Late on a September afternoon in 2010, the big orange California sun was dropping toward Sweeney Ridge just east of the blue-collar town of San Bruno on the San Francisco Peninsula. Families were preparing dinner and catching up on the day’s activities when, at 6:11 p.m., a section of pipe in a 30-inch-diameter intrastate natural gas pipeline owned by Pacific Gas & Electric ruptured near the corner of Glenview Drive and Earl Avenue.

A half-million cubic feet of natural gas gushed out of the pipeline in the first minute after the rupture, and for 94 minutes thereafter, until PG&E finally was able to shut down the flow of natural gas.  Almost instantly after the first highly explosive molecules escaped the pipeline’s confines, something ignited it — quite possibly a gas stove heating up dinner in one of the nearby homes.

The resulting explosion and inferno obliterated that home and 37 others and killed eight people.  It created a crater, long since filled in, that was big enough to swallow any of the houses destroyed in the explosion.  The twisted remains of the ruptured section of pipe, weighing 3,000 pounds and about as long as three elephants lined up nose-to-tail, lay smoking where the explosion hurled it, 100 feet away.

Worse news

The tragic San Bruno pipeline explosion on September 9, 2010 was hardly the worst man-made disaster in California — that dubious honor goes to the failure of the St. Francis Dam in 1928, which killed about 600 people — but it stands as a monument to the longstanding ineptitude of California’s bureaucracies and state Legislature. And last week, two and a half years after explosion, the story of San Bruno’s catastrophe and California’s ineptitude got even worse.

On Tuesday, staffers at the California Public Utilities Commission unveiled their proposed punishment for PG&E: a $2.25 billion fine, the largest ever imposed by the PUC. It includes $300 million that will go directly to the California treasury to be spent on who knows what, and $1.95 billion of required safety upgrades to PG&E’s natural gas distribution system.

The five appointed — not elected — board members of the PUC will decide on the staff proposal this fall, possibly coinciding with the explosion’s third anniversary. They are expected to approve the recommendation, or something close to it. But they are not expected to do anything about who’s just as much at blame as PG&E, because missing from the recommendation is a similarly sized fine for the state of California.

The actions of the state and the PUC are in fact the root cause of the catastrophe, according to the National Transportation Safety Board, which, as the federal regulator of pipelines, investigated the incident. Its accident report found 28 contributing factors to the explosion, two of which stand out.

The first is that the section of pipe that ruptured had defects so pronounced they should have been visible to the PG&E work crews and state inspectors when the pipe was installed in 1954.  The second is that, when the PUC adopted new pipeline inspection standards in 1961, it decided against all logic not to apply them to pipelines that were in place prior to that year. All pre-1961 natural gas pipelines in the state, including the one laid seven years earlier under San Bruno, would be grandfathered.

PUC decision

If not for this half-century-old PUC decision, PG&E’s pipeline would have undergone hydrostatic pressure tests that very likely would have revealed the defect under San Bruno. Obviously, industry lobbying, not safety concerns, were behind that decision, because the NTSB report states: “There is no safety justification for the grandfather clause exempting … pipelines from the requirement for post-construction hydrostatic pressure testing.”

The grandfathering happened long before most current legislators and regulators were born, but they’re still not off the hook, because they got a wake-up call less than two years before the San Bruno catastrophe. On Christmas Eve 2008, another PG&E gas pipeline exploded in the Sacramento suburb of Rancho Cordova and killed one person, injured five others and caused severe damage to two homes. Even after that, neither the legislature nor the PUC thought to revisit the grandfathering of the state’s natural gas pipelines.

Clearly, California is culpable for much of the blame for this great tragedy, but it has let itself off the hook — just as it always lets itself off the hook for all the mistakes, missteps and crazily expensive, profoundly useless regulatory crusades it routinely subjects its citizens to.

What a shame.

Laer Pearce, a veteran of three decades of California public affairs, is the author of “Crazifornia: Tales from the Tarnished State.”

By Laer Pearce

I have a financial planner friend who often includes tax-free municipal bonds in his customers’ portfolios and therefore closely tracks matters like the Stockton bankruptcy’s potential impact on municipal bond rates. He definitely did not smile as he took the accompanying photo near his Newport Beach office.

The license plate translates as “Ex Newport Beach Fire Department” and it’s affixed to a 2013 Ferrari California 30, a car that retails for $208,000 before all the costly extras and options Ferrari offers are added.  It didn’t help that earlier in the week he saw another very expensive car — a Shelby Cobra 427 — with the license plate “I  STERS,” as in CalSTERS, the California State Teachers’ Retirement System. And keeping up the car/pension theme, he knows a retired water district general manager who recently spent $200,000 on a professional rebuild of his late 1960s Oldsmobile 442.

It’s possible these three well off former “public servants” could have lucrative side businesses, but more likely they’ve just got great retirement benefits. It’s common for a retired fire chief, for example, to receive a retirement pension of $200,000 a year or more, along with Cadillac (or Ferrari) medical coverage.

