Month: July 2002

I spent the day in Sacramento serving on an advisory board that I helped create by passing some legislation a few years ago, and when I came back home I discovered something interesting on the web. Ann Salisbury, a Gray Davis volunteer, wants to remind us of Gray’s accomplishments, so she’s posted a list of them to her blog:

— In his first three years, Governor Davis increased investment in K-12 education by $9.1 billion, or 39 percent — the largest three-year increase in history;

— Expanded the Cal-Grant program to help disadvantaged students who need financial assistance to pay for college;

— Increased University of California freshman admissions among African-American students by more than 13 percent for Fall 2001;

The list goes on and on, including virtually every major bill the governor signed or vetoed in the past three years. There are a couple of interesting things about this list, to whit: a) it was copied from the gray-davis.com web site, and b) most of the measures Gray and Ann tout were actually conceived and passed by members of the legislature who aren’t especially friendly to Gray.

John Burton, arguably Gray’s most vocal critic, wrote the expansion of the Cal-Grant program that’s number two on this list, and Gray wasn’t at all friendly to it since it’s a potential budget-buster. Similarly, the increase in African-American enrollment in UC is a consequence of the Four Percent Plan George W. Bush cooked up as governor of Texas, and Prop 209, a measure Gray opposed, which sent much of the affirmative action population to the lesser UC’s and away from Berkeley and UCLA. At the places like Riverside and Irvine, they don’t drop out as fast, so total ethnic enrollment is up. Most of the increased spending on K-12 is the result of Prop 98, and Gray can’t take credit for that either, not that education quality is up commensurate with education spending. She also touts:

— Expanded the eligibility and streamlined the application process for the Healthy Families program ? increasing enrollment from 30,000 to over 500,000 previously uninsured and disadvantaged children;

— Expanded the Medi-Cal low-cost health insurance program to include two-parent working families at or below the federal poverty level;

Increasing enrollment in Healthy Families and MediCal were the result of drives taking place over the course of several years that started well before Gray took office. He has no business trying to take credit for these things even if they did finally come to fruition while he was officially governor.

Ann and Gray also want to take credit for Fred Keeley’s park bond, Sheila Kuehl’s gay rights in the schools bill (“California Student Safety and Violence Prevention Act of 2000”), the legislature’s MTBE phaseout, Byron Sher and Dianne Feinstein’s Headwaters Forest deal (enacted while Pete Wilson was governor), and giving out money under the CalWorks welfare law that was passed under Wilson as a result of the Gingrich welfare reform.

There are some legitimate accomplishments of the Davis Administration that deserve some touting, such as the education reforms he pushed through in his first year, and the reorganization and continued improvement of the child support collection system, but the list Ann Salisbury cribbed from the Gray-Davis.com web site is extremely misleading.

The question that this list raises, however, is why Gray wants to reposition himself as a solid, hardcore leftwinger with all these welfare- and ethnic- and enviro- and gay-centric issues, after he won election in ’98 as a moderate, centrist, DLC-style Democrat. During the last campaign, Davis said he would continue Pete Wilson’s policies in most areas, and now that we’re in the midst of a budget crisis triggered by our too-heavily-indexed tax rates, that seems a more prudent course than running to the extreme left.

Davis has had the most dysfunctional relationship with the Legislature of any governor in memory. The way the system normally works is that legislators contact the governor and engage him in dialog over any measure that has the potential to draw a veto; changes are made, the hard edges are softened, and a compromise generally emerges that allows both the lawmaker and the governor to emerge looking like winners.

Even hard left politicos like Sheila Kuehl work this way with Republican governors, because there’s nothing more heartbreaking than a veto. Tom Hayden knew it was time for him to leave the legislature when Gray made him the most-vetoed member, telling Hayden that he intended to make an example of him. Davis, however, doesn’t return these calls, so lawmakers send legislation to the corner office blind, without any clue as to whether he’s going to sign it or send it back. Lawmakers consider him arrogant, uncooperative, and high handed, and they haven’t forgotten the infamous Davis outburst to the Chronicle’s editorial board when he said the legislature is simply supposed to “implement his vision.”

Gray, give me a call and let’s see if I can’t help you out; your campaign strategist Garry South must be smoking some of Burton’s locoweed to have put out this list of “accomplishments.”

