Tag Archives: California

California – The Land Where They Hate Poor People

Job Line

It’s simple econ 101:

Put a ceiling on the price of a commodity, you get less supply of the commodity.

Put a floor on the price of the commodity, you get less demand for the commodity.

Rent control – a ceiling – results in fewer rental units.

Minimum wage – a floor – results in reduced demand for workers.

Politicians ignore this:

In December, The Federal Reserve Bank of San Francisco released a paper examining the current research on the impact of minimum wage increases. It stressed that the “most important” policy consideration was whether there would be “fewer jobs for the least skilled workers” because “they are the ones the minimum wage is intended to help.” It found that the “most credible” research showed minimum wage increases resulting in “job losses” for these workers and “with possibly larger adverse effects than earlier research suggested.”

Or worse, they acknowledge AND ignore:

In January of this year, Gov. Jerry Brown agreed, stating that raising “the minimum wage too much” would put “a lot of poor people out of work.” His conclusion: “There won’t be a lot of jobs.”

I’ll include the math, though it likely won’t help the average minimum wage earner supporting a family [they don’t speak math]:

Take a typical quick service restaurant employing 25 people with annual sales of $1.25 million. The National Restaurant Association’s annual Operations Report states that the average pre-tax profit margin for such a restaurant is 6.3 percent, or $78,750. While more experienced employees typically contribute more to a business’s bottom line, for this example let’s assume that each of these 25 employees contributed an equal amount to the business’s success of $3,150.

According to the Bureau of Labor Statistics, restaurant sector employees work an average of 26 hours per week. Increasing California’s minimum wage from $10 an hour to $15 for such an employee results in an annual cost increase of $6,760, or more than double what the employee contributed to the business’ success – resulting in a loss of $3,610 per employee per year.

I recently went to see “Captain America: Civil War” and had the pleasure of waiting in line for concessions.  Agonizing.  Lines forever, employees that couldn’t remember “a beer, medium buttered popcorn, duds and a water” and the idea of making change was foreign.  Not a whiff of customer service much less mastery of task at hand.

Fifteen an hour?  Hardly worth the job.

Water Crisis In California


Recent rains in California may not really be helping the dry conditions very much – in some cases the flooding may be causing more harm than good.

Anyway, reading some of the coverage, I’m struck by:

The harm caused by the severe drought in California [“California’s lasting drought threatens family farmers,” news, Feb. 10] has been exacerbated by bad policy. For decades, the federal government has heavily subsidized water in the state, particularly for crop irrigation. Artificially low water prices have encouraged overconsumption and planting in dry areas where farming is inefficient and environmentally unsound.

Federal farm subsidies have made these problems worse by boosting demand for irrigation water and encouraging farmers to bring marginal lands into production.

I know that I have a tendency to over simplify complex issues, but … It’s really hard to imagine that making water cheap will lead to over demand of water.

For example, what if this:

Ending farm subsidies while moving toward market pricing of water would help solve recurring water shortages in California and elsewhere in the West.

Would lead to this:

The drought, combined with continued protections for endangered species, has forced farmers to find alternatives. Most farmers have already switched to drip irrigation, which is much more efficient than the flood irrigation technique used when water was plentiful.

More expensive water, forcing farmers to conserve water, wouldn’t solve a drought, to be sure.  But it certainly would allow the existing water to stretch further than it otherwise would.

Mandatory Union Membership


Teacher’s Unions

I’ve never disputed the right of members of a group to gather in unity and plead their case.  For example, if I and several of my peers in the office were to band together and make the case that we needed more money – we have every right to do that.

As long as my employer can fire me if I stop working to protest his decision not to pay me more.

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When We Said We Don’t Trust The Government

Big Brother

This is what we mean:

The California health exchange has admitted it has been divulging contact information for tens of thousands of consumers to insurance agents without their permission or knowledge in an effort to hit deadlines for coverage.

Covered California said it was handing out consumer information as part of a pilot program to help people enroll ahead of a Dec. 23 deadline to have health insurance in place by the new year, according to the Los Angeles Times. The consumers in question had gone online to research insurance options, but didn’t ask to be contacted.

