Jerry Brown pulls a Nixon

May 10, 2012 - By admin

May 10, 2012

By Chriss Street

“Only Nixon could go to China” is a political metaphor referring to the ability of a politician with an unassailable reputation among his supporters for staunchly representing and defending their values, to take actions that would draw vicious criticism and fierce opposition if taken by someone without those credentials.

With California’s financial condition in free fall, ultra-union friendly Gov. Jerry Brown demanded public-employee unions cut compensation by 10 percent.  If the People’s Republic of California is adopting fiscal responsibility, perhaps America can too.

For unions, Jerry Brown has been the governor who always kept on giving.  In 1977, he approved the Dills Act, collective bargaining for California government workers.  Last November, he signed SB 922, protecting “project labor agreements” that force non-union workers to apply for union membership, and pay dues, in order to work on public projects.

While predicting a $9.2 billion budget deficit in January, Brown sought to protect public service union jobs by cajoling private sector retailers to support a voter initiative to raise sales taxes.  As state tax revenue had fallen by $4.9 billion in February, Brown focused on raising $630,000 in contributions for his tax increase initiative from unions, Indian tribes and crony capitalists.  As revenue continuing to fall last month, Brown extended union contracts representing tens of thousands of workers that increased the state’s health benefits by 9.5 percent.

Brown’s good-old-boy support for his union brothers and sisters may have come to a screeching halt as California State Controller John Chaing published a devastating April Financial Statement showing monthly income, sales and corporate tax revenue came in 20.2 percent below the governor’s latest projections; and sales tax collections fell by an astounding 61 percent below last year.

Looking closer into the numbers, California missed the national economic recovery.  As U.S. Gross Domestic Product grew by 2.2 percent, California employment grew by only 1.3 percent.  Given that the workforce expands by 1.5 percent annually as more young people begin looking for jobs, this explains why California unemployment rose to 11 percent in March from 10.9 percent in February — as U.S. employment fell to 8 percent.  Chiang ominously stated:

Without a timely, financeable budget plan, the State will be unable to access the working capital needed to pay its bills later this year.”

This is bureaucratic speak for: We are insolvent, our credit rating should be junk and we will default when we can’t borrow any more money!

Credit Rating

Standard & Poor’s, in a new credit report last week, warned that California lawmakers’ resistance to steep cuts in welfare and health care programs is to blame for failure to balance the state budget:

As the most important month of the year for [income tax] collections, April receipts are not only failing to solve part of the state’s projected problem, they are deepening the estimated budget gap.”

With the state needing to borrow $20 billion in July to finance operations until collecting property payments in mid-December, this is S&P speak for: We will cut your rating.

California rolled over an $8.2 billion deficit from last year’s budget disaster and this year’s growing deficit has forced the state to increase borrow another $7.7 billion.

The state did cut $1.8 billion, or 8 percent, from operations; and school funding was flat this year. But spending on health and human services jumped by a stunning $3.7 billion, or 6.2 percent.

President Richard Nixon had a reputation as the leader of hardcore Republican anti-communists when he announced he was going to improve relations with China by personally visiting the country in 1972.  No Democrat at the time could have absorbed the political blowback of such a spectacular change in America’s foreign policy.  Over the next 40 years, America and China have become each other’s most important trading partners

Just as Richard Nixon was the strongest ally of anti-communists, Jerry Brown has been the strongest ally of public-sector unions.  Chief Executive Magazine’s survey of best and worst states for business ranks California dead last.  According to one CEO:

The leadership of California has done everything in its power to kill manufacturing jobs in this state. As I stated at our annual meeting, if we could grow our crops in Reno, we’d move our plants tomorrow.”

Given that high taxes and onerous regulatory enforcement were championed by Brown in California and then spread out across the nation, Brown is best positioned to unwind these job killers.  When Jerry Brown told state employee union leaders his next budget would include a 10% cuts in state worker compensation, there has been little opposition.  Perhaps California’s financial distress may require Jerry Brown to be America’s pro-business governor.

