell and curse.”
But the staffer said none of this is true, “One time, I got
a complaint that they were arguing, and the guest called the police, but that’s
the only one that I know of. They would argue sometimes- but people argue.”
“It’s a couple with a young kid,” the staffer noted, “they
argue like normal.”
The warrant even suggested that Barton and his wife refused
to wear a mask for COVID, “Motel staff was concerned about COVID and them not
following COVID precautions.”
The staffer said this too was blow out of proportion.
Initially, they were not wearing a mask but after being warned, they have worn
one since.
The warrant also suggested that Barton and his wife were
unreasonably dirty, “Motel staff that the sheets that they were unable to wash
the sheets and had to throw away the sheets. The living environment was filthy
and dirty, and the motel staff had concerns about the living conditions inside
the room.”
The staffer noted this was very misleading.
“We had to toss the sheets. All we did was tell them to try and maintain more
cleanliness. But it’s because when they checked in- obviously they were staying
with the county- so I was assuming they were homeless before, because all the
people that the county pays for to stay with us are homeless, so obviously,
they’re dirty.”
But the staffer noted that this was immediately fixed, and
the sheets were clean going forward, “That was in the beginning. That was it.”
More
Reason for Skepticism
The warrant also noted that John Barton became belligerent
when his son was taken.
He said, “fuck law enforcement” and “the father began
raising his voice while holding {their son}, telling the mother, ‘I told you
not to fucking talk,” according to the warrant.
Barton provided video footage from the
motel and it shows him leaving before their son was taken.
He denies doing any of the inflammatory things in the
warrant, like saying “fuck law enforcement.”
The Humboldt County CWS said they could not comment due to
privacy issues.
“Thank you for your inquiry, but we cannot answer questions about cases
involving juveniles due to confidentiality,” stated Christine Messinger, from
the California Department of Health and Human Services.
However,
Barton told me that a subsequent hearing, only days after my query, he was
warned in court that speaking to the press could lead to sanctions.
He said he
is being punished for taking proactive steps to treat his wife’s alcoholism.
Post Script
If you believe there should be more articles like this, please support a new endeavor I have started. Please, check out the crowdfunding site for a media organization which tells stories about abuses in family court, child protective services, probate, wrongful convictions, along with other stories told be whistle-blowers and other truth tellers.
My head usually spins trying to follow the appeals process of any case in which constitutionality is at issue. The case of Prop 8 in California is one such case. Here's the latest.
Same-sex "weddings" in California are on hold indefinitely after a federal appeals court blocked them while it considers the constitutionality of the state's ban on homosexual unions.
The decision, issued Monday by a three-judge panel of the 9th U.S. Circuit Court of Appeals, trumps Judge Vaughn Walker's order that would have allowed same-gender marriages to begin on Wednesday.
Walker had previously ruled that the ban, known as Proposition 8, violated the constitutional rights of homosexuals, who he said should not face discrimination based on "moral and religious views." The ban's sponsors appealed that ruling and also asked the 9th Circuit to block same-sex weddings in the meantime. They claimed in papers filed with the 9th Circuit that homosexual marriages would harm the state's interest in promoting responsible procreation through heterosexual marriage.
You may recall that weeks ago a district judge ruled that the ban on gay marriage in California, Prop 8, was unconstitutional. That was immediately appealed. In the meantime, the appeals court, the ninth circuit which is the most liberal in the country, has put all gay marriage ceremonies on hold indefinitely while they look at the district judge's ruling.
The state of California is desperate, and the voters are ready for any reform. Sometimes, it's just for the sake of reform. That may explain proposition 14. Proposition 14 will create one universal primary for all parties. So, no matter which party you are affiliated you can vote for any of the candidates from any of the parties. Then, the two with the most votes will move out of the primary and into the general election.
The logic behind this system is that primaries cause extreme candidates. By opening the primaries up to everyone you moderate the winner. There are of course problems. First, it renders all third parties completely hopeless. None of their candidates will ever sniff a general election. So, the Free and Equal Campaign, the advocacy group for ballot access, has come out vociferously against the proposition. Here's how Christina Tobin, of the Free and Equal Campaign, described the opposition.
There is no evidence that this type of system helps the polarization problem, it’s almost like the Pro Prop 14 crowd is trying to convince Californians the world is flat.
