"Mandatory Volunteering" in San Jose School District

Huh?

"District may require parents to volunteer" is the title of the article today (paper version) by Sharon Noguchi at San Jose Mercury News.

The online version of the article has a different headline, which is even more hilarious: "School district may make volunteering mandatory"

Maybe I'm missing some intricacy of the English language, but isn't volunteering supposed to be, uh, how to say it, voluntary?

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California's New Deficit Reduction Strategy: Cuss Free Week

If you violate, you drop a coin or two in a no-cuss jar. They actually passed the resolution.

California Assembly passes resolution for Cuss Free Week
(2/25/2010 San Jose Mercury News)

"SACRAMENTO — Feeling a little salty, Californians? Better get it out of your system while you can.

"Amid the ongoing — and occasionally tense — debate over how to clean up California's budget mess, lawmakers are trying to tidy something else, almost as unmanageable: our language. Thursday morning, the Assembly approved a ceremonial resolution turning the first week of March into "Cuss Free Week."

"With the Senate expected to follow suit next week, all Californians will be asked to bite back on four-letter words and a few choice compound phrases. WT (bleep)?, you ask. Don't sweat: Police officers won't be waiting with soap. That's not the point.

"According to sponsors of the measure — inspired by a Southern California teen whose creation of a "no cussing" school club sparked an international movement — it's more about minding the delicate sensibilities of those around you. Like your grandmother. "When we're at our grandmother's house," said Anthony Portantino, D-Pasadena, "we have respect and decorum."

"Aren't there more important things on government's agenda right now? Sure, Portantino concedes. But maybe a little civility is just the prescription to help "break through that logjam." To keep things honest, Portantino is handing out no-cuss jars to all 120 legislative offices in the Capitol — and to Gov. Arnold Schwarzenegger. Every time a naughty word slips out, a few coins get dropped in. He'd like us all to try it at home, too. How's that for a deficit-reduction strategy?"

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California to Withhold Bigger (10% Bigger) Chunk of Paychecks

Not to be outdone by Hillary, the State of California has just started to withhold the state tax 10% more than it already does.

California to withhold a bigger chunk of paychecks
(10/31/09 LA Times)

"Reporting from Los Angeles and Sacramento - Starting Sunday, cash-strapped California will dig deeper into the pocketbooks of wage earners -- holding back 10% more than it already does in state income taxes just as the biggest shopping season of the year kicks into gear.

"Technically, it's not a tax increase, even though it may feel like one when your next paycheck arrives. As part of a bundle of budget patches adopted in the summer, the state is taking more money now in withholding, even though workers' annual tax bills won't change.

"Think of it as a forced, interest-free loan: You'll be repaid any extra withholding in April. Those who would receive a refund anyway will receive a larger one, and those who owe taxes will owe less."

It feels like an outright theft. This 10% extra withholding was one of the little-noticed provisions that were approved during California's budget crisis this summer. By raiding the paychecks of Californians, the state will be able to raise $1.7 billion.

California has also raised the sales tax. With local governments heaping their own additional sales tax, the total sales tax for my area is now 9.25%. Less than a year ago, it was 8.25%.

"Change we can believe in." I truly honestly wholeheartedly believe that change has happened. It's just not the change for the better, that's all. (Or my definition of "better" is vastly different from that of the White House honchos.)

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California Assembly Bill AB 1506

This bill, if enacted, will make California IOUs legal tender.

State lawmakers back bill to make IOUs legal tender
(7/7/09 SignOnSanDiego.com)

"SACRAMENTO – Republicans and Democrats alike embraced legislation Tuesday that would make California IOUs legal tender for all taxes, fees and other payments owed to the state.

"A unanimous vote in the Assembly Business and Professions Committee and support from the Democratic majority launched the bill on what could be a quick trip to the governor's desk.

“I think we can get this done in the next two or three weeks if the majority wants to push it hard,” Assemblyman Joel Anderson, R-La Mesa, said after the hearing on his measure, AB 1506."

"... Anderson's legislation simply declares the state must accept its IOUs as payment for any taxes, fees or other payments owed to the state. The state already accepts its IOUs for payment of income taxes."

And why not? The Federal Reserve is issuing IOUs called Federal Reserve Notes against the federal government's debt obligations - Treasury bills, notes and bonds. It's all fiat anyway. As the 10th largest economy in the world, California should be entitled to issue its own "legal tender".

If this becomes law, it will present an interesting conundrum for the federal government. So far, the federal government is determined to teach California a lesson by refusing to bail out the state. But by allowing California to have its own legal tender within the state, the union of the states will be threatened, won't it? What if other states decide to follow California?

