Making the news recently is California Senate Bill 131, which seeks to open up a one year "window" in 2014 allowing anyone over the age of 26 to sue the Catholic Church for damages stemming from clergy sex abuse. Suits would be allowed even if the alleged activity took place many decades ago and even if the accused abuser is long ago deceased, thus making it nearly impossible for the Church to effectively defend itself in court.
Sound familiar? It should. California enacted the exact same measure a decade ago, which led to the Catholic Church in California paying out $1.2 billion in settlements because of the "window" year of 2003 determined by the state legislature.
Indeed, it was implicit a decade ago that California's temporary lifting of the statute of limitations was a one-time event that would give people who were abused decades ago a unique opportunity to come forward and collect damages. Yet cash-hungry contingency lawyers are at it again for a second round. ...
After the record $660 million settlement in Los Angeles in 2007 (which was a direct result of the 2003 window), the jubilation among contingency lawyers was to the point that their celebration "looked like a frat party" with some lawyers "even chest bumping," according to one victim who witnessed the surreal scene.
Indeed, the notorious Church-suing lawyer Jeff Anderson, who funnels tens of thousands of dollars annually to the anti-Catholic group SNAP, has already set up a web site (along with Facebook and Twitter accounts) as a way to attract more clients in the event that SB 131 is passed.
Yet mainstream journalists like Powers go to great lengths to portray the Church's efforts opposing the outrageous bill as somehow nefarious and sinister. Meanwhile, they ignore the efforts of contingency lawyers like Anderson, who stand to bank millions if SB 131 is enacted.
It's a very bad bill, as I explained at: http://www.professorbainbridge.com/professorbainbridgecom/2013/06/an-open-letter-to-assemblyman-adrin-nazarian.html
If like me, you're disgruntled about Janet Napolitano's appointment as the new President of the University of California system (see here and here), what is particularly galling is that there was an obvious alternative. I speak, of course, of former UCLA law school dean and current University of Chicago law dean Michael Schill. In addition to having two highly successful deanships under his belt, Mike has been a finalist in at least one major University chancellor search. When he was in the running to be head of the University of Wisconsin-Madison, the local paper reported that "UW-Madison chancellor finalist Michael Schill [is] known as fast-rising higher ed administrator":
Schill, who was law school dean at the University of California, Los Angeles, for five years before moving to Chicago, was known as the "energizer dean" at UCLA and is considered a fast-rising university administrator.
"Everybody understands he's going to be head of a great university someday," said Douglas Baird, who teaches at the University of Chicago law school and helped choose Schill to be dean. ...
Schill has a reputation as a successful fund raiser. As law school dean at UCLA, he helped bring in $65 million in three years toward a $100 million endowment campaign before being lured to Chicago.
And a Wisconsin faculty blogger opined that there were several reasons to support Schill, including:
2. Schill genuinely likes to talk, and seems to really enjoy listening too. Body language conveys a lot, and Schill's speaks of openness, assertiveness and sincerity. After more than hour of close observation from only a dozen feet away, I can assess this quite well. His reception line went very slowly because he refused to brush anyone off or move them along, despite the efforts of his hosts. He made excellent eye contact, leaned forward when speaking, was evidently comfortable with physical contact (I witnessed several hugs, real handshakes, and he even challenged me to a race), doesn't wear his ego on his sleeve, and displayed a range of emotions. Let's just say, I've seen chancellors smile before but their eyes usually wandered over my shoulder. Schill has a background in activism, and this talent displays it. Of course, I suspect he is shrewd as well-- he knows that people like to be listened to, and he does so to maximum advantage.
3. Voicing strong concern for affordability, Schill told me that we must "keep tuition low, and aid high," restraining ourselves to increases solely to keep up with inflation. He did not speak of competitive pricing, and or peer comparisons. Now, perhaps this is just because he's speaking to me, and he's read the blog. But I checked on this, and what colleagues of his told me is that "He's too smart to think pricing high is smart, and far too smart to believe in 'disruptive' innovation." I asked him for his thoughts on test-optional admissions and he was able to discuss that literature with me, bringing up his teaching on higher education at UCLA in a manner that was quite impressive. In his view, the Supreme Court will rule against Texas in a narrowly tailored decision.