In recent days, the debate over Proposition 14, which would abolish California's partisan primaries for most offices and replace them with a system similar to Los Angeles' process for electing its leaders, has turned into a debate over whether it would hurt the viability of third parties. On Saturday, Green Party supporters argued that the measure would go so far as to "destroy" the smaller parties. On Monday, a coalition of opponents raised the level of hyperbole with the bold claim that it would "end democracy in California." It wouldn't. Proposition 14 would allow voters to select their favorite candidate in a primary, just as they do today. The top two finishers would then advance to a general election. The winner would get the office. That's hardly revolutionary. The only difference from today's system is that the primary would include all candidates from all parties, and that the top two finishers in that contest could both be Democrats or Republicans — or Greens, for that matter. In the end, to win the office, a candidate still needs to win the support of a majority of voters.
On the other hand, OC Register columnist Steve Greenhut makes this point against the proposition.
Critics point to Washington state and Louisiana, which have tried this specific type of open primary system. Neither state has seen a reduction in partisanship. So it might not even work as planned. But even if it does create more moderates – more people like Gov. Arnold Schwarzenegger and Lt. Gov. Abel Maldonado – how would that help the state? These types of politicians have been the ones least likely to stand up for principle. Most disturbing, the top-two system would destroy third parties in California, which would no longer be likely to field candidates in the general election. This could reduce debate just as the state needs a livelier political discussion.
Governor Schwarzenneger and the California Chamber of Commerce have come out in favor of the proposition while Ralph Nader is one of the biggest names against the proposition.
While he’s in the state with the highest foreclosure rate in the nation Friday, President Obama plans to announce a proposal to take $1.5 billion in funds originally designed to assist ailing banks and instead use it to help the hardest hit states stem the housing crisis, according to senior administration officials.
The proposal to redistribute money from the Troubled Asset Relief Program will benefit the five states with the steepest declines in home prices: Nevada, California, Florida, Arizona and Michigan.
$1.5 billion would be a drop in the bucket. Also, it's unclear what this money would do that his failed $75 billion loan modification plan would do. Most importantly, TARP was not supposed to be used for this purpose.
Thousands of Californians who live in or close to poverty in the state have worked hard for decades to score victories that level the playing field. They've passed laws that increase affordable housing and raise the minimum wage, so they can provide for their families. They've also spent their personal time, which is in chronically short supply, pushing for better teachers and textbooks so the kids in their neighborhoods can have better opportunities. On these and other issues the odds have been against them, but these Californians leveraged their significant numbers with coordinated grassroots organizing to achieve victory.
Until now, they carried out this work as a chapter of the national organization ACORN. Until now, governance and financial management resided at the national level. In recent months it has become increasingly clear to the leadership, staff and members in California that the serious challenges ACORN is facing are jeopardizing the important work we are doing here in California.
The new entity will be called Alliance of Californians for Community Empowerment (ACCE). It will, on paper at least, be entirely separate now from ACORN. The relationship will be what Wade Rathke characterized the relationship between ACORN and ACORN Housing. ACORN is its own entity and ACCE is its own entity and the two are fighting for common goals.
It's important to note that most, if not all, of the staff and board of ACORN in California will be kept on with the new company. In fact, at the bottom of the press release the contact person is Amy Schur. Schur, according to a source, was privvy to the knowledge that Dale Rathke had been involved in embezzlement from ACORN and kept that knowledge from the board.
This continues the slow and painful to watch disintegration of ACORN. Last month, I did a similar story centered in Connecticut.
Its political allies fled. And with its national organization fighting for its life and unable to give any money, ACORN of Bridgeport is doing what other chapters have been doing across the nation, going independent, sort of.
This month, the group began a campaign to raise money and create two local nonprofits, one to concentrate on social issues, the other on political action. To be clear, the plan is to continue to work with other chapters on national issues through a federation, according to Emeline Bravo-Blackwood, a small business owner who is leading the effort to transform the group in Bridgeport.
This is slightly different for a few reasons. In that case, the name didn't change and the local chapter turned itself into a federation of ACORN. In this case, the California chapter is not only changing its name but cutting ties with national, at least visibly.
The most interesting dynamic to watch going forward is what the relationship will be between Gubernatorial candidate, Jerry Brown, and the new organization. ACORN is a voter registration force and that organization contributed heavily to helping Brown get elected as he was moving up the political ranks. He's now in the uncomfortable position of having to investigate ACORN. Of course, ACORN in California is no longer. (that's no small thing since California was their biggest chapter in terms of members)
The people at ACCE are the same as those at the former ACORN in California only with the name change there's likely to be less scrutiny. Will there be folks out in full force wearing ACCE shirts signing up voters? Will the media notice that those folks are really from ACORN? Only time will tell that.
