Badlands Journal
Nothing but mean and stupid...Badlands Journal editorial board...6-18-09
Politics in this part of California is mean and stupid. State Sen. Dean Florez, hailed by the anti-asthma activists as the hero who expanded the San Joaquin Valley air board to include three more city council members, a doctor and a health professional, called for the abolition of the state Department of Food and Agriculture on Tuesday. Florez comes from Wasco, deep in the Westlands Water District, but the Farm Bureau has opposed all his efforts to expand the air board and curb air pollution in the worst part of the worst air basin in the nation. So, Florez, chair of the state Senate Agriculture Committee, proposed Tuesday to abolish the state agency with oversight over the farms and ranches of the fifth most agriculturally productive political jurisdiction in the world.
In April he proposed permitting federally recognized tribes to automatically cancel a Williamson Act contract on land that they acquire.
In the midst of the worst dairy crisis in a generation, he is pushing a bill to benefit seven dairies and further weaken the price of the state fluid milk pool.  
Florez is running for Lt. Governor in 2010. His Republican opponent is state Sen. Jeff Denham, from Merced County.  
Merced County Supervisor Mike Nelson, a big shot in the local Republican Party who serves on the Valley air board, and Florez are locked in a number-one contest over Nelson’s remarks concerning the testimony at the last air-board meeting of one Ms. Sharp, a critic of our lousy air quality and the perpetual obfuscation of our air board. This contest has been fomented by air quality activists within the district.
Nelson said: I was going to give Mr. Abernathy a standing ovation after his comments but Dr. Forman, you do have a valid point. If we don’t listen and work together we won’t get it and that’s good for me to remember too because honestly when folks like Sarah get up here and others I tend to tune you out because as it says right here on our agenda front page, the Governing Board depends on the credibility of witnesses and the veracity of testimony, the truthfulness of testimony given here, and often times when people come up here I don’t think they are telling the truth, so that’s it. 
Egged on by the anti-asthma tribe, Florez felt called upon to remonstrate with a strong local supporter of his upcoming opponent for statewide office, instructing Nelson that impugning the integrity and veracity of critics is bad public policy.
Activists feigning skins as thin as a dowager empress's get news of the terrible insult to countless media outlets including the Merced Sun-Star, which interviews Nelson, who says he was quoted out of context. The Sun-Star doctors Nelson’s comment to prove his point. Meanwhile, Nelson “composes” a response to Florez, although we suspect the hand of the redoubtable executive director of the air board, Seyed “The Mendacious” Sadredin, in every line. The response indicates Florez is full of the well known substance. That afternoon at a Merced County Board of Supervisors meeting, Supervisor Nelson muttered contemptuously about Florez’ intent to abolish the state Department of Food and Agriculture. The following day, Florez replies to Nelson that Nelson is full of the well known substance.  
On Thursday there is to be a demonstration of anti-air pollution activists against Nelson in front of the Fresno offices of the Valley air board.
Finance, insurance and real estate (FIRE) is laughing at the Valley destroying itself in this side show as Florez and his opponent’s surrogate compete for FIRE bribes. The problem with the Valley is the problem with the nation: it wasted resources and now the price must be paid. The lazy political class of California, particularly in the Valley, has an easy answer to who must pay the most: the most vulnerable and fastest growing class in the San Joaquin Valley.
Mean and stupid.
Los Angeles dairy industrialization...Badlands Journal editorial board
Review of Dairy Industrialization in the First Place: Urbanization, Immigration and Political Economy in Los Angeles, by Jess Gilbert and Kevin Wehr, Rural Sociology, 2003
Thanks to the century-long special relationship between the University of California and California agribusiness, Californians are basically as innocent of knowledge of American rural sociology as they are of Uighar oral poetry. Although Wehr was born in Oakland, he had to travel to the University of Wisconsin, where Gilbert teaches, to study rural sociology and only got his PhD the year this article was published. So, from the beginning, there is a political aspect to this study: it could be and was done out of University of Wisconsin, in the second largest dairy state in the nation; Californiaovertook Wisconsin for the crown in 1994.
"Diary Industrialization in the First Place" is an historical account of the first time and place this form of agribusiness occurred, among Dutch dairymen in Los Angeles County. The authors assert their independence from previous academic works on the subject dairy industrialization by their emphasis on time and place, no doubt unconsciously emulating the "espacio-temporal" theory employed successfully by El colegio de la frontera norte in its research into the history and development of Tijuana and other Mexican border towns beginning in the late 1970s.
Gilbert and Wehr begin with the questions where and when did industrial dairies first occur and how were they enabled? It has been a vital question for the last 40 years for any resident of the San Joaquin Valley who wants to understand his or her political economy; it has become a critical question since the beginning of 2009 as dairy prices have sunk and feed and fuel have skyrocketed putting the most productive dairy region inthe nation in an historical economic jam.
Gilbert and Wehr found that dairies first industrialized in Los Angeles County between 1930 adn 1960. Dutch dairymen arrived in the 1920s with "essential cultural and technological resources" and rapid urbanization and constantly rising real estate values capitalized dairy industrialization.
From 1925 until 1965 Los Angeles County was the leading dairy county in the nation, and for most of that time was one of the nation's most populous and fastest-growing counties. Every 20 years or so, LA County doubled in population and in dairy cows. The largest county in agricultural sales until the 1950s, after WWII LA County had the largest hay and one of the largest cow markets in the world. In this situation, more peculiar the more you think about it, LA County dairymen developed a new style of dairying, "drylotdairying," concentrating a lot of cows on small acreage, purchasing all feed, which was brought to the cows rather than having them graze on pasture. Drylot dairies quickly developed extremely large herds, "cutting-edge technology," were dependent on large amounts of hired labor, a combined style that produced what the LA Chamber of Commerce called "milk factories."