4. Schill is a candidate for chancellor with a very serious and impressive set of publications and books that merit tenure (so is Blank, by the way). He's written on low-income housing, immigration and race, and co-authored with smart people I like and trust, such as Amy Ellen Schwartz of NYU and Colin Chellman of CUNY. I especially liked what I read in Housing and Community Development in New York City: Facing the Future regarding the reasons why efforts to improve low-income housing have failed; he attends to politics and structure in insightful ways. ...
But overall, I am supportive of Michael Schill's candidacy for chancellor. He's bright, calm, thoughtful, and exceedingly well-liked by those who work with him. I'd enjoy getting to know him better.
Indeed. When he was our dean, Mike was a tireless fundraiser and superb administrator. More important, he consistently demonstrated his fealty to academic values such as academic freedom, high quality scholarship, and intellectual diversity. Those are, of course, precisely the values that Napolitano's tenure at DHS convinces me she lacks ... and probably that she doesn't even understand.
We could have had a 24 carat gold choice, but the Regents opted for fools gold.
I see that I'm not the only one who is displeased by Janet Napolitano's appointment as the new President of the University of California system. (See my earlier post for my take.) Interestingly, the complaints are coming from both right and left, as the Washington Times reports:
“University of California students can look forward to the same authoritarian management style Secretary Napolitano brought to the Department of Homeland Security, hardly a bastion of free speech and open government,” said Rep. Doug LaMalfa, a California Republican. “While I am pleased to see her leave Homeland Security, Napolitano’s views are entirely incompatible with the UC system’s history of civil liberties and the decision to appoint her is perplexing.”
Those views were echoed by immigrant-rights advocates who predicted Ms. Napolitano’s move to run the school system, expected in September, will be “met with protests.” “UC should take the opportunity to thoroughly examine her record in Arizona and at DHS to see if it reflects the university’s values before they confirm her to this important post,” said Chris Newman, legal director for the Los Angeles-based National Day Laborer Organizing Network.
And a scathing editorial at IBD, entitled Is Janet Napolitano Best The UC Regents Can Do?, opines that:
Instead of appointing a world class scientist, leading medical expert, respected academic or distinguished public servant — such as the truly qualified Condoleezza Rice — to lead the great University of California system, the UC regents opted for a political hack of no academic merit whatsoever. Their pick, Janet Napolitano, has presided over one disaster after another at the Department of Homeland Security. ...
There's every reason to think Napolitano would bring what was once considered the world's finest public university system to a new low. Her record at Homeland Security was a series of failures, stemming from a slavish devotion to her boss in the White House and an adherence to political correctness. ...
And just to underline what she really stood for — Napolitano presided over the Transportation Security Administration, which today is one of the worst faces of Big Government, harassing terrified toddlers on their way to Disneyland and old war heroes in wheelchairs holding colostomy bags. Heckuva job, Janet.
Someone with this record at the University of California can lead that once-great institution only downhill.
I couldn't agree more.
The LAT reports:
Janet Napolitano, the U.S. secretary of Homeland Security and former governor of Arizona, is being named as the next president of the University of California system, in an unusual choice that brings a national-level politician to a position usually held by an academic, The Times has learned. Her appointment also means the 10-campus system will be headed by a woman for the first time in its 145-year history.
Napolitano has no experience in higher education administration. She is just a partisan hack. What an absolutely appalling choice by our Regents.
The systemwide leader of the University of California’s faculty said Friday that he hoped that the announced move of prominent neuroscience researchers from UCLA to USC reminds government leaders in Sacramento of the importance of research at UC. Robert Powell, chairman of the system Academic Senate, said that much of recent proposed legislation and rules from state lawmakers and the governor stress undergraduate graduation rates, online education and upping teaching loads without recognizing UC’s strong international role in scientific and academic research.
While it is important to improve undergraduate education and make UC more efficient, he said, he wants to ensure that change does not come at the expense of graduate school training and the pursuit of new inventions and medical discoveries...
