October 2012


ACLU Sues Morgan Stanley, Targets Loan Securitizer Over Loan Originator

By David Dayen

The ACLU plans to sue Morgan Stanley on behalf of five named plaintiffs (they will seek class action status), for the investment bank's role in fueling what they view as a discriminatory subprime bubble. In doing so, the ACLU will try to pioneer a new legal strategy, by going after the securitizer of the loans instead of the now-defunct originator.

Taxpayers Should Stop Subsidizing Wal-Mart

By Tina Dupuy

Wal-Mart is the biggest retailer in the world. It boasts of having 1.2 million Americans on their payroll. Its reported annual profits are around $13 billion. So it’s safe to say since it is so big - and so ubiquitous - and so obviously successful - the government can now stop subsidizing it.

Will Gas Prices Continue To Keep Californians Over A Barrel?

By Jamie Court

Californians finally saw $5 per gallon at their pumps last week. Unfortunately, it's not likely to be the last time.

The Los Angeles Times published my op-ed Friday, "Refueling California," where I detail how sudden price spikes will plague drivers here until we adopt some simple reforms recommended by a state taskforce more than a decade ago.

Middle Class Tax Breaks: An Invisible Lifeline?

By Rev. Jim Conn

When a man makes millions a year and pays a paltry tax of 13 percent and then demonizes people too poor or too old to pay any, who's the "moocher?" Well, that's easy, but besides the really rich, those of us who are in the middle class also get lots of breaks. The federal tax code offers tax deductions that support our comfort, while the budget delivers subsidies that underwrite the way we live. Some of these are obvious, some obscure and some buried so deep we don't bother to count them.

Fighting for Prop 37: the Truth That $36 Million Can't Hide

By Stacy Malkan

The people's movement for our right to know what's in our food has hit a critical fork in the road: the moment when it's time to ask ourselves and each other - how hard are we willing to fight for our basic right to know what's in the food we're eating and feeding our families?

Proposition 37 is the litmus test for whether there is actually a food movement in this country, writes Michael Pollan in an article in Sunday's New York Times Magazine. It may also be the litmus test for whether there is democracy left in this country.

Prop 31: A Smorgasbord of Provisions

By Sheila Kuehl

Prop 31 is a collection of seven disparate provisions gathered together by a collection of think-tanks and pundits aimed changing state government procedures. It is primarily the brainchild of an organization called California Forward, which was put together by Common Cause and the Center for Governmental Studies, among others, and funded by five foundations, including the California Endowment. The hope was to find ways to make government more efficient and responsive. However, several critics have opined that Prop 31 doesn't really accomplish the goal, but simply recycles a number of ideas that have been floated through the years without a good deal of empirical evidence on whether or not they accomplish what they set out to do.

How to Win the Debate on Taxes

By Steve Hochstadt

TV commentators say Mitt Romney won the first presidential debate. He won it on taxes: "I don't have a $5 trillion tax cut … My number one principle is there will be no tax cut that adds to the deficit … I will not reduce the taxes paid by high-income Americans … I will not, under any circumstance raise taxes on middle-income families. I will lower taxes on middle-income families." Should we believe that?

Prop 38: A Different Take on the Problem of Education Funding

By Sheila Kuehl

This is the second in a series of essays analyzing the Propositions appearing on California's November ballot. This essay describes Proposition 38, which amends state statutes (not the Constitution) to increase state income tax for any Californian earning more than $7316 a year, and allocates the increased revenues to K-12 education, state debt and early childhood education. I'll also address what happens if both the tax measures, Propositions 30 and 38, should pass.

Westlands Masquerades as "Tea Party" in Attack on Delta Film

By Dan Bacher

The Westlands Water District, regarded as the poster child of government-subsidized corporate agribusiness in California, is apparently posing as the anti-tax, anti-big government "Central Valley Tea Party" in an attack on Restore the Delta's documentary Over Troubled Waters.

In a statement, Restore the Delta (RTD) on October 3 exposed the effort by Westlands, one of the largest beneficiaries of taxpayer subsidies, for "masquerading" as the "Central Valley Tea Party" to instigate opposition to RTD's film documenting the public subsidies of water for huge, unsustainable corporate agribusiness on the west side of the San Joaquin Valley.

RTD is a well-respected coalition of farmers, fishermen, environmentalists and business owners dedicated to a fair water policy in California.

Governor Brown Looks to Patch a Budget Gap with Prop 30

By Sheila Kuehl

When Governor Brown took office, he erroneously believed he was dealing with the same California Republican party with whom he had worked out so many things in the past. Instead, he was strung along just long enough for the temporary taxes put into place by Gov. Schwarzenegger, which were simply supposed to be extended, to expire. Left with no alternative, the Governor put his version, a continuation of the Schwarzenegger tax increases, out for signature. At the same time, a proposed initiative, cheerfully dubbed the Millionaire's Tax, was circulating and the two seemed destined to do some harm to each other, especially since the provisions of the Millionaire's Tax were polling better. As Sen. Russell B. Long once put it, "Don't tax him and don't tax me, tax that guy behind the tree." That would be the rich, and the 99% seemed very willing to do it.

Why California's Gas Prices Have Skyrocketed

By David Dayen

Brad Plumer has a decent enough explanation of why gas prices have soared in California over the past week or so. But being a resident of Southern California, perhaps I can provide a bit more insight into how this has played out on the ground.

