"Chinatown" and "Day of the Locust"-level flak

Submitted: Jun 06, 2008

The drama! The panic! The fear! Visions of people dying of thirst in yet-unnamed Southern California suburbs. Millions of acres of farm crops disked under.


At the Monday meeting in Los Banos with farmers, Bureau of Reclamation staff and Rep. Jim Costa is reported to have said that California has a perfectly good water system for 20 million people, the problem being that we have now around 38 million people and rising.

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Unrepresented Stevinson resident speaks out for Sherron, against Kelsey

Submitted: May 28, 2008

Wednesday, May. 28, 2008
Letter: Stevinson left out

Editor: The Hilmar/Stevinson MAC (Municipal Advisory Council) Board is my town's only official connection to the Merced County Board of Supervisors. Without a MAC board, small communities cannot discuss and vote on issues of a local nature with a collective voice. A MAC board only serves in an advisory capacity, but its importance cannot be denied. If an individual complains of a problem to his or her supervisor it can fall on deaf ears. If a board of citizens in a public place complains of a problem to its supervisor then many people have witnessed the event and it cannot be denied or simply brushed aside.

In 2005, I noticed a real problem on the MAC Board representing my town. Stevinson has just two seats on the Hilmar/Stevinson MAC. One of the gentlemen representing Stevinson was only attending the monthly meetings two or three times a year. The other gentleman rarely came because of health issues, and when he did, he almost never spoke a word.

On Aug. 25, 2005, I wrote an e-mail to my supervisor, Deidre Kelsey, asking that the problem of virtually no representation for Stevinson on the MAC Board be rectified. My letter was polite and kind. I received no reply on this issue. I followed this up with a phone call where she said she would think about the situation. Still nothing came of it. I then made a request at a MAC Board meeting. Nothing came of that either. The MAC Board itself has questioned the Stevinson representation issue with Kelsey as well. Again ... nothing happened.

The problem had existed for months before I called attention to it. So, for three years or more there has been virtually no representation for the town of Stevinson under Kelsey's watch, even though she was made aware of it many times.

Please bear in mind that during this time period of no MAC board representation, Stevinson has been under the pressure of a 3,880-unit gated residential development proposal. Also during this time period a steering committee was formed by Kelsey to shape a general plan for Stevinson that would bump our population from 400 to 19,000 people. Every single one of the steering committee meetings was held at the Stevinson Ranch Clubhouse, and they all violated the Brown Act. No guidance package was submitted to the MAC Board for comment on this development project, again, during this time period.

I do not believe that Kelsey has done her job well in Stevinson. The injustices done to this tiny town by Kelsey and the Merced County Planning Department are intolerable.

I have met with Claudine Sherron who is running against Kelsey for the seat of supervisor for District 4. I am astounded by Sherron's intelligence, handle on the issues, honesty and integrity. I am proud to say that I am going to vote for Claudine Sherron for supervisor on June 3. I hope that all of you will take into careful consideration the above events and vote for a change in leadership as well.



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The Green Job Frame, a Loose Cheeks Special Feature

Submitted: May 20, 2008

About a hundred people, many of them from Merced, got an education in UC intellectual bankruptcy this week at the old Merced Theatre during a forum on "Green Jobs." The event was organized by Kenny, the Monster UC Merced Faculty Spouse, and it featured a trio of top Bay Area speakers on everything green. After the Monster got the computers started (computer inadequacy is a hallmark of Monster Shows), we entered the world of "Framing and Reframing," a rhetorical confection created by UC Berkeley's Chomsky-Lite, Prof. George Lakoff.

The Monster framed it like this: the environmental debate is always framed as an environmental protection argument, yet we need thousands of new jobs but if the environment collapses, human health and safety also collapses; ergo, we need "green jobs." QED, it's a "no brainer" for Merced to seek these "green" industries and jobs.This "framing" of the question unleashed the speakers to bay after the elusive "green job."

Merced City Councilman John Carlisle, the only member of the panel that did not indulge in "framing" lingo, described the situation in Merced in dire terms -- gangs, bad air quality, teen pregnancy, etc. -- all the products of poverty in this weird county, which has among the nation's least affordable housing, its highest foreclosure rate and is among the five poorest counties in the state. For "a community already in need of help,"

Carlisle wants "green jobs." In his definition of "green jobs," however, the audience got its first intimation that it was going to get had that evening. "Green jobs," according to Carlisle and others on the stage have good employers, good benefits, upward mobility, and meaningful work -- for starters. Carlisle's election apparently owed quite a bit to the work of the sponsors of the Green Job event. In this context, we can understand his utopian affection. Otherwise, he seems to be a pretty level-headed retired probation

Nwamaka Agbo, from the Oakland-based Ella Baker Center, made an excellent presentation on the Center's efforts to get more "green-collar jobs" in Oakland, Berkeley, Emeryville and Richmond, pointing out that poor communities of color also care about the environment but have more immediate worries. She defined "eco-apartheid" in West Oakland near the port, presenting the dichotomy of "organic food v. no food at all." "Eco-equity" means the incorporation of everyone into the environmental movement. We thought Agbo's presentation would have been equally interesting and relevant to Merced if she had been talking about Brooklyn or Compton, but we now live in the home of UC Merced, so we must gratefully
accept its total framing of our lives as we so gratefully accepted the finance, insurance and real estate framing of our economy in recent years.

"The environmental conversation lacks racial analysis," Agbo bravely asserted against the entire history of the environmental justice movement in an evening definitely not devoted to discussion of CEQA suits in Planada. (One of the event sponsors later tried to “reframe” what Agbo said, but Loose Cheeks, “framing-deficient," didn't get it.)

Marc Stout represented the Bigshot Entrepreneur wing of "green jobs," a flak for Cleantech, "a utility-scale power-plant project developer." He said construction and maintenance of future solar farms will require thousands of workers. He mentioned figures. He described a 40-acre facility near Mendota (unfinished) and a 640-acre solar farm his company is planning for the San Joaquin Valley.

The only interesting thing he said was that Germany, a cold, northern European country, employs a half a million of its citizens in the solar business. Siemens, the German global conglomerate, is the largest player in this market, according to other sources, but Germany is probably absorbing most of what it produces. Japanese solar technology dominates the US market at the moment, but Siemens’ India-made panels sold here reportedly have quality problems. It is interesting to note that in the cornucopia of “green jobs” Stout touted, manufacturing solar panels or any other "green" technology was absent. The entire industry seems to be gearing up for its Conquest of America on off-shored manufacturing.

Although, according to Stout, hundreds of thousands of jobs will be available soon for construction and maintenance of solar farms, about twice as many jobs will be available off-shore plants to make solar panels. Stout did not indicate if all this solar power injected onto the grid will in any way lower utility rates and not just make money for the utility companies and solar entrepreneurs like himself (and, of course,
those thousands of construction and maintenance personnel, who will all be US citizens and working for Bay Area-level wages and protected by strong unions.)

It was with the presentation by Cheryl Brown of the UC Berkeley Labor Center that we entered into the full vedanta of what it means to be "green."

"Green jobs are quality jobs," she said. And, although that was about as far as she went to defining green in mere layperson's language, she said she thought that some concept of "sustainability" should be included and that a quality job meant one that might last.

That would knock out solar farm construction work. Stout never broke down the figures on numbers of jobs between construction and maintenance. Asians will manufacture the panels.

While we have heard and largely approved of the new verb, "to greenwash," to describe what corporations are doing to claim to be environmentally friendly, it was Brown who brought back to our hick consciousness the verb, "to green," languishing in the shadows since the 1970's gerund, The Greening of America.

Brown's "framing" was dead on arrival, but it twitched along obliviously anyway. Quality jobs apparently mean that we must "unionize in the market-driven green solution." Well, we dunno. But, to use an older Berkeley term, we had a " flashback." We don't think Cesar Chavez' dying words in Yuma were, "Unionize in the market-driven green solution!"

Brown cavorted around the various bills in Congress and the state Capitol and the innumerable institutions out there doing something "to green" industry and jobs, claiming that the East Bay is to become the "Silicon Valley of green stuff."

Loose Cheeks left before all the questions from the audience were finished because they weren't questions. They were living ads for various "green" and "greenwashed" groups and public institutions.

However, in the hoopla before the event and during the event, we noted only two references to agriculture. In the Merced Sun-Star's editorial boosting the event, editors referred to "stagnant agriculture." At the "green jobs" forum, agriculture was treated solely as land available for the placement of large numbers of solar panels and as a very minor source of air pollution (less than 10 percent, versus construction, the worst polluter at 40 percent).

One of the sponsors of the event, the carpet-bagger professional opponents of the WalMart distribution center project, once again increased the threat to their cause and our environment. Having done very little but kiss the posteriors of politicians and the press since they arrived, the City of Merced has totally suckered the WalMart Action Team into making "positive contributions" instead of simply and coherently opposing the project.

They were overjoyed that the City's economic development director was in the audience. They don't like Quintero much because they feel he doesn't always listen to them. That could be because Quintero actually knows something about the employment situation in Merced. He made more sense than anyone on the panel when he said Merced contains many "line workers" who need a job tomorrow and certainly cannot afford to go through lengthy "green job" training programs, assuming government funds are made available for them. All the panelists and some of the "questioners" mentioned the sainted state Sen. Darryl
Steinberg's bill to provide $3 billion for "green job" training. Clue: Steinberg has made an entire career out of haphazard, ill-timed defenses of politically correct causes.

Thoroughly engrossed in the process of allowing UC to completely “reframe” their reality, Kenny the Monster and his sponsors never thought to include anyone on the panel who actually knew anything about the San Joaquin Valley environment or its labor history. For this act of appeasement, they were rewarded: the Sun-Star didn’t even send a reporter to cover the event.

Loose Cheeks left the performance at the old theatre in a disordered state. How is it that you come to "green" Merced without talking about its natural resources? How does that work? Presumably, UC Merced and Kenny Monster will reframe it for us us all in the finest Goodbar/Valley Hopefuls style.

Loose Cheeks learned the next day that Merced County Planning Commissioner Etc. Cindy Lashbrook said something about not wanting all the farmland filled with solar panels. This is reported to have made the posterior-kissing crowd nervous, for which we applaud the Commissioner of Many Hats.

Meanwhile, to respond to Quintero's excellent question: house the homeless in foreclosed, empty homes and hire the unemployed to mow those lawns and maintain those gardens. That would provide permanent housing for the homeless and work for those gardeners for the rest of their lives. With water, the grass and the gardens would once again be "green."

As for the Walmart "opponents," the asthma coalition and the local Sierra Clubbers who sponsored the event, Loose Cheeks wanted to remind them and their Florida-based employers, knucklehead labor goons, that you don't stop environmentally destructive development by sucking up to the land-use officials that approve the projects, and the job of opponents does not include providing "positive" solutions. That’s the business of the government and its good friends in private enterprise.

RE: [WMAT_Leadership] MSS: Forum to tout green growth‏
From: wmat_leadership@yahoogroups.com on behalf of Diana Westmoreland Pedrozo
Sent: Thu 5/15/08 4:26 PM
To: 'Kenny Mostern' (kenny@kennymostern.net); wmat_leadership@yahoogroups.com;
cvaq@yahoogroups.com; cvhopefuls@yahoogroups.com; ccvj4j@yahoogroups.com; 'Nick Robinson'

Just wanted to let you know that I will not be able to attend tonight. Thank you for bringing this issue to the forefront. If I can be of assistance in any future endeavors please let me know. I am sitting on the board of the San Joaquin Valley Clean Energy Organization formed last year through the Housing, Land Use and AG Committee of the San Joaquin Valley Partnership and green jobs is an important component of addressing energy and air quality issues here in the Valley.
Good Luck!
Diana Westmoreland Pedrozo
(Executive Director Merced County Farm Bureau, President California Women for Agriculture, Top Henchette Supervisor Deidre Kelsey reelection campaign, Etc.--ed.)

--A.J. Gangle

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When carpenters can no longer afford to buy the houses they built

Submitted: Mar 01, 2008

A lesson certain to be unlearned in California: When finance, insurance, real estate, large landowners and politicians create a housing bubble like the one we have been through, the only form of economic growth permitted to survive is construction. Thefore, when the bubble bursts, so may the economy itself. The Invisible Middle Finger of the Market has flipped off California.