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Comments(0)
  1. Beelzebub says:

    I’m not sure what the triggering event will be – whether the dominoes will start falling in europe and come across the ocean or whether all the deceptive accounting and failure to mark-to-market on Wall Street will eventually be impossible to paper over and we’ll have another Lehman on our hands or whether the municipal bond markets start blowing up one after another while the resulting tsunami takes out the remaining financial markets. I really don’t know. But I do know what we see happening in the capital markets and in government is simply unsustainable and must eventually come crashing down….1 year…..2 years…..3 years…… I have no idea. The Kabuki Financial Theater has become so well oiled they might be able to keep the juggling the plates for some time. No predictions from me anymore.

    I appreciate your informative articles, Mr. Street. When you get time would you please give us an update on what’s happening in Orange County? Moorlach has been trash talking you from the Chairman’s seat and the Board is searching for a fall guy to their current fiscal dilemma(s). And it’s much more convenient to go after former officials than current officials. Please continue to provide the other side to the story so we get some balanced reporting. Thank you, Sir.

  2. Rex The Wonder Dog! says:

    JP Morgan took a $2 BILLION hit today on mark to market credit/debt instruments…….and the slide into depression ocntinues!

  3. Beelzebub says:

    JP Morgan tells Uncle Ben at the Fed Reserve when to crank up the printing machine. They’ll just tack on a few more dollars to the cost of a salmon or a roast beef or another $1.50 to a gallon of gas. We will run out of affordable food and energy before JP Morgan is forced into bankruptcy. $2B to JP Morgan is chump change. But it does indicate there are cracks in the financial armour. And it’s not just JP Morgan either. Many others are in trouble. If the big financial boys were forced to mark-to-market tomorrow they would ALL go under. This economy will surely collapse. I just can’t put a date on it. When they force our 401-k’s to backstop the treasury market we know the end is near.

  4. queeg says:

    The political class makes the rules, prints the money and doles out the many benefits you enjoy…..your like a well fed pet mouse!!!! No real purpose… you’re just running around in a rich guy’s maze going nowhere.

  5. Beelzebub says:

    You’re like a flea on my dog’s arse. Far enough away to be safe from harm while feeding off delicacy doggie dung. For the short time you’re around it’s paradise.

  6. Oh gawd! Chris is furthering a phoney narrative by giving Brown undue credit. (Will a Nobel prize be next?)

    The unions are under contract and have no incentive for givebacks. In fact, Brown larded up sone of the contracts, himself. So, give us a friggin’ break! Brown’s talk is so much gas.

    Just say no to being a useful iidiot.

  7. Beelzebub says:

    Btw, it’s JP Morgan that processes and administers the food stamp program for the US government – so they’ll just have to double the food stamp recipients from 46M to 92M to make up that $2B shortfall.

    I was listening to an FM music channel in the car yesterday. They broadcast an advertisement by the FDA to encourage people to apply for food stamps. In fact, it said just because you have a job, a bank account and own a car doesn’t mean you cannot get food stamps! HAH! No lie! I laughed out loud. They are really determined to run the train right off the side of the damn cliff, aren’t they? I have to admit the ride is entertaining. There was never so much material to work with as there is in 2012. The ride over the side of the cliff won’t be so fun tho.

  8. Rex The Wonder Dog! says:

    You’re like a flea on my dog’s arse. Far enough away to be safe from harm while feeding off delicacy doggie dung. For the short time you’re around it’s paradise.

    LOL…OMG is that funny!

  9. Rex The Wonder Dog! says:

    sales tax collections fell by an astounding 61 percent below last year.

    Yet Clown and every other elected official refuses to freeze hiring and raises and benefit increases.

    Look at the prison guard contract Clown just did- 4% annual raises over 3 years while we are in a huge budget deficit.

  10. Beelzebub says:

    Latest breaking news is that Gov Clown is toying with the idea to cut state worker’s pay by 5% across the board. How much you wanna bet he excludes cops and firewhiners? And 5% is not enough. It’s got to be no less than 10% or massive layoffs. For Clown to propose this he must know the state is screwed financially. I so hope that the Nov tax measure fails. That will put him between a rock and a hard place. We would be talking an INSTANT credit downgrade on California and higher borrowing expenses. I hope and pray the tax measure gets slapped down. Last I heard it was about just about an even split. So it seems to be losing more votes as we move toward the elections.