Full story from the LA Times at http://www.latimes.com/local/lanow/la-me-ln-uc-faculty-20130510,0,7070977.story
The Golden State isn't so golden when it comes to taxes. It's the second worst in individual income taxes and sixth worst in corporate taxes. It earns the 40th spot for sales taxes. In 2005, California-based Intel even decided to build a multi-billion dollar chip-making facility in Arizona due to its favorable corporate income tax system. To make matters worse, in November, California voters passed Proposition 30, preventing planned cuts to education spending by raising the state sales tax from 7.25 percent to 7.5 percent for four years and adding four new income tax brackets to the existing seven. A new top income tax rate of 13.3 percent (up from the current 10.3 percent) is effective for seven years, but retroactive to January 1, 2012.
If Gerard Depardieu lived in California, he'd be headed for the border here too:
Debate over Proposition 30, the November ballot initiative to raise sales taxes on everyone and income taxes on “the wealthy,” revolved around whether it would solve a problem or lead to lower revenues. ...
Alas, the consequences are now clear of the income-tax hike that the proposition actually made retroactive to the beginning of last year (via Examiner.com):
After Proposition 30 passed on November 6, 2012, the State of California experienced a decline in the total state revenue for the month of November. California State Controller John Chiang reported that the total revenue for the month of November declined by $806.8 million, which is 10.8 percent below budget.
The State of California experienced a decline in its revenue as several of the high income earners have relocated to other states, and have also relocated their businesses out of state. This led to a decline in corporate and income tax revenues by more than $1 billion.
Even more predictably, California’s legislature—which the voters in their infinite ignorance turned into a Democrat supermajority, thus enabling unlimited future tax increases sans ballot initiatives—spent the money before it came in.
As a result of the decline in tax revenues collected, and the increase in spending, California’s deficit increased to $27 billion for the first five months of this fiscal year.
Don’t worry, though. The Democrats will solve the problem by raising taxes.
The California Republican Party is functionally dead. And how is California doing, now that liberals have successfully terminated the state's remaining conservatives?
For starters, it's still in debt. Despite Brown's historic tax hike, the California Legislative Analyst's Office announced this week that the state still faces a $2 billion budget deficit just for the next fiscal year. California's liberal electorate has already racked up an additional $370 billion in state and local debt over that last decade. That is more than 20 percent of the state's gross domestic product.
According to the California State Budget Crisis Task Force, that comes to more than $10,000 in debt for every Californian. And because the state's credit rating is so low, California taxpayers must fork over about $2 for every new dollar borrowed. In 2012 alone, the state budget included more than $7.5 billion in debt service -- more than most states' budgets.
Don't think for a second that California's chronic deficits are caused by low taxes. Even before last Tuesday's tax hikes, California had the most progressive income tax system in the nation, with seven brackets, and the second-highest top marginal rate. Now it has the nation's highest top marginal rate and the nation's highest sales tax. And the budget still isn't balanced.
The real cause for California's fiscal crisis is simple: They spend too much money. Between 1996 and 2012, the state's population grew by just 15 percent, but spending more than doubled, from $45.4 billion to $92.5 billion (in 2005 constant dollars).
What are Californians getting for all this government spending? According to a new census report released Friday, almost one-quarter, 23.5 percent, of all Californians are in poverty. One-third of all the nation's welfare recipients live in the state, despite the fact that California has only one-eighth of the country's population. That's four times as many as the next-highest welfare population, which is New York. Meanwhile, California eighth-graders finished ahead of only Mississippi and District of Columbia students on reading and math test scores in 2011.
Middle-class families that want actual jobs, not welfare, are fleeing California in droves. According to IRS data compiled by the Manhattan Institute, since 2000, almost 2 million Americans have left California for other states. Their most popular destination: Texas.
If I were a business man instead of a law professer, Texas would look pretty good to me too. But I keep hoping against my better judgment that the California Democrat establishment will come to its senses before the state turns into Greece.