San Diego Union-Tribune
Carlsbad for-profit You Walk Away assists those facing foreclosure...Emmet Pierce
You Walk Away LLC has found a way to profit from the ongoing mortgage crisis, but co-founder Jon Maddux says the Carlsbad-based company also is providing a valuable service to borrowers who took out risky adjustable-rate loans during the fevered housing boom.
Launched in January, the business helps distressed homeowners navigate their way through the foreclosure process for a fee of $995. Although it has served about 200 clients so far, Maddux says the potential market is largely untapped. An estimated 1.8 million adjustable subprime loans are scheduled to reset to sharply higher interest rates nationwide over the next two years...“The contract goes both ways,” Maddux said. “The mortgage has a clause that says if they don't pay, the bank gets the house back. When they made the loan, it was risky. It allows for Plan B if (borrowers) can't afford the home anymore or they have to make a decision whether to put food on the table or make the mortgage payment. . . . We try to help protect the homeowner.”
Economist Edward Leamer, director of the UCLA Anderson Forecast, said the creation of a company that helps borrowers go into foreclosure reflects “a collective erosion in borrowers' commitment to service their loans"...“People are walking away just because it was a bad investment.”
Martin McGuinn, a San Diego attorney who represents lenders and loan servicers in foreclosures, called the trend disturbing. “From a lender's standpoint, the worst thing in the world that could happen is for people to simply walk away from their property,” McGuinn said.
January foreclosures in San Diego County totaled 1,305, up 32 percent from December and up nearly 257 percent from January 2007. Notices of default, the first step in reclaiming mortgaged properties, totaled 3,109, up 21 percent from December and up 145 percent from a year earlier...Gabe del Rio, president of the Housing Opportunities Collaborative, a nonprofit consortium of homeownership and housing counseling agencies, said distressed borrowers have other alternatives besides harming their credit through foreclosure.
Information on foreclosures is available at no cost online or from the nonprofit groups he works with, he said. “A foreclosure is the worst outcome that could happen,” del Rio said. “There are other steps you can take.”
As loan defaults have surged, lenders have become more willing to negotiate, he said. In some cases, they will take back homes and forgive the remaining debt to avoid the expense of the foreclosure process. “You are basically settling with the lender,” del Rio said. “You are saying, 'I will give you back the collateral if you release me with from my debt.' You are not just skipping out.”
Another option is a short sale, in which a lender agrees to allow the borrower to sell the home for less money than the amount that is due on the loan... “All the critics out there, what do they recommend?” Maddux asked. “If they can't sell and they can't refinance and a loan modification puts them in a similar situation, what is their option?”
You Walk Away offers reliable foreclosure information, he added. If borrowers “did it themselves, they could save some money, but there are too many mistakes that could cost you well over $1,000.” The company operates in California and six other states where Maddux and co-founder Chad Ruyle have agreements with attorneys who address local foreclosure laws...

Los Angeles Times
California job growth slows to a crawl
The state added just under 15,000 positions in 2007 and January saw another shrink in employers' payrolls. Training programs and other initiatives will be pursued, officials say...Lisa Girion and Ken Bensinger
Here's more evidence that California is losing its struggle against recession: The state shed 20,300 jobs in January, more than the other 49 states combined for the month, a government report showed Friday.
That comes on top of more bad news. California's job engine sputtered nearly to a halt last year, adding just under 15,000 positions, or 0.1%, to the state's payrolls, according to the Employment Development Department's revised annual figures, also released Friday.The state's job losses in the first month of the year swept across several sectors, with construction, information and financial services among the hardest hit...In all, 15.2 million people were employed in California in January. The state's unemployment rate held at 5.9%, unchanged from December's revised rate and up from 5% in January 2007.
The figures show California's hard-hit home-construction sector was a drag not only on the state economy but also figured prominently in the U.S., posting its first job losses in more than four years in January.The U.S. economy as a whole dropped a net 17,000 jobs during the month -- fewer than California alone, meaning that California's losses were offset by gains elsewhere. The nation's unemployment rate edged lower to 4.9% in January from December's 5%.Economists said the latest figures showed that the state economy was sluggish at best and might be headed toward recession...

Inland construction jobs in freefall, state employment records show...JOSH BROWN...2-2908
The crippled housing market sent the Inland region last year into the biggest jobs freefall on record, state figures released Friday show. Riverside and San Bernardino counties lost 7,300 jobs in the past year, the vast majority of losses in home construction-related fields.
The new state figures represent a dramatic revision to the state's estimates in December that showed the Inland region had gained 32,400 jobs during the previous 12 months. Regional economists long had expected a downward revision to the numbers after reports were heard of the construction industry hemorrhaging jobs...

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UC: Robbing Peter and the professor to pay Chancellor Paul

Submitted: Dec 18, 2007

Anyone in Merced not in on the land deal brought about by the boondoggle on Lake Yosemite, UC Merced, or dazzled blind by the glitter of blue and gold, knows UC chancellors have ethics and spiels that make Fresno developers look and sound like a neighborhood-watch group. UC administration is systemically ethically disadvantaged. Dr. David Kessler, dean of UCSF Medical School, did important research and discovered Disappeared Multiple Millions Syndrome (DMMS). An outraged UC administration fired him. He should have received a Nobel Prize for identifying the parasitic disease that is rotting a once-great public institution.

Merced county schools dispatched hundreds of third-grade lobbyists to the state Capitol, wearing "UC Merced" T-shirts for this?

Badlands Journal editorial board

San Francisco Chronicle
Doctoral students turning down UC due to inadequate aid packages...Tanya Schevitz

The University of California is failing to attract some of the best doctoral students because its financial aid and fellowship packages are not competitive with other top colleges, according to a new report from UC. California's high cost of living further aggravates the problem, said the study, which was based on a survey of graduate students. The stipend is what ends up in the students' pockets after tuition and fees.
The net average stipend of $17,356 offered to UC's doctoral graduate students is $1,000 lower than the average of competing institutions. The difference is even larger when cost of living is factored in, creating a net disadvantage for UC of $3,259 per year.
"Students rate UC very highly and comparable with competing institutions in terms of academic reputation, research activities, location and diversity of students and faculty," the report says. "Students also indicate, however, that UC's financial support offers are less attractive than those of other institutions in terms of the amount, type and duration of supported offered."
There are currently 22,500 doctoral students at UC's 10 campuses. Among UC's top competitors are Stanford University, the Massachusetts Institute of Technology, Harvard University, the University of Washington and the University of Michigan.
In 2007, 52 percent of students who were admitted to at least one other university outside of the UC system said they would attend UC. That is an increase from 50 percent in 2004, the last time the survey was done. But UC is still losing many top students and hasn't been able to grow its ranks as much as it would like, said Glantz.
The problem, UC faculty and officials say, lies in part with the state budget crunch that led to increases in fees and tuition in recent years... The rising costs have strained the budgets of departments, which have chosen to admit fewer doctoral students instead of offering smaller financial packages.
"This results in a gradual erosion of quality across the system," Glantz said. "Once you fall off the quality pedestal, it is very hard to get back on it."

San Francisco Chronicle
UCSF medical school fires dean in dispute over finances...Sabin Russell

Dr. David Kessler, the onetime commissioner of the Food and Drug Administration who became dean of the UCSF School of Medicine in 2003, was fired Thursday night after years of discord over finances at the prestigious medical school.
Kessler's boss, campus Chancellor Michael Bishop, announced the dean's departure Friday morning in an internal e-mail to faculty members but did not disclose the reason.Hours later, Kessler told The Chronicle that he had been labeled a "whistle-blower" by the University of California after he repeatedly sought to uncover what he called "financial irregularities that predated my appointment." At the heart of the dispute, Kessler said, are tens of millions of dollars in funds that he believes should have been in the dean's office account prior to his starting the job, but have never been properly accounted for because of what he called "poor financial controls."
UC officials countered that Kessler was mistaken about how much money should have been in the fund, and a university spokeswoman said Friday that two audits done after he raised the matter found no irregularities.The spokeswoman said Kessler first raised the issue in the spring of 2005. If so, that was after an anonymous complaint was sent accusing Kessler of lavish spending. An internal UC audit found no support for the anonymous allegations against Kessler. Kessler was dean of the Yale School of Medicine when he was recruited in 2003 to the $540,000-a-year post as UCSF vice chancellor and medical school dean.In his e-mail to the faculty, Bishop wrote that Kessler has "left office," and thanked him for "his energetic service to the university and his substantial achievements on behalf of UCSF."
UCSF spokeswoman Corinna Kaarlela declined to comment on the reason for the firing, saying, "This is a personnel issue, and we cannot comment further," she said.
However, late Friday the university released a statement declaring that Bishop in June had asked Kessler to resign by Jan. 1, and asked to work with him on a plan for severance and transition to a successor. "Unfortunately, Dr. Kessler did not relinquish his position, forcing the Chancellor to formally dismiss him," the university said....Bishop said the university would start an international search for a successor to Kessler.In an exclusive interview with The Chronicle, Kessler claimed the firing was the culmination of a long effort on his part to straighten out the finances of the medical school dean's office - an effort that he said remains unfinished.
"It was a matter of financial integrity," he said. "I tried to work within the system for 2 1/2 years, to get it fixed. I wanted to protect the school, the institution."
He said that Bishop had asked him to resign last summer, but that he had refused. When Bishop asked him to resign again on Thursday, Kessler said, he once again declined and was fired.At issue, according to Kessler, was his discovery after a year in office that the amount of money available to run discretionary programs in the dean's office was millions of dollars less than he was promised when he took the job. He conducted his own financial analysis in December 2004, concluding the source of the problem was an $18 million annual discrepancy dating from the fiscal year ending in 2002, a year before he arrived.
Kessler told The Chronicle that he had been provided financial documents before he joined showing there would be an annual infusion of $46.4 million for the dean's office to spend on a variety of programs, but he subsequently discovered the figure was $28.8 million. With each successive year since 2002, the discrepancy has been accumulating, reducing the financial viability of the dean's office.
"What it means is there is less money for recruitment, less money for renovations, less money for faculty support and less money for educational initiatives," Kessler said. He stressed that this issue was not one of missing money or embezzlement, but of "inadequate financial controls" - the set of rules, procedures and regular reports that large organizations use to keep track of their money...

Sacramento Bee
UC weighs raises of 33% for all 10 chancellors...Dorothy Korber

University of California regents are weighing a proposal to increase their top executives' pay by an average of 33 percent over the next four years, beginning with salary hikes this year of between 13 and 17 percent.
The plan, which will be discussed in a closed committee meeting today, is drawing fire from critics who question the propriety of such increases in a tight budget year for the state.
The full Board of Regents is expected to vote on the proposed raises Thursday at their meeting in Los Angeles.
A brief executive summary released by UC President Robert Dynes says the pay increases are necessary to "address particular recruitment and retention needs." According to Dynes, UC chancellors' pay lags 33 percent behind similar universities.
The proposed salary hikes for chancellors heading the 10 UC campuses would total $3 million.
For UC Berkeley Chancellor Robert Birgenau, a 33 percent increase would boost his current annual salary of $416,000 to $553,280. For UC Davis Chancellor Larry Vanderhoef, the increase would take him from $300,000 annually to $399,000...
But critics say the timing and tone of the executives' raises is wrong. Lt. Governor John Garamendi, a UC regent, noted that the raises would come the same year the university has raised student fees by 7 percent. Since 2001, he said, fees have nearly doubled for undergraduates...
He rejected the argument that higher pay is necessary to retain top people. "They already have very good salaries," he said. "This is a public university; if it's about money, they shouldn't be there. My attitude is if you don't want to work here, leave."
State Sen. Leland Yee, a San Francisco Democrat, also criticized the chancellors' proposed pay raises. Yee is the author of SB 190, a law that takes effect Jan. 1 and requires open discussion of executive compensation by UC regents and California State University trustees...
The proposed salary hikes for UC chancellors come less than a week after the release of a state audit critical of how much the California State University system awards its executives...