In the summer and fall of 2008, Michigan ACORN board member Adrianna Jones attempted to remove the head organizer for Michigan ACORN, David Lagstein. She wanted him removed based on three failings: 1) lack of financial oversight of Michigan ACORN 2)abuse of canvassers during the 2006 election cycle and 3) "disrespect of the membership". Jones eventually brought up a motion for removal at the September 2008 board meeting of the Michigan ACORN board meeting. That motion eventually passed and Lagstein was scheduled to be fired, when the motion met opposition. Jones was eventually opposed by a faction of the boad lead by Karen Flagg and her motion was reversed. She later joined with the effort of Marcel Reid and Karen Inman to demand a forensic audit of ACORN that lead to the formation of ACORN 8.
When Jerry Brown ran for Mayor of Oakland and subsequently Attorney General of California, Fannie Brown represented ACORN as they endorsed him both times. ACORN hasn't yet endorsed Brown for Governor but that likely has much to do with their own toxicity currently.
Meanwhile, following the stand off in Michigan, Lagstein was moved from Michigan to California. California is also home to one of the biggest and most important funders (those that shower ACORN with money) Herb and Marion Sandler. The Sandlers have been associated with the sub prime crisis through their ownership of Golden West Financial. They were also forever satirized by this Saturday Night Live skit. To ACORN however, they are a near endless supply of money.
Meanwhile, following the release a couple weeks back of the latest installment of the James O'Keefe and Hannah Giles undercover videos, Jerry Brown announced an investigation. At first, most thought that was an investigation of ACORN. Then, a couple days back, word leaked that in fact Brown was targeting not ACORN, but Giles and O'Keefe. Then, it was revealed by Langstein that Brown confided in him that ACORN needn't worry because they weren't the target of the investigation, instead O'Keefe and Giles were.
Let's break it down. First, Brown has no business getting himself involved here. He has a plethora of conflicts and this case is the poster child for what happens when there are conflicts. It was highly inappropriate to communicate with ACORN while investigating them. He should have stepped aside to begin with and now he should be sanctioned. Second, if California is a two way consent state, then O'Keefe certainly, Giles maybe, and Breitbart and even You Tube, might all technically be breaking the law. By this, I mean that California would be a state where both parties must consent before a recording occurs. Even my blogging nemesis, Michael Gaynor, has made this point. Of course, there's something called prosecutorial discretion. So, even if they technically broke the law, the prosecutor must decide if this case is worth prosecuting. Finally, Lagstein is no stranger to controversy.
Just this week it appears that California's legislature finally compromised on a budget that would fix the shortfall in the short term.
Gov. Arnold Schwarzenegger and California legislative leaders Monday said they reached a compromise to close the state's $26 billion budget shortfall.
Under the plan, state lawmakers would cut $15 billion in spending. The rest of the gap would be filled by taking funds from local governments and through one-time fixes and accounting maneuvers. The deal must still be approved by rank-and-file legislators, who are expected to vote on it Thursday.
"We have accomplished a lot in this budget," Mr. Schwarzenegger told reporters after lawmakers struck the deal Monday evening. "We dealt with the entire $26 billion deficit," he said.
While this gives the state's budget a reprieve in the short term, it does nothing to solve the plethora of structural problems that have afflicted the state to put into this position. A movement is growing in the state that will attempt to tackle that problem. That movement is the movement for a Constitutional Convention. This movement is a coalition of activists and think tanks that include the New America Foundation, the Bay Area Council, and Common Cause among a coalition of groups that includes conservatives, liberals, business leaders, and localities. The current California Constitution is nearly two hundred years old, it's the third longest Constitution in the WORLD, and it's been amended about 500 times. So, there are four structural problems that need to be attacked.
1) Budgetary Rules:
The budgetary rules favor waste, corruption, and inefficiency. For instance, all budgets must pass with a two thirds majority. That makes it nearly impossible to make unpopular cuts. The budget is NOT performance based. In other words, departments have no metrics to judge performance. In a performance based budget, department heads lay out quantifiable goals and those that meet goals earn more money in their budget in future fiscal years. In California, department budgets merely grow as a factor of inflation, and as department Secretaries propose new programs money is earmarked into their budgets for those programs as well. This creates a vicious cycle of an out of control government. Cutting budgets is near impossible because getting two thirds of legislators to agree. Growing budgets is much easier since it only takes a good sounding idea from a Secretary. In Texas, the state has something known as the sunset commission. In that state, all new programs go away after twelve years unless a specific act of the legislature. The state of California has no such commission.
