Saturday, May 23, 2009

The L. A. Times Deigns to Differ . . .

The Establishment is not taking its rebuke by California's voters lying down. The L. A. Times "reports" today in California budget crisis could bring lasting economic harm that:

. . . eliminating as much as $24 billion from the proposed $95.5-billion general-fund portion of the 2009-10 state budget would further corrode an economy already creaking under the weight of a national recession.

The above sentence was presented as fact. It was not a quote expressing some expert's opinion.
Yet it is in fact an opinion. This article, printed in the business section, is an editorial in disguise. More disguised editorializing masquerading as reportage:

Distressed car dealers could see sales to state agencies shrink, printing shops may lose business as courts and other government operations shorten their workweek, and office-equipment suppliers would lose sales as cash-strapped agencies make do with aging copiers.

And cutting as many as 5,000 state jobs, and perhaps thousands more as budget reductions cascade down to schools and local governments, would hit especially hard in a state that already has the fifth-highest unemployment rate in the nation.

Sorry about the loss of state jobs. (Where are the regrets in the piece about the loss of zillions of private sector jobs?) It's just that the employers of these employees, namely the taxpayers of California (and soon the taxpayers of all 50 states?) can't afford these employees. Are you, gentle reader, wiping the tears from your eyes because state agencies must make do with used copy machines?

(Why is anybody copying much of anything anymore, anyway?)

More scare tactics reported as fact, not opinion:

Promising students would go to other states, taking their future skills, earnings and, possibly, Nobel Prizes elsewhere.

Talk about purple prose. All because California voters rejected a set of gimmicky propositions, such as gambling on future lottery revenues to pay for current spending. Gimme a break! Back to the article:

Businesses have long complained about big-spending government in California. But with state and local spending accounting for about one-fifth of the state's gross domestic product, California is in line with some other heavily populated, expensive-to-manage states, such as New York and Florida.

The way competition between states works is that better-run states, as with better-run companies, gain market share. Yours truly is a Florida resident. While I love California climate and physical attributes as well as many of the attitudes of Californians, from a "business of government" standpoint, there is no comparison between the states. Despite suffering just as bad a real estate bust as California, the state of Florida maintains a triple-A credit rating. Florida was one of a handful of states, and the only "housing bust" state, to have gained jobs last month. Not to get overly political, but Florida is in its 3rd straight term with a Republican governor and has for some years had an all-Republican legislature. Unlike D.C. Republicans, these guys cannot print money, and they actually have acted like the prior image Republicans had. They kept government small and did not get carried away with grandiose projects as did the Gubernator.

So much for the whining and for the implication by the Times that California is really well-run, it's just that the voters are too cheap or stupid to vote for the funding the state needs.

Back to the L. A. Times article, which ends by quoting someone the reader is supposed to assume is impartial:

"Government is supposed to be a stabilizing influence, and instead they're becoming part of the problem," said Christopher Thornberg of Beacon Economics. "They should be spending when everyone else is cutting back. They should be buying cars when no one else is buying cars."

Here is information taken directly from the Beacon Economics website:


Beacon Economics contributes to the understanding of economic development issues in the state of California and local regional economies through a variety of outlets. The completion of contract research targeted to economic development issues is an important part of this work.

Current clients include:

The City of Oakland
The Port of Oakland
County of Los Angeles Workforce Investment Board
The Bay Area Council Economic Institute
Paulson & Company, Inc.
The Los Angeles Area Chamber of Commerce
Resolve Capital
California Forward
Clear Capital

And this is to whom Chris Thornberg has loyalty:

In December 2007, he was appointed to California State Controller John Chiang’s Council of Economic Advisors – the body that advises the state’s chief fiscal officer about critical economic issues facing California.

In other words, the Times forgot to tell you that it ended this sorry piece of "journalism" by quoting a highly interested party.

If this is at all typical of what goes on at the Times, it's time for it to fail.

On the other hand, I am more bullish on California than I have been in a long time. It reminds me of New York City in 1975: nowhere to go but up-or so we can hope.

Copyright (C) Long Lake LLC 2009

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