Professor James Hamilton explains that a series of refinery and pipeline shutdowns, and a fire at the Richmond Chevron refinery back in August, have conspired to create a perfect storm in California. A power outage shutdown at the ExxonMobil refinery in Torrance last Monday was kind of the last straw. As California is somewhat closed off from the rest of the country in terms of pipelines feeding into the state, this has a major impact. In addition, California mandates a particular blend of gasoline, which reduces smog and other pollution, but also is more specialized to produce. So the price of gas leapt 50 cents per gallon in the last week.

Gas Prices Spike Across California, Strengthen the Case for High Speed Rail

By Robert Cruickshank

After a brief respite at the end of the summer, gas prices in California are rising sharply, with shortages being reported in Southern California.

Gas prices in Southern California jumped 9 cents overnight Wednesday into Thursday, and experts say they'll continue to rise. Thursday saw the largest single-day increase in average price ever, DeHaan said….

The current situation has been exacerbated by a power outage at a refinery in Torrance on Monday that halted production. It follows a power outage and weeklong shutdown at a refinery in Wilmington in mid-September.

Federal Government Runs out of Money to Fight Fires, Pays for It By Cutting Fire Prevention Programs

By David Dayen

Here's a story at the intersection of catastrophic climate change and austerity.

Because of the constant burning of carbon into the atmosphere and the resulting changes to the weather and climate, the US has experienced more and more wildfires over the past several years. In fact, this has been the worst wildfire season on record.

Obama Announces Cesar Chavez National Monument

By Randy Shaw

President Barack Obama came to Keene, California yesterday to announce the establishment of the César E. Chávez National Monument. The monument at La Paz was the national headquarters of the United Farm Workers (UFW) during its heyday, and the center of Chávez's life from the early 1970's until his death in 1993. While Obama’s White House message highlighted Chávez's role in giving "a voice to poor and disenfranchised workers everywhere," the President has personal reasons to promote the legacy of the farmworker leader. As I described on Cesar Chavez Day in 2010, Chavez and the UFW provided the political outreach model for Obama's 2008 grassroots campaign. Obama also borrowed his "Yes We Can" rallying cry from the UFW's "Si Se Puede." Many have worked for years to make this national monument a reality, and while specifically named for Chavez, it is also a tribute to all those who have worked for greater social and economic justice for farmworkers.

Will California Reap Growth Rewards with the Sustainable Communities Strategies Initiative?

By Alan Kandel

Houston: We (California) have a problem, a Texas-sized problem.

California used to be the envy of the country - at one time, maybe of the world even. Ours was the land of plenty; it still is. The Golden State's number one industry - agriculture - is a cornucopia, a veritable cash crop to the tune of $32 billion per year - handily. The central San Joaquin Valley's contribution, incidentally, is about half.

But where acre after productive acre of the highest quality farmland once existed, much has been paved over. And left in its wake: sprawl, traffic congestion and deleterious air pollution. And the dirty air is pervasive. How problematic is it?

When is a Paid Employee a Volunteer? When a Surcharge is a Discount

By Daniel Palay
Consumer Watchdog

In response to our Consumer Alert exposing the Prop 33 campaign for using paid campaign employees in their TV ads, the insurance industry-backed Proposition 33 campaign issued a statement to the L.A. Times Opinion blog - excerpts below - stating that "the two women in their ads were simply volunteering their stories in support of the effort to pass Proposition 33." That disingenuous response begs the question: "Is a Paid Employee a Volunteer?" I guess if you can call charging people more for their auto insurance simply for not driving a "discount," then why not call an employee a volunteer?

Farm Bureau Anti-HSR Suit Clearly Intended to Stop Project

By Robert Cruickshank

There's been a lot of discussion of the California Environmental Quality Act lately and the need to reform it. My view is that environmental regulations and reviews of projects are very important, but that it should not be used to stop good and environmentally friendly projects from going forward. If the review process is used with the intent of making a project better, that's great! But that's not what's happening with high speed rail.

Katherine Porter's Dogged Work Helps Struggling Homeowners in California

By David Dayen

Tuesday was the first day that the servicing standards for the foreclosure fraud settlement went into effect. The standards, 304 in all, include large changes to the servicer business model, like banning robo-signing, mandating quick decision making on loan modification, providing borrowers with options to foreclosure, establishing a single point of contact and ending "dual tracking" (negotiating a loan modification with a homeowner and starting the foreclosure process on them at the same time). In a negotiated process, the big five servicers had a choice of taking 60, 90 or 180 days to implement the standards. The servicers took the full 180 days. But that ended October 3.

An Education: How Prop 32's Backers Have Tried to Ditch Public Schools

By Matthew Fleischer

The billionaire backers of Proposition 32 are an eclectic bunch–from bow-tied Tory parodies like Charles Munger Jr., to Bible-thumping fire-breathers like Larry T. Smith, to old-fashioned oil tycoons like the Koch brothers. Over the years members of this crew have combined to push a number of conservative pet projects through the halls of Sacramento's Capitol - on every issue from stripping gay rights to dismantling environmental protections.

FTC Estimates Google's Privacy Hack Earned Up To $4 Million

By John M. Simpson

One of the things you hear when companies try to minimize the impact of privacy violations is an attempt to claim there was no financial harm to consumers. However, in an interesting development the Federal Trade Commission is now publicly estimating that Google's hack around Apple's Safari browser privacy settings earned the Internet giant up to $4 million.