To add salt to the taxpayer’s wound, Newport Beach currently pays 94 percent of fire employees’ pension costs, with the firefighters contributing just six percent. It’s actually considered a significant pension reform by some within government that the city’s contribution will drop to “only” 80 percent of the costs in 2014.

The death of CalPERS?

Ferrari pensions — even Buick pensions — given away for just pennies on the dollar are proving to be unsustainable, as reflected by the recent announcement from CalPERS that it is going to hike employer contributions by 50 percent. Sure, they’re going to phase it in over six years, but a 50 percent hike is still a 50 percent hike. And when you multiply it by 1.6 million, the number of California government workers covered by CalPERS, you’re looking at some very serious financial impacts on municipal and state budgets.

The rate increase was foretold by a recent California Public Policy Center report, covered in CalWatchdog.com as California’s pension Death Star, that predicted CalPERS’ pension costs would increase by 50 to 100 percent of the net property tax income of six Northern California counties it studied.

To see how the new increase hits home, look at the small town of Canyon Lake in Riverside County. CalPERS already has increased the town’s contribution rate from 12.8 percent of an employee’s salary to 17.9 percent over the last three years, and the City Council was looking at its contribution going to 26.8 percent this summer — before the 50 percent rate hike starts to kick in.

In response, the Canyon Lake city council did what any logical person would do: It voted to quit CalPERS. According to news reports, saying farewell is going to cost the tiny city $660,000, the amount of unfunded liability CalPERS is carrying on Canyon Lake’s small employee base. The city figures the cost of financing the $660,000 will be less than the cost of putting up with CalPERS jacking up rates instead of paring down benefits.

Bigger settlements

Cities with more employees, especially those who have been shorting CalPERS because of their own financial woes, would be looking at much bigger settlements, should they decide to divorce CalPERS. They’re looking, nonetheless.

San Jose recently found it would cost $5.7 million just to end CalPERS pensions for its city council; and Modesto determined it would have to pay $1.1 billion to fully exit the retirement system. I know of one special district that is developing a strategy for raising the money needed to divorce itself from the system without raising rates, and I’m sure the newest CalPERS rate hike will swell the numbers of municipalities looking at a CalPERS divorce.

If American business ingenuity kicks in, as I suspect it will, you’ll see new financing tools to fund CalPERS split-ups. When that happens, the move toward more sustainable pensions could become a stampede, which would leave the nation’s biggest pension plan little more than a big chunk of space junk.

In Crazifornia, my recent book, I predict it is likely California will only reform itself one catastrophe at a time. If so, we should hope the pension catastrophe will arrive before things get too much worse — and increasingly, it’s looking like it might.

Laer Pearce, a 30-year veteran of California public affairs, is the author of Crazifornia: Tales from the Tarnished State.

By Katy Grimes

U.S. Sen. Diane Feinstein’s husband Richard Blum, won the first phase construction contract for California’s high-speed rail.

I’m shocked, shocked I tell you.

If I didn’t witness the insanity and corruption in politics every day, I wouldn’t have believed this.

“The Perini-Zachary-Parsons bid was the lowest received from the five consortia participating in the bidding process, but “low” is a relative term,” the Laer Pearce, author of Crazifornia wrote. “The firms bid $985,142,530 to build the wildly anticipated first section of high speed rail track that will tie the megopolis of Madera to the global finance center of Fresno. Do the division, and you find that the low bid came in at a mere $35 million per mile.”

“As this fiasco progress, remember that this $35 million per mile represents the best California can do on the section of track the High on Crack Speed Rail Authority selected to go first because it will be the cheapest,” Pearce said.

Read Pearce’s story here. And stop staring dumfounded at the computer screen. Yes, this is true.

By Laer Pearce

On Jan. 31, the strained California electricity grid marked the one year anniversary of the shutting down of Unit 3 at the San Onofre Nuclear Generating Station. The reactor was taken off-line when pinhole leaks were discovered in water pipes that carry heated radioactive water from the reactor to a steam generator.

The process of shutting down the reactor caused a much publicized release of radioactive steam — which contained about as much radioactivity as one year’s worth of emissions from your home smoke detector. But its long-term effect is more worrisome and less publicized.

The negative impact on California’s electricity grid was made worse by the routine shut-down of San Onofre’s Unit 2 earlier in January for routine maintenance and refueling. It has been off-line ever since because it’s now under the same regulatory hold as Unit 3. (SONG’s Unit 1 was decommissioned in 1992 following 24 years of uneventful service.)

When the two reactors are on-line, they generate up to 2,200 megawatts of power — enough for 1.4 million homes and businesses. Besides supplying so much power, the power stations are critical to California’s electrified life because they provide essential voltage support. Voltage support functions like water pressure in a water system. A minimum amount of pressure is needed within the system to ensure water will move through pipes, just as a minimum amount of voltage support is necessary to ensure electrons will move through power lines.