In 1910, the City of Los Angeles was 85 square miles; but 1920 it was 362 square miles. Part of the reason for the low-density sprawl was that LA engulfed many little village city halls in its path and spread out to inhabit these local administrative units. The bulk of the early migration to LA was from the United States. Spurred by Depression and the Dust Bowl, many migrated to the largest agricultural county in the nation for farmwork, but, as the war developed, ended up in war industries, the third leg of the economic stool of LA, along with agriculture and entertainment. The rapid rise in population encouraged milk production. Meanwhile, as population expanded, NIMBYism (Not In My BackYard played out, causing a concentration of dairies in certain areas. There is just something about a dairy, particularly a drylot dairy, that makes it difficult for the realtor to sell the new tract house. But dairymen could always sell out to the developers, at considerable profit, and reinvest in his next dairy somewhat farther outof town.
An interesting perspective is provided by a dramatic increase in average herd size between 1927 and 1930 -- from 29 to 51 cows. Fifty-one cows was considered very large by prevailing standards. Productivity per cow also raised due to better breeding stock, cow testing and better feed. A campaign against tuberculosis closed many of the smaller LA dairies in the laste 1920s, adding to the impetus for larger, more specialized dairies.
Drylot dairying was mainly a contribution of Dutch immigrants in the early 1920s to LA, largely from Freisland, where Dutch dairymen, for lack of pasture land, were already using this technique. An economic decline in Freisland pushed young Dutch dairymen to LA, where milker wages were excellent and within a few years they were able to start small milk herds of their own on drylots. The Dutch were also attracted by the familiar terrain, "low, flat, and near the ocean," and enjoyed the non
North Sea weather.
It was soon noted that cows on drylot out-produced pasture-fed herds and with bi-products from other major commodities grown in the area, it turned out to be cheaper to feed cows than to graze them. The innovation of Southern California dairies was not, per se, drylot feeding, already used in Europe, but in the size of the herds.
The Dutch tended to settle in southeast LA County, in towns like Paramount, Bellflower, and Artesia, where, along with their dairies, they built their churches, private schools for their children and even an ice rink. The sociologists remark that the Dutch wanted to establish dairying as "a way of life." In fact, it is a way of life, and a very strenuous one that requires all the cultural support it can get.
Noting that the LA cows were producing higher than the national average, the milk press began to tout their techniques. By 1930, it became something of a realtor pitch that LA County produced its milk (30 percent of it) in its own "backyard," on the borders of Orange, Riverside and San Bernardino counties.
The Depression was ugly. Fluid milk sales dropped Various processor schemes to lower prices for both producers and consumers eventually led to the "Milk Wars" of the 1930s, which resulted in more concentration as broke dairies sold their cows at auction to larger competitors. In the Milk Wars, some dairymen went to direct sales, retailers slashed prices to lure more customers and processors squeezed the dairies. Finally, everybody was hurt and producers and distributors appealed to the governor, who assigned the task to the state Department of Agriculture. A commission of producers and distributors agreed on a standard wholesale price but doubts arose about its enforcement and price-cutting continued through 1933.
The federal Agricultural Adjustment Act was passed in 1933. The state thought it now had a basis for an enforceable federal milk marketing order. Certain distributors disagreed and sued to prevent the state joining the federal order. Federal lawyers agreed with the distributors that California milk prices were a local matter. In 1935, the state Farm Bureau successfully supported the state Young Act, which, basically following the federal order, stabilized milk prices at a profitably level for dairymen. This situation was intolerable for distributors who got the Legislature to pass the Desmond Act in 1937, guaranteeing a profitable price for distributors from retailers. Together, the two state acts ended the milk-price wars.
With a premium now paid for the highest quality fluid milk, dairymen improved their technology: milking machines, stainless steel tanks, tiled milking rooms, which eventually came to look more like hospital rooms than the old milking barns. As war industries took off, LA County's population increased and dairies increased production and state-supported prices increased dairy profits.
Some numbers from after WWII: average US cow production, 200 pounds butterfat per day; California average, 280 pounds; LA County, 400; Artesia, 480.
Dairymen throughout LA County after the war faced expanding urbanization and the ability to expand their herds. Many sold at "incredibly high prices" and relocated to the southeast corner of the county (Artesia), bought larger herds, new facilities, and large houses. The area offered cultural, political-economic and environmental advantages.
Culturally, the established Dutch Reformed churches, private schools and the ice rink (now called the East West Ice Palace) were attractive to Dutch dairymen.
Economies of scale were attractive: bulk delivery of hay and gray, faster milk collection, numerous veterinarians, feed companies, cattle brokers, supply stores, and "specialized financial institutions." The invention of the tanker truck was very important but was only economical in areas of great dairy concentration. Politically, the concentration of producers offered the best defense against urban complaints.
Environmentally, southeast LA County had more groundwater and cooler summer temperatures.
Drylot dairying requires huge quantities of water for cleaning and waste disposal. Also the land was cheaper because it is subject to flooding.
Soon, southeast LA County contained the largest number of cows and the richest dairymen in the world. Between 1930 and 1950, the number of dairies declined by 42 percent and the number of cows increased by 77 percent, average herd size going from 51 to 154 cows. It is important to note that this increase was driven by huge profits in real estate sales as dairies relocated in the southeast part of the county, after selled to the developers.