Social Security numbers, income and other information were not provided to the agents, but names, addresses, phone numbers and email addresses were made available, exchange officials said.

The names provided by Covered California include people who started an insurance application on the website but didn’t complete the process.

State officials say they do not know exactly how many people are affected by the information sharing.

Whoever is in charge, your team or mine, they are gonna think that what they are doing is in the best interest of the people.

And it just gets worse from there.

The Republican Conundrum On Social Security – California

Savings Account

As the debate raged over Obamacare, I warned that republicans were painting themselves into a corner.  It has been correctly pointed out that the idea of the individual mandate was an idea first introduced by the right.  After all, by requiring everyone to purchase health insurance, the costs would be spread more equitably – those more likely to require care would pay more, those less so would be less.

While that debate was raging, republicans were pushing the idea of reforming Social Security.  The goal was to institute personal retirement accounts.  In other words, the government would still take 6% of your money, probably 6% of your employers money, and give you the option of investing it as you so desired.

Forced savings.

I didn’t see the difference between forcing someone to purchase health insurance and forcing them to  purchase savings accounts.

To be sure, both are good ideas – VERY good ideas.  But having the government force it on us?  No bueno.

Now see this:

California lawmakers are pushing a controversial, first-in-the-nation plan that would require private-sector employers to remove 3 percent from every worker’s paycheck. The money would go into a new state fund with a guarantee that all withheld funds plus investment gains will be available for distribution at retirement age.

The idea behind the Secure Choice Retirement Savings Program, which got preliminary approval, is for it to be a state-run supplement to Social Security, but only for people who don’t have traditional workplace retirement plans. For an estimated 6 million working Californians, the benefit of a pension or 401(k) is out of reach — so state lawmakers are trying to implement the new mandatory retirement fund for private sector workers.


Now, to be fair, there is NO WAY that California doesn’t spend the money before the benefits come due causing a dramatic budget deficit.  Beyond that, however, there is little difference between this plan and the one republicans called for in social security reform.

Maybe the good news is that by being continually to the right of the crazy, the crazy will feel the need to move right.

Crony Capitalism


Sen. Diane Feinstein’s husband Richard Blum won a construction contract for California’s high-speed rail project, reports the California Political Review.

 Author Laer Pearce says Perini-Zachary-Parsons, a construction group partially owned by Blum’s investment firm, Blum Capital, and their investors, bagged the nearly billion dollar contract:

Pays to be connected.

How To Reduce Healthcare Costs: Increase Supply Of Healthcare

Health Care

Last week I posted on the fact that the government released data describing the prices hospitals charged the government for services.  Armed with this knowledge, perhaps we can begin to see some comparison shopping resulting in lower prices.

I am glad to see the administration embracing some free and open market concepts.

And we have another example, this time in California:

As states gear up for the Affordable Care Act, they’re trying to figure out if there will be enough providers of health care to meet demand from the newly insured.

California is one of 15 states expected to consider legislation this year that would give advanced practice nurses more authority to care for patients without a doctor’s supervision.

If you want to bring prices down, you need to reduce demand, something that Obamacare does NOT do, or you need to increase supply, something governments have been unwilling to do.

As an example, I was discussing this with my mother-in-law some 2 years ago.  I mentioned that we need to increase the amount of services that can be handled by lower educated/certified professionals, thus increasing the number of people who can perform that service.

“For example” I said, “if I were to break my finger today, there is no need for a medical doctor to set that finger; a nurse could do it just fine.”

“Not me!  Why would I want to see a nurse when I can see an orthopedic specialist today?”


Yes, Indeed

Sometimes I get worried or concerned over the state of our voters.  The knowledge, or lack of it, among our citizenry is stunning.

But then you get teh krazy from the people who craft legislation:

What do you say to that?

Obamacare and Cost Savings

health care

Remember when proponents of Obamacare told us that government run health care models were better than private ones because they wouldn’t have to spend money on things like profit?

Or marketing?