Without sufficient voltage support, California will experience brownouts and blackouts when demand peaks. Yet last summer, with San Onofre completely off-line, we dodged brownouts. Southern California Edison, which co-owns the plant with San Diego Gas & Electric and the city of Riverside, attributes that to the lucky alignment of four factors:

* New transmission lines switched on in 2012, so more power could be brought in from elsewhere;

* Different places in the service area had hot spells at different times;

* Edison was able to buy power from AES’ 900 megawatt natural gas-fired power plant in Huntington Beach;

* People conserved.

This year, only the fourth factor remains certain. Businesses and individuals will conserve power when it’s needed, especially since many have traded 100 percent reliability for lower rates.  But no new transmission lines will come on-line this year, and last year’s Southern California weather, which saw hot spots migrating from location to location instead of covering the entire region, was unusual and not likely to be repeated.

AES Plant

What about the AES generating plant in Huntington Beach?  It’s still there and the natural gas pipeline is still connected to its boilers. So why is it that we won’t be able to get even a single kilowatt of power from it when we’ll need it this summer? The answer can be found in California’s fixation on single-handedly saving the planet from the ravages of global warming.

One keystone to that quixotic quest is California’s first-in-the-nation state-run cap and trade program, which kicked off last November with the state’s first carbon credit auction.  AES decided to sell the plant’s carbon credits at the auction, and because it did, no greenhouse gases can be emitted from its stacks this year.  As far as California’s electricity grid is concerned, the plant might as well have been wiped out by a tsunami.

Could it really be that a slip of paper from a harebrained and costly auction — an auction that will not accomplish one whit of planet-saving — may result in brownouts and blackouts this summer? The answer to that question, unfortunately but not at all unexpectedly, is yes.

With long-time environmentalist Gov. Jerry Brown at California’s helm, green-leaning Democrat super-majorities in both houses of the state legislature and entrenched eco-crats ruling the state’s regulatory agencies, the AES plant is certain to remain shuttered no matter what the summer may bring. The carbon crusaders simply cannot afford to allow a high-profile precedent to undercut the centerpiece of their carbon-fighting battle so early in the auction’s history.

So, should brownouts and blackouts return to California this summer, remember this: It wasn’t really problems at the San Onofre nuclear power plant that caused them. It was problems in the thinking of California’s leadership.

Laer Pearce, a veteran of three decades of California public affairs, is the author of “Crazifornia: Tales from the Tarnished State.”

By Laer Pearce

California’s hostility towards business, and willingness to tax it into oblivion, is storied. As State Senator Ted Gaines, R-Roseville, is quoted in my recent book, “Crazifornia“:

“I am tired of my constituents and other business owners here being treated like pinatas by regulators and politicians who smack them around until some fine or penalty falls out.”

Or, for that matter, some newly created tax liability — like the new retroactive (to 2008) tax that’s going to smack the Golden State’s golden goose upside the head. Henry Blodget explains in Business Insider:

“As a way of encouraging entrepreneurs and investors to start companies in California, the state has long offered a tax deduction for those who start, invest in, and eventually sell companies.

“This tax deduction allowed entrepreneurs and [investor] angels to exclude 50 percent of any gain on the sale of ‘Qualified Small Business’ (QSB) stock.

“California’s capital gains taxes are a high 9 percent, so the deduction reduced the capital gains rate to 4.5 percent. This encouraged the entrepreneurs to start and keep their companies in California, instead of decamping to lower-tax states.

“And, for many years, California entrepreneurs and investors have taken advantage of the deduction.

“But now the state has apparently decided that it no longer needs to encourage entrepreneurs to start and keep their companies in California.

“So it is eliminating the tax deduction.

“Far more startling, the state is eliminating the deduction retroactively–going all the back to 2008.” (Emphasis in original)

As you can imagine, those QSBs, the companies that qualified for the reduction in taxes but now suddenly don’t qualify, are not reacting positively to this news.

Retroactive taxes

Retroactive tax increases — a recent passion of our revenue-hungry governor and his Democrat allies in the legislature — should be unconstitutional. They’re certainly unconscionable. Business people make decisions based in part on tax implications, and to change those implications after the fact is akin to double jeopardy and an apparent  violation of the ban on ex post facto laws in the U.S. Constitution. An affected party would have to go back in time to protest the change, which of course had not yet been changed.

It’s taxation without representation stuck in a time loop.

The impacts of this criminal behavior by the state will be swift and profound. For starters, a lot of entrepreneurs who sold their businesses after 2008 are going to be very, very angry at the state, and will become much more likely to leave the state. Worse, hundreds or thousands of other entrepreneurs who plan to sell their companies will relocate to states with less onerous tax policies.

Like Proposition 30, which increased income taxes retroactively after voters passed it last November, the net effect will be not more money for the state, but less — as we soon will find out. Will Sacramento ever learn that bullying the successful has consequences?