  11. queeg says:

    Ever thought his “revised” budget cuts will give the impression those greedy porkulent government workers are getting cuts…..will show them…yeah….populist pap….now residents… raise taxes on the rich….

  12. Rex The Wonder Dog! says:

    Clown will NOT cut any gov employees pay-and certainly not GED educated cops and FF’s.

  13. Beelzebub says:

    Clown is supposed to give his budget revision announcements in May. That’s sort of like when mommy and daddy meet with the teacher and see how well you’re doing part way through the semester. Clown knows he screwed. His estimates were WAY WAY off. No telling what the deficit will be now – but it will be MUCH higher than $9.2B. He’s scared – he has to be – otherwise he wouldn’t have leaked his proposal for the 5% gov worker pay cuts. Of course, he could be blowing smoke. That’s yet to be seen. For him to go after the public workers would be like the Archbishop publicly badmouthing the Pope. For that there will be political consequences. Let’s see how this plays out.

  14. queeg says:

    No pension cuts….so salary cuts….your beloved clown gives and takes…..the rich made me do this!

  15. Chriss Street says:

    You people need to be more empathetic to the poor lost souls on the Left that almost destroyed California and America. They never understoood that their actions had consequences! Now it is cruch time and they are going to blink. The challenge to the social welfare state is not that you run out of people to tax. The ones that make the money you want to tax vote with their feet and leave.

    Jerry Brown needs to do a really big capitalist deal. California is perfectly positioned to exploit resources, because they have been off limits for 40 years.

  16. Beelzebub says:

    “You people need to be more empathetic to the poor lost souls on the Left that almost destroyed California and America”

    I’ll work on that, Chriss. I’ll start tommorrow by going to SanYsidro and handing out maps to the OC Social Service Agency to indigent illegals as the lunch crowd crosses no-man’s land onto paydirt.

  17. Hondo says:

    I grew up in Kalifornia, my beloved state. I live in Colorado, but most of my family still lives there. We are a foolish clan. We believe in hard work, we buy houses we can afford, we don’t go into big debt. I don’t know one lawyer of all the hundreds of family I have in Kali. My cousin is a doctor in Oregon.
    My older brother hasn’t worked a couple years now. He’s a contractor and construction is completely gone now. His house is close to being paid off but he may not make it. He may be foreclosed when he owes just a few thousand dollars. Then He is out on the street.
    I’m trying to think of someone in my family who has sued anyone. We just don’t do those things. I guess we are behind the times.
    Where I live in Denver there have been 3 armed robberies within a block of my house in the last month. 5 in the last 6 months. There have been close to 20 armed robberies within 5 blocks of my house in the last 20 months, including several hate crimes by the gang members. The Press reports maybe one in ten of these. And we have concealed carry here, too. We don’t dare use it for the liberal district attorneys here will throw us in jail if we even bother to try to defend ourselves.
    This country is on the brink and as bad as California is, the rest of the country isn’t far behind.
    Hondo

    Things are much worse in this country than we are led to believe.

  18. Beelzebub says:

    “My older brother hasn’t worked a couple years now. He’s a contractor and construction is completely gone now. His house is close to being paid off but he may not make it. He may be foreclosed when he owes just a few thousand dollars. Then He is out on the street”

    That makes no sense. If the home is almost paid off – why not sell it, take the equity and rent? No reason to live under a bridge. Let’s not catastrophize here.

    “The Press reports maybe one in ten of these”

    The mainstream media (those who report day to day news) are all owned, Hondo. Most of them are on the verge of bankrupcy. The Union-Tribune is negotiating the purchase of the OC Register as we chat. They brought a new CEO on board a couple years ago and obviously that worked out, didn’t it? Personally, I won’t miss the OC Register. The biased and slipshod reporting has gone viral. I used to subscribe too. I didn’t cancel due to the internet. I cancelled because I could no longer stand reading the liberal gobbledegook dripping off the print. I hope they all go out of business. Most of my information comes from the blogs today.