San Francisco Chronicle
Higher pay = higher costs: UC regents raise salaries, student fees...Charles Burress

(09-20) 19:27 PDT Davis -- The UC regents voted Thursday to award substantial pay raises to faculty and to sharply increase the fees students pay at the university's law, medical and other professional schools.In the more controversial of the two actions, the regents' decision to raise professional school fees would result, in some cases, in significant differences in the amounts charged at each campus, with some costing more than $40,000 a year.
Critics said a public university shouldn't be too expensive for the poor and middle-class and that the 10-campus system would foster an undesirable hierarchy with some campuses being viewed as superior to others. Supporters argued that UC's nearly three dozen professional schools, in the face of declining state financial support, desperately need to boost income to maintain quality and attract top faculty and that increased financial aid would be offered for those who cannot afford the cost.
The plan passed on a 13-5 vote by the regents at their meeting at UC Davis.
The fee hikes - ranging from about 4 percent to 15 percent each of the next three years - will see the biggest rise at UC Berkeley's Boalt School of Law, where total annual fees would rise to $40,906 in 2010-11 from $26,897 this year. In 2001-02, the school charged $11,175, meaning the cost will have risen 266 percent in nine years.
Berkeley's Haas School of Business would see a similar rise to $40,882 in 2010-11, compared with UC Davis' business school, which would cost $30,975 in the same year.
"This is not an affordable education for the majority of people UC must serve," said Regent Eddie Island, who argued that the increased financial aid was inadequate. He said the purpose of UC as a public land-grant institution was to make high-quality education attainable by even the least-advantaged classes of society. "That was our original mission and we've gotten away from that."
Board Chairman Richard Blum countered that the schools face losing their best faculty without further funding, noting that the Haas school lost 10 of its 13 accounting professors in just one year.
Regent Peter Preuss said, "If we don't act, our quality will go down."
Regents voting against the measure were Island, Benjamin Allen, Odessa Johnson, Frederick Ruiz and Lt. Gov. John Garamendi.
On the other side of the ledger, in response to alarms over the loss of underpaid professors, the regents also approved hefty salary raises for a substantial portion of the faculty with an intent to push academic compensation to market levels within only four years.
"The faculty is the University of California's most valuable resource," UC Provost Rory Hume told the regents.The increases, however, are premised on increased funds, including promised money from the state next year that appears threatened by shrinking state revenues...

UC, CSU reach again for students' wallets
Tuition increases approved for both state university systems -- 5th boost in 6 years...Tanya Schevitz, Jim Doyle

(03-15) 04:00 PST Los Angeles -- California's 626,000 public university students got clobbered Wednesday with their fifth tuition hike in six years as the governing boards of both the University of California and the California State University agreed to raise the price of attendance dramatically. Despite emotional pleas from students, the UC Board of Regents and the CSU Board of Trustees said they had no choice but to increase the costs next fall to maintain the quality of the institutions. As dozens of students chanted in protest outside, the regents voted 13-6 during their meeting at UCLA to increase undergraduate and graduate fees in the fall by 7 percent and professional school fees by up to 12 percent. Meanwhile, in Long Beach, the CSU trustees voted 15-1 to impose a 10 percent fee hike on undergraduate and graduate students next fall.
Regents acknowledged this is probably not the end of annual increases for UC students. Since the 2001-02 school year, undergraduate tuition has climbed 92 percent at UC's campuses and 94 percent at CSU's schools...

Offer letters from UC detail top hires' perks
Enhanced benefits promised to recruits
Tanya Schevitz, Todd Wallack

www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/03/13/MNGE2HN6N91.DTL - 56k

Extra compensation up 9 percent over previous year (11/9)

Chart: Who received what (11/9)

Regents committee OKs pay raises for 71 (7/20)

Some UC execs to get more money (7/19)

Low-rate loans for UC's elite on homes (7/13)

Colleagues baffled, grief-stricken at news of Denton's suicide (6/26)

UC Santa Cruz chancellor dies in suicide plunge (6/25)

Bid to bar UC regents' closed pay meetings (5/23)

Study: scores of violations kept secret (5/18)

700 awarded $23M in exit pay (5/17)

Comparing pay scales is no easy task (5/14)

Embattled UC prez defiant over recruitment policy (5/7)

3 lawmakers want UC chief out of office (5/3)

Auditor blasts UC's pay practices (5/3)

Administrators, president's office blasted (5/2)

UC said to break meeting laws (5/2)

Legislators want UC to reveal all about exec perks (4/26)

Audit says perks to 68% of top employees (4/25)

Task force criticizes UC pay practices (4/14)

Big perks for aides to UC's president (3/31)

UC files formal charges against UCLA prof (3/31)

Santa Cruz chancellor's housing wish list (3/30)

List of items (PDF) (3/30)

Regents vote to add supervisors for budget, compliance (3/17)

New controls on spending for UC homes and offices (3/16)

Offer letters detail UC hires' perks (3/1)

More pay revelations on ex-UC executive (3/1)

UC failed to give regents required reports (2/28)

Faculty group asks UC leader to rethink plan for pay raises (2/28)

Brass grilled on pay practices

Talk of limiting UC execs' outside roles

UC admits regents should have OKd extra pay

Senators demand answers

UC officials in Capitol hot seat today over pay practices (2/8)

Extra cash set aside for top execs who leave

List of execs who got severance

President gets power to boost salaries

Big changes sought in how UC raises pay

Details given on extra pay

Legislative hearing into UC compensation

Ex-provost still on payroll

Outrage in Capitol at pay revelations

UC refuses to release exec raise list

Student services cut as high-pay jobs boom

Free mansions for people of means

UC piling extra cash on top of pay

Other perks include gifts, travel, parties

Database of highest paid UC employees

When the University of California recruited UC Berkeley Chancellor Robert Birgeneau two years ago, he was promised at least 1 1/2 years in paid leave when he steps down -- with the opportunity to earn more. UC also agreed to sweeten his health care benefits and give him $150,000 a year in research funding. When UC hired Steven Chu to run the Lawrence Berkeley National Laboratory in 2004, the university agreed to give him a $50,000 "signing bonus," tweak the retirement formula to boost his pension and, in addition to covering his actual moving costs, give him additional money to cover any taxes he might owe on the relocation payment.
And the university promised UC San Diego Medical Center director Richard Liekweg, who was hired in 2003, up to a year's severance pay if he is fired without "good cause" in his first five years. Those are just some of the special perks contained in offer letters UC tendered to 29 current and former top executives during the hiring process that have not been previously reported. The Chronicle obtained the letters last week under the California Public Records Act. The information is just the latest in a series of revelations about the university system's pay practices that have prompted several audits and legislative hearings.
"The bottom line is about transparency,'' said Sen. Debra Bowen, D-Redondo Beach (Los Angeles County), a member of the Senate Rules Committee, which reviewed the appointments of several regents at a hearing earlier this month. "That kind of disclosure would be required at a publicly traded company, and no less is expected when taxpayer money is involved."
In some cases, the letters provided additional reasons why UC offered the perks.
Birgeneau's letter said he was offered 1 1/2 years of paid leave to make up for the leave he had accumulated at his prior employers, the University of Toronto and MIT. According to the offer letter, Birgeneau will also be able to accumulate additional sabbatical leave while working at UC, so he could wind up taking a much longer leave when he eventually steps down as chancellor. In addition, UC reduced the amount of years Birgeneau needs to qualify for health care coverage when he retires, "as an exception to policy." The letter said the exception would be noted in the item presented to the regents to approve his appointment, but the written proposal just mentioned his salary and a promise to increase his pension.
UC Berkeley spokesman George Strait said Birgeneau, who earns $400,000 a year in salary, simply asked UC to match the benefits he was already receiving as president of the University of Toronto when he came to UC Berkeley. And Strait said Birgeneau will not be able to personally pocket any of the $150,000 a year he was promised in research funding, because it's reserved for equipment and other expenses. Meanwhile, Chu's offer letter said UC offered to give the lab director a $50,000 signing bonus to pay back a loan he owed to Stanford University, where he previously worked as a physics professor. UC also agreed to boost his pension benefits -- basing the calculations on his full base salary (currently $359,000 a year), instead of the usual limit of $205,000 -- in lieu of covering the closing costs on his home. Both items were approved by regents, but not publicly announced.
Other perks contained in the offer letters that weren't publicly reported include:

-- An $8,916 car allowance for executive vice provost Wyatt "Rory" Hume, who was hired last year. Though many senior executives at UC receive a similar allowance, the offer letter said the regents hadn't approved one for Hume's position because it was new. Instead, President Robert Dynes approved the allowance on his own. Hume, who is now acting provost, earns $296,000 in salary.

-- A list of "improvements" requested by UC Santa Cruz Chancellor Denice Denton to the chancellor's residence. The list was not attached to the letter. But UC has come under fire in the past few months for spending $30,000 on a dog run for Denton's home and her dogs. UC also offered Denton $35,000 a year in research funding, the letter shows. Denton earns $282,000 in base salary.

-- Liekweg's severance pay. UC promised he would continue to receive his salary and health care benefits for up to 12 months (or whenever he took another job, whichever is first), unless he was let go for "good cause,'' such as gross misconduct or committing a felony. Liekweg's base salary is $445,900.

Several UC spokesmen pointed out it would have been the responsibility of UC's Office of the President -- not the appointees themselves -- to report such details, if necessary. None of the appointees even worked at UC at the time they were recruited. Regent Judith Hopkinson said it's not always clear what regents were told at the time, because they were sometimes given information about appointments orally, rather than in writing. She also said the regents didn't do enough to tell administrators which items needed to be reported to the board.
"I don't think it was a deliberate effort to not do things properly, but I do think it was poor administration by the regents and by the administration,'' she said. "It just became practice over time."
The offer letters are part of an audit under way by UC's outside auditing firm, PricewaterhouseCoopers, which is expected to be completed in April. UC spokesman Paul Schwartz said the administration's own review of the letters found that administrators sometimes violated university policies by failing to disclose some elements of compensation packages to the regents and the public -- a problem Schwartz said was exacerbated by UC's failure to file routine annual reports on executive compensation for the past two years.
Schwartz also said it's clear that UC made exceptions to policies too often, "involving such items as relocation allowances, accelerated vesting of annuitant health benefits, sabbatical payout, additional retirement and future severance benefits."
UC has taken steps to improve disclosure in the past few months. For instance, last week UC publicly announced a series of appointments approved between meetings, and included relocation allowances, temporary housing, deferred compensation and other benefits in addition to base salary. The university also posted reports, summarizing pay packages for its top managers, online for the first time on Thursday. Still, Schwartz urged The Chronicle to hold off on reporting anything about the offer letters until the PricewaterhouseCoopers audit is completed, because the auditors will also review other information that isn't publicly available, such as the executives' personnel files.
"We want to state in writing, in the strongest terms possible, our concern about The Chronicle moving forward with representations based on these offer letters alone,'' he said...

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Kuttner: 1929 and 2007

Submitted: Oct 15, 2007

Testimony of Robert Kuttner
Before the Committee on Financial Services
Rep. Barney Frank, Chairman
U.S. House of Representatives
Washington, D.C.
October 2, 2007
Mr. Chairman and members of the Committee:

Thank you for this opportunity. My name is Robert Kuttner. I am an economics and financial journalist, author of several books about the economy, co-editor of The American Prospect, and former investigator for the Senate Banking Committee. I have a book appearing in a few weeks that addresses the systemic risks of financial innovation coupled with deregulation and the moral hazard of periodic bailouts.

In researching the book, I devoted a lot of effort to reviewing the abuses of the 1920s, the effort in the 1930s to create a financial system that would prevent repetition of those abuses, and the steady dismantling of the safeguards over the last three decades in the name of free markets and financial innovation.

Your predecessors on the Senate Banking Committee, in the celebrated Pecora Hearings of 1933 and 1934, laid the groundwork for the modern edifice of financial regulation. I suspect that they would be appalled at the parallels between the systemic risks of the 1920s and many of the modern practices that have been permitted to seep back in to our financial markets.

Although the particulars are different, my reading of financial history suggests that the abuses and risks are all too similar and enduring. When you strip them down to their essence, they are variations on a few hardy perennials -- excessive leveraging, misrepresentation, insider conflicts of interest, non-transparency, and the triumph of engineered euphoria over evidence.