Playground politics

In an article in Xconomy, California entrepreneur Brian Overstreet explains how this crazy situation came to be.

It concerns a business that a few years ago had taken the tax advantages due it as a Qualified Small Business. The Franchise Tax Board, the state tax collector, told the company that it was in fact not qualified for the deduction, and would have to pay the higher 9 percent capital gains tax. The FTB had determined that the company failed to meet one of the qualification points — having 80 percent of its workforce and assets in California.

The company sued and won, with the court ruling that the FTB’s action was an unconstitutional violation of the Commerce Clause.  Overstreet picks up the story from there:

“Since the FTB lost the case, you might think that they would strike the unconstitutional requirement and keep the rest of QSB statute intact. Not a chance.

“What the FTB did instead was to take their ball and go home. They decided that since they could not impose the ’80 percent requirement,’ no one would be entitled to the QSB exclusion. They put out an announcement terminating the Qualified Small Business exclusion and retroactively disqualifying all exclusions and deferrals going all the way back to 2008.”

True to form, California is alone in its stupidity.  The federal government, tone deaf as it is on the economy, realized that encouraging fast-growing businesses is a good thing and extended its QSB program.

Who could disagree with Overstreet when he concludes: “Why in the world would any smart business person start or invest in a new California company facing that kind of penalty?”

Laer Pearce, a 30-year veteran of California public affairs, is the author of “Crazifornia: Tales from the Tarnished State.“

By Laer Pearce

For a lot of very good reasons, California’s environmental regulators have earned a reputation for being, well, crappy to the rest of us. Three ongoing California regulatory battles over poop reinforce their already well-deserved reputation.

The first battle is between the California Coastal Commission and the city of Morro Bay over the city’s proposed new wastewater treatment plant. The city, called by some the Gibraltar of the Pacific because the massive Morro Rock dominates its harbor, made the terrible mistake of wanting to do the right thing. It, along with the Cayucos Community Services District, wants to replace an aging wastewater treatment plant with a new facility that will clean wastewater to higher levels and produce recycled water.

Less pollution going into the ocean and less fresh water used to water yards seem like good ideas — except to the California Coastal Commission. The commission’s executive director, Charles Lester, has decided coastal towns should move their unsightly infrastructure away from the coast to inland locations. There’s one little problem with this idea: It defies gravity.

Sewage treatment plants are located at the low point of local geography — the coast in California — because it’s much cheaper to let the sewage flow by gravity to the plant than it is to pump it uphill to an inland plant. In Morro Bay, the commission’s staff, on its own, found a site about one mile from the coast, then decreed that site to be the superior location for wastewater treatment. It is recommending the commission force the city to build the plant there.

If the eco-bureaucrats prevail, they will turn the three-year project into a 10-year one and raise its cost from $60 million to $90 million. They will also saddle Morro Bay’s 10,000 residents with higher bills, since it takes a lot of money — and burns a lot of carbon fuel — to pump sewage uphill. This fact seems to be lost on the commission’s staff, which claims it wants to move infrastructure off the coast not for aesthetic reasons, but because of sea level rise caused by global warming — which in turn is caused, we’re told, by burning a lot of carbon fuel.

The matter was on the commission’s October agenda, but staff pulled it when the city pointed out major inaccuracies and flawed assumptions in the staff’s report.

Cormorant poop

Then there’s the battle over cormorant, pelican and sea gull poop that’s piling up on the rocks in the tony San Diego coastal enclave of La Jolla.  Scenic, rocky La Jolla Cove has become an open cesspool, resident Ed Witt told the U-T San Diego, adding, “You couldn’t operate a zoo like this.” The problem started when much of La Jolla’s rocky shore was put off limits to humans, encouraging birds to flock to the rocks, relieving themselves with impressive regularity.

So why not just wash off the poop? That would be fine, regulators at the Coastal Commission and San Diego Regional Water Quality Control Board say. But only if the city submits a plan describing every detail of how they’ll do it — what methods and materials they’ll use, how they’ll protect the ocean and how they’ll ensure pooping pelicans and cruddy cormorants aren’t bothered.

If the clean-up plan poses any perceived threat to birds or marine life, then the California Department of Fish & Game, the U.S. Fish & Wildlife Service and the National Marine Fisheries Service stand poised to join the battle.

It’s not even possible to create a timeline for reaching a solution to this monumental problem, since the Regional Water Quality Control Board has deemed it a low priority. Residents and business owners, who fear the smell will drive away tourists, disagree.

Home invasion

San Diego’s Regional Water Quality Control Board — which I fought unsuccessfully when it decreed that rainwater becomes toxic the moment it hits the ground — is the cause of the third poop battle as well.