This can be considered the first period of urbanization, relocation and expansion of the LA County dairy industry. Two more would follow.
Attempting to stave off urbanization in the southeast, the dairymen created three "Dairy Cities," the largest of which was Dairy Valley (home of Joe Gonsalves, who, as a state legislator, sponsored the 1965 revision of the state milk order).
However, due to later waves of urbanization, in the 1960s LA County cows decreased from 90,000 to 40,000 and the number of dairies decreased between 1966 and 1972 from 290 to 75. Meanwhile, Chino, in neighboring San Bernardino County boomed, as the number of dairies increased from 99 to 225 in the Fifties and increasing much more since. One factor was that processors favored dairies closer to the city, which Chino is comparted with Artesia.
The authors offer an exemplary case: a dairyman bought a 12-acre dairy in Artesia in 1950 for $12,000; he sold it to developers for $300,000; he bought 30 acres in Dairy Valley (now Cerritos), which he sold to developers in 1970 for $1.5 million and moved to Chino.
We are left in suspense about how much he sold his Chino dairy for in the 1990s and how many acres and how many cows he may have bought in the San Joaquin Valley.
The authors of "Review of Dairy Industrialization in the First Place: Urbanization, Immigration and Political Economy in Los Angeles" wish to emphasis one point, often confused by state and university extension programs and industry publications: the dairy industrialization was not just a ring on the finger of the Invisible Hand of the Free Market; it arose in a certain place at a certain time for local reasons. And it's still going on. It has been noted, for example, that the increase in milk production in California, which surpassed Wisconsin as the top dairy state in the mid-1990s, can be accounted for largely in terms of the rising prices of Southern California real estate -- something anecdotally obvious when one observes the new mega-dairies in the San Joaquin Valley -- we see that real estate sales, along with IRS tax code section 1031, have driven certain counties in California to great leadership in milk production and, today, to great economic peril because of it, as prices stay well below costs of production and there is no recapitalization to be found in a speculative real estate bubble that has popped. This is particularly critical for Merced County, second largest producer in the nation, because it is also one of the top foreclosure-rate counties in the nation.
It also raises a question about the Valley's "indigenous" dairies, that have not recently had a great infusion of cash from a real estate sale in Chino. Given the catastrophic prices in the last six months, it can be speculated that any dairy without deep pockets is in deep economic peril at the moment.
Watching California and federal milk pricing at the moment, one can speculate that the "regulatory" functions of government, established to allow all segments of the industry to prosper, have fallen into the hands of the largest players to the misery of the milk producers. While some degree of this is not new, the present situation has a drastic edge.
However, the California dairy industry does not enjoy much public support. It is perceived, in general, as rich, arrogant, politically slick and aggressive, its public generosity (when it occurs) is not well known, and some of its leaders (Hilmar Cheese Co. for example) have been serial violators of environmental law.
Merced Sun-Star
Merced County jobless rate, although still bad, continues to improve...SCOTT JASON
Merced County's unemployment rate has fallen for the second consecutive month, though it still ranks among the highest in the state.
California's Employment Development Department reported Friday that the county's unemployment rate slid to 17.3 percent.
It had been 18.1 percent in April and 20.2 percent in March.
"It's tapering off," said Pedro Vargas, a state labor market consultant based in Merced. "The numbers are getting better."
The state average, on the other hand, rose 11.5 percent, the highest since the statistics have been kept. The U.S. unemployment rate climbed to 9.4 percent.
Merced County's reversal comes after seven months of a steady increase. It's due solely to the ag industry gearing up and other sectors not worsening.
The farm industry packed on an additional 1,600 jobs from April to May, bringing its work force to 11,100 people, according to the figures. Still, the number of ag workers is down from this time last year when the industry employed 11,400.
All other industries remained stagnant, with any gains being cancelled out by other losses.
The manufacturing industry hired 100 people from April to May, while the trade, transportation and utilities sector shaved off that many.
All other industries remained stagnant.
Year over year, Merced County lost 2,000 jobs.
Since May 2008, all the industries cut jobs except financial activities, government and educational services. Business and professional services added 100 jobs.
Of Merced's labor force, 105,800 people, there are 18,200 without jobs.
The highest unemployment rate ever recorded in Merced County was 21.7 percent in February 1996.
Interactive map: Unemployment in California...California Employment Development Department
Los Banos mayor takes to the Hill...MICHAEL DOYLE, Sun-Star Washington Bureau
WASHINGTON -- Lawmakers on Friday sympathized with the San Joaquin Valley but showed uncertainty over the best way to help the economically struggling region.
Certainly, Los Banos Mayor Tommy Jones found a receptive Capitol Hill audience, as he pleaded with a House panel for federal aid.
"Our community, our county, tends to be overlooked," Jones told the House Financial Services Committee, "but our need is not any smaller than those who have faced hurricanes or floods."
Jones recounted the city's 21 percent unemployment rate and 50 percent drop in property tax revenues over the past year. One out of five Los Banos homes has been caught up in foreclosure.
"We're small-town America, facing extreme economic hardship," Jones said.
The committee's chairman, Rep. Barney Frank, D-Mass., acknowledged that residents of Los Banos and the larger San Joaquin Valley are facing worse circumstances than many other parts of the country.
While noting that "there are a variety of programs" already designed to aid troubled regions, Frank pledged to work toward new solutions as well.
The 90-minute hearing Friday afternoon touched briefly on one proposal by Reps. Dennis Cardoza, D-Merced, and Jim Costa, D-Fresno, to create new "economic disaster" zones.
