Analysis of 5/19/09 California Proposition Results

Link to county by county map of returns for each proposition
http://projects.latimes.com/elections/2009-05-19/california-propositions/results/map/

My not so scientific analysis of the country by county votes. I did this my analyzing the county by county map in the link above. I was curious about how different areas of the state tend to vote.

Prop1A – Rainy Day Fund(34% Yes, 66% No)
Counties that voted more than 40% Yes: Sonoma, Yolo, Marin, San Mateo, Contra Costa, Alameda, Monterey, Santa Cruz, Imperial (south eastern most)

Purpose: in addition to creating a so called rainy day fund, the measure would have extended billions of dollars of tax increases on sales, income, and vehicle taxes for up to two years.

Prop1B – Education Funding (38% Yes, 62% No)
Santa Clara was the only county to vote Yes. Many counties were very close to a Yes on this measure.

Purpose: To claw back recent cuts in funding for education. Obviously, this was supported by the California Teachers Assn.

Prop1C – Modernize Lottery (35% Yes, 65% No)
All counties voted No. Voting against this was more widespread, although states that voted agiast it most strongly tended to be away from the coast and non-greater Bay Area. Imperial County in south eastern California was an outlier again. It voted 47% Yes 53% No.

Purpose: To allow state officials to borrow $5 billion against future lottery earnings.

Prop1D – Child Services Funding (34% Yes, 66% No)
All counties voted No. Voting pattern similar to Prop1C

Purpose: To shift about $1.7B away from early childhood development programs to balance the state’s budget. I have no idea what “childhood development” is.

Prop1E – Mental Health Budget (34% Yes, 66% No)
All counties voted No. Voting pattern similar to Prop1C

Purpose: To temporarily shift money away from a mental health program established by voters in 2004, paid for with a 1% tax on personal income above $1 million.

Prop1F – Elected Official Salaries (74% Yes, 26% No)
All counties voted Yes. This prop differed from the other props in that a Yes vote was a vote agaist the government and against higher taxes. Interestingly, Imperial county, which tented to have a very strong Yes vote on all of the other props, voted 75% Yes for 1F. Contrary to what I expected, many of the Bay Area counties with had the strongest Yes votes for the other props, had very strong Yes votes for this proposition.

Purpose: To prevent pay raises for legislators and statewide officeholders in deficit years.

I did not vote in the recent proposition contest in California as I am leaving the state soon and I could care less. Part of the reason I am leaving the state is that I cannot stand the high tax rates, from the sales tax, to the income tax, to parking tickets, to speeding tickets, to the cost of living out here. However, I do find the results interesting.

New York Tax Receipts

New York state reported an astounding 44% year over year decline in tax revenues in April versus a national average decline of 13%.

http://www.bloomberg.com/apps/news?pid=20601015&sid=aePqq4foFyxE&refer=munibonds

Bastiat and The Law

I read The Law by Frederick Bastiat after hearing Walter Williams, an economist at George Mason University, quote from it while guest hosting the Limbaugh Program. The thesis of this panthlet sized treatise is that socialism perverts law from its proper purpose of protecting the rights of man to plundering wealth. The Law is well written and easy to comprehend. It is fairly unique in that it attacks socialism from that standpoint that it is a perversion of the law. It traces how laws are used to rob citizens of their rightful income. What I find particularly effective about the book is Bastiat's talent of extrapolating the logical consequences of socialist policies and following them to their absurd conclusions, thus bending them back on themselves.

Below, I have typed out passages that I underlined because I found they succictly illustrated an important point.

On Legal Plunder...

But how is legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it away to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime

The present day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.

I like the phrase that points out that socialism is an attempt to enrich everyone at the expense of everyone else. It illustrates the absurdity of the socialist claim. I like to joke, that here in California where I currently live, that the state is going to tax us into prosperity.

Socialism is legal plunder...

Socialists desire to practice legal plunder, not illegal plunder. Socialists, like all other monopolists, desire to make the law their own weapon.

The humanitarian in thought is the terrorist in action...

It must be admitted that the tendency of the human race toward liberty is largely thwarted...This is greatly due to a fatal desire - learned from the teachings of antiquity - that our writers on public affairs have in common: They desire to set themselves above mankind in order to arrange, organize, and regulate it according to their fancy...