Because it succeeded in defining fallen rain as toxic, the board now exerts its authority beyond the prior limits of its purview, the gutter, and reaches into people’s yards. This change is reflected in proposed new regulations that  would subject homeowners to six years in prison and fines of $100,000 a day if they repeatedly let dog poop sit unpicked up in their own backyards.

Similar punishments would be meted out to those who repeatedly allow their sprinklers to hit the pavement and those who wash their car in their driveway.

The board’s goal is to cut the amount of bacteria in runoff that reaches the ocean. That reminded me of a study conducted some years ago — in Morro Bay, interestingly enough. Scientists collected samples of ocean water and isolated the DNA from fecal coliform found in it to trace its source. They found it to be overwhelmingly not pet or human in origin, but the DNA of coyotes, rabbits, deer, seals, sea birds and fish.

What will California’s regulators come up with next? Diapers for dolphins?

Laer Pearce, a 30-year veteran of California public affairs, is the author of Crazifornia: Tales from the Tarnished State.

By Laer Pearce

Gov. Jerry Brown is no Billy Beane.

Coaching a bottom-dwelling state, Brown is continuing to dole out big money for policies that are past their prime and failing to perform. California remains at the bottom of the education, business-friendliness and government efficiency rankings — and at the top of taxation, regulation and fleeing residents rankings.

Beane, whose Oakland A’s are once again in the Major League playoffs, realized in 2002 he didn’t have enough money to put a team together the old fashioned way. So, as recounted in Michael Lewis’s best-seller, “Moneyball,” he signed undervalued players other teams overlooked. Each was smartly chosen for on-base percentage, scoring runs, or less measurable qualities like stepping up when the chips are down. Other managers thought Beane was either desperate, insane or both, but the rag-tag team of forgotten players he assembled became winners.

The book was made into a 2011 movie starring Brad Pitt.

Beane had the ability to see in baseball’s raft of statistics what other managers didn’t. Brown is surrounded by statistics on how California’s various players — agriculture, business, local government, state bureaucracies, pension funds — are performing compared to other states, but he can’t seem to read them. Instead of pursuing government policies that are the parallel of Beane’s brilliant recruiting, he’s doing the governmental counterpart of the Yankees shelling out $18.7 million (prorated down from a contracted $28 million) to get pitcher Roger Clemens back from the Houston Astros in 2007. Clemens made $1 million a start that year, and came to define “worst trade ever” to many baseball buffs by turning in a lackluster 6-6 season.

Proposition 30 is Brown’s Clemens, a high-cost, past-its-prime approach to government that he hopes will lift California out of the cellar. Like Clemens, it costs a lot, with sales and income tax increases of as much as $50 billion over the next seven years. Like Clemens, it too has a strong arm, in this case strong-arming Californians with its threat that if they don’t pay up, the teacher dies. And just like Clemens showed the Yankees, there’s no guarantee it will work as promised.

Moneyball for California

Should Prop 30 fail in November, Brown will have a chance to start playing Moneyball.  Here are some ideas for the manager of the major league Sacramento Spenders. 

Schools. Schools are the state’s single biggest expense, receiving 43 percent of the General Fund. Half of this largess goes to administrative overhead, because it takes a lot of administrators and $400 million a year to fulfill all the mandates, reports and busy work imposed on school districts by Sacramento.  In contrast, just 20 percent of Connecticut’s education budget goes to administrative overhead.  California ranks No. 46 in the most recent “best-educated state” rankings, while Connecticut comes in second.

Then there’s the problem that our teachers are the highest paid in the nation, despite California’s tragically poor education outcomes. The California Teachers Association, which gave almost $50 million to Brown’s 2010 gubernatorial campaign and has paid out $6.3 million to support Prop 30, does all it can to keep salaries high and performance-based pay a nonstarter.

Moneyball in education would see the elimination of most of state-imposed mandates on public schools, so we could stop paying for thousands of high-priced school administrators. Then, Brown could support a ballot initiative requiring performance-based pay for teachers, and rail against the devious CTA advertising that would attack it. Brown would never do this, of course, but a Governor Billy Beane would. 

Pensions. The real reason Brown needs Proposition 30 is to shovel money into the $250 billion to $500 billion hole of unfunded state employee pension liabilities. Brown needs to start managing this problem Moneyball-style. He will get nowhere as long as he dodges dealing with the contracts of existing employees, as he has to date.  That’s where the real liability is, so he has to force the rewriting of those contracts, especially when retroactive increases were given, or unions won increases that were completely out of the norm of private sector increases. Costly add-ons, like life-time health insurance for agency directors, need to be prohibited retroactively.

This won’t be easy, but in “Crazifornia,” I make the case that many public employee contracts can be voided because management negotiators were city administrative employees who would benefit from rank-and-file salary and benefit increases when their own contracts were renewed. Brown should seek to have thousands of these sorts of contracts across the state declared null and void by claiming they are the fruit of criminal racketeering under the federal Racketeer Influenced and Corruption Act. Brown would never do this, of course, but a Gov. Billy Beane would. 