    “And we have concealed carry here, too. We don’t dare use it for the liberal district attorneys here will throw us in jail if we even bother to try to defend ourselves”

    If you can’t shoot a crook who is robbing you and simultaneously threatening your life in Denver – you need to find another home.

    “Things are much worse in this country than we are led to believe”

    Yes, you are correct. And the reason many Americans don’t know it is because the mainstream media is owned today and is basically just another arm of the government. If the newspapers and TV news is full of lies and half-truths – how do you expect the people to know to the extent that they’re being swindled and sold down the river as their civil rights are being eliminated one after the other?

  19. Rex The Wonder Dog! says:

    Clown is supposed to give his budget revision announcements in May. That’s sort of like when mommy and daddy meet with the teacher and see how well you’re doing part way through the semester. Clown knows he screwed. His estimates were WAY WAY off. No telling what the deficit will be now – but it will be MUCH higher than $9.2B.

    Try a whopping $16 BILLION+++++++!!!!!

    If Clown thinks tax hikes are going to fly in this economy he is off his rocker……….read the comments in the LA Times article about the $16 billion deficit-nearly all of them are against the pension tax hikes………

  20. Ted Steele, Associate Prof. says:

    mmmmmmmmmmmmmmmmmmm

    nice to se that the doom and gloom machine is alive and underinformed as per usual!

    Trolls Discuss–

  21. Beelzebub says:

    “nice to se that the doom and gloom machine is alive and underinformed as per usual!

    Trolls Discuss–”

    John Seiler > Please note that Tattle Tale Teddy Steele continues to instigate and provoke here! This is what he does best. Instead of debating the topics he attacks other messengers. So the next time he runs to you and demand that you take action against other – TELL HIM TO LOOK IN THE MIRROR AND POUND SAND!!! I will continue to point this out whenever I see this. TWO CAN PLAY THAT GAME!!!

  22. Beelzebub says:

    “Try a whopping $16 BILLION+++++++!!!!!”

    Nearly double the $9.2B, rex. This will now be used as propoganda to SCARE PEOPLE into voting for higher taxes. I called this in earlier posts. This is what they do – DEFICIT SPEND AND SCREW THE POOCH – then they run to the voters and say “If you don’t vote for higher taxes we are all going to die”.

    They have the ethics of street criminals, rex. They screw up then expect everyone to come in and save them.

    TELL EVERYONE YOU KNOW ABOUT THIS SCAM AND IMPLORE THEM NOT TO VOTE FOR NEW TAXES!!!!

  23. Ted Steele, Associate Prof. says:

    beezybob— Are you saying that I went to the management to complain about you, or anyone?

    Not me little buddy! You may have other admirers though.

    My comment is very substantive and heck, by golly, let me make it again.

    There continues to be a steady drumbeat of doom and gloom out here without the LEAST substance. LOL— There– fixed!

  24. Beelzebub says:

    “beezybob— Are you saying that I went to the management to complain about you, or anyone?”

    You made that quite clear when I showed that the phrase ‘long legged mac daddy’ was coined by a black pastor named James David Manning.

    You were complaining about off-topic material, remember? You fool no one. The door swings in both directions.

    I will be writing in Pastor Manning as my pick for the 2012 presidential race, btw. He rocks.

  25. Ted Steele, Associate Prof. says:

    Wow— you ARE paranoid. If I ratted you out I give permission for the powers that be out here to let you know. I don’t do that little buddy. My problems with your post were the ones I stated to your face. Even the casual observer would note the racist way you portrayed the President of the United States. Does not matter to me one wit if someone else did it as well. We all read the news amigo.

    When I see race played as you do, I raise the issue. You did it pal. Own it.

    Staying on topic, being decent and civil are important, shape up.

  26. Beelzebub says:

    “Even the casual observer would note the racist way you portrayed the President of the United States”

    Calling somebody a ‘long legged mac daddy’ is not racist. Look at the origin of the phrase ‘mac daddy’. It’s french, you idiot. Pimps come in every color. A pimp is someone who exploits other people for personal gain. It does not have to be sexual in nature either. Go google Pastor Manning and the phrase “long legged mac daddy”. He explains it very clearly and the method HE (a black man) used as he coined the term.

    You lowlifes who play the race card at every turn could crawl under a snake and never touch it’s belly.