2) The Initiative Process:
Right now, the process for introducing a budget initiative onto the ballot favors wealthy special interests and they're made nearly impossible for the average citizen to succeed. In order to get an initiative on the ballot, an idea must be drafted and presented to the Attorney General's office. That proposal is reviewed and then the Attorney General's office draws up the language for the initiative that will be used if it winds up on the ballot. At this point, supporters have 150 days to gather about 800,000 signatures for this initiative. Of course, such a task takes millions of dollars and hundreds of man hours. As such, an ordinary citizen would never get their initiative on the ballot.
3) The Relationship Between the State Government and Localities:
Over the last several decades, the government in Sacramento has usurped more and more power from counties and localities. More and more, property taxes go to the state first before being filtered back to the localities to pay for schools and roads. Once Sacramento gets its hands on any money they filter it back to counties and localities with all sorts of strings. In fact, part of this budget compromise was Sacramento agreeing not to enforce a mountain of mandates they have created onto localities. Right now, Sacramento mandates all sorts of things like earthquake preparedness in schools, lawn care, among thousands of things that cost not only the localities but Sacramento itself billions to enforce. One idea is one implemented in the Constitution of the state of Illinois known as Home Rule. This lays out a clear framework for the responsibilities of local governments and mechanisms to make sure that all monies are raised and kept in those localities for those responsibilities. There is no such provision in California.
4) Elections:
Right now, between Gerrymandering and the primary structure, California has created a system of elections that not only favor the incumbent far too heavily but to favor the extremes. Most California districts have closed primaries. As such, the only ones allowed to vote in these primaries are those registered for a particular party. Since the primary voters more often than not represent the extremes, the extreme candidates win most often. On top of this, decades of Gerrymandering, fixing districts to favor a party, leave the general election nothing more than a foregone conclusion.
Several proposals have been suggested to fix this. First, the Constitution could mandate open primaries where anyone can vote in any party's primary. Another idea is called the top two primary. In this idea, the two people that got the most votes from all the primaries would face off. In such an idea, two candidates from the same party could wind up facing each other. Whereas the most extreme would likely have gotten the most votes in the primary, in the general election the more moderate candidate would be favored.
A third idea involves regional proportional representation. In this idea, the legislature would still be unicameral (just one house) but the representatives would be split into two categories. One set of representatives would represent districts. The other set would represent regions of the state. For the second group, all parties would submit a list of candidates. Then, the voters would vote for a party not for an individual candidate. Then, the parties would fill these seats based on the proportionality of their vote. This would by pass Gerrymandering and give third parties some representation in the legislature.
The Mechanism of the Constitutional Convention:
The key for any successful Constitutional Convention is to make sure that delegates are free of political and special interests. That's why this Constitutional Convention proposal will be a Citizen Convention. It's a concept known as deliberative democracy. It works much like polling. A random set of citizens would be selected and those citizens would accurately reflect the demographics, income, and political ideology of the state as a whole. Then, for each district (80 in total), two hundred people that represent the make up of the state will be sent a letter from each district. ( in other words all two hundred won't be conservatives, African Americans, wealthy, etc.) Those two hundred would then meet at a central location and out of those two hundred five will be chosen for the convention. Then, five people from each district will represent at the state's constitutional convention. The delegation will set rules but those rules will only be in the framework of fixing the four things I spoke about. This delegation would have subpoena power and so experts, special interest leaders, and anyone else the delegation sees fit will present their ideas in front of the delegation. After the ideas will be heard, the delegation will vote, under rules they designed, on a new Constitution.
This is a philosophy that has tried and worked in New Orleans in the aftermath of Katrina, in New York following the 9/11 attacks, and in New Jersey to address property tax reform. Supporters of the Constitutional Convention believe in the process more than anything, though they each have ideas that they'd like considered in the convention. They believe that if regular citizens are chosen at random for a convention, that would by pass the special interests. Ordinary citizens with no agenda are the best people to make these decisions. The individuals would have the time to get educated and with subpoena power, they would have access to all sorts of experts from a variety of different perspectives. (all delegates would get paid throughout the process and the total cost for the entire convention would be about $25 million and it would come from the general fund)
What's Next:
The coalition expects to present its formal idea to the Attorney General of California in September. They expect the Attorney General's office to review the proposal. Then, signatures will need to be signed. The same problems that are currently in the Constitution will face the coalition. It will take somewhere around $6-7 million to get these signatures. Furthermore, the coalition faces a current Constitutional dilemma. Currently, the citizens can't call for a Constitutional Convention. Only the legislature can do that. As such, the coalition will have to have two ballot initiatives. The first changes the Constitution to allow the citizens to call for a convention. The second actually has the citizens call for one. Then, the initiative would go on the ballot in November of 2010.