Taxes. William Voegeli of Claremont University found that California’s per-capita outlays increased 21.7 percent from the early 1990s to the mid-2000s, compared to an 18.2 percent average increase for the other 49 states. Just cutting back to average, which can hardly be categorized as heartless conservatism, would save California $10.6 billion a year, or enough to close most of the current budget gap — without new taxes. If California’s spending over those years had increased only with inflation and population growth, Voegeli writes in Failed State, “the resulting levels of per-capita government outlays … would have equaled neither Somalia’s nor Mississippi’s, but … Oregon’s, which is rarely considered a hellish paradigm of Social Darwinism.”

Brown would never attack spending in this way, nor would he do many other smart Moneyball approaches to fixing our lumbering disaster of a state. Which is why his governorship will ultimately fail.

Laer Pearce, a veteran of three decades of California public affairs, is the author of the new book, “Crazifornia: Tales from the Tarnished State.”

By Wayne Lusvardi

In 2050, after California was hit with a 6.9 Richter scale earthquake on the Hayward Fault, the city of Vallejo didn’t suffer much because it already was a ghost town. California no longer had enough families to populate suburban Vallejo.

The Sacramento Delta, however, nearly instantly became an inland saltwater sea.  Most of urban and agricultural California had lost its access to fresh water supplies overnight. California’s civilization hadn’t collapsed after all; it dissolved.

Democracy didn’t collapse, either.  That is because democracy had already been replaced long before “the Little Big One” had destroyed much of the state’s water and transport infrastructure. Instead, unelected regional government committees that had merged cities and suburbs for tax sharing had supplanted it.

In the ruins, however, they found a book, “Crazifornia! Tales from the Tarnished State — How California is Destroying Itself and Why It Matters to America.”  The author: Laer Pearce, a former war diplomat in the civil wars in California. The book had predicted the disaster that had just happened.

The above science fiction scenario is where author Laer Pearce takes you at the end of his prophetic book of tales of how California destroyed itself.

Like all classic literature, the book tells tales rather than boring with sophisticated public policy analysis, the dryness of a history book, or the escapism of a novel.  Pearce’s stories are real life.  Why write a novel when real life is more unbelievable than a novel?  Pearce was involved as a participant in most of the tales he tells.  He didn’t just read about them on the Internet.

What Crazifornia proves is Machiavelli’s dictum, “Nothing good occurs except by necessity.”  And through some 15 decades of Progressive rule by both Democrats and Republicans in California there never had been any necessity to change.

I have worked in many capacities in several levels of California government. Pearce provides one of the most accurate descriptions of what ails California that I have ever read:

 “A key factor in the demise of California is the state Legislature’s determination to dodge accountability for the negative effects its progressive actions have on the state’s residents and businesses.  To do this, the Senate and Assembly have effectively turned California into a technocracy — a government ruled by educated elites who know what’s best for the people. It is these technocrats in the state’s many large and powerful regulatory agencies, commissions, and boards who actually impose the will of the Legislature through obtrusive and costly regulations and fines that were at best approved only in vague concept by California’s elected representatives.” 

Progressive policies

Pearce describes how much of Progressive public policy is geared to take away choice from people and replace it with government mandates.  But choice is what defines modernity.

As far back as 1893, California fought against the social change that came with modern society with the coming of the Southern Pacific Railroad.  California’s counter-modernization has continued to this day with 16th-century energy technologies (windmills, solar energy mirrors), 19th-century modes of transit (light rail and the bullet train), dam removals and nuclear power plant building moratoriums and shut downs.

California has also embraced a de-modernizing worldview that rejects the Protestant work ethic and market capitalism for environmental ideology and social-movement unionism.  It can only be called “crazy” for California to embrace “Progressivism” while wanting to go backward.

Pearce’s book is chock full of stories you likely never heard of.  In Chapter 4 on California’s cultural revolution of the 1960’s Pearce describes how the C.I.A. program MKULTRA in San Francisco birthed the Hippie Movement.  MKULTRA researched mind-altering drugs and two of its volunteer test subjects were Ken Kesey and Stuart Brand.

Kesey was the author of “One Flew Over the Cuckoo’s Nest” and Brand authored “The Whole Earth Catalog” — the manual of the Hippie Movement. It wasn’t hallucinogenic drugs that made “Crazifornia” crazy, however.  It was Progressivism.

Jerry Brown’s blood money

In Chapter 3 on “Progressivism’s Legacy,” Pearce tells how Gov. Jerry Brown’s inherited wealth came from the blood-soaked Indonesian dictator Sukarno. Jerry’s father, former Gov. Pat Brown, brokered a loan for Indonesian junta generals to set up two oil trading firms.  In return, Brown’s dad was given one of the trading firms.