The newly designated areas would be eligible for additional federal assistance, including funds provided through the existing Community Development Block Grant program.
The current community block grant program funnels upwards of $5 billion annually to communities nationwide. A $787 billion economic stimulus bill, approved in February over Republican opposition, included a $1 billion boost for the current block grant program.
Although the new bill's details remain a work in progress, Costa and Cardoza suggest increasing the overall block grant funding and setting some of this aside for the designated "economic disaster" zones.
Unemployment and foreclosure rates and other criteria would be used to select the economic disaster zones. The bill itself may not be introduced for another several weeks.
"What has been put forward to help the rest of the country is not enough to us at home," Cardoza said, adding that "our entire nation has been hurting right now, but our region is hurting much worse."
Cardoza and Costa persuaded Frank to hold the hearing Friday as a first public step toward potential legislation. Fewer than one-fifth of the committee's 69 members attended, but there were enough present to suggest some of the legislative hurdles still ahead.
"I sympathize with my colleagues," said Rep. Spencer Bachus of Alabama, the senior Republican on the panel, but "I do have concerns that redirecting (block grant) funds may have unintended consequences."
Texas Republican Rep. Jeb Hensarling, a vocal budget hawk among GOP members, added that "there are better ways to promote jobs." And Bill Johnson, director of the Alabama Department of Economic and Community Affairs, cautioned that block grant spending may take several years to have any real impact.
Still, by the end of the hearing, Frank was committing himself to do what he could on the San Joaquin Valley's behalf
Our View: Finally, Valley's case heard in D.C.
Los Banos Mayor Jones testifies about 'facing extreme economic hardship.'
Some of the most influential people in Washington, D.C., heard from Los Banos Mayor Tommy Jones on Friday afternoon about just how dire the economic situation is here in the San Joaquin Valley.
We realize it's bad in most places across the country, but we hope that the powerful Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee, and its members will start to appreciate just how bleak it is for Valley families.
Reps. Dennis Cardoza, D-Merced, and Jim Costa, D-Fresno, are promoting a proposal that would declare Merced, Stanislaus and San Joaquin counties an "economic disaster area," making it eligible for extra assistance and perhaps some easing of regulations or other mandates.
Though there will be no vote, Friday's 90-minute hearing could help advance that legislation, hopefully to the point where it gets serious consideration. Just what kinds of extra assistance might accompany such a designation is unclear, but we agree with Cardoza that the first step is getting the attention of people in Washington.
Our Valley is not the only region in the country where the problems are especially acute. Presumably, an "economic disaster area" declaration also would apply to some other areas whose problems can be identified.
"Our community, our county, tends to be overlooked," Jones told the committee, "but our need is not any smaller than those who have faced hurricanes or floods."
Jones recounted the city's 21 percent unemployment rate and 50 percent drop in property tax revenues over the past year. One out of five Los Banos homes has been caught up in foreclosure.
"We're small-town America, facing extreme economic hardship," Jones said.
And, it's hard to imagine many places in worse shape than here.
Add to that California's massive budget problems, which are tumbling down hardest on children, the elderly and the poor -- who account for a large segment of our population.
Add to that the fact that our No. 1 industry, dairy, is in a world of hurt. And add to that the drought and the diversion of water, which has forced some farmers to leave fields fallow.
The picture is grim, and if forecasters are correct, our counties will be among the slowest to recover from the nationwide recession.
We need the folks on Capitol Hill to understand the desperate straits we're in, and thanks to Cardoza and Costa that may have happened Friday.
But that's just the start -- what we need after all the talk is some concrete action to address our situation.
Sacramento Bee
California jobless rate hits record high in May...Jim Downing
Job losses slowed across much of the country last month – but not in California.
In May, the state's payrolls shrank at the fastest rate since February, wiping out 68,700 jobs, including more than 14,000 in the public sector, according to figures released Friday. Employment fell across all major sectors of the economy except health care, pushing the jobless rate to a modern record of 11.5 percent.
Economists ticked off a familiar list of causes, from the housing bust and the contraction of the financial sector to a state budget crisis that's soaking up federal stimulus dollars meant to goose the economy.
Beyond the employment numbers, though, they pointed to some reasons for optimism. Leading economic indicators – like consumer confidence and building permits – were up in May. Home sales are strengthening. A UCLA forecast this week predicted the California economy will grow slightly in the second half of the year.
Still, "There's no sugar-coating the May (employment) report," said Stephen Levy of Palo Alto's Center for Continuing Study of the California Economy.
The real estate collapse in particular continues to weigh on California's economy, Levy said. "It's where we were really much worse than the nation."
The nation lost 345,000 jobs in May, down from 504,000 in April and more than 650,000 in February and March.
One sign of despair among California job-seekers: The state's work force – the number of people employed or actively looking for a job – fell by 105,000 in May, the biggest monthly drop in 33 years of record-keeping.
California's labor force had grown 19 of the last 20 months – a sign that spouses, children and domestic partners have been trying to pick up the slack as family members lose jobs.
May's work force drop is so large that state officials think it might be a statistical blip. But if it's roughly accurate, it signals that large numbers of the unemployed are giving up the job hunt. Howard Roth, chief economist at the state Department of Finance, said it usually doesn't take so long for a recession to start pushing people out of the work force.
"They weren't easily discouraged this time," Roth said.
Friday afternoon at the Folsom Boulevard office of the Sacramento County Department of Human Assistance, Trista Treaster was just starting her search. On Monday, the mother of five lost her job teaching children with disabilities for a care provider that contracts with the state.