The most basic and alarming parallel is the creation of asset bubbles, in which the purveyors of securities use very high leverage; the securities are sold to the public or to specialized funds with underlying collateral of uncertain value; and financial middlemen extract exorbitant returns at the expense of the real economy. This was the essence of the abuse of public utilities stock pyramids in the 1920s, where multi-layered holding companies allowed securities to be watered down, to the point where the real collateral was worth just a few cents on the dollar, and returns were diverted from operating companies and ratepayers. This only became exposed when the bubble burst. As Warren Buffett famously put it, you never know who is swimming naked until the tide goes out.

There is good evidence -- and I will add to the record a paper on this subject by the Federal Reserve staff economists Dean Maki and Michael Palumbo -- that even much of the boom of the late 1990s was built substantially on asset bubbles. ["Disentangling the Wealth Effect: a Cohort Analysis of Household Savings in the 1990s"]

A second parallel is what today we would call securitization of credit. Some people think this is a recent innovation, but in fact it was the core technique that made possible the dangerous practices of the 1920. Banks would originate and repackage highly speculative loans, market them as securities through their retail networks, using the prestigious brand name of the bank -- e.g. Morgan or Chase -- as a proxy for the soundness of the security. It was this practice, and the ensuing collapse when so much of the paper went bad, that led Congress to enact the Glass-Steagall Act, requiring bankers to decide either to be commercial banks -- part of the monetary system, closely supervised and subject to reserve requirements, given deposit insurance, and access to the Fed's discount window; or investment banks that were not government guaranteed, but that were soon subjected to an extensive disclosure regime under the SEC.

Since repeal of Glass Steagall in 1999, after more than a decade of de facto inroads, super-banks have been able to re-enact the same kinds of structural conflicts of interest that were endemic in the 1920s -- lending to speculators, packaging and securitizing credits and then selling them off, wholesale or retail, and extracting fees at every step along the way. And, much of this paper is even more opaque to bank examiners than its counterparts were in the 1920s. Much of it isn't paper at all, and the whole process is supercharged by computers and automated formulas. An independent source of instability is that while these credit derivatives are said to increase liquidity and serve as shock absorbers, in fact their bets are often in the same direction -- assuming perpetually rising asset prices -- so in a credit crisis they can act as net de-stabilizers.

A third parallel is the excessive use of leverage. In the 1920s, not only were there pervasive stock-watering schemes, but there was no limit on margin. If you thought the market was just going up forever, you could borrow most of the cost of your investment, via loans conveniently provided by your stockbroker. It worked well on the upside. When it didn't work so well on the downside, Congress subsequently imposed margin limits. But anybody who knows anything about derivatives or hedge funds knows that margin limits are for little people. High rollers, with credit derivatives, can use leverage at ratios of ten to one, or a hundred to one, limited only by their self confidence and taste for risk. Private equity, which might be better named private debt, gets its astronomically high rate of return on equity capital, through the use of borrowed money. The equity is fairly small. As in the 1920s, the game continues only as long as asset prices continue to inflate; and all the leverage contributes to the asset inflation, conveniently creating higher priced collateral against which to borrow even more money.

The fourth parallel is the corruption of the gatekeepers. In the 1920s, the corrupted insiders were brokers running stock pools and bankers as purveyors of watered stock. 1990s, it was accountants, auditors and stock analysts, who were supposedly agents of investors, but who turned out to be confederates of corporate executives. You can give this an antiseptic academic term and call it a failure of agency, but a better phrase is conflicts of interest. In this decade, it remains to be seen whether the bond rating agencies were corrupted by conflicts of interest, or merely incompetent. The core structural conflict is that the rating agencies are paid by the firms that issue the bonds. Who gets the business -- the rating agencies with tough standards or generous ones? Are ratings for sale? And what, really, is the technical basis for their ratings? All of this is opaque, and unregulated, and only now being investigated by Congress and the SEC.

Yet another parallel is the failure of regulation to keep up with financial innovation that is either far too risky to justify the benefit to the real economy, or just plain corrupt, or both. In the 1920s, many of these securities were utterly opaque. Ferdinand Pecora, in his 1939 memoirs describing the pyramid schemes of public utility holding companies, the most notorious of which was controlled by the Insull family, opined that the pyramid structure was not even fully understood by Mr. Insull. The same could be said of many of today's derivatives on which technical traders make their fortunes.

By contrast, in the traditional banking system a bank examiner could look at a bank's loan portfolio, see that loans were backed by collateral and verify that they were performing. If they were not, the bank was made to increase its reserves. Today's examiner is not able to value a lot of the paper held by banks, and must rely on the banks' own models, which clearly failed to predict what happened in the case of sub-prime. The largest banking conglomerates are subjected to consolidated regulation, but the jurisdiction is fragmented, and at best the regulatory agencies can only make educated guesses about whether balance sheets are strong enough to withstand pressures when novel and exotic instruments create market conditions that cannot be anticipated by models.

A last parallel is ideological -- the nearly universal conviction, 80 years ago and today, that markets are so perfectly self-regulating that government's main job is to protect property rights, and otherwise just get out of the way.

We all know the history. The regulatory reforms of the New Deal saved capitalism from its own self-cannibalizing instincts, and a reliable, transparent and regulated financial economy went on to anchor an unprecedented boom in the real economy. Financial markets were restored to their appropriate role as servants of the real economy, rather than masters. Financial regulation was pro-efficiency. I want to repeat that, because it is so utterly unfashionable, but it is well documented by economic history. Financial regulation was pro-efficiency. America's squeaky clean, transparent, reliable financial markets were the envy of the world. They undergirded the entrepreneurship and dynamism in the rest of the economy.

Beginning in the late 1970s, the beneficial effect of financial regulations has either been deliberately weakened by public policy, or has been overwhelmed by innovations not anticipated by the New Deal regulatory schema. New-Deal-era has become a term of abuse. Who needs New Deal protections in an Internet age?

Of course, there are some important differences between the economy of the 1920s, and the one that began in the deregulatory era that dates to the late 1970s. The economy did not crash in 1987 with the stock market, or in 2000-01. Among the reasons are the existence of federal breakwaters such as deposit insurance, and the stabilizing influence of public spending, now nearly one dollar in three counting federal, state, and local public outlay, which limits collapses of private demand.

But I will focus on just one difference -- the most important one. In the 1920s and early 1930s, the Federal Reserve had neither the tools, nor the experience, nor the self-confidence to act decisively in a credit crisis. But today, whenever the speculative excesses lead to a crash, the Fed races to the rescue. No, it doesn't bail our every single speculator (though it did a pretty good job in the two Mexican rescues) but it bails out the speculative system, so that the next round of excess can proceed. And somehow, this is scored as trusting free markets, overlooking the plain fact that the Fed is part of the U.S. government.

When big banks lost many tens of billions on third world loans in the 1980s, the Fed and the Treasury collaborated on workouts, and desisted from requiring that the loans be marked to market, lest several money center banks be declared insolvent. When Citibank was under water in 1990, the president of the Federal Reserve Bank of New York personally undertook a secret mission to Riyadh to persuade a Saudi prince to pump in billions in capital and to agree to be a passive investor.

In 1998, the Fed convened a meeting of the big banks and all but ordered a bailout of Long Term Capital Management, an uninsured and unregulated hedge fund whose collapse was nonetheless putting the broad capital markets at risk. And even though Chairman Greenspan had expressed worry two years (and several thousand points) earlier that "irrational exuberance" was creating a stock market bubble, big losses in currency speculation in East Asia and Russia led Greenspan to keep cutting rates, despite his foreboding that cheaper money would just pump up markets and invite still more speculation.

And finally in the dot-com crash of 2000-01, the speculative abuses and insider conflicts of interest that fueled the stock bubble were very reminiscent of 1929. But a general depression was not triggered by the market collapse, because the Fed again came to the rescue with very cheap money.

So when things are booming, the financial engineers can advise government not to spoil the party. But when things go bust, they can count on the Fed to rescue them with emergency infusions of cash and cheaper interest rates.

I just read Chairman Greenspan's fascinating memoir, which confirms this rescue role. His memoir also confirms Mr. Greenspan's strong support for free markets and his deep antipathy to regulation. But I don't see how you can have it both ways. If you are a complete believer in the proposition that free markets are self-regulating and self- correcting, then you logically should let markets live with the consequences. On the other hand, if you are going to rescue markets from their excesses, on the very reasonable ground that a crash threatens the entire system, then you have an obligation to act pre-emptively, prophylactically, to head off highly risky speculative behavior. Otherwise, the Fed just invites moral hazards and more rounds of wildly irresponsible actions.

While the Fed and the European Central Bank were flooding markets with liquidity to prevent a deeper crash in August and September, the Bank of England decided on a sterner course. It would not reward speculators. The result was an old fashioned run on a large bank, and the Bank of England changed its tune.

So the point is not that the Fed should let the whole economy collapse in order to teach speculators a lesson. The point is that the Fed needs to remember its other role -- as regulator.

One of the odd things about the press commentary about what the Fed should do is that it has been entirely along one dimension: a Hobson's choice: -- either loosen money and invite more risky behavior, or refuse to enable asset bubbles and risk a more serious credit crunch -- as if these were the only options and monetary policy were the only policy lever. But the other lever, one that has fallen into disrepair and disrepute, is preventive regulation.

Mr. Chairman, you have had a series of hearings on the sub-prime collapse, which has now been revealed as a textbook case of regulatory failure. About half of these loans were originated by non-federally regulated mortgage companies. However even those sub-prime loans should have had their underwriting standards policed by the Federal Reserve or its designee under the authority of the 1994 Home Equity and Ownership Protection Act. And by the same token, the SEC should have more closely monitored the so called counterparties -- the investment and commercial banks -- that were supplying the credit. However, the Fed and the SEC essentially concluded that since the paper was being sold off to investors who presumably were cognizant of the risks, they did not need to pay attention to the deplorable underwriting standards.

In the 1994 legislation, Congress not only gave the Fed the authority, but directed the Fed to clamp down on dangerous and predatory lending practices, including on otherwise unregulated entities such as sub-prime mortgage originators. However, for 13 years the Fed stonewalled and declined to use the authority that Congress gave it to police sub-prime lending. Even as recently as last spring, when you could not pick up a newspaper's financial pages without reading about the worsening sub-prime disaster, the Fed did not act -- until this Committee made an issue of it.

Financial markets have responded to the 50 basis-point rate-cut, by bidding up stock prices, as if this crisis were over. Indeed, the financial pages have reported that as the softness in housing markets is expected to worsen, traders on Wall Street have inferred that the Fed will need to cut rates again, which has to be good for stock prices.

Mr. Chairman, we are living on borrowed time. And the vulnerability goes far beyond the spillover effects of the sub-prime debacle.

We need to step back and consider the purpose of regulation. Financial regulation is too often understood as merely protecting consumers and investors. The New Deal model is actually a relatively indirect one, since it relies more on mandated disclosures, and less on prohibited practices. The enormous loopholes in financial regulation -- the hedge fund loophole, the private equity loophole, are justified on the premise that consenting adults of substantial means do not need the help of the nanny state, thank you very much. But of course investor protection is only one purpose of regulation. The other purpose is to protect the system from moral hazard and catastrophic risk of financial collapse. It is this latter function that has been seriously compromised.

HOEPA was understood mainly as consumer protection legislation, but it was also systemic risk legislation.

Sarbanes-Oxley has been attacked in some quarters as harmful to the efficiency of financial markets. One good thing about the sub-prime calamity is that we haven't heard a lot of that argument lately. Yet there is still a general bias in the administration and the financial community against regulation.

Mr. Chairman, I commend you and this committee for looking beyond the immediate problem of the sub-prime collapse. I would urge every member of the committee to spend some time reading the Pecora hearings, and you will be startled by the sense of déjà vu.

I'd like to close with an observation and a recommendation.

My perception as a financial journalist is that regulation is so out of fashion these days that it narrows the legislative imagination, since politics necessarily is the art of the possible and your immediate task is to find remedies that actually stand a chance of enactment. There is a vicious circle -- a self-fulfilling prophecy -- in which remedies that currently are legislatively unthinkable are not given serious thought. Mr. Chairman, you are performing an immense public service by broadening the scope of inquiry beyond the immediate crisis and immediate legislation.