So far California has received $910 million in federal grants to launch its new health insurance exchange under the Affordable Care Act (“Obamacare”).

The California exchange, “Covered California,” has so far awarded a $183 million contract to Accenture to build the website, enrollment, and eligibility system and another $174 million to operate the exchange for four years.

The state will also spend $250 million on a two-year marketing campaign.

Two hundred fifty million on marketing.

Not to mention the $143 million extra to start the thing:

Privately funded Esurance began its multi-product national web business in 1998 with an initial $5.5 million round of venture fund investment in 1999 and a second round of $34 million a few months later.

I’m not sure that we’ll ever be able to fix this thing we call Obamacare.  But it sure is gonna cost us if we don’t.

Unions: Legalized Racketeering


I have no issue whatsoever with the McWorker, along side his McFriend, walking into the McBoss’s office and asking for a raise.  And if denied, threatening that the two of them, in hopes they are valuable, will walk off the job and go to work somewhere else.

In this case, the McBoss can call the McBluff and say, “No raise for you!” and hope the McWorkers get back to McWork.  Or, perhaps the McBoss, seeing the value of the McWorkers, will relent and approve the raise and everyone is happy.

In other words, uniting in the pursuit of self interests is fine.  As long as the rules are fair for everyone.  And when it comes to unions, the rules are most certainly not fair:

“The most glaring examples of union favoritism under state laws,” notes a 2012 U.S. Chamber of Commerce report, “tend to occur in criminal statutes and allow individuals who engage in truly objectionable behavior to avoid prosecution solely because they are participating in some form of labor activity.”

Pennsylvania unions now enjoy a loophole that the state’s anti-stalking law “shall not apply to conduct by a party to a labor dispute.” In Illinois, anti-stalking laws exempt “any controversy concerning wages, salaries, hours, working conditions or benefits … the making of collective bargaining agreements.”

These exemptions prove that organizing tactics used by unions can have something in common with those of stalkers – and can perhaps inflict similar emotional distress.

While a number of states have exemptions that have allowed union members to intimidate and harass, California is by far the worst actor. As in other states, it is a crime in California to interfere with a lawful business through physical obstruction or intimidation of workers or customers.

Yet California has exempted unions from this law. The negative effects were clear in 2008, when United Food and Commercial Workers Union members picketed a new Ralph’s grocery store in Fresno. They went beyond traditional picketing, harassing customers and instigating confrontations with employees on store property. When store workers finally called the police, authorities refused to come and put a stop to the union’s disruptive behavior.

The police refused to even dispatch to the site.

But it gets even worse:

California also has a host of exemptions that allow union members to violate the property rights of private citizens. The 2008 Researcher Protection Act makes entering the residences of academic researchers to interfere with their work a crime. Sounds reasonable. Yet this doesn’t apply to union members. They can invade a professor’s home in California and it’s not a crime – so long as the invader is “engaged in labor union activities.”

And even worser:

Labor bosses have even deemed it necessary to get legislators to grant unions exemptions from laws against sabotage. Wisconsin’s state law against sabotage exempts unions, so as to not curtail their organizing activities. The fact that anti-sabotage laws might be construed as an impediment to union organizing says more about union organizing efforts than anything else.

Yet, in 2011, union members were alleged to have sabotaged equipment belonging to supporters of Governor Scott Walker’s labor reforms. In New York and New Jersey, during a labor dispute between Verizon and the Communications Workers of America, the telephone company contacted the FBI to investigate allegations of sabotage. The company reported equipment being stolen, fiber-optic lines cut and an office heating system tampered with.

During a union organizing effort in Ohio, the owner of one non-union electrical services company had his tires slashed and rocks thrown at his windows. One of his employees was assaulted. The owner was himself shot in the arm while confronting a person who was vandalizing his car on his property. Other owners of non-union shops experienced similar harassment and intimidation. When the Associated Builders and Contractors called on unions to halt such odious behavior, the unions responded that their actions were perfectly legal.

We all should have the right to bargain for our services and our compensation.  We should be able to grieve our differences when they occur.  But we should all be safe from threats, violence, theft and assault.