Treaster's husband, Neal, a tile layer, has been out of work nearly a year. Trista said she'd take almost anything.
At the county's "job seekers' boot camp," the Rancho Cordova couple balanced their 4-month-old twins and worksheets and binders designed to sharpen their networking and interviewing skills.
"Everybody's looking for work – from the slacker to the hard worker," Neal Treaster said. "I'm learning things now that I had no clue about."
Even those charged with helping job seekers can end up holding pink slips.
"I found out last Wednesday," said Stephanie Knowles, 30, a county communications officer working one of her final shifts with the Department of Human Assistance. At the Folsom Boulevard office on Friday, Knowles was trying to practice what her agency preaches.
"You can't let negativity get to you," she said. "Push through, you will get that job."
In the May jobs report, the four-county Sacramento region fared better than the state as a whole, with the nonfarm payroll dropping by just 300 positions. The unemployment survey measured the jobless rate at 11.1 percent, up 0.3 percent from last month but shy of March's record 11.5 percent.
Layoffs and hires were scattered around the local economy, according to state Employment Development Department data. About 900 scientific and technical jobs disappeared, a 2 percent drop. Employment in the construction sector, down 23 percent from a year ago, declined by 300 positions. Retailers added 600 jobs. And state government rolls actually grew by 300, or 0.3 percent.
The state budget crisis looms over the local economy. Gov. Arnold Schwarzenegger has proposed laying off 5,000 state employees to help address a $24.3 billion deficit. State government employs about 113,000 people in the Sacramento region.
Yet, in an impromptu interview on Capitol Mall on Friday afternoon, EDD Director Patrick Henning seemed surprisingly upbeat.
Henning, who had been smoking and chatting with EDD employees outside his agency's headquarters, said he feels that the unemployment numbers are "bottoming out."
A close examination by his analysts of the state's construction sector, for instance, gave him some hope, Henning said.
"If things are getting worse, I would expect more layoffs of heavy equipment operators in the construction sector – and it wasn't there," Henning said. "That might be a good sign."
San Francisco Chronicle
OPEN FORUM: Leland Yee on reining in UC administrators
In 1879, the UC Board of Regents were granted autonomy on most issues related to the management of the institution. As a result, laws are generally not binding over the university, leaving an appointed and unresponsive board with exclusive authority to run the institution in a manner often not reflective of the will of the people of California. Last month, I proudly joined UC students and employees to introduce bipartisan legislation that would bring public oversight, access, transparency and accountability to the university. Senate Constitutional Amendment 21 would allow the voters to decide if the UC Regents deserve to maintain their autonomy and circumvent the tenets of good governance.
The UC Regents and the UC Office of the President are fighting this commonsense reform, just as they have deliberately undermined every reasonable effort to correct their previous acts of misconduct. Unsurprisingly, the UC administration is attempting to characterize this effort as a takeover.
The fact is the Legislature can enact law that affects policies at the California State University, yet the CSU is still fully administered and managed by the Board of Trustees. My legislation would ask the voters if they believe the taxpayers should enjoy a similar relationship with the UC Board of Regents.
As a UC alumnus, I believe it is time for the administration to stop conducting the business of the public university system as if it were a private club. Only five other public universities in the country have a similar status, with UC receiving the greatest level of autonomy. This governance model should be revisited.
The university has violated the public trust, most recently when the regents approved double-digit compensation raises for two new chancellors, with each earning more than $400,000 in addition to the many perks and benefits enjoyed by these executives. Such compensation packages far exceed those earned by even the president of the United States and the governor of California. In the same meeting that these salaries packages were approved, the regents raised student fees and precluded public comment by holding the meeting via teleconference.
Despite several attempts to rein in such egregious actions, the questionable conduct continues -- public records requests are denied, workers are disenfranchised, high-level executives are granted golden parachutes and then immediately rehired, whistle blowers are retaliated against and contracts are kept secret and often not put out to a competitive bidding process. In the case of the UC Retirement Plan, the management contracts were given to firms owned by family members of the UC Investment Advisory Committee. The need for my legislation has never been greater.
While students are hit with huge fee increases, top UC administrators receive exorbitant raises. In these tough economic times, California residents have been asked to sacrifice. Our state budget and our residents cannot afford to furnish university executives with lifestyles like that of the rich and famous.
Please join our bipartisan coalition supporting SCA 21 that will restore the luster of the University of California as an invaluable public asset and create the oversight necessary to ensure the regents keep the public interest at heart.
Sen. Leland Yee represents portions of San Francisco and San Mateo counties in the state Senate. Here is more information about the bipartisan coalition.
UC Davis chancellor faces questions about scandal...JULIET WILLIAMS, Associated Press Writer
Sacramento, CA (AP) -- An admissions scandal at the University of Illinois has reached California, where an incoming campus chancellor is facing questions about a secretive process that benefited the children of politicians and the politically connected.
Linda Katehi, a provost and head of academic affairs at the university's main campus in Champaign, denies wrongdoing and has not been called to testify in a state investigation.
In California, a state lawmaker is seeking a review of her involvement, if any, in the admissions scandal. He also has criticized her $400,000 salary to lead the University of California, Davis, among the largest in the UC system.
The Chicago Tribune reported last month that the University of Illinois kept at least 800 applicants for admission — typically those recommended by politicians — on a separate "Category I" list.
Katehi, who has been the university's chief academic and budget officer for three years, has said she had never heard the term "Category I" and didn't know about the secret list.
"I was not aware of all this. I considered it very inappropriate," Katehi told The Sacramento Bee earlier this week.