Most Gubernatorial candidates including Meg Whitman, Gavin Newsom, Tom Campbell, and Jerry Brown have publicly supported this convention. (Arnold Schwarzenegger also agrees with it but he can't run again) Supporters believe that if they can get the signatures, the two initiatives should pass with a healthy margin. Still, the battle to transform California's political structure has just gotten started.
Most folks have never heard of the CIT Group. It's like that even now you haven't heard of the commercial lending and financial services firm. It's likely that over the next couple weeks you will hear a lot about this company. CIT Group is now struggling just to survive. They have about a billion dollars worth of bonds due, and they simply don't have enough capital available to cover the due date.
CIT has a $1 billion payment due in mid-August and it is unclear the company "will be able to handle that," said this person. The company will give more guidance when it discusses second quarter earnings in two weeks.
CIT declined to comment on whether it was preparing a filing or why it had retained Skadden Arps. But if CIT did file, the consequences could be considerable, because the 101-year-old company, as of March 31, had $68 billion of liabilities.
Furthermore, CIT is framing their need in the context that their failure would send ripples through not only the financial system but our economy as a whole.
The collapse of the company, run by Chairman and Chief Executive Officer Jeffrey Peek, would put 760 manufacturing clients at risk of failure and “precipitate a crisis” for as many as 300,000 retailers, CIT said in internal documents obtained by Bloomberg News.
It would also be the biggest bank failure measured by assets since regulators seized Washington Mutual Inc. in September. CIT reported $75.7 billion in assets and $68.2 billion in liabilities, including $3 billion in deposits, at the end of the first quarter
.
Does this sound familiar? It should. It's what we heard from an entire banking system back in October before we passed TARP. It's what we heard at the end of the year from GM and Chrysler when they were also on the verge of collapse. Do you remember CEO's of GM and Chrysler proclaiming that their failure would lead to the failure of thousands of suppliers? Doesn't that sound an awful lot like the argument made by CIT? In effect, like other banks, GM, Chrysler, and California, CIT is essentially arguing that they are too big to fail. It's roughly the same sob story that California is still using in hopes that the Federal government will back their debt. (so far they're the only ones that have been unsuccessful) Every industry from manufacturing, news, and small businesses have been mentioned as those deserving bailouts because their survival is necessary to the economy.
Moral hazard is the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk. In insurance, moral hazard that occurs without conscious or malicious action is called morale hazard.
Now, we'll never know why CIT, just a month before doom, now suddenly is begging the government for a bailout. In fact, I posed that very question to the author of the Bloomberg piece, Pierre Paulden, and he correctly pointed out that this would require that he speculate about someone else's thought process.
Yet, it's without a doubt that CIT continues a very troubling patter. Companies and even governments take on too much risk, too much debt, and then wait until the last minute to figure out what to do. Then, immediately come to the federal government for bailout. Furthermore, company and other entities continue another pattern. They frame their bailout as necessary because their failure, CIT, GM, California, would send a ripple effect throughout the economy. If large corporations and states get the idea that their scope can strong arm and extort the federal government into bailouts because they are deemed "vital to the economy", that's the very definition of a "moral hazard". We'll never know if that's what happened in the case of CIT. We can only say that this case has all the characteristics of moral hazard. We can, further, say that critics of TARP and bailouts predicted just such scenarios in opposing them.
The California Supreme Court today upheld Proposition 8’s ban on same-sex marriage but also ruled that gay couples who wed before the election will continue to be married under state law.
The decision virtually ensures another fight at the ballot box over marriage rights for gays. Gay rights activists said they may ask voters to repeal the marriage ban as early as next year, and opponents have pledged to fight any such effort. Proposition 8 passed with 52% of the vote.
Now, by upholding Prop 8 but also upholding all gay marriages prior to Prop 8, we will inevitably have a series of Constitutional arguments. The first argument is the equal protection argument under the 14th amendment.
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
By upholding a ban on gay marriage but also upholding prior gay marriages, the state of California certainly appears to have violated the 14th amendment. After all, future gay couples wouldn't be treated equally under the law as those that got married when it was allowed.