  27. Beelzebub says:

    Btw, I am under NO obligation to show respect to the POTUS. He has disrespected me and the rest of the American citizen on many, many occasions in the last 3.5 years. I refuse to respect someone who disrespects me. If you choose to be a lemming – then that is YOUR personal choice. But don’t expect self-respecting humans to follow your lead. When you say that you are ‘challenged’ it’s becoming more and more evident with every additional comment you post.

  28. Ted Steele, Associate Prof. says:

    Wow— man up and admit what you wrote? As I have told you I remember the public outcry when Manning said it. It was a statement connecting the African American President to urban crime/race/culture/etc. You have obvious contempt for the President vis many comments you’ve made. This was low. Denying what we all see does not clothe the emporer little buddy.

  29. Beelzebub says:

    “It was a statement connecting the African American President to urban crime/race/culture/etc.”

    The POTUS is half-white you blubbering idiot. Seriously, you must have manure for brains.

    “You have obvious contempt for the President vis many comments you’ve made”

    You’re damned right I have contempt for Obama. He’s an inveterate liar many times over and has successfully usurped a boatload of civil liberties from the American citizens during his 3.5 years in office. He has added over $5B to our national deficit and has given Wall Street criminals immunity from the laws. He has violated the US Constitution at least twice and helped to make our country the laughing stock of the world. You’re damned right I have contempt for him. He’s a total farce and a fraud. Even his birth certificate and selective service registration card have been PROVEN to be a fraud through a scientific and forensic investigation. Even the first 3 numbers of his SS number are designated for someone who was born in Connecticut – not Hawaii!!! HAH! HE’S A FRACKING FRAUD FROM A TO Z!!! OF COURSE I HAVE CONTEMPT FOR HIM!!! :D

  30. Rex The Wonder Dog! says:

    Nearly double the $9.2B, rex. This will now be used as propoganda to SCARE PEOPLE into voting for higher taxes

    I have been telling all who will listen that Clowns Pension Taxs are DOA, they are going down just like Props 1a-1g went down in flames when Arnold tried it. It is going to be even harder to pass the pensiosn taxs the second time around.

    Folks, mark my words, Clowns pension taxes will not even come close.

  31. Rex The Wonder Dog! says:

    The POTUS is half-white you blubbering idiot. Seriously, you must have manure for brains.

    Well, I know Teddy Steals has no brains, but we ALL know when Teddy Steals lips have been :)

  32. Beelzebub says:

    “Folks, mark my words, Clowns pension taxes will not even come close”

    I pray, I pray, I pray you are right, rex. I am not as sure as you are but I pray that Californians have the common sense and insight to see through all the deceit and smoke ‘n mirrors.

    Do you see what he is doing now, rex??? He is trying to SCARE voters into approving the tax hike AFTER he intentionally underestimated the expense and overstated the revenue. IT WAS ALL INTENTIONALLY ORCHESTRATED, REX!!! THIS WAS THE GAME PLAN ALL ALONG!!!

    I feel like I’m living in a damn Franz Kafka novel!!! This crap is scarier than what happened back in the old Soviet Union!!!

  33. Beelzebub says:

    I just penciled out some numbers on the back of an envelope. Consider this:

    Let’s say some Hollyweird pig makes a movie and earns $10M.

    Taxes owed:

    35% fed tax > $3.5M
    2.9% medicare tax > $290k
    13.3% proposed State tax > $1.3M
    Net income > $4.9M
    Sales tax on $4.9m used to buy crap > $441k

    Net funds after income and sales taxes > $4.5M

    Effective tax rate = 55%

    If the feds raise the highest marginal tax rate to 50% effective rate = 70%

    If the Hollyweird pig moves to Florida he saves $1.3M on his income.

    So even the Hollyweird pigs will start leaving. The same jokesters who paid $40k a plate to go to Clooney’s house and shake hands with the long-legged mac daddy. HAH! :D

  34. Ted Steele, Associate Prof. says:

    YOU WROTE–”The POTUS is half-white you blubbering idiot. Seriously, you must have manure for brains.”