Nova last night was a repeat of a 2000 show on the spectacular failure of Long Term Capital Management, a hedge fund setup to use the Black-Scholes and similar models (Scholes himself was one of the principals) to make hugely leveraged investments in virtually all the world’s financial markets. LTCM collapsed and threatened to take the markets down with it, as this book (When Genius Failed: The Rise and Fall of Long-Term Capital Management) explains:

LTCM began trading in 1994, after completing a road show that, despite the Ph.D.-touting partners’ lack of social skills and their disdainful condescension of potential investors who couldn’t rise to their intellectual level, netted a whopping $1.25 billion. The fund would seek to earn a tiny spread on thousands of trades, “as if it were vacuuming nickels that others couldn’t see,” in the words of one of its Nobel laureate partners, Myron Scholes. And nickels it found. In its first two years, LTCM earned $1.6 billion, profits that exceeded 40 percent even after the partners’ hefty cuts. By the spring of 1996, it was holding $140 billion in assets. But the end was soon in sight, and Lowenstein’s detailed account of each successively worse month of 1998, culminating in a disastrous August and the partners’ subsequent panicked moves, is riveting.

Models like Black-Scholes are inherently unreliable, as this collapse shows.

Robert Novak, the Prince of Darkness, has the smoking gun proving that the Clinton White House used the IRS to harass its enemies. Since the Clintons left the White House, former IRS agents leaked Bill Simon’s tax returns to the press:

A filing in the court last Jan. 7 indicates the documents were released by lawyers from the Justice Department’s Tax Division. The government’s chief litigator against Judicial Watch has been a remarkable Washington bureaucrat named Stuart Gibson.

While serving as a civil service tax lawyer, Gibson also is a liberal activist in suburban Fairfax County, Va., where he was elected to the school board with Democratic backing. He was the lead litigator in the public disclosure of tax shelters by individual taxpayers — including Bill Simon, the Republican nominee for governor of California.

The legacy of sleaze and corruption is still upon us, but Simon didn’t make things any better for himself by playing cat-and-mouse with the press about his tax returns. He can either release them or not, but the game he played with the press the other day where he allowed reporters to look at thousands of pages without tax experts’ advice and copy nothing created the perception that Simon has something to hide.

This is why I read Talking Points Memo: by Joshua Micah Marshall:

Maybe federal employees shouldn’t get the double protection of unions and civil service status. It’s not an unreasonable argument. If that’s what the president believes, he should send up a separate bill abolishing the civil service system.

Although my preference would be to abolish collective bargaining for government workers at all levels, because their civil service protection is enough, or should be in a country run by elected officials.

Ben Fritz of Spinsanity does yeoman’s work in taking apart Bob Scheer’s recent attack on Vice-President Cheney line-by-line:

Two of Scheer’s accusations of “a slimy trail of conflict-of-interest questions” are similarly unfair. First, he points out that while Cheney was Secretary of Defense under the first President Bush, he “conveniently changed the rules restricting private contractors doing work on U.S. military bases, allowing the Kellogg Brown & Root subsidiary of his future employer, Halliburton, to receive the first of $2.5 billion in contracts over the next decade.” Conflicts of interest are not retroactive, however. Cheney’s future employment by Haliburton does not constitute evidence linking the two at the time and, thus, creating a conflict of interest.

The term also doesn’t apply to Scheer’s second example. He points out that “When Cheney left to become CEO [of Halliburton], he recruited his Pentagon military aide, Joe Lopez, to become senior vice president in charge of Pentagon dealings, which ultimately formed the most lucrative part of the otherwise ailing company’s business.” Taking a job dealing with the government after leaving public sector work is not a conflict of interest (though some have raised other legitimate questions about the common practice). Conflicts of interest only arise when one has two interests that clash at once, which is not the case in the hiring of Lopez.

I’m really bowled-over by Ben’s patience: when I read this Scheer thing on-line at The Nation, I just rolled my eyes and groaned. Scheer’s so predictable, so loose with the facts, so inclined to the smear, you have to wonder why anybody publishes him anymore. Grow up already, Bob.

An LA Times reader offered a good suggestion about Scheer’s column:

In the future I suggest that The Times should put a disclaimer on all of Scheer’s commentaries as “being out of touch with reality.”

That sums it up quite nicely.