Former Bush administration solicitor general Theodore Olson is part of a team that has filed suit in federal court in California seeking to overturn Proposition 8 and re-establish the right of same-sex couples to marry.
The suit argues that the state's marriage ban, upheld Tuesday by the California Supreme Court, violates the federal constitutional right for same-sex couples to marry. The complaint was filed Friday, and Olson and co-counsel David Boies -- who argued against Olson in the Bush v. Gore case -- will hold a news conference in Los Angeles Wednesday to explain the case. The conference will feature the two same-sex couples on whose behalf Olson filed suit.
The suit also asks the U.S. District Court for the Northern District of California to issue an injunction that would stop enforcement of Proposition 8 and allow same-sex couples to marry while the case is being decided.
"I personally think it is time that we as a nation get past distinguishing people on the basis of sexual orientation, and that a grave injustice is being done to people by making these distinctions," Olson told me Tuesday night. "I thought their cause was just."
So, clearly, this ruling will face significant Constitutional challenges. Now, one potential counter to the argument that this ruling violates the 14th amendment might be the concept of ex post facto.
An ex post facto law (from the Latin for "after the fact") or retroactive law, is a law that retroactively changes the legal consequences of acts committed or the legal status of facts and relationships that existed prior to the enactment of the law. In reference to criminal law, it may criminalize actions that were legal when committed; or it may aggravate a crime by bringing it into a more severe category than it was in at the time it was committed; or it may change or increase the punishment prescribed for a crime, such as by adding new penalties or extending terms; or it may alter the rules of evidence in order to make conviction for a crime more likely than it would have been at the time of the action for which a defendant is prosecuted. Conversely, a form of ex post facto law commonly known as an amnesty law may decriminalize certain acts or alleviate possible punishments (for example by replacing the death sentence with life-long imprisonment) retroactively.
Ex post facto laws are specifically prohibited under the Constitution. In other words, one cannot be punished for something that is now illegal but was legal at the time of the offense. Normally, ex post facto concerns criminal violations of law. So, such an argument would likely find a slightly different interpretation.
Either way, the ruling yesterday by the California Supreme Court is certain to ignite a series of significant constitutional battles.
If you really want to see the future vision of America, all one really needs to do is look at California. That's because California has been trying, and failing, to implement Obama's vision in that state for decades.
First, let's look at the dynamics that have put California on the brink of disaster. In its simplest form, the state of California has spent far too much money on a range of government services. Furthermore, to raise money to pay for all of this the state has gone more and more to raising taxes on its most productive citizens.
The roots of California's budget disaster have several areas. Some of its roots can be found in the .com explosion of the late 1990's. The explosion of revenues to the state also came with an explosion in spending. The dot com boom busted but spending has been permanently increased without the same revenue pool.
In 1988 Proposition 98 passed and mandated that 40% of general funds be spent on education. So, when the revenue increased into general funds so to did education spending. As with most spending, once it went up cutting education spending was no easy task. Furthermore, California's massive education spending hasn't been rewarded. It's educational system tests in the bottom five of all fifty states in most years.
Furthermore, California is not only inviting to all, legal or not, but the state provides a robust system of entitlements for everyone. California provides everything under the sun for citizens of the state including those that are in the country illegally. For instance, Medi Cal, its universal health care for the poor program, is billions in the red. Their entitlement programs included food stamps, unemployment, and free health care and education for all those that can't afford it. Providing everything for everyone that can't afford it is not without its own costs. As such, California boasts the highest state income tax in the country and, frankly, is among the highest in state capital gains, property, and sales taxes as well.
Finally, two special interest groups dominate the state, the unions and the envirnomentalists. The unions represent workers in all sorts of state government jobs. The unions are often instrumental in negotiating higher wages, health care benefits, and and retirement plans for their state employees. All of this needs to be paid and ultimately it is paid by the tax payers of California.
The other major player is the environmental lobby. In 2007, California passed the landmark Global Warming Solutions Act. This raised the emissions standards on almost all carbon emitters.
Schwarzenegger especially celebrated California for its leadership on energy and the environment. Just three months earlier, he had signed the Global Warming Solutions Act, committing California to reducing greenhouse-gas emissions to 1990 levels—roughly 25 percent below today’s—by 2020, and all but eliminating them by 2050. The Governator then lambasted the Bush administration for failing to tackle global warming: “It would not act, so California did. California has taken the leadership in moving the entire country beyond debate and denial to action.” Such performances have helped establish Schwarzenegger as a national figure, even a statesman, on the environment. In April 2007, he posed for the cover of Newsweek, spinning a globe on his finger under the banner leadership & the environment, and in September, he even addressed the United Nations on climate change.