State Sen. Leland Yee, D-San Francisco, said that explanation is not sufficient. He asked University of California President Mark Yudof to investigate, but Yudof declined.
"She's got to explain exactly what did she know, and if she didn't know, why didn't she?" Yee said. "You just can't be a chancellor and say, 'I don't know what's going on on my campus.'"
Yee noted that in a follow-up story Friday, the Tribune reported that Katehi was copied on at least 14 e-mails related to the Category I program over the last five years. Her name also appears on a spreadsheet of offices inquiring about those students, some of whom were admitted despite subpar academic qualifications.
The newspaper said the records do not suggest she overruled any admissions decision, urged admission for any insufficient applicant or played a role in the secret admissions list.
Katehi (ka-TAY-hee) declined to discuss the scandal with The Associated Press on Friday. Mitchel Benson, UC Davis' assistant vice chancellor for communications, said in an e-mail that Katehi "has said all that she intends to say on this subject."
He forwarded several comments and e-mails citing Katehi's lack of knowledge about the admissions controversy, including a letter from University of Illinois System President Joseph White to Yudof.
"Provost Katehi, to my knowledge, was and is not involved in this controversy," White wrote. "The reason is that the Chancellor handled these matters directly with the admissions director and, in some cases, deans ... She had no involvement in admissions cases that are fueling the controversy."
Yudof also has defended Katehi and in a letter this week said the incoming chancellor had assured him she was not involved.
"We have seen nothing to persuade us that we should open our own investigation at this point," Yudof wrote. "Dr. Katehi was not mentioned in the Tribune report and is not on the witness list."
The UC's board of regents already is facing criticism over the compensation package it awarded Katehi and a chancellor at UC San Francisco amid a severe budget crisis.
Katehi's $400,000 salary is nearly 27 percent higher than the salary of her predecessor at UC Davis, the third largest campus in the University of California system.
The campus of 31,000 students is known for its medical, veterinary, agriculture and viticulture programs.
Katehi also received a $100,000 relocation allowance, university-provided housing and a $9,000 annual car allowance. She and incoming UC San Francisco Chancellor Susan Desmond-Hellmann, whose salary will be $450,000, were hired the same day the regents approved a 9 percent student fee increase.
The faculty associations that represent many professors at three UC campuses, including UC Davis, sent a letter to regents on Thursday urging them to hold an emergency meeting to address the budget crisis. The system could lose $1 billion in funding over a two-year period through June 2010.
Ian Kennedy, president of the UC Davis Faculty Association, did not return a telephone message or e-mail seeking comment Friday.
Yee, a critic of the UC administration, is seeking a constitutional amendment giving the state Legislature greater authority over the university. He said he intends to keep up the pressure on Katehi and Yudof until questions over whether she was involved in the admissions scandal are answered.
"I think the integrity of the UC is at stake right now," Yee said. "She comes now with a checkered record, and it's extremely important that she clear that up. The only one that's going to be able to clear that up is the UC itself."
CSU to pay $65,000 in S.F. State age-bias case...Bob Egelko
SAN FRANCISCO -- The state university system has agreed to pay $50,000 to a veteran San Francisco State instructor who was passed over for a tenure-track job at age 61 in favor of a 36-year-old candidate without a doctorate.
The U.S. Equal Employment Opportunity Commission announced the settlement Friday in its age-discrimination suit on behalf of Lawford Goddard, a former teacher in the school's black studies department.
Goddard applied in 2004 for an assistant professor's position at San Francisco State, where he had been a part-time lecturer since 1989. He had been teaching at Bay Area colleges since earning his doctorate from Stanford in 1976. A faculty committee placed him among three finalists for the job, but the school's dean chose another candidate.
In its lawsuit, the federal agency said the dean had told the screening committee he wanted "fresh blood and new ideas" and had made comments about getting rid of "old '60s hippies" faculty members.
The agency said Goddard was more qualified than the winning candidate for the $65,000-a-year job and had been rejected because of his age.
The university denied discriminating and said it had chosen a candidate who was more accomplished in his writings, had a superior overall record and had performed superbly since his hiring. The settlement, approved Thursday by a federal judge, contains no admission of wrongdoing.
Years of data about San Francisco State hiring practices showed that "the campus regularly hires tenure-track faculty members in all age ranges," Susan Westover, a lawyer for the university system, said Friday. She said the agreement was "a good business decision" for the university after the federal agency reduced its settlement demand.
Goddard, who retired in 2004, will get the same benefits as retired teachers with tenure as part of the settlement. The university system also agreed to train its managers on prevention of age discrimination in hiring.
Los Angeles Times
Environmentalists baffled by Obama's strategy
The administration is defending in court environmental measures that the president once vowed to roll back. Officials say they have a plan, but some fear backpedaling...Jim Tankersley
Reporting from Washington — As a candidate for president, Barack Obama wooed environmentalists with a promise to "support and defend" pristine national forest land from road building and other development that had been pushed by the Bush administration.
But five months into Obama's presidency, the new administration is actively opposing those protections on some 60 million acres of federal woodlands in a case being considered by the U.S. 9th Circuit Court of Appeals.
The roadless issue is one of several instances of the administration defending in court environmental policies that it once vowed to end.
Its position has been a disappointment to environmentalists who had hoped for decisive action in rolling back Bush-era policies.
Administration officials say that in some cases, they are defending the policies to prevent the courts from settling the issues -- a prospect that would restrict the government's ability to set the environmental agenda. They say the task of setting policy is better left to government agencies and legislators.