Three decades ago, a group of economists inspired by the work of the late Milton Friedman created a shadow Federal Open Market Committee, to develop and recommend contrarian policies in the spirit of Professor Friedman's recommendation that monetary policy essentially be put on automatic pilot. The committee had great intellectual and political influence, and its very existence helped people think through dissenting ideas. In the same way, the national security agencies often create Team B exercises to challenge the dominant thinking on a defense issue.

In the coming months, I hope the committee hears from a wide circle of experts -- academics, former state and federal regulators, financial historians, people who spent time on Wall Street -- who are willing to look beyond today's intellectual premises and legislative limitations, and have ideas about what needs to be re-regulated. Here are some of the questions that require further exploration:

First, which kinds innovations of financial engineering actually enhance economic efficiency, and which ones mainly enrich middlemen, strip assets, appropriate wealth, and increase systemic risk? It no longer works to assert that all innovations, by definition, are good for markets or markets wouldn't invent them. We just tested that proposition in the sub-prime crisis, and it failed. But which forms of credit derivatives, for example, truly make markets more liquid and better able to withstand shocks, and which add to the system's vulnerability. We can't just settle that question by the all purpose assumption that market forces invariably enhance efficiency. We have to get down to cases.

The story of the economic growth in the 1990s and in this decade is mainly a story of technology, increased productivity growth, macro-economic stimulation, and occasionally of asset bubbles. There is little evidence that the growth rates of the past decade and a half -- better than the 1970s and ‘80s, worse than the 40's, 50's and ‘60s -- required or benefited from new techniques of financial engineering.

I once did some calculations on what benefits securitization of mortgage credit had actually had. By the time you net out the fee income taken out by all of the middlemen -- the mortgage broker, the mortgage banker, the investment banker, the bond-rating agency -- it's not clear that the borrower benefits at all. What does increase, however, are the fees and the systemic risks. More research on this question would be useful. What would be the result of the secondary mortgage market were far more tightly subjected to standards? It is telling that the mortgages that best survived the meltdown were those that met the underwriting criteria of the GSE's.

Second, what techniques and strategies of regulation are appropriate to damp down the systemic risks produced by the financial innovation? As I observed, when you strip it all down, at the heart of the recent financial crises are three basic abuses: lack of transparency; excessive leverage; and conflicts of interest. Those in turn suggest remedies: greater disclosure either to regulators or to the public. Requirement of increased reserves in direct proportion to how opaque and difficult to value are the assets held by banks. Some restoration of the walls against conflicts of interest once provided by Glass Steagall. Tax policies to discourage dangerously high leverage ratios, in whatever form.

Maybe we should just close the loophole in the 1940 Act and require of hedge funds and private equity firms the same kinds of disclosures required of others who sell shares to the public, which in effect is what hedge funds and private equity increasingly do. The industry will say that this kind of disclosure impinges on trade secrets. To the extent that this concern is valid, the disclosure of positions and strategies can be to the SEC. This is what is required of large hedge funds by the Financial Services Authority in the UK, not a nation noted for hostility to hedge funds. Indeed, Warren Buffet's Berkshire Hathaway, which might have chosen to operate as private equity, makes the same disclosures as any other publicly listed firm. It doesn't seem to hurt Buffett at all.

To the extent that some private equity firms and strategies strip assets, while others add capital and improve management, maybe we need a windfall profits tax on short term extraction of assets and on excess transaction fees. If private equity has a constructive role to play -- and I think it can -- we need public policies to reward good practices and discourage bad ones. Industry codes, of the sort being organized by the administration and the industry itself, are far too weak.

Why not have tighter regulation both of derivatives that are publicly traded and those that are currently regulated -- rather weakly -- by the CFTC: more disclosure, limits on leverage and on positions. And why not make OTC and special purpose derivatives that are not ordinarily traded (and that are black holes in terms of asset valuation), also subject to the CFTC?

A third big question to be addressed is the relationship of financial engineering to problems of corporate governance. Ever since the classic insight of A.A. Berle and Gardiner Means in 1933, it has been conventional to point out that corporate management is not adequately responsible to shareholders, and by extension to society, because of the separation of ownership from effective control. The problem, if anything, is more serious today than when Berle and Means wrote in 1933, because of the increased access of insiders to financial engineering. We have seen the fruits of that access in management buyouts, at the expense of both other shareholders, workers, and other stakeholders. This is pure conflict of interest.

Since the first leveraged buyout boom, advocates of hostile takeovers have proposed a radically libertarian solution to the Berle-Means problem. Let a market for corporate control hold managers accountable by buying, selling, and recombining entire companies via LBOs that tax deductible money collateralized by the target's own assets. It is astonishing that this is even legal, let alone rewarded by tax preferences, even more so when managers with a fiduciary responsibility to shareholders are on both sides of the bargain.

The first boom in hostile takeovers crashed and burned. The second boom ended with the stock market collapse of 2000-01. The latest one is rife with conflicts of interest, it depends heavily on the perception that stock prices are going to continue to rise at multiples that far outstrip the rate of economic growth, and on the borrowed money to finance these deals that puts banks increasingly at risk.

So we need a careful examination of better ways of holding managers accountable -- through more power for shareholders and other stakeholders such as employees, proxy rules not tilted to incumbent management, and rules that reward mutual funds for serving as the agents of shareholders, and not just of the profit maximization of the fund sponsor. John Bogle, a pioneer in the modern mutual fund industry, has written eloquently on this.

Interestingly, the intellectual fathers of the leveraged buyout movement as a supposed source of better corporate governance, have lately been having serious second thoughts.

Michael Jensen, one of the original theorists of efficient market theory and the so called market for corporate control and an advocate of compensation incentives for corporate CEOs has now written a book calling for greater control of CEOs and less cronyism on corporate boards. That cronyism, however, is in part a reflection of Jensen's earlier conception of the ideal corporation.

I don't have all the answers on regulatory remedies, but people smarter than I need to systematically ask these questions, even if they are beyond the pale legislatively for now. And there are scholars of financial markets, former state and federal regulators, economic historians, and even people who did time on Wall Street, who all have the same concerns that I do as well as more technical expertise, and who I am sure would be happy to find company and to serve.

One last parallel: I am chilled, as I'm sure you are, every time I hear a high public official or a Wall Street eminence utter the reassuring words, "The economic fundamentals are sound." Those same words were used by President Hoover and the captains of finance, in the deepening chill of the winter of 1929-1930. They didn't restore confidence, or revive the asset bubbles.

The fact is that the economic fundamentals are sound -- if you look at the real economy of factories and farms, and internet entrepreneurs, and retailing innovation and scientific research laboratories. It is the financial economy that is dangerously unsound. And as every student of economic history knows, depressions, ever since the South Sea bubble, originate in excesses in the financial economy, and go on to ruin the real economy.

It remains to be seen whether we have dodged the bullet for now. If markets do calm down, and lower interest bail out excesses once again, then we have bought precious time. The worst thing of all would be to conclude that markets self corrected once again, and let the bubble economy continue to fester. Congress has a window in which restore prudential regulation, and we should use that window before the next crisis turns out to be a mortal one.

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Some thoughts on Daniel Cassidy's How the Irish Invented Slang

Submitted: Sep 07, 2007

This book is a great gift, a revelation, a genuine invasion of one's speech patterns (I’ll be looking over my tongue's shoulder for the Irish from now on). Cassidy beautifully handles the problem of our unconsciousness of this, or as I used to put it in high school, my "street" rather than "home" (proper grammatical English) language. What a pain it was to have to speak only the one at college. It made working on peach loading docks in the summers a deep relaxing into the rhythm and twang of Oklahoma speech. And there were words that fit with our work that had no utility in college. I think these words often came from Scots-Irish Gaelic, the other great stream of Gaelic speech into the nation. I see them in the incomparable poetry of Wilma Elizabeth McDaniel.

So, Cassidy immediately engages us at very deep levels. I am in the grip of his idea and how he is working it out. In San Francisco, too, although many are dead now, 20 years ago you could still hear a Irish lilt in many of the best parlors in the city, which may have simply denoted the speaker was born in that city. I think the Democratic Party pols that weren't Irish San Franciscans picked it up unconsciously along with a basic vocabulary of Irish origins explaining what they were getting paid or volunteering to do. Listen to pols like Gray Davis and Bill Lockyear: the tones are there but, as Cassidy indicates, by any other name. Nevertheless, they all sound familiar, if you’d ever worked for Pat Brown.

The day John Burton, then president pro tem of the state Senate, who had learned to speak and think in his political family and in bars like Monahan's and Harrington's, called UC Merced "a boondoggle," he knew exactly what he was saying. And, the heart of one opponent of that project, mine, leapt for joy because I did, too, and the word brought the discourse down to its proper level and the UC big shots cut back the lying to senators for awhile. But, in defense of UC administrators, they could hardly have called UC Merced what it is, a boondoggle, a scam, and nothing but a land deal. They had to try to keep the Legislature’s mind off the obvious description. No idiom in the land beats flawless academic-speak for that purpose.

Anathema to UC was our own local expression, “boomdoggle,” that caught both the scam of the campus and all its induced development, now melting down in subprime catastrophe.

Cassidy’s book is beautiful because it returns us to some of the most descriptive political nouns and verbs in our language.

However, Cassidy’s work also reminds us of Appalachian poet Jim Wayne Miller, one of whose “Brier” poems talks about old Scots words for farming -- nouns and verbs -- how they were being forgotten, and how heart-breaking that was. Miller felt very strongly that these words bound Appalachians to their history and healed historical wounds, prejudice, oppression, and the exploitations of culture.

"Brierhopper" was an alternative to "hillbilly." Our own variant around here (at least around Bakersfield) is "peckerwood." It sounds like a mere inversion of "woodpecker," but I’m holding out for a Scots or Irish origin.

The melodic sound of Irish words for violence – slugger, whale, mill, mayhem, Sunday or sucker (punch), swoon, etc. – remind me of a fellow who fought 40 years ago out of a Haight Street bar whose ring moniker was the “Battling Hippie” (he sported long green trunks and a pony tail). In college, while contemplating turning pro, he fell in love with a banker’s daughter, hung up the mawleys and got a PhD in English literature. A finer, gentler man you couldn’t fine, but the day we were demonstrating against the Iraq invasion and were being harassed by an aggressive knucklehead faction, it was a pleasure being at his side as he negotiated the rules with the opposition. The professor didn’t have a speck of yellow in his makeup, the chief knucklehead perceived the fact and order was restored for the duration of the demonstration.

Cassidy reminds me of the Boss of our little world of political campaign professionals during my post-graduate studies in nuts-and-bolts. Mr. Bradley spoke little, always clearly, and you didn’t argue. He had forgotten more about any conceivable political situation than you would ever know. He had guided many of the most important Democratic Party campaigns in the state from the end of WWII until the 70’s, during a period in which the party built up the highest registration percentage in its history in California and the best voter turnout. He spoke pure Irish political slang and claimed his own contribution, “Joe Sixpak,” at once his linguistic creation and political nemesis. Bradley spent his formative years in politics when if you wanted to find a guy in the neighborhood to talk to about the candidate, you went to his corner bar, where the guy cashed his paycheck and drank his beer after work. “Sixpak” drank his beer at home watching TV, so you couldn’t talk to him. You had to rely on the media. Bradley knew that was the end of politics. He became a political bard the day he told SF Chronicle columnist Herb Caen about Joe Sixpak.

Pat Brown, running for Attorney General in 1950, came into the Topaz Room in Santa Rosa and worked the diners. “There’s that Pat Brown again,” my Republican grandmother said. “It’s getting so you can’t go out without meeting him. Oh, hello, Mr. Brown.” Pleasantries were exchanged, I shook the hand of my future employer for the first time, there was no sound bite and he seemed like a nice man, despite my grandmother’s carping.

