City Journal Summer 2014

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Summer 2014
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Pete Peterson
On Further Review . . . « Back to Story

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First, the climate change legislation:

Utilities are to a great degree insulated against this economic detriments of this legislation. After all, if the costs of energy production go up, they pass those extra costs on to the ratepayers. The utilities never suffer since their profits are guaranteed by law. In fact, utilities were on of the few industries to pay dividends through the Great Depression.

So, the only people who suffer is the ratepayer i.e. the public. And they suffer doubly since those businesses which need power - and which business doesn't? - will simply leave if costs go up.

As for high speed rail, California's plan is insanity - of course construction firms want it to go forward since they make money, at taxpayer expense. Who did the marketing study for this future boondoggle? Isn't there more than adequate airline service between these two points?

By analogy, here in New Jersey we have "light rail" which runs in two urban areas of the State, north and south, although not connecting the two. Both systems are dismal failures, and require enormous subsidies. For example, only $15 million of the northern part of the system's $45 million operating costs are recovered each year - to say nothing of the construction costs, which were of course entirely at taxpayer expense. The system that serves the southern part of the state requires even greater subsidies. And the benefits of these systems are entirely speculative especially since bus service is far less expensive, both to implement and operate.

In fact, one urban planner I spoke to said that "high speed rail is the transportation idea of the future and always will be."

And finally, both of these laws, but more especially the climate change statute, are business as usual for California Democrats in their continuing effort to make conditions so bad in the golden state that the productive class - who, with a few well publicized exceptions - are exclusively Republicans, leave. This, of course, results in more power to the Democrats who have already used poor economic conditions and immigration, both legal and illegal to change California from red to blue.

In other words, Democrats have keyed in to the fact that prosperity is a negative when it comes to getting into and staying in power. For Democrats, success lies not in prosperity, but in beggering the community - while at the same time making it appear that they are doing whatever they can to improve it. The more poor people there are, the better for the party.

Accordingly, for Democrats in California and everywhere else for that matter, the worst possible outcome would be prosperity - especially since people who are not well off have been manipulated into thinking that Democrats favor the poor. That's quite true, of course, but only if the goal is for the poor to remain poor.

So, Democrats play a game of appearing to take actions that would result in better economic conditions, while at the same time ensuring that economic conditions either stay the same or - preferably - get worse.

Oddly enough, some pundits and other commentators don't understand the foregoing, and assume that people like Jerry Brown and other Democrats want the Californian economy to improve. Not true - that would be a disaster, since it would mean a loss of power. It would also threaten the 100% hold Democrats have on power in the inner cities, where economic conditions for most people haven't improved for decades, if not half a century, thanks to the success of Democratic policies aimed at ensuring a population in a permanent condition of poverty and dependence, with shattered families, a crime infested community and zero educational achievements. The result is the perfect Democratic constituency which invariably gives Democrats all of their votes year after year decade after decade. What possible incentive is there on the Democratic Party to change any of that?

Don't believe it? Check out other comments on the African American experience with the Democratic Party over the last 50 years, the result of which is anything but prosperity. It is positive proof that you can fool all of the people all of the time if you have most of the media on your side.
If California had a decent newspaper, with real reporters, we might not be in this mess. But the Los Angeles Times--so pathetic it sells for a dollar where the out of state NY Times sells here for more-is no such thing.

Its recent editorial reaffirmed its mindless support for high speed rail. With breathtaking historical and economic ignorance, the LA Times insisted that the project was a chance to build something as great as the pryamids. Yes, that's right: the pyramids. A big project in the middle of no where, used by a few at great cost to the many.

The Times is always like this: it opposed Schwarzzeneger's Propositions in 2005 to rein in state spending and pensions: needless to say those would dhave helped us avoid the financial trainwreck we're in now.

Not one responsible source has backed high speed rail. The initial PR for bond passage was underwritten largely by an out of state contractor, aided by unions, politicians and investment banks. They all stand to make a mint: the hapless taxpayer stands to make all the payments.

The thing is so impractical--initial spur is located in the middle of farm country--not a leg of the vaunted LA to SF route.

The LA Times aided passage of the rail bonds by a near blackout on responsible reporting on the probable costs and finances of other high speed rail projects in the world.

Only when the Independent Review Committee--thankfully made part of the law that enabled this farce--roasted the economics did people agree that, well yes, it might cost not 33 billion but 98 billion. Maybe more. And we have funding for a total of 3b--3-- from the feds.

People will make the right decisions if given honest information. But inside detaisl are never disclosed to the taxpayers: and the LA Times aids and abets the scam on the taxpayer because it regards all these projects necessary for the "good" of the People--whether they like it or not.

Pensions, disability benefits etc for public employees have been hidden away--made in backrooms and ignored by news papers. Same with this project.

The LA Times opposed Prop 13, opposed Three Strikes, opposed the recall of Governor Gray ("whatever the prison guards want I'll give") Davis, opposed English immersion for students, and supports raising any and every tax for more state "services." It pushed for "green power" mandates that require the reduction in coal-fired electricity, while ignoring the projected costs and rate increases (until after the election). Only now are peolpe being told that rates "may" go up by 15% or more. And it will continue to support high speed rail.


We owe the review Committee a huge debt (or the absence of a huge debt, I hope). People may be waking up the their role in California as sheep to be fleeced for the unions, legislators and banks. I hope so.

I hope the sheeple here in Calif finally catch on to this idiotic boondoggle.This is nothing more than a union make work project designed to enrich a few well connected investors and politicians.By summers end this thing should be dead
The legislators are not "clueless" as you put it, there's tons of money to be made in these ridiculous projects, by them and their cronies. Kinda makes you wonder about the chances for "democracy", doesn't it?
Was there ever a politician who admitted he was wrong outside of Mitt Romney?

I suppose being called a flip flopper is too high a price to pay?
Doug,

You are so generous with my money. Please let me know how I can send you my $300 monthly electric bill.
Retired Lady
Governor Brown and the Democratic cabal that run California are a bunch of idiots.

The state budget is deeply in the red, but Gov. Brown propses to spend $9 billion more next year than last year? What maniac proposes spends more money during a deficit year? And rail projects that will require an additional, never-ending budget subsidy from taxpayers only aggravates an already bad situation. This high-speed rail project is unaffordable, plus it will never be self-sustaining. There won't be enough ridership to meet the costs. Why would anybody take an all-day train ride from Southern to Northern California, when they can fly faster, for the same or less cost?
Gov. Brown is living in some sort of European dream-world. Rail works in Europe because they have government controlled population centers. Most European governments will not allow housing developments in the exurbs, but insist that new housing be located adjacent to existing developments (inner suburbs). This prevents "leapfrog" development into rural areas, but also denies homeowners the right to live wherever they want. America is bigger and more spread out than Europe and our dispersed population does not lend itself to mass transit. Many Americans (myself included) have jobs that require the use of a car to do business.

High-speed rail is a failed boondoogle that should be terminated. Those who would make money on it still push the idea, but it's a disastrous idea for state taxpayers.

Buying votes from people who don't pay taxes is a big Democratic ploy out here.
It's actually heartening that "green" energy is projected to boost electric rates by a mere 15 percent.

Civilization can ride out a bump in the price of a kilowatt hour. Efficiency gains can easily offset that.

Spending billions on luxury trains for a happy few is another story.