After the 2nd Central Bank failed in the US in 1836 and before the National Banking Act of 1864, individual banks used to issue their own currencies, and those currencies used to compete on the strength of the issuing institutions. Currencies from less capitalized, risky institutions were quickly discounted by the market force and driven to extinction. It seems to me to have been a very effective system, until the federal government came butting in to spoil the party (as it always does) and wrestle control (as it always does).

Maybe out of this California mess comes regional, competing currencies issued by anyone, from state government to county to local businesses. Many of them will be fiat currencies like the current Federal Reserve notes, but some may be asset-backed real currencies. Let them compete, and allow the free market to work.

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California IOU Is Now A Security, Says SEC

California's IOUs are now "securities", just because the government says so. (If the government says the sun goes around the earth, I am sure the sun will go around the earth like good old times.)

The Daily Capitalist: We Buy and Sell California IOUs
(7/10/09 Noozhawk)

"This is the power of capitalism. When the big banks announced that they would not accept California’s IOUs as cash deposits, it took about three minutes for a market to spring up on eBay and Craigslist for this scrip. Of course, many buyers want a discount on the paper.

"Then some idiot at the Securities and Exchange Commission comes up and says the scrip is a security and no one can sell without registering them.

"So, now a promise to pay is a security because some bureaucrat said so. I don’t think so. I would love to see the SEC try to get away with this. If it was a security, the state of California as the issuer would first have to register the IOUs as a security. Then the people working a secondary market on an already registered security would need a broker-dealer license to trade them. The state controller insists they aren’t securities, but rather “a form of payment.” And they are correct."

However, according to Market Watch, the spokesman for the California State Treasurer has this to say:

"Tom Dresslar, a spokesman for California State Treasurer Bill Lockyer, lauded the SEC's announcement, saying in a statement: "The SEC has sent a pretty clear warning to folks who plan to profit by buying and reselling IOUs: If you're not registered as a municipal securities broker-dealer, you run the risk of violating federal law." "

So they are now happy that their IOUs are regulated "securities" after the fact, even though they didn't issue them as securities and the recipients didn't receive as securities and didn't agree to receive as securities. Fraud, anyone? Lawsuits, anyone?

When I first heard the news that banks would refuse to cash CA IOUs after Friday July 10, I immediately went to eBay to check if anyone was offering to cash them. There was. One eBay seller was offering to exchange $100 IOU plus $70 that the IOU holder needs to send to the seller, with $140 visa gift card. So the IOU holder would mail in total $170 ($100 IOU and cash), and receive $140 cash equivalent. It would represent a 17.6% discount. I doubted if anyone needed to cash IOU badly enough to take a steep discount like that, but I was sure as competition heated up the discount rate would be less - probably between 8% and 15%.

Now that SEC is here, and sellers like the one I found on eBay have disappeared. And it looks like jobs will start to disappear at those businesses in California unfortunate enough to have received IOUs.

At some point, you have to wonder. What does the federal government want? Major banks who had said they would accept California IOUs reversed very quickly, possibly under the guidance from the government. When the free market started to take care of the problem by offering to cash them at discount, SEC stepped in to make it impossible for the free market risk takers to offer cashing.

Bankrupt the 10th largest economy in the world, suck the remaining juice out and beat the carcass to pulp so that it never recovers is what they want. My question is why. I am already hearing an answer from far away... "Because We Can!"

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California To Ditch Two-Third Rule And Prop.13 ?

Heard it on the NPR radio today.

California legislators busy bickiering over bills on fruits and pomegranate juice (I wonder if Mr. and Mrs. Resnick have a say in it) while they collect per diem (currently $173 max in Sacramento) and perfunctorily attempt to balance the budget want to blame the super-majority rule or two-third rule - the rule that says two-thirds of the lawmakers in both houses have to agree on the budget.

NPR claims California voters are rethinking the two-third majority rule, while 73% OPPOSE ditching the Proposition 13, which currently requires the two-third majority.

Rethinking the Two-Thirds Rule (7/8/09 NPR California Report)
(Sorry their embed code didn't work.)

My suspicious mind whispers, "They WANT to bankrupt California so that they can ditch both two-third rule and Proposition 13 by bankruptcy judge's unitary decision."

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Big Banks Refuse California IOUs

After indicating they would accept California's IOUs from their customers, big national banks are breaking their promise and will stop accepting them on Friday.

Big Banks Don't Want California's IOUs (7/7/09 Wall Street Journal)

"A group of the biggest U.S. banks said they would stop accepting California's IOUs on Friday, adding pressure on the state to close its $26.3 billion annual budget gap.

"The group of banks included Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and J.P. Morgan Chase & Co., among others. The banks had previously committed to accepting state IOUs as payment. California plans to issue more than $3 billion of IOUs in July."

The article did say not all banks will stop accepting IOUs on Friday; some credit unions will still accept them.