By the time Bradley and the campaign geniuses leaked the story of George Christopher’s milk scandal in the 1966 primary, thinking a Hollywood actor would be the preferred opposition to their ancient Republican foe in San Francisco, the die were cast. Reagan was never anything but a sound bite. The spiel went that “Brown was no good on TV.” What was meant was that Brown didn’t have a sound bite in him and sounded ridiculous when he tried. One of his best speech writers said he used to read Mark Twain for a half hour, have a little whisky and cut it loose. By chance, Cassidy quotes Twain extensively for examples of Irish words, marvelous concoctions like “the fantod.” Bradley and Brown’s idea of how to use the media was to lock the campaign hacks and their typewriters in a room with walls made of windows to keep an eye on them.

Politics was people you talked to in their bars and restaurants and especially on the telephone. For the phone, the Boss had a secret weapon known as “Cyr’s Rolodex.” (More on Cyr later.) It was the bee’s knees of private political telephone numbers in the state and nation.

Mr. Bradley was the last statewide campaign manager who had a nearly grassroots grasp of California, almost block-by-block. The numbers beat him. Three decades after his last campaign, the state has nearly twice as many people and the developers own the Legislature as completely as Southern Pacific owned it before the Reform movement. Possibly worse than the political corruption has been what’s happened to statewide campaigns. The hacks escaped from their cages into the head offices and turned campaigns into baloney factories. If someone were to say today that political campaigns organized communities at a grassroots level, you’d laugh in his mug and tell him to scram. Karl Rove is the reigning political big shot and his whole gig has been social destruction.

Nobody I ever saw or heard of could calm and charm a hostile crowd better than Pat Brown, although last year Pete McCloskey changed a lot of righwinger views in Richard Pombo’s former district. I believe it is one of the rarest human talents (and in its masters it is genius), but it may simply have been driven off the podium in America at the moment. It is a highly complex quality, a mixture of genuine friendliness toward strangers, a respect for every man, woman and child regardless of class, creed, ideology or race, and an ability to listen under duress. It is a form of grace and Irish-American politicians seemed, at least once, to have cultivated it more highly than any other group. It is a secret mixture of love and courage, generally unknown to its possessor, producing an instinct composed of love of political battle, joy in punishing enemies, and compassion for the oppressed. Bobby Kennedy said it best, frequently in the spring of 1968, when touring some of the most impoverished regions of the nation: “This is unacceptable!” Pat Brown’s old Twainish speechwriter, a Texas radical by birth, brought it to my attention. Listen to him, he told me, he’s just saying this is unacceptable, period.

In late August, 1974, I found myself in Sacramento with what Cassidy would correctly define as a political “crony” at Posey’s Brown Derby, where politicians who would dine later at Frank Fats went to lunch. We had lunch with the City and County of San Francisco lobbyist, Jack Shelley, SF congressman since 1949 and mayor in the tumultuous period of 1964-1968. We didn’t talk about the election much. Jerry Brown had made it clear in so many ways that he wasn’t his father, now was not then, that it was obvious anyone tainted with political work for his father would be doing something else for a living after he was elected. It was hard on younger men like ourselves, but there were sneaking suspicions buried inside us that he was right. I knew from relatives that Jack had been a courageous labor leader in the 1930s, he was good on civil rights and wasn’t insanely pro-development. Propping his walker against the wall, the waiter having already provided his first martini, Jack launched into the two-hour story about the cement contract for Candlestick Park, which explained everything anyone needed to know about postwar SF politics. I remember thinking it could have been written by James Joyce. The names, dates, deals, campaigns, and the monetary figures swirled through his story, dots mysteriously and compellingly connected, yet in the matter-of-fact telling of ordinary political chat, that it took me a long time to admit I couldn’t reconstruct it because it was a superb narrative, and because of its main theme, I didn’t want to. The point of the story was that, “Fools names and fools faces are often found in public places.” Yet reading How the Irish Invented Slang, I was again reminded of Shelley’s tale. What Cassidy is calling "slang" in Shelley’s supreme command of the idiom became the choral voice of the people that fashioned a vocabulary for political analysis and action for taking of democratic power unequaled in American history. Campaigning was a noble, heroic activity bringing out the best in a man. Governing, on the other hand, brought out the cement contract in the same man or in his cronies and it ended up on his desk.
Mr. Shelley died within two weeks of telling two young almost strangers that long musing on public life in San Francisco.

The present conundrum has a lot to do with what rich Irishmen think. I suppose Reagan, an Irishman who preached the end of any kind of solidarity with neighborhood, ethnicity or unions in favor of full of anomic greedy individualism in a “city on the hill” resembling a Hobbesian snooker table, was no substitute for two assassinated Kennedys, but the name had the right ring to it.

A man in our childhood neighborhood of WWII veterans, their wives and us war babies, occasionally took us boys to a baseball diamond and to teach us how field grounders and shag flies to divert us from our weekend work: raiding the gang on the next block or defending our block against their raid. We little savages did not understand that he’d shared a PT boat with John Kennedy, who would appoint him assistant secretary of the Navy when he became president. He was a fervent Kennedy rooter in town and a successful builder living in Pacific Heights by the 60’s. I am sure he, like most of Irish San Francisco, was devastated by the two assassinations. I know that after Bobby’s death, political headquarters in the city were halls of the walking dead all summer. Late that election season, I sat among a group of pols on a conference call with Larry O’Brien, a Kennedy man who was managing Humphreys’ campaign in an attempt to shorten the wake for Bobby. O’Brien said that people were at last awakening and if the election were to be held at the end of November rather than on its first Tuesday, the Democrat would win.

Cyr and her miraculous Rolodex were in the Mayor’s Office the day Dan White assassinated both Mayor George Moscone and Supervisor Harvey Milk (probably the first openly gay elected politician in the nation). White had resigned from the board of supervisors five days earlier to try to save his potato vending business on Pier 39, to feed his nine children. Moscone had said publicly he would reappoint him if he changed his mind. If we are to believe the contemporary account, White went to the mayor’s office through a basement window, armed, to ask for his job back one last time.

The lame SF district attorney, a dude from Escalon who’d passed through a few years of Carnuba wax-and-polish in DC, did not even try that case. His connections were mainly with John Tunney (the dumber son of Gene, who beat Jack Dempsey in the famous “long count” fight in 1927) a Riverside congressman who served a term as US Senator. So, White served five years of a seven-year sentence for manslaughter due to an excellent defense establishing diminished capacity – and due to the diminished capacity of the prosecution. White’s lawyers successfully portrayed him as too “depressed” to deal with the “dirty politics at city hall.”

Interpretation: the one conservative supervisor elected betrays his supporters, voters in his district as well as funders, by quitting. The police chief himself urges White to ask for his job back. Meanwhile, liberal supervisors lobby liberal Moscone to appoint a liberal replacement.
In one of the flipflops that has always marked her politics, Supervisor Dianne Feinstein urged White to ask for his seat back, which Moscone was eventually persuaded to refuse to give him. When, after serving his sentence and after a year of parole in LA because authorities feared he might be killed if he returned to SF, as mayor, Feinstein urged him not to return. He did return and killed himself soon after he did.

Detective Frank Falzon, one of two who took his confession, told the press in 1998 that he’d met with White shortly before he killed himself and White told him the murders were premeditated and that he’d planned to kill Supervisor Carol Ruth Silver as well, along with state Assemblyman Willie Brown, who White said was “masterminding the whole thing.” He killed a Sicilian, a fine liberal with radical edges, who had been a superb state Senate majority leader, and had been a USF basketball star. He killed a gay man who was one of the most decent supervisors the city ever had. He wanted to kill a female Jewish liberal and a Black assemblyman who became the longest serving assembly speaker in history on pure political ability, and was John Burton’s roommate in law school. Willie wasn’t always an easy man to like but he made good deals and kept his word.

I like to imagine what would have happened if White had gone gunning for Rep. Phil Burton, D-SF, whose faction had just taken near total control of City Hall by legal means after 20 years of hard political slogging against the elder Irish machine in town. It’s not that Willie couldn’t have finagled the whole thing, but he wouldn’t have without consultation with Mr. Burton. That was simply not done while Mr. Burton, a veteran of both WWII and Korea, was alive. If White had tried it, Burton would probably have paralyzed him with bursts of profane outrage to the effect that the little man could not seriously imagine doing such a thing, and crammed White’s little pistol down his throat, bellowing at him all the while: “What the Fuck do you mean resigning your seat, ya little twerp? You have no respect for the public offices people fought and died to create! You have no respect for the process, for government, for the people!” Extracting the pistol from White’s throat, Burton might have said, “Now, go back to your family, take care of them and never darken the door of government again for the rest of your life.”

What was “the whole thing”? A conspiracy against good, clean Irish-American murderers, real life “Dirty Harry (1971)” Callahans like himself?

The hoodoo had come off the city’s violent streets into City Hall through a basement window.

There’s no connection between the following and the city’s Irish-American politics. It happened nine years before White killed Moscone and Milk and five years before Shelley told two young strangers the story that summed up his life. And besides, you would have had to have been there to see the rookie cop from Ireland in his new uniform and you would have had to have heard his voice and seen his face and his tears of frustration under the street light.

In the old Indian Center on 16th Street near Valencia right across the street from where they gunned down the painter’s union leader, Dow Wilson three years earlier, a drunk from the Colville reservation attacked me for having personally stolen his language. Fleeing downstairs from the Center (torched a few months later), I stepped on the blood of a stabbed Indian, quietly dying on the sidewalk as this young cop, somebody's relative imported from the Emerald Isle, yelled at the Indians passing by: "Why don't you take care of him? He's one of your own!"

Evidently, no one passing by was of the stabbed man's tribe. So he died, with the young Irish cop, bewildered and outraged, yelling at the indifferent crowd of relocated Indians before the ambulance arrived to haul off the stiff.
No, buddy, it ain’t right. It doesn’t make much sense at all. But a river of Irish slang runs through it and without it, it’s possible we would not be able to tell tales about any parts of the whole ruckus that we live.

An especially talented political campaign professional once confessed in my hearing that his ancestry was “psychotic shanty Irish.” Translation: pity me, I really can’t control myself; fear me, I really can’t control myself; though my background is lamentable, it has its uses in politics; I’ll get you if you don’t get me first.

Then there was Pete McCloskey, former Marine hero, former congressman, co-author of the Endangered Species Act, opponent of President Richard Nixon in the 1972 New Hampshire primary. McCloskey, in his mid-70s, came down to San Joaquin County in 2006 and, although he didn’t defeat Rep. Richard Pombo, then chair of the House Resources Committee, in the Republican primary, he beat him up so badly with an old-fashioned campaign of meeting, listening and talking along with well documented stories to the media that reporters could not resist because the material dignified their profession, that a nobody Democrat from the Bay Area beat him in the general. This rookie congressman, Jerry McNerney, is also fierce and can be counted on to stand adamantly for absolutely nothing in order to maintain his seat.

The words Cassidy brings up are mere flashes that restore the character and velocity of our history. Back when Shelley was mayor and Love’s summer occurred, followed by the Walpurgesnacht of Speed, many of us in San Francisco were attracted – like the old welterweight Battling Hippie –- to the Zen master Suzuki, and his quiet meditation center in the middle of the Fillmore District, and to Dogen, the founder of his school of Zen, who described existence as we felt it –- occasional lightning flashes in the night.

Bill Hatch

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More on subsidized farmers no longer alive

Submitted: Aug 16, 2007

Letters to the Editor
Fresno Bee
July 27, 2007

Dear Sir or Madam,

The U.S. Department of Agriculture gets my inept federal bureaucracy of the month award for writing subsidy checks to 172,801 dead farmers totaling $1.1 billion dollars during the period from 1999 to 2005. This gives new meaning to the term "buying the farm."
All the sordid details are available in a report from the Government Accountability Office located at http://www.gao.gov/new.items/d071137t.pdf.
Nineteen percent of the deceased subsidy recipients had been dead for seven years or more, while a whopping 40 percent had been dead for three years or more. Even more troubling, someone undoubtedly alive signed and cashed those checks given the considerable difficulty the dead have in signing checks.
There must be plenty of dead San Joaquin Valley farmers on the list given that we are the farming capitol of the nation. They must be chuckling somewhere in the Great Pasture in the Sky that they couldn't make any money while living but managed to generate some green after they were gone.