They think only of subjecting mankind to the philanthropic tyranny of their own social inventions. Like Rousseau, they desire to force mankind docilely to bear this yoke of the public welfare that they have dreamed up in their own imaginations.

This bit makes me think of the Green movement, and how the members of it want to impose on the rest of us a lifestyle and set of ethics they have arbitrarily made up. Cars a bad. Hybrids cars are good. Organic is good. Cheap is bad. Higher priced gasoline is good. Higher priced energy is good. Eating cold food is good because it uses less energy. It goes on and on and on. The commonality of all of this is that it flies in the face of what most human beings want, which is goods that are more affordable that make lives easier and more pleasant.

This next quote may not make a lot of sense taken out of the lead in to it, but it makes sense to me...

The strange phenomenon of our times - one, which will probably astound out descendants - is the doctrine based on this triple hypothesis: the total inertness of mankind, the omnipotence of the law, and the infallibility of the legislator. These three ideas form the sacred symbol of those who proclaim themselves totally democratic.

Here, he is attacking the idea that mankind does not have an inherent nature, that it is like soft clay in the hands of a sculptor. The fact of the matter is that humans do have an inherent nature that cannot be changed. Every individual has his own thoughts, wishes, goals, likes, and dislikes, and we are not particles waiting to be organized by some enlightened ruler. Related to this is that socialists implicitly assume that the government, or those who run it are infallible. Obviously, this is not the case, but socialism does rest on this tenant.

Chart of Consumer Credit Since 1950

This is a chart of consumer credit excluding loans backed by real estate since 1950. Source is Federal Reserve and Bloomberg. Debt can be reduced in two ways: paying it down and defaulting on it. I think we have some more delevering of the economy to go coupled with a longer recession than what I see being predicted in the news on average.

Unions Foster Fraud in California Program for Elderly

I saw a link to this gem of a story in an article on another subject by George Will. The gist of this story is that the California “In Home Supportive Services” program for the elderly is rife with fraud. The program is designed to provide care for 440,000 Californians who are not able to take care of themselves. The state thinks it is cheaper for these people to stay in their homes rather than in nursing homes, so it allows these people to hire a person of their choice to care for them. The article says people tend to hire relatives.

Here is the kicker: attempts to detect and prevent fraud are resisted by political forces because employees of the program are members of the Service Employees International Union (SEIU) and the United Domestic Workers of America which benefits from the fraud. All workers hired by the program are required to pay monthly union dues. The article draws this key connection: “The unions donate heavily to the campaigns of Democrats who control the Legislature and organize get-out-the-vote efforts on their behalf.”

Essentially, two unions and the Democratic Party benefit from fraud in this program, and thus they resist efforts to prevent the fraud. I have always wondered what percent of the California budget is siphoned off by the corrupt. I do not see how California can be totally broke given the extremely high rate of taxes we pay here.

Obama and Biden Get Burgers

On May 5, 2009 a reporter, Kelley O'Donnell at MSNBC reported on Obama and Biden eating at a burger joint. She actually said, "One of the things that we have been talking about, of course, does deal with Ben Bernake who indicates that consumer spending is picking up a bit and perhaps the President pulling out a few dollars of his own pocket is another indication of that."

So, according to this ditz, Obama and Biden going to a burger joint for a PR stunt and buying a burger is an indication of improving consumer sentiment. Amazing! They should buy a Chrysler and some S&P 500 SPDRs so we know the economy is really booming.

Rush members can find the clip here

Here is the AP story.

How this rises to the level of being news is just beyond me. Worse yet, portraying it as a sign the economy is improving is just laughable. This is a perfect example of how far in the tank the mainstream media is for the Obama administration. Any serious news outlet would poke fun at such obvious propaganda.

Whitehouse threatens investment fund

The Obama administration has threatened to destroy the reputation of an investment firm if it does not toe the line on the admin's Chrysler debt cram down plan.

White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's Reputation*

One has to wonder what this will do to the long term prospects for Chrysler or GM to access the capital markets. In the future, who will want to lend to a private company that could at some point become a political football, to later have the government abrogate the investment terms at will?