    Well– That confirms it—- you wrote the pimp statement as a direct racial remark about our African American President. It was pretty obvious to me. Your not-so-subtle-racism is a direct reflection on who you are as an individual and has zero reflection on the object of your remarks; the President.

  35. Beelzebub says:

    Pimps come in all shapes, sizes and COLORS you fracking idiot!! Pimping is not isolated to those who are half white and half black like Obama!!! And the urban dictionary points out that the word ‘pimp’ applies to anyone who exploits another human for personal gain. Have you ever heard the term “poverty pimp” before??? George W. Bush was a POVERTY PIMP. There!!! DOES THAT MAKE ME A RACIST TOO!!! HAH! Since George W. Bush belongs to a certain race so I must be a racist!!! HAH! And, yes, I despise Barrack Hussein Obama. I think he is helping to destroy the fabric of our beloved nation. And I disrespect him too!!! There. Stick some of that in your pipe and suck on it!!! :D

  36. Ted Steele, Associate Prof. says:

    Tut-tut—- I hope you don’t get injured trying to back peddle out of your literary faux pas. It was widely criticized in the zeitgeist as racist when Manning said it and he was black. When you say it, regardless of your background, it is obvious to any adult where you come from little buddy.

    Please back peddle some more…

  37. Beelzebub says:

    Once again, I repeat: I AM STATING HERE THAT IMO GEORGE W.BUSH WAS A POVERTY PIMP!!! I am stating that unequivocally.

    Since George W. Bush belongs both to the HUMAN RACE and to the CAUCASION RACE does that make me a racist????

    You’d better really consider your words when you accuse someone of being a ‘racist’ on these boards, kimosabe.

    You really do owe me a public apology.

    Waiting………….

  38. Ted Steele says:

    Mr. Beezlebub, your comments and the context stand alone and speak for themselves. You may call them what you want—-Why don’t we just try to be civil?????

  39. Beelzebub says:

    “Why don’t we just try to be civil?????”

    That’s like Frankenstein asking “Why do you people come after me with torches? What did I do to you? Can’t we just get along?” HAH! :D

  40. Ted Steele says:

    Torches?

  41. Beelzebub says:

    Yes, torches. Didn’t you ever watch the movie about Frankenstein? Or were you limited to the more sophisticated shows like “Howdy Dooty” or “Crazy Donkey”???

  42. Ted Steele says:

    Howdy Dooty? (sic) Crazy Donkey?

  43. Beelzebub says:

    Why don’t you ever answer my questions directly? Do I scare you? You always dance around my questions. Do you find me intimidating? Too much of a challenge for you? A cut above? Why can’t you just debate a topic from start to finish with me without resorting to insults? Am I your better? :D

  44. Ted Steele says:

    you resort to insults?

    Well….usually that’s where you start.

    Hey, on another note—– Don’t ya think it is time we let the normal people out here have their board back?

    Go ahead—– have the last word—–mmmmmmmmmmmmmmm

  45. Beelzebub says:

    “Don’t ya think it is time we let the normal people out here have their board back?”

    I’m glad that you admit you’re not normal.

    That a great start.

    You give me hope. :D

  46. Ted Steele says:

    mmmmmmmmmmmmmmm that’s right

  47. Edward Rasen says:

    Repeal the Dream Act. Kill the Bullet Train to Nowhere. Eliminate all hobby and entertainment classes from California universities and colleges. Eliminate remedial education and English as Second Language classes from universities and colleges plus eliminate school funded sports teams from community colleges and convert teams to intramural competition. Double the fines for unlicensed and uninsured drivers. Add “sin” tax to all alcohol products.

  48. eqauloportunityoffender says:

    Has anyone ever checked out any of the state agencies?
    Many still have “Student Assistants”, “Temps/Contractors” and “Retired Annuitants”. Most spend $$$ on overtime for thier internal mail carrirers.
    I even heard that one retired annuitant wrote his own job description and never comes in the office and just “teleworks” and said cell me if you have any questions.
    He’s at DFG in the IT department.

  49. Ted Steele says:

    Ed– I am a Democrat who agrees with every idea you have listed. Your idea by the way , while good, saves us very little, maybe 3- bil. But it’s a start.

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