Pearce writes that it was a lucrative deal because only Indonesian crude oil could meet California’s low-sulfur clean-air standards. It is implied that environmentalism serves as a pretense for elites to make mega-bucks from quasi-monopolistic enterprises.  Only in “Crazifornia” could the greenest governor of any state have the political split personality of a closet oilman.

Pearce describes how the California’s “Brown-Shirt” unions tag team with environmental regulators to force businesses to unionize.  One holdout company got inundated with 144 legal requests for data and another company got 143 data requests pursuant to a threatened lawsuit alleging non-compliance with environmental laws.

Another company that had relented to unionize received no such harassment or investigation from the California Energy Commission. In an event that could probably only occur in “Crazifornia,” the unions ended up brokering a settlement between the companies and environmental groups that the unions had funded.

Then there is the question that has to be asked: How did Pearce come up with the title “Crazifornia” for his book?  Pearce says he was using the term on his old blog, “Cheat Seeking Missiles,” way before the book was written. But it was Pat Mulroy, the head of the Southern Nevada Water Authority, who perhaps validated Pearce’s characterization of California: “It’s hard being next to California.  You’re so big, so powerful…and so crazy.”

Pearce was apparently a stand up comic in another life.  He can’t help but dot his book with laughable stories such as how Brown was going to cut 3,000 jobs out of a state work force of over a quarter million bureaucrats.  Pearce writes that this would be “like a small business with 10 employees, facing a prolonged recession and continuing massive losses, laying off one employee’s arm.”  That’s becasuse, 3,000 employees comprise about 1 percent of the work force.  But the state Legislative Analyst’s Office concluded that Caltrans was 15 percent overstaffed.

Read his book for the treasure trove of unforgettable stories you won’t find anywhere else.

The book deserves an Amazon.com five-star rating.  It’s a quick, fun read.  Buy it and hold on for a zany ride.  But until the apocalypse, perhaps all you can do is laugh and then cry.

It’s a tragedy! It’s a comedy! It’s Crazifornia!

By Laer Pearce

In The Great California Exodus: A Closer Look, the Manhattan Institute has chronicled California’s fall from “the state with more jobs, more space, more sunlight, and more opportunity” to, well, the state with more sunlight.

In documenting the 3.4 million people who left the state in recent years — that’s just about enough to double the population of Oregon — the study identifies three reasons why California has been transformed from a “pull in” state to a “push out” state. Of course, one reason is the state’s pathologically unfriendly treatment of business. The second is the related collapse of its state and municipal finances. The third reason is less familiar to most, and shows just how good California has become at inflicting economic wounds upon itself.

It’s the state’s high density. While less than 6 percent of the state’s landmass is developed — about 50 percent is government-owned and about 45 percent is agricultural — to most Californians, it feels like a very crowded state.

In my home of Orange County and neighboring Los Angeles County, the density is hovering just below 7,000 people per square mile.  That makes the LA/OC megalopolis the most densely populated metro area in the country. San Francisco/Oakland is second, and San Jose is third. New York City is fourth, with a meager 5,319 people per square mile. Chicago is 25th.  Of the 50 densest metro areas in the country, 20 are in California.

It shouldn’t come as a surprise that, when places get too crowded, people (including business owners) move if they have the chance. In the late 19th century, America’s largest cities had densities of 50,000 or even 100,000 people per square mile.  When streetcars and trains, then cars, opened the door to suburbia, urban densities plummeted. Philadelphia is a case in point; its density fell from 56,000 people per square mile to 12,000 during those years.

As California’s expensive coastal counties started getting uncomfortably crowded in the 1990s, many moved one or two counties to the east to get more room for less.  Of course, those are the very areas that were the hardest hit by the housing and job market collapse. So now they are the California counties losing the most people to other states.

Higher density

What is progressive California doing about this? It should come as a surprise to no one that it’s doing exactly what it shouldn’t be doing:  Crusading Sacramento bureaucrats are forcing higher density on everyone.

The tool of this latest round of madness is 2008’s California Sustainable Communities and Climate Protection Act, or SB 375, authored by Darrell Steinberg, D-Sacramento, now the Senate president pro-tem. SB 375 stepped up California’s regulatory game from just controlling every aspect of how houses are built to dictating where they can be built.

The law mandates regional sustainable growth plans, and definitely doesn’t include suburbia in the “sustainable” column.  The Brown administration is using it like a hammer in its Quixotic campaign to single-handedly free the world of global warming.  For example, Attorney General Kamala Harris recently sued San Diego under SB 375 because its long-range plan did too much for highways, the transportation system that supports suburbia, and not enough for mass transit.

More to the administration’s liking is the Bay Area’s “Initial Vision Scenario for 2035,” which proclaims that, by 2035, the Bay Area’s population will grow by 2 million people, yet there will be fewer cars there than there are today.  That will only happen if yards, tree-lined streets and a car commute to work are traded in for lofts by the train station.