Lloyd Carter

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Best little weekly on the Grapevine

Submitted: Aug 04, 2007

For reasons unknown to Patric Hedlund, editor of the Mountain Enterprise, and to the Badlands editorial staff, we received a press release on the Enterprise's recent success garnering three awards for excellence in journlaism from the California Newspaper Publishers Association. What is more remarkable, for an CNPA award, the Enterprise in an independent newspaper serving unincorporated towns near and along the Grapevine and in the Los Padres National Forest.

The story gets better. We contacted Hedlund because we were interested in the the paper's reporter staff of "volunteer community reporters." Hedlund informed us that much of the Enterprise copy is written by volunteers from the various communities the 4,000-subscription weekly covers. In fact, one of the paper's chief missions is training good volunteer community reporters to get both sides of the story in the sprawling rural area it covers. The stories are edited by professional journalists on the Enterprise staff.

As a recent example, she told the story of being contacted by a Pine Mountain resident, LaVonne L. Lewis, Ph.D., R.N., a psychologist and an emergency room and critical care nurse. Lewis' husband had discovered a dead bird on her porch, Lewis contacted Kern County about how to deal with the carcass and later contacted the state about how to deal with Kern County. Finally, she wrote the story that appears below. This report, it turned out, was part of a much larger breaking story that Kern County is the leading county in the state for human cases of West Nile Virus, which prompted state Sen. Dean Florez, D-Shafter, to request that the governor declare a state emergency in Kern County.

The cause of the independent weekly, fact-based journalism and the promotion civic dialogue around public process is well served by the Mountain Enterprise.

Badlands editorial staff

The Mountain Enterprise
Tiny Mountain Newspaper Wins Three Statewide Journalism Awards
California Newspaper Competition Draws More Than 4,000 Entries

FRAZIER PARK, CA – The Mountain Enterprise, which serves a cluster of mountain villages in the Los Padres National Forest (a tri-county area of Kern, Los Angeles and Ventura counties) has won three awards for excellence in journalism. A team of volunteer community reporters and the woman who founded the newspaper 41 years ago were all invited to accompany the paper’s owners to the awards ceremony at the historic Fairmont Hotel in San Francisco on Saturday, July 14.

During the 119th Annual Convention of the California Newspaper Publishers Association, The Mountain Enterprise received:
• First Place award for its series telling how mountain residents worked together to respond to a 700-home development project that produced a six-volume Environmental Impact Report without disclosing that the water table was plunging in the area on which it wished to build;
• First Place for its newly launched website (www.MountainEnteprise.com)
• Second Place for its public service series about the deaths and endangerment of mountain residents caused by inadequate ambulance response in an area of Kern County served by a private ambulance company owned by the Mayor of Bakersfield.

Management and ownership of The Mountain Enterprise was assumed by Publisher Gary Meyer and Editor Patric Hedlund in August of 2004. The two are producers of award-winning documentary films and investigative articles, including an Academy Award for Best Documentary.

More than 4,000 entries were received by the statewide newspaper association from over 400 contest participants throughout the state. Newspapers compete with their peers in categories set by size and frequency of circulation.

Context in which The Mountain Enterprise works:

A deluge of industrial and residential developments are poised to explode into the Interstate 5 region known as the Grapevine. The Mountain Enterprise's coverage area has become ground zero for a convergence of deep-pocket interests ready to do battle with environmental litigators, starting this winter of 2007-08.

Tejon Ranch Company's 270,000 acres is the largest contiguous parcel of privately owned land in California. This year, TRC hopes to launch the 23,000-home Centennial project in northern LA County and the 3500-home, seven resort hotel Tejon Mountain Village in southern Kern County. Meanwhile, adjacent developments are lining up applications for about two thousand additional homes..

The area in which these developers wish to build is targeted by environmentalists as a critical habitat to many rare species of plants and wildlife, some of which are found nowhere else in the world. Environmental and conservation groups have lined up on both sides of the issues, some casting their lots with TRC's plans, others against.

The Mountain Enterprise has covered the issues as they arise for public consideration, aiming always at the needs of residents and businesses to stay informed about the coming changes, while also examining possible strategies for developing a stronger local economy.

First Place Series
The paper closely reported detailed findings in a series of hearings hosted by the Mountain Communities Town Council and added original reporting about the Frazier Park Estates development proposal.

When community reporter Doug Peters analyzed the housing project’s six volume Draft Environmental Impact Report (DEIR) for data regarding water studies, Editor Patric Hedlund and Publisher Gary Meyer worked with him to explain clearly how ground water measurement data had been scattered throughout the report in a confusing manner.

When Peters assembled the data and presented it in a graph published in the paper, readers learned that the water levels in the proposed development area (near Frazier Mountain High School in Lebec) had fallen significantly over a period of 11 years.

Following a Kern County public presentation of the DEIR, the The Mountain Enterprise published the Planning Department’s subtle verbal assertion that, according to the development plan, Frazier Park’s Fire Station 57 would be closed and moved three miles away to the housing development site. After significant and well-informed public input by letter and email during the 45-day comment period, Kern County’s Planning Department withdrew the DEIR and required the developer to perform a complete rewrite.

Best Website

The Mountain Enterprise received a First Place award for “Best Website” within the new site’s first few months of operation. The site, www.MountainEnterprise.com went online in December 2006.
It is a feature-filled yet simple-to-use site, designed for high functionality and user convenience. Back issues of the paper can be searched using a full range of Google-like search tools. It also contains significant additional material in the Community FYI areas. This year, The Mountain Enterprise’s full 42 years of history are being prepared for inclusion in the archive.

Public Service

In addition to the two First Place awards, The Mountain Enterprise’s coverage of ongoing community efforts to bring full-time Advanced Life Support (ALS) paramedic services to the outlying areas of the Mountain Communities received a Second Place award for Public Service reporting.

After Pine Mountain resident Harold Bailey died of a heart attack in 2005 while waiting more than an hour for an ambulance to arrive, The Mountain Enterprise reported the groundswell of community action that persisted to demand improvements by private company Hall Ambulance Service and in standards set by Kern County’s Emergency Medical Services Department.

On May 29, 2007 the Kern County Grand Jury recommended that County Fire Department establish paramedic services in Pine Mountain and that “Kern County Fire Department and private ambulance companies resolve their differences” regarding public safety in medical emergencies. Kern County Fire Chief Dennis Thompson has announced that a third firefighter will be on duty at Station 58 in Pine Mountain during all shifts by August 1 and that his goal is to have firefighters licensed as ALS paramedics on the mountain within the next two years.

Outstanding Reporting

A fourth series by The Mountain Enterprise received the CNPA Certificate of Achievement. The Mountain Enterprise provided in-depth reports about actions of the El Tejon Unified School District (ETUSD) board of trustees, then-superintendent John Wight and Frazier Mountain High School’s principal to offer a Philosophy of Intelligent Design course in early 2006.

While ETUSD’s superintendent provided soundbites to national TV news networks from the campus, The Mountain Enterprise published interviews with the teacher offering the course and the lead plaintiff in a lawsuit filed with eleven other parents requesting that the course be stopped. During the final days of the class, ETUSD Superintendent John Wight called the Kern County Sheriff’s Department to have publisher Gary Meyer and editor Patric Hedlund of The Mountain Enterprise arrested while reporting on the high school campus—a right and responsibility of the press on behalf of the public, protected by state and federal law.

The paper dedicated a forum for the community’s ongoing dialog about Intelligent Design in its pages for more than a month.

The lawsuit was settled and the superintendent resigned five months later, thirty minutes after being shown a videotape of himself taking gasoline, allegedly for personal use, in six trips within four hours from school district gas pumps, and appearing to pump the fuel into a system of gasoline containers assembled in the rear seat area of his car. When the board president refused to discuss the existence of the videotape and the reason for the superintendent’s sudden departure, a public records request submitted by The Mountain Enterprise secured release of copies of the videotape. The newspaper also published a carefully documented history of serious problems in a previous district where the former superintendent had served. See “El Tejon Unified School District” under “Community FYI” at www.MountainEnterprise.com for those stories.
Mountain Enterprise

West Nile Virus May Be Here To Stay ... LaVonne L. Lewis, Ph.D., R.N.

West Nile Virus is a growing problem in Kern County. Last month two elders died of the disease in this county. The State of California reports that there are 56 reported human cases of the virus and 38 of those are in Kern County. This makes us the number one county in the state dealing with this disease.

So what is being done about it? From what I have seen, not nearly enough.

On Monday, July 23 a dead bird was found on our Pine Mountain porch by my husband. He followed the recommendations of the State of California. The dead bird was reported at 3:30 p.m. Monday to www.westnile.ca.gov, the website for the California Department of Health Services.

That report was sent by fax to Kern County Environmental Health Services at 3:42 p.m. by an employee identified as Clarence (the last names of state employees are not allowed to be given to the public, he said).

Another state employee then called my husband to tell him to "bag the bird" himself and leave it outside the house. The county, he was told, "would pick it up within 24 hours." He was also told "if the bird is not picked up after three days, just discard it." Much to the dismay of our family, the bird was never picked up by Kern County to be tested.

I called the California Department of Health Services on Thursday July 26 to speak with Lakeyssia (again, we were told that last names not allowed to be given by state employees) at (877) 968-2473.

She checked the computer record to confirm that the report had been logged by the state and that Kern County Environmental Health Services was informed within 12 minutes by fax. Lakeyssia stated that the protocol requires that the animal be picked up within 24 hours. She was quite surprised that the protocol was not followed and that the bird was not picked up.

I then placed a call to Kern County Environmental Health Services and spoke with Mat Constantine at (661) 862-8700. His response was appalling. He said he felt that testing animals was "wasting resources."

Constantine said, "West Nile Virus is here—we already know that—so why test?" He said he feels the money should be used in prevention and education. He stated that there are no funds in the county to have employees driving (sometimes for a couple of hours) to pick up a dead animal. He said sometimes he has to pull people from other jobs in order to pick up a dead animal.

I replied that from an epidemiological point of view it is important to know how many animals might be infected in a given area. That information can then be used to prevent human deaths by finding and treating the source (such as standing water).

I asked him, hypothetically, if they found 35 infected dead animals in an area like Pine Mountain, would he think that would be valuable information? There was a prolonged pause on the phone.

I stated that this would be very valuable information leading to possible spraying to prevent loss of human life.

Constantine agreed, but said he feels there is just not enough money to do it. So the question arises: how many dead and infected animals are not being picked up for testing in our county?

The California Department of Health Services has since called me to apologize for this entire unfortunate situation. The supervisor (Stan) said he is going to call the county to try to seek a resolution, as the State is very concerned about the disease. Kern County seems to be having difficulty acknowledging the magnitude of this situation. The numbers speak for themselves, 38 out of 56 human cases are here in Kern County. What is it our taxes are paying for?

LaVonne L. Lewis, Ph.D., R.N. is a Psychologist and an Emergency Room and Critical Care Nurse. Her family lives in Pine Mountain

BREAKING NEWS: State of Emergency Declared in Spread of West Nile Virus

At 10:00 a.m. Thursday, August 2 Governor Arnold Schwarzenegger declared a state of emergency in Kern County due to the three-fold increased spread of West Nile Virus (WNV). Of 56 cases of WNV reported in California this year, 38 of them are in Kern County. Colusa and San Joaquin counties were included in the declaration to prevent the spread of this mosquito-borne disease. This year there have been four deaths in California due to West Nile Virus (two in Kern County, one in San Joaquin County and one in Colusa County).

In The Mountain Enterprise issue on the news stands today, Thursday, August 2, see the story about how a Mountain Communities family's efforts to get Kern County 's health officials to test a dead bird found on their deck reveals a dysfunctional system for protecting the public against West Nile Virus in Kern County.

In an August 1 letter to State Senator Dean Florez, D-Bakersfield, the governor said, "I agree that there is a need to address this issue to protect our fellow Californians against an epidemic. To that end, tomorrow I will proclaim a state of emergency within the counties of Kern, Colusa and San Joaquin, the counties hit hardest by the virus. My proclamation will make financial assistance available to the local vector control districts and direct State agencies to take proactive measures to protect Californians from further spread of West Nile Virus."