"We have set out on a very clear path toward improving our nation's environmental laws and policies so they balance America's need for a strong, sustainable economy and a healthy environment," said Christine Glunz, spokeswoman for the White House Council on Environmental Quality. "That means taking short- and sometimes longer-term action."
Still, the strategy has puzzled some environmentalists because the administration has used the courts to backpedal from Bush policies in some areas, including spotted owl protection, energy efficiency standards and hazardous-waste burning.
Most prominently, Environmental Protection Agency Administrator Lisa Jackson dropped an appeal to the Supreme Court in a case that struck down Bush-era limits on mercury pollution from coal power plants, which environmentalists called too lax.
Whatever the overall strategy, the result has been a series of cases in which Obama appears to be taking positions in court that run counter to his stated goals
The Interior Department this spring, for example, defended a Bush plan to lease western Colorado's picturesque Roan Plateau for oil and gas drilling.
When the Bush administration announced the plan in 2008, then- Sen. Ken Salazar of Colorado called it "the unsound product of an administration that has lost sight of the balance" between developing and conserving public lands.
But today, Interior Secretary Salazar is opposing a court challenge from environmentalists to block the leases.
A Interior spokesman declined to comment on the department's position, but other officials noted that negotiations are underway on a possible out-of-court settlement, and the government's hand in these negotiations may be stronger if it continues to fight in court.
Administration lawyers have also fought environmentalists in court over a particularly damaging type of coal mining known as mountaintop removal.
The administration successfully argued this year that the court should reject the environmentalists' suit, in part because officials were already developing new standards for mountaintop mining projects.
They announced the standards last week, though many environmentalists criticized them for doing too little to protect against water pollution and other effects of mountaintop mining.
In the road-building case, the governor and the attorney general of Oregon urged the federal government in a letter last week to drop its opposition to a court ruling that tossed out Bush's roadless policy and reinstated Clinton-era protections.
"Obviously, we'd love for the Obama administration to withdraw the appeal," Oregon Atty. Gen. John Kroger said in a telephone interview, "or otherwise help us to get the right rule."
Administration officials say they are committed to protecting roadless areas but have decided to pursue the goal through policy-making rather than in the courts. As part of that effort, the Agriculture Department last month announced a de facto one-year "time out" on development in most roadless areas.
In broad terms, administration officials say relying on court cases to deal with such issues entails greater delays and uncertainties.
"Our judgment is, we're going to have these court cases for a long time to come, and therefore, we'd have uncertainty for a long time to come," said Robert Bonnie, a senior advisor in the Agriculture Department, which is responsible for a large proportion of federal forest lands.
Some environmental groups warn, however, that there is a risk to this strategy of opposing an issue to ultimately support it.
If the courts agree with the government and allow the building of more roads in wilderness areas, the administration could face enormous difficulties in achieving its ultimate goal of keeping the roads out.
CNN Money
Searching for a bottom in the housing market
Sales look like they could rebound soon, but you can't say the same for prices...Janet Morrissey...6-19-09
NEW YORK (Fortune) -- Sales in the decimated housing market may finally be bottoming, but don't expect home prices to stop dropping before mid-2010 at the earliest, analysts and economists say.
Indeed, prices in the battered housing market could get a lot worse before they get better as an avalanche of specialized adjustable rate mortgages, known as option ARMs and Alt-A mortgages, are slated to reset over the next 18 to 24 months, and rising unemployment causes a surge in the number of prime mortgages going into default. All of this is expected to trigger another round of foreclosures and cause home prices to tumble at least another 20% before the market rebounds, according to market analysts and economists.
Market bulls believe home prices could bottom in the second half of 2010, but the bears warn it could be 2013 before they finally trough. And once prices do reach a low, it could be years before they significantly rebound.
"This is clearly the worst housing crisis since the Depression," says John Burns, president of John Burns Real Estate Consulting. Losses from the housing meltdown totaled $3.6 trillion at the end of 2008, and will likely approach $5 trillion by the time the crisis ends, predicts Lawrence Yun, chief economist with the National Association of Realtors.
Nevertheless, there have been signs in recent months that the industry may be stabilizing -- at least when it comes to sales. Consumer confidence in May shot up to its highest level in eight months, housing starts jumped more than 17% in May from the previous month, and most importantly, a recent report by the National Association of Realtors shows sales of existing homes climbed 2.9% in April.
"We are at or near bottom in terms of sales," says Yun. "We are seeing strong buying activity, particularly in those boom and bust markets, where prices have declined significantly. Buyers are coming in and fighting over properties -- there is multiple bidding in California and Florida."
"Sales are the first indicator" of a bottom, concurs Elliot Eisenberg, a senior economist with the National Association of Home Builders. "Even though there's more pain to come in certain markets and the prices may go down further and there's more defaults ahead," sales are going up, he says.
Bob Curran, managing director at Fitch Ratings, is a lot more cautious, noting that one month of gains doesn't make a trend -- existing home sales are still off 3.5% from a year ago. "You'd want to see a string of months -- ideally three months -- to say with confidence that a bottom has been reached," he says.
Buying off the bottom
Much of the recent sales increase is related to distressed homes, as a stampede of homebuyers snap up properties in foreclosure or through short sales on the cheap. "Foreclosure sales have picked up pretty dramatically in the past four months," says Alex Barron, a senior research analyst at Agency Trading Group Inc.
Yun estimates about 50% of current sales involve distressed properties, and he expects this trend to continue as foreclosures soar in the months ahead. About 2 million properties were in foreclosure in 2008, and he expects this number to climb to 2.5 million this year.