So the IOUs from the 10th largest economy in the world is not good enough for the national bankers, some of whom have to bid every single week on the U.S. federal government's IOUs (Treasuries).

Or are the national banks, particularly those deep in TARP money, taking orders from the Fed and Treasury? Maybe the president wants to run California, along with GM, Chrysler, AIG and health care.

The stock market is sinking anew in the last half hour of trading. Dow Jones Industrial is down 145 (-1.75%) to 8179, S&P 500 down 15 (-1.76) to 882, Nasdaq is down 36 (-2.05%) to 1750.

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Michelle Obama's UC Merced visit cost school $1M

And the first lady wasn't even paid for her appearance. What a shame.

Michelle Obama's UC Merced visit cost school $1M (7/6/09 AP via Yahoo News)

"MERCED, Calif. – The final price of the University of California, Merced's commencement ceremony featuring first lady Michelle Obama was more than $1 million — surpassing the original estimate tenfold.

"Private contributions and interest on a private endowment fund have helped cover the cost. UC spokeswoman Patti Waid Istas said that nonstate dollars and other contributions will be used to cover the remaining balance of around $362,338.

"The school had budgeted $100,000 for the May commencement ceremony. The price tag ended up being $1.04 million.

"The address attracted about 12,000 visitors, requiring additional transportation, audiovisual and multimedia needs and other items. Obama was neither paid for her appearance nor compensated for travel and security."

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Obama to California: Take A Hike

White House to California: You're On Your Own (6/16/09 CNBC):

"The White House Tuesday dashed hopes that the federal government would help California overcome a mammoth budget crisis that has brought the state dangerously close to an economic meltdown, saying California will have to solve the problem on its own."

The message was delivered by Mr. Press Secretary Robert Gibbs.

""It's obviously not an easy time for the state of California," White House spokesman Robert Gibbs told a briefing when asked if the administration would provide emergency financing for the state.

"We'll continue to monitor the challenges that they have, but this budgetary problem unfortunately is one that they're going to have to solve," Gibbs said."

The governor and his delegation, as well as California's Senators and Represenatives, must have thought they would be eventually bailed out. Aren't they too big to fail, with 13% of GDP? Also, didn't they vote (60%) for the current president in 2008 election?

After all, AIG got $180 billion, GM will get $50 billion, and they are just private companies. Right?

"It will run out of cash within weeks if it does not balance its books, according to State Controller John Chiang, who estimated last week California was "less than 50 days away from a meltdown of state government.

"Standard & Poor's ratings agency on Monday put $67.1 billion worth of California's debt on alert for a possible ratings cut because the state may run out of cash by the end of July."

California's budget deficit is about $21 billion, with the total budget at $131 billion. Only 8 years ago the budget was below $100 billion. When the current governor took over, the state budget was $104 billion.

Now that California has been officially told to take a hike, it can seriously start cutting the excesses for a change, and that is a good thing in the long run.

The one trick I think California may still have up the sleeve is a threat to cut social welfare programs for the minorities / the poor / (legal and illegal) immigrants / socially disadvantaged (whatever). The administration may respond to that line of pleading.

(What happens if China, Japan, Russia, Brazil start to tell the administration the same thing? "It is obviously not an easy time for the U.S. We will continue to monitor the challenges that the U.S. has, but this budgetary problem unfortunately is one that the U.S. is going to have to solve.")

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Budget Deficit in Santa Cruz, CA the Original Surf City

Recession Threatens the Original Surf City (1/19/09, Times):

"With a floundering economy forcing cities nationwide to slash budgets, some municipalities are having to carve out their very souls. A Californian case in point: Santa Cruz. The city is iconic in the history of American surfing. But the city council, faced with a $7 million deficit, voted in December to close the city's surfing museum, the world's first and a mecca for locals and tourists alike since it opened in 1986. And it's not just the surfing musuem. The decision includes shutting down the natural-history museum, a teen center, a community center and a public pool.

"But it was the proposed closure of the surfing museum that sounded the loudest alarms. It immediately unleashed a tidal wave of response from surfers worldwide and sparked an emotional campaign to keep the museum afloat."

The pattern is the same as bigger California. No appreciable reduction in departmental head counts or budgets (most departments show increase), no cuts in entitlement plans, hardly any cuts in salaries and expenses (it's actually an increase there), but let's cut where people actually visit and use.

According to the Santa Cruz city's 2010 proposed budget plan, city will save $135,372 by closing two museums. By closing down a public pool, it will save $205,515. How much is the budget deficit for the city? $6,747,314. So these closures will reduce the deficit by 5%.

The budget plan doesn't say how they are going to fill the deficit, which is 12% of the budget. Their assumption about tax collection on property tax and sale and use tax looks optimistic. They are actually forecasting increased revenues over 2009.

But no matter. Why, me worry? Everybody's gone surfing.

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