Senator Florez requested a minimum of $48 million from Gov. Schwarzenegger. The governor responded that he, "will make as much funding as immediately needed to combat this virus at the local level."

The Thursday morning press release said "since taking office, Governor Schwarzenegger has invested more than $15 million to fight the West Nile Virus. California has one of the most comprehensive West Nile Virus surveillance and control systems in the U.S. The state deploys surveillance and detection technology to track specific areas of West Nile Virus activity and alert local agencies so they can target their mosquito control activities."

The story in The Mountain Enterprise revealed that such "surveillance and control" systems were not being fully implemented in Kern County.

Watch The Mountain Enterprise for an update about the specific measures Kern County will now take to protect the public against WNV.


"Today I'm taking action to help the counties hit hardest by West Nile Virus. My proclamation makes financial assistance available to the local vector control districts and directs state agencies to take proactive measures to protect Californians from further spread of this deadly virus. I will continue to ensure our local agencies have whatever resources they need to fight the spread of this disease," said Governor Schwarzenegger.

For more information about West Nile Virus, visit http://westnile.ca.gov.

Full text of the Governor's emergency proclamation:


WHEREAS when compared to the same time last year, there has been a three-fold increase in the number of people infected by West Nile Virus; and

WHEREAS since 2002, West Nile Virus has infected hundreds of people and caused multiple deaths in California, including four deaths this year; and

WHEREAS the recent upturn in foreclosures this year has increased the number of vacant homes this summer with unattended and untreated pools, which has exacerbated the spread of West Nile Virus; and

WHEREAS local governments have made sustained efforts to minimize the spread of the virus, and the state has supplemented these efforts by dedicating over $15 million over the last three years to mitigate the virus's effects; and

WHEREAS despite those efforts to eradicate West Nile Virus, the virus remains a threat, and further efforts to control the spread of the virus and to reduce and minimize the risk of infection are needed; and

WHEREAS the Mosquito Vector Control Association of California, which is composed of 61 local vector control districts, is seeking state assistance in addressing the potential for a West Nile Virus epidemic in California; including a request for funding for surveillance activity and abatement efforts; and

WHEREAS control of West Nile Virus may require immediate actions to limit the population of adult mosquitoes and mosquito larvae, and those actions may include the ground and aerial application of pesticides in urban, suburban and rural areas; and

WHEREAS there are also numerous and significant incidents of Valley Fever, especially in Kern County; and

WHEREAS due to the magnitude of the threat, the size of the affected areas and the need to control the spread of the virus across jurisdictional boundaries, the conditions are beyond the control of the services, personnel, equipment and facilities of any single county, city and county, or city, and require the combined forces of a mutual aid region or regions; and

WHEREAS under section 8558(b) of the California Government Code, I find that conditions of extreme peril to the safety of persons and property exist within the Counties of Kern, Colusa and San Joaquin caused by the threat of West Nile Virus.

NOW, THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of the State of California, in accordance with the authority vested in me by the California Constitution and the California Emergency Services Act and, in particular, sections 8625, 8567 and 8571 of the California Government Code, HEREBY PROCLAIM A STATE OF EMERGENCY to exist within Kern, Colusa and San Joaquin Counties, and hereby issue the following orders:

IT IS ORDERED that the Department of Public Health shall allocate up to $1 million dollars as needed, to local vector control agencies to identify potential mosquito habitat and to treat those areas to prevent the spread of West Nile Virus in the three above-listed counties and other counties identified by the Department of Public Health.

IT IS FURTHER ORDERED that the Department of Public Health shall allocate up to $350,000 to local vector control agencies for surveillance purposes to provide an early warning of the incidence of West Nile Virus so that proper control measures can be taken by the local vector control agencies to prevent the spread of West Nile Virus in the three above-listed counties and other counties identified by the Department of Public Health.
IT IS FURTHER ORDERED that the Department of Public Health shall coordinate with the State and Consumer Services Agency, the Resources Agency and the Department of Food and Agriculture to develop a plan using best management practices for implementation by the appropriate state agencies for the early detection of West Nile Virus on state-owned properties and appropriate mitigation and abatement measures. Funds in the amount up to $150,000 shall be allocated for the purpose of developing this plan.

IT IS FURTHER ORDERED that the Department of Public Health and the Department of Food and Agriculture shall work with the Mosquito Research Program at the University of California, Davis, to determine what resources are needed to further advance the research on the ecology and the epidemiology of West Nile Virus.

IT IS FURTHER ORDERED that the Department of Public Health shall work with (1) local vector control districts to utilize their existing power pursuant to Health and Safety code section 2053 to inspect and abate vector or public nuisances, with special emphasis on the removal of standing water in untended pools and containers on vacant property; and (2) the Business, Transportation and Housing Agency and local public health departments to notify lenders, realtors, mortgage brokers and others whose responsibilities include managing vacant homes to ensure that pools and other containers that can hold water are drained and maintained empty to prevent the spread of West Nile Virus.

IT IS FURTHER ORDERED that the Department of Public Heath shall implement a supplemental program of mosquito control, including health advisories and technical assistance, in the above-listed counties to assist those counties and the mosquito and vector control agencies within those regions to minimize the proliferation of mosquitoes and to reduce the transmission of West Nile Virus.

IT IS FURTHER ORDERED that all agencies and departments of state government utilize and employ state personnel, equipment and facilities for the performance of any and all activities consistent with the direction of the Department of Public Health in an effort to address and mitigate this emergency, and consistent with the State Emergency Plan as coordinated by the Office of Emergency Services.

IT IS FURTHER ORDERED that the Department of Public Health enter into such contracts as it deems appropriate, in consultation with the above-listed counties and the mosquito and vector control agencies within those regions, to provide services, material, personnel and equipment to supplement the West Nile Virus mitigation efforts in those jurisdictions.

IT IS FURTHER ORDERED that the provisions of the Government Code, the Public Contract Code, the State Contracting Manual and Management Memo 03-10, along with all Department of Pubic Health policies, applicable to state contracts, including, but not limited to, advertising and competitive bidding requirements and approvals for non-competitively bid contracts, are hereby temporarily suspended with respect to contracts to provide services, material, personnel and equipment to supplement the West Nile Virus mitigation and abatement efforts in the above-listed counties to the extent that such laws would prevent, hinder or delay prompt mitigation of the effects of this emergency.

IT IS FURTHER ORDERED that the Department of Public Health shall consult with the county agricultural commissioner prior to the application of "prohibited materials," as defined in subdivision (p) of section 110815 of the Health and Safety Code, to agricultural land used for the production of certified organic foods.

IT IS FURTHER ORDERED that the Department of Public Health work with local public health departments to take appropriate actions to minimize the incidents of Valley Fever in the above-listed counties.

I FURTHER DIRECT that as soon as hereafter possible, this proclamation be filed in the Office of the Secretary of State and that widespread publicity and notice be given to this proclamation.

IN WITNESS WHEREOF I have hereunto set my hand and caused the Great Seal of the State of California to be affixed this 2nd day of August 2007.

Governor of California

For the probable origins of West Nile Virus in the US, see Lab 257 by Michael Christopher Carroll, pp. 28 et seq. -- Badlands

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Greased pig contest in Congress

Submitted: Jul 22, 2007

We rodeo fans down here in the San Joaquin Valley have had a ball for the last 10 days watching representatives debate the Farm Bill. McClatchy gave us minute-by-minute coverage of this greased pig contest, featuring Rep. Dennis Cardoza, D-Merced, the fellow with the big 18-CA on his back. Cardoza was moving real good after them squealing, greased porkers. Boy’s got some moves in him we hadn’t seen before.

Cardoza put on a diverting performance on behalf of fruit and vegetables, while cotton, corn and dairy interests in his congressional district dod just fine in the new Farm Bill. Cardoza established himself as a good Nancy Boy, saved subsidies for his largest contributors, and “reached out” to the fruit, nut and organic communities. At least as far as McClatchy is concerned, the senior Valley Democrat was very successful. He is portrayed in their pages in the arena under the floodlights with a firm grip on the hind leg of a porker and defending it with snarling sound bites, like a real cowboy.

In fact, calmer voices than McClatchy see the bill as being just about the same except that the big commodity subsidies have actually increased.

You can almost hear the rodeo announcer saying “Ol’ Number 18 outta Merced, California has got a grip on a leg and if it don’t slip, maybe the fruits and vegetables and nuts and organics will get something. All he’s got to do is hang on to the greasy little trotter for … how long? Until the Republicans and big commodity Democrats chop up the bill, gut the provisions he fought for willingly? But ol’ Number 18 is showing some style out there in the arena.”

This is the kind of suspense that makes good rodeo.

In fact, Cardoza’s efforts on behalf of the interests represented by the subcommittee specialty crops he chairs, seen in light of his history, are total, hypocritical bunk. The communications director for the Blue Dogs advocating for organics? The old' Shrimp Slayer, who teamed up with former Rep. Richard Pombo, to try to gut the Endangered Species Act? But, we give him high marks for a fine performance as the Rodeo Clown in this porcine divertissement confected by the Speaker.

Letting all them porkers loose in the House for a couple of weeks put everybody in a fun-loving, all-American cowboy mood, and very few of those discouraging I-words (Iraq, Iran and Impeachment) were heard.

Meanwhile, back at the ranch, the president signed “Executive Order: Blocking Property of Certain Persons Who Threaten Stabilization Efforts in Iraq.” It appears to be a monarchial order of attainder against certain persons deemed by the administration to be fomenting or supporting violence against the Iraq government and hampering the peaceful development of that nation.

Liberty loving rodeo fans might find the “Persons” a mite vaguely defined for their tastes.

Although agriculture has recently been through an unseemly moment on the Farm Bill, there are a great many generous farmers in America who regularly contribute food through charitable foundations to foreign countries. If shipments get hijacked by groups defined as “evil doers” by the Bushies, these generous farmers could find themselves up a murky creek. So, make sure you hedge your contributions to the faith-based food charity of your choice with contributions to candidates of your president's choice.

Attainder: Extinction of the civil rights and capacities of a person upon sentenc of death or outlawry, usually after a conviction of treason.
-- Webster's Ninth New Collegiate Dictionary

The Constitution (Article III, Section 3, states:

1) Treason — Definition and Conviction: Treason against the United States, shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort. No person shall be convicted of treason unless on the testimony of two witnesses to the same overt act, or on confession in open court.
2) Punishment: The Congress shall have power to declare the punishment of treason, but no attainder of treason shall work corruption of blood, or forfeiture except during the life of the person attainted.

Neither the two witnesses, the overt act (in fact any act—suspicion will do) or the open court appear to be contemplated in the president’s executive order. Although the property blocking at first seems like a financial inconvenience, reading further the order begins to look like a declaration of outlawry — a very severe ban and set of restrictions. The order also neglects mention of the doer “of violence threatening the peace and stability of Iraq and undermining efforts to promote economic reconstruction and political reform in Iraq and to provide humanitarian assistance to the Iraqi people …” who invaded under false pretenses concerning the existence of weapons of mass destruction. The ensuing four-year-old undeclared war has “violently” killed 3,636 US troops, wounded an estimated 23,000-100,000 US troops, and killed between 68,000 and 74,336 reported Iraqi civilians — setting aside the carnage in Afghanistan.

While the president continues to prolong our Pogo moment (”We have met the enemy and he is us”), the Senate unanimously passed an amendment concerning Iran by Sen. Joe Leiberman, I-CT, which increases the danger of war with Iran.

We the People demand to be amused. We bought the ticket, after all. But, it appears the ticket we bought was for a one-way trip back to the Dark Ages in search of the last gob of grease.

Bill Hatch

“Executive Order: Blocking Property of Certain Persons Who Threaten Stabilization Efforts in Iraq,” White House Office of the Press Secretary, July 17, 2007
(or http://www.counterpunch.com/ “Counterpunch Diary, Alexander Cockburn," July 21/22.)

Lieberman Leads Senate One Step Closer to Repeating History in Iran
R.J. Eskow
Huffington Post, NY - Jul 13, 2007


San Francisco Chronicle
Pelosi takes heat for OK of farm bill…Carolyn Lochhead

Washington Post
Farm Bill leaves some subsidies…Dan Morgan

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