Whatever its effect, the GWSA, along with much of California's other environmental initiatives, have increased energy costs and forced California to become dependent on other states for its energy needs.
The spending hasn't stopped even in the middle of the crisis. Despite the utter failure of Medi Cal, the state was near the passage of a single payer universal health care package. On the other end, there wasn't a tax that the state didn't want to increase: taxes on alcohol, pop, cigarettes, gasoline, along with increases on income, sales, and capital gains. All of this not only hurts the poor that consume most of these "excises", and it also has meant a migration of the wealthy which have been the primary target of most of the main tax increases.
If all of this sounds familiar, it is almost an exact replica of the vision of President Obama. Both the environmentalists and the unions have emerged as the two special interest groups dominating his administration. He has a vision to provide entitlements for everyone that can't provide for themselves. The utter failure of both Medicaid and Medicare have not deterred Obama from pursuing universal health care that would implement a similar structure on the economy as a whole. Finally, to pay for the massive increases in spending, President Obama has found all sorts of creative new taxes including taxes on cigarettes, soda, and even on charitable giving.
The only difference is that the state of California demands a balanced budget whereas President Obama can carry these obscene deficits until there is no one there to fund them. Yet, the due date on Obama's massive government expansion and deference to both the unions and the environmentalists is coming and the state of California is a good marker for the final product.
This morning my email was flooded with many local and state watch dog groups warning me that our new Governor, Pat Quinn, is planning on raising the state's income tax a whopping 50%. Cook County, the state' largest county, is already battered by the massive sales tax increase instituted about six months ago. Unlike President Obama's dubious promise, these taxes affect every single citizen. If enacted, try and imagine what a tax increase would do to the economy of the state of Illinois if it's done into the teeth of the recession.
Unfortunately, the state of Illinois is NOT the only state currently raising their taxes. More troubling is the list of large states doing it. The biggest offender is the state of California which raised several taxes amounting to a $13 billion added bill for California residents.
The revenue proposal would raise the state sales-tax rate to 8.25 percent from 7.25 percent and boost vehicle license fees to 1.15 percent from 0.65 percent of the value of an automobile. The package doesn’t include a gasoline tax increase that was included in previous versions.
It also adds 0.25 percentage points to all personal income tax brackets for two years. A resident currently taxed at 8 percent will face an 8.25 percent levy. That increase would drop to 0.125 percentage point depending upon how much money California receives under the economic stimulus measure signed by President Barack Obama. The budget anticipates at least $7.8 billion in such federal funds.
The state of New Jersey is looking to add a punishing income tax increase only to those making $500,000 and more. The state of Maryland is proposing to raise the tax on alcohol. Michigan plans to raise its gas tax.
On and on it goes. Most states will face a budget shortfall in 2009. Most of these states are very unlikely to cut spending. As such, they will only be able to borrow, if it's allowed, or raise taxes. So, throughout the country tax payers will have all sorts of taxes go up: income, sales, property, alcohol, gas, etc. This will affect each state in its own unique way.
One thing that no one can get around is that raising taxes into the teeth of a recession is totally counter productive. It only ecacerbates the recession. The United States is a collection of fifty states. If New York, California, and Illinois lead a host of states all raising their taxes, it is a terrible burden on the economy of the entire country. It will be very difficult to see any sort of a recovery if state governments, of most of the large states, are ensuring that their own states see their economies worsen even more into the teeth of the recession with a plethora of new taxes.
Not every state is doing it for sure. So far at least, the state of Ohio for instance has not announced any tax hikes. The state of Florida is only looking at an alcohol tax hike. The state of Pennsylvania is proposing a very modest increase in the state's cigarette tax (about 10 cents a pack), but Governor Rendell is also floating the idea of allowing counties the ability to raise their own individual sales tax. One need only go to Cook County to see what effect that has on any local economy.
Still, while this won't be seen everywhere in the country, it will be seen in a lot of places. In each of these places, for the most part, these tax increases will have a localizing effect of perpetuating the recession. Of course, it will be damn near impossible to have any sort of recovery when California, New York, and Illinois move toward economic abyss. The recovery is hard enough without an endless stream of states and localities raising taxes to make things even more difficult.