Joel Kotkin notes that President Obama won California by "20 points, 10 times his margin elsewhere — a massive bear hug from Californians." And that Election night "was a great night for Democrats, who now have a two-thirds majority in the state legislature and can spend a massive tax increase that targets families making over $250,000 a year." He goes on to warn that:
California will serve as the prime testing ground for President Obama’s form of post-economic liberalism. Every dream program that the Administration embraces — cap and trade, massive taxes on the rich, high-speed rail — is either in place or on the drawing boards. In Sacramento, blue staters don’t even have to worry about over-reach because the Republicans here have dried into a withered husk. They have about as much influence on what happens here as our family’s dog Roxy, and she’s much cuter.
California now stands as blue America’s end point, but contrary to the media celebration, it presents not such a pretty picture. Even amidst our decennial tech bubble, the state’s unemployment is among the highest in the country, and is trending down very slowly. Over the past decade, California has slowed as a source of fast-growth companies, as a recent Kauffman Foundation study shows, while other states such as Washington, Virginia, Texas and Utah have gained ground.
Old-style liberals might point out that California’s progressive policies have not done much for the working- or middle-class folks often trumpeted as its beneficiaries. Instead income inequality has grown far more than the national average. True, the fortunate sliver of dot-com geniuses make billions, but the ranks of the poor have swollen to the point that the state, with 12% of the nation’s population, account for one third of its welfare cases. Large parts of the state, notably in the interior regions, suffer unemployment in the 15% range and higher.
The question he poses next is whether California, once again, is a leading indicator of where the country as a whole is heading.
As a resident of Los Angeles, I'm getting really tired of President Obamas regular trips to our fair city to tap the Hollywod ATM. Every time he comes out here, it hopelessly snarls our commutes. And he's at it again:
President Obama's star-studded fundraising concert Sunday at Nokia Theater -- with the likes of Jon Bon Jovi, Jennifer Hudson, Stevie Wonder and Katy Perry -- is expected to snarl traffic in the area.
The president is expected to arrive Sunday to attend several functions, Los Angeles police said in a statement. Details were not available, but police said his motorcade would move through the Westside on Sunday afternoon, with temporary street closures.
In late afternoon, the motorcade will travel to downtown Los Angeles for more events, with potential brief closures along the 10 Freeway and streets around L.A. Live and Nokia Theatre, police said.
Early Monday there could be more street closures in the Beverly Hills and Westside areas as the president departs Southern California.
So going to church on Sunday and work on Monday are shaping up to be real fun. Coming on top of Carmageddon I and II, another Obama visit adds both insult and injury.
The WSJ today reported that:
A handful of local officials in California who say the housing bust is a public blight on their cities may invoke their eminent-domain powers to restructure mortgages as a way to help some borrowers who owe more than their homes are worth. ...
... instead of tearing down property, California's San Bernardino County and two of its largest cities, Ontario and Fontana, want to put eminent domain to a highly unorthodox use to keep people in their homes.
The municipalities, about 45 minutes east of Los Angeles, would acquire underwater mortgages from investors and cut the loan principal to match the current property value. Then, they would resell the reduced mortgages to new investors.
The scheme "is the brainchild of San Francisco-based venture-capital firm Mortgage Resolution Partners, which has hired investment banks Evercore Partners and Westwood Capital to raise funds from private investors." The key plotters are three fellows named Graham Williams and Steven Gluckstern of MRP and Evercore's founder and co-chairman, Roger Altman.
Here's how the troika will make their profits:
For a home with an existing $300,000 mortgage that now has a market value of $150,000, Mortgage Resolution Partners might argue the loan is worth only $120,000. If a judge agreed, the program's private financiers would fund the city's seizure of the loan, paying the current loan investors that reduced amount. Then, they could offer to help the homeowner refinance into a new $145,000 30-year mortgage backed by the Federal Housing Administration, which has a program allowing borrowers to have as little as 2.25% in equity. That would leave $25,000 in profit, minus the origination costs, to be divided between the city, Mortgage Resolution Partners and its investors.
As an unrepentant free market capitalist, I generally have no objection to people making a profit. But I very much object to these people making this profit in this way.