But, as the Manhattan Institute study illustrates, when faced with a choice between already too-dense cities and less dense (demographically and politically) places like Arizona, Texas, Oregon or Utah, more and more Californians are opting out of the craziness.

A number of years ago, New Republic senior editor Gregg Easterbook wrote, “Sprawl is caused by affluence and population growth, and which of these, exactly, do we propose to prohibit?” California’s Progressive leadership has apparently chosen both, firing one more shot into its suffering economy in the process.

Laer Pearce is the author of the new book, “Crazifornia: Tales from the Tarnished State.” Portions of this column are excerpted from the book.

Commentary

Sept. 19, 2012

By Laer Pearce

The warm, caring hands of government are poised to protect us once again.  Just like how California started protecting us in 1986 from chemicals it knew, in its wisdom, could cause cancer, birth defects and other reproductive harm, it may soon be protecting us from those nasty genetically engineered foods.

In 1986, it was Proposition 65, the Safe Drinking Water and Toxic Enforcement Act. I began to understand how sleazy that proposition was when I got a frantic call from a homebuilder client just a couple months after it passed.

“I’m going to have to put warning signs on all my new model homes or I’ll get sued,” he moaned. “What’s it going to do to sales if people have to walk by a cancer warning to go into one of my models?”

I told him not to worry because his competitors would have to post similar signs.  But I was curious why a model home would need a Prop. 65 warning.  After all, a brand new home is hardly a toxic sump of the sort the Yes on Prop. 65 ads had frightened Californians about.

“Well, for starters,” he said, “estrogen and testosterone are both on the Prop. 65 list of known carcinogens, so unless something other than men and women is going through my models, I’m going to have to post the signs.”

That was when I realized California had become what I’ve come to call “Crazifornia,” a state that has become a state of disaster. And it will be even more of a disaster if Proposition 37 passes this November.

Prop. 37

Prop. 37, we learn from its campaign website, “is a common-sense November ballot measure that will help consumers make informed choices about the food they eat.” That sounds reasonable.  If my donut is laced with DDT or my orange was doused in Agent Orange, I want to know about it before I take a bite.  Who could possibly have a problem with that?

Certainly not Jim Wheaton (pictured above), the Berkeley-educated lawyer who wrote Prop. 37. That would be the same Jim Wheaton who heads up the Environmental Law Foundation, a Bay Area litigation mill that has made $3 million in settlements and legal fees off Prop. 65 lawsuits.  Oh, and he’s the same Jim Wheaton who wrote much of Prop. 65 in the first place.

Prop. 37 is a genetically engineered clone of Prop. 65. To create it, Wheaton simply grafted an anti-genetically engineered food gene onto Prop. 65’s DNA. If you’re worried about genetically engineered foods running rampant and destroying ecosystems, you should see what a genetically engineered proposition can do to California’s already reeling business sector.

More bureaucrats

Like Prop. 65, Prop. 37 would create a panel of experts, hand selected by Wheaton and his environmentalist and trial attorney collegues, that would decide what food ingredients and compounds at what concentrations constitute risk in California’s eyes. As a starting point, California’s regulations will be about twice as tough as ones that are already hurting farmers and food processors in Europe.

And as occurs with Prop. 65, each year attorneys from litigation mills and their environmentalist expert witnesses will petition this panel to have more compounds added to the list.  Industry will push back, but most of the compounds will make it onto the list.

Then, similar to Prop. 65, state functionaries will look for violators who have missed the latest round of updates. They will monitor tens of thousands of food labels at grocery stores, retail outlets, farms and food processors, burning through tax dollars to produce the citations that are the raw materials for one of California’s biggest products: anti-business litigation.

The Prop. 65 litigation mills worked this formula so well with Prop. 65 that, between 1989 and 2011, companies have paid attorneys like Wheaton nearly half a billion dollars in legal fees and settlements to settle nearly 20,000 lawsuits.  That’s apprently not enough, so the trial attorneys are hopeful they’ll open a big new market with Prop. 37.

At the top of this column, I alluded to DDT in my donuts and Agent Orange in my oranges.  Surely the Yes on 37 campaign wouldn’t stoop so low as to dredge up dangerous chemicals that have long since been banned, right? Think again.

“You’ve heard the false corporate health claims before,” says a pro-37 ad.  “DDT is ‘safe.’ Agent Orange is ‘harmless.’ Now they say genetically engineered food is safe.”

Of course, food manufacturers, retailers and farmers are lining up against Prop. 37, but as with the earlier Yes on 65 campaign, Yes on 37 is simply painting them as greedy corporations that don’t mind killing off customers, as long as they make an extra buck or two.

In 1986, 63 percent of California voters bought the lie. With polls showing 51 percent of likely voters planning to vote for Prop. 37 and just 16 percent planning to vote against it, there’s little evidence the voters have wised up to Wheaton’s game.

Laer Pearce is the author of “Crazifornia: Tales from the Tarnished State.” Portions of this column are excerpted from the book.