This is happening for a number of reasons. In Illinois, a combination of corruption which lead to then Governor Blagojevich simply buying votes through things like near universal health care and free public transportation for seniors contributed to this budget short fall. In California, the state was bloated with all sorts of social services not to mention a massive debt piled on by its growing illegal immigration policy. Whatever the reason, almost no state showed any fiscal restraint throughout the beginning of the decade when revenues were much higher. As such, they now all face budget shortfalls with no cushion. Furthermore, it is rare to find the politician with enough courage to propose spending cuts. As such, states all over will raise taxes on their citizens as we enter the teeth of the recession. By doing so, all these governments have just made the task of overcoming the recession just that much harder.
The proposition in California that received the most media attention was Proposition 8. Proposition 8 kept the definition of marriage as one man and one woman and it passed narrowly. While that proposition got all the headlines, California also passed a far more significant proposition, in my opinion. That proposition was Proposition 11.
Proposition 11 will dramatically change how we choose legislators and no longer allow them to choose us. Let me explain.
Since the founding of the state in 1850, the California Constitution has charged the legislators with the task of redrawing their district lines every 10 years and right after the U.S. Census is completed.
This was not really a problem until more recently. The process is now the poster child for gerrymandering, which is a practice of controlling the political makeup of the district in which the legislator resides with the goal of making it nearly inevitable for him or her to be re-elected.
Even when term limits are reached, the same political party wins the election. The seat is nearly "guaranteed" for one or the other of the two major political parties.
The net effect is that we are regularly electing the most ideological extremes of both parties to the Legislature. These legislators find it very difficult to work together to solve the real public policy matters for fear of losing the next election. The only thing they seem to work well on is redistricting.
Proposition 11 forces the State Legislature's districts to be drawn by an independent panel rather than the politicians themselves. In California, the people have seen up close the corrossive effect of Gerrymandering.
Gerrymandering is a form of redistribution in which electoral district or constituency boundaries are manipulated for electoral advantage. Gerrymandering may be used to help or hinder particular constituents, such as members of a political, racial, linguistic, religious or class group.
The term gerrymandering is derived from Elbridge Gerry (1744–1814), the governor of Massachusetts from 1810 to 1812. The term first appeared in the Boston Gazette on March 26, 1812 (see image). In 1812, Governor Gerry signed a bill into law that redistricted his state to benefit his Democratic-Republican party.
In California, the districts are drawn up in such a way that, for the most part, they benefit those with extreme points of view on each side. As such, the legislature is forced to compromise between far left politicians and far right. As such, the budgetary process has come nearly to a halt.
The concept of Gerrymandering gets little attention in current political coverage, and yet, I believe it is at the root of most of our political problems. Congressional re election rates have traditionally been around 95% of the time. Some of this is is due to name recognition and other benefits of being an incumbent. Most of it is due to Gerrymandering.
Whenever a political party has an opportunity to redraw districts, (usually following a census) they re draw them in their own favor. By extension, what they really do is, more often than not, redraw districts to favor incumbents in general.
Gerrymandering occurs when a party re draws districts so that as many of their folks get elected. They do this by re drawing districts so that people of like mind are kept in the same district. As such, the minimum number of diversity is kept in any district. As such, incumbents are almost always the favorites. The districts have been rigged to make it that way. Incumbents rarely get competition from their own party. The system is rigged so that the opposition is meant to lose. That's because the district is rigged so that the overwhelming number of people agree with the ideology of the incumbent's party.
Gerrymandering leads to extremism, laziness, and most importantly corruption. If a politician feels so safe in re election, that anything can go, anything does go. Almost everything that we get cynical about in politics has its roots in gerrymandering. Most Congressional veterans are hated in general everywhere but in their district. This is no accident. This happens because their district was tailor made for them.
This brings me back to Proposition 11. You may have noticed that politicians would no longer be able to re draw districts in the State Legislature. The California Congressional districts could still be re drawn by the politicians. That's because proponents of Proposition 11 feared that Nancy Pelosi et al would bring in heavy artillery against the Proposition if it also forbade politicians from re drawing Congressional districts and then the Proposition would fail.
Make no mistake. Gerrymandering as at the root of most of our political problems. This problem is perpetuated because the media ignores this corrossive problem. The politicians that rely on it for their nearly unlimited power won't let it go without a fight. With the media, in general, providing them cover, it's likely for the most part it won't go down.
Please note. I welcome any and all comments from any political perspective. I will not stand or approve any swearing, and personal attacks will likely also not be approved.