The foreclosure floodgates are expected to swing wider in the second half of the year as rates reset on option ARMs, and high unemployment triggers defaults on prime mortgages. Many of the option ARMS issued over the past few years were in markets that saw the biggest run-up in home prices and are now seeing the biggest corrections.
At the end of the first quarter, one out of eight U.S. households with a mortgage was either late on its monthly loan payment or in the foreclosure process, according to the Mortgage Bankers Association. Jay Brinkmann, chief economist with the MBA, says defaults among prime mortgages accounted for 50% of the increase in foreclosures in the last quarter.
The pending flood of foreclosures could mean buying opportunities for bargain hunters -- as long as they're prepared to hang onto the house for a number of years. "If you're a renter who just missed this cycle and didn't get in, right now is a great time to buy if your issue is the monthly mortgage payment," says Burns.
Although prices may fall further, low mortgage rates and President Obama's $8,000 first-time homebuyer tax credit make current prices attractive, especially in heavily-beaten down areas, such as California, Arizona, Nevada and California. "I think there are great deals out there," says UBS analyst David Goldberg. "But you have to have a long-term time horizon."
Some speculate that the pending surge in foreclosures and recent uptick in mortgage rates could push fence-sitting homebuyers, worried about rising rates, to jump into the market. Also, some home seekers may rush to score a bargain before the Obama Administration's $8,000 credit for first-time homebuyers expires at year end. The tax credit has already helped to boost sales, especially in states, such as California, which are offering their own tax credit in addition to the federal one, says Curran.
Sales vs. prices
While sales may be increasing, home prices are a different story, in part because of rising interest rates and surging unemployment. The average rate on a 30-year fixed rate mortgage climbed to 5.59% last week -- its highest since Dec. 11 -- but retreated slightly to 5.38% this week, according to Freddie Mac. The nation's unemployment rate spiked to its loftiest level in more than a quarter of a century in May at 9.4%. Burns is predicting the jobless rate will hit 12% by 2011.
National home prices plunged 19.1% in the first quarter, according to the Standard & Poor's/Case-Shiller National Home Price index -- the biggest quarterly decline in the index's 21-year history. Home prices are off 32% on average from their peak in mid-2006. Average prices have not been this low since the fourth quarter of 2002, the Case-Shiller report says.
"We're about two-thirds of the way through the pricing correction on a percentage basis," says Joshua Shapiro, chief U.S. economist with MFR Inc., an economic consulting and analysis firm. He expects prices to slide at least another 20% over the next 18 months.
"There's still pain to come in parts of Florida, California and Michigan, where there's still a tremendous amount of oversupply," says Eisenberg. "Prices will have to come down further and it will take a while to burn off the excess inventory that's floating around there."
Brinkmann expects to see prices start to rebound in 2011. While a bottom may be reached within the next year, it will be many months, and possibly years, before prices significantly come back. "I think that once prices bottom out, they're going to stay flat for several years," says Burns.
40 banks failures in 2009
Banks in Georgia, North Carolina and Kansas are closed by regulators as the financial crisis takes a toll on local banks across the nation...Ben Rooney
NEW YORK (CNNMoney.com) -- Regional banks in North Carolina, Kansas and Georgia were closed by state regulators Friday, bringing the total number of failed banks this year to 40, the Federal Deposit Insurance Corporation said.
The 24 branches of Wilmington, N.C.-based Cooperative Bank will reopen Monday as branches of First Bank, which is based in Troy, N.C.
Cooperative bank had assets of $970 million and total deposits of approximately $774 million. First Bank will assume all of the failed bank's deposits and agreed to purchase $942 million of its assets.
In Kansas, First National Bank of Anthony, which operated 6 branches - including two under the name of First National Bank of Johnson County - will be taken over by Bank of Kansas.
Bank of Kansas, which is based in South Hutchinson, acquired all of First National Bank of Anthony's $156.9 million deposits. It also purchased the bulk of the failed bank's $156.9 million worth of assets.
Meanwhile, the five branches of Southern Community Bank, which is based in Fayetteville Ga., will become part of United Community Bank of Blairsville. It was the seventh bank to fail in Georgia this year.
United Community Bank paid a premium of 1% to acquire all of the of the $307 million deposits held in the failed bank. It also agreed to purchase approximately $364 million of assets.
The assets not purchased by the acquiring banks will be retained by the FDIC and sold later.
The FDIC said it entered into a "loss-share transaction" with the acquiring banks for a portion of the assets belonging to the failed banks. The arrangement is designed to maximize returns on the assets covered by keeping them in the private sector, the FDIC said.
"Under the loss sharing agreement the FDIC will reimburse United Community Bank for losses on Southern Community Bank's loans and foreclosed properties," said Jimmy Tallent, president and chief executive of United Community Banks, in a statement.
The total cost of Friday's bank failures to the FDIC is $203 million, bringing the total for this year to $11.53 billion. That compares with $17.6 billion in all of 2008.
So far this year, the number of bank failures has already exceeded last year's total of 25, with an average of nearly 7 failures per month.
The FDIC expects roughly $70 billion in losses due to the failures of insured institutions over the next 5 years.
The FDIC, which is funded primarily by fees paid by banks, insures individual deposits up to $250,000. The amount was increased from $100,000 late last year in response to concerns about the stability of the nation's banks.
The Obama Administration unveiled a highly-anticipated new plan to overhaul how banks and other firms are regulated in the hope of preventing another financial collapse.
Under the new proposal, the FDIC and other regulators would have more power to take over and unwind troubled financial companies beyond banks.
The plan would also, among other things, expand the powers of the Federal Reserve and create a new agency dedicated to consumer protection