Williams, Gluckstern, and Altman are not going to be making a profit by the sweat of their brow. Instead, they will do so by persuading desperate city governments to grossly abuse their eminent domain powers. As such, it is a classic example of how big government faciltates private rent seeking:
Rent seeking is a way of transferring previously-existing wealth to oneself by something other than voluntary trade. It typically involves a transfer of wealth, not a creation of wealth like that which occurs in a market with voluntary trade driven by utility and profit maximization. I will list a couple of examples of rent-seeking for illustration. Stealing is perhaps the “purest” example of rent-seeking. A thief takes what others earned without earning it. ... A mugger might hit you over the head and take your wallet, but when government takes wealth from one sector and transfers to another, there is the implied force that comes from the government having enforcement agents (police, prosecutors) to ensure that its wishes are carried out.
... Government has the power to pass laws, to write regulations, to collect taxes and to enforce the laws, regulations and taxes. Because members of government have lots of power, they have lots of favors to dole out, and it is the competition for these favors that forms the basis of rent-seeking. Firms are competing with each other, but instead of competing for customers by offering better products or better service at lower prices, they are competing for government favors. Instead of employing salesmen or engineers or factory workers, they are employing lawyers and lobbyists.
It's thus not surprising that the people behind this effort are wealthy Democrats. Back to the WSJ: "Evercore's founder and co-chairman, Roger Altman, served in the Clinton administration and is raising funds for President Barack Obama's re-election effort." Rich Democrats like Altman love big government precisely because they can game the system to transfer wealth to themselves, just as he plans to do here.
What's particularly frustrating about this example of the phenomenon is that it strikes so close to home. There will dountless be costs to California tax payers. There will inevitably be litigation (even though Messrs Williams, Gluckstern, and Altman reportedly are deliberately targeting the weakest banks with the shallowest pockets for legal fights). Banks will be less willing to lend to Californians, which will drive down property values. As such, this is a wealth transfer from people like yours truly who were fiscally prudent, took on only as biug a mortgage as we could afford, and didn't run up huge lines of credit to people who were fiscally imprudent, who took on jumbo mortgages to buy far bigger houses than they needed, who ran up huge lines of credit to finance spending, and stupidly thought the housing bubble would last forever. Now that the music's stopped, they're going to get relief--with a big chunk being siphoned off for Messrs Williams, Gluckstern, and Altman--at our expense.
The whole thing reminds me of Rick Santelli's famous tea party rant:
"This is America!" Santelli declared. "How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills?"
Granted, the words are not as elegant as those of Thomas Jefferson or John Adams. But the thought is clear. Santelli was arguing that the people who, in Bill Clinton's felicitous phrase, "work hard and play by the rules" shouldn't have to subsidize those who took on debts that they couldn't repay.
This was both an economic and a moral argument. Economic, because subsidies to the improvident are an unproductive investment. We know now that very many of the beneficiaries of the administration's mortgage modification programs ended up in foreclosure anyway. Subsidies just prolonged the agony.
But it's also a moral argument. Taking money away from those who made prudent decisions and giving it to people who made imprudent decisions is casting society's vote for imprudence and self-indulgence.
When one takes into account who else will benefit from this proposal, the moral case against this proposal becomes even stronger. It's time for somebody to throw an old-fashioned tea party Messrs Williams, Gluckstern, and Altman. You know, the kind with tar, feathers, and a rail for them to ride out of town. Or so I think, in my First Amendment-protected humble opinion.
The kitchen at Hatfield's:
Amazing beignets with molten chocolate for dipping and a shot of a date milkshake capped off a delicious dinner:
The kitchen in action:
NFL.com's Albert Breer gives us what purports to be a rundown on the prospects of moving a NFL team to Los Angeles:
The league actually has found L.A. to be a profitable market from a TV standpoint if it's simply fed the best games week to week, which happens because there isn't a local club to stop that from happening.
That means the NFL can pick its spot. And with the league hell-bent on getting it right the next time in L.A., the ability to be patient is considered key. As one NFC executive said, "The league will wait until they get L.A. perfect -- perfect team, perfect owner, perfect location, perfect situation."
I don't expect objectivity from the NFL's in-house shills, of course, but Breer should have acknowledged that the perfect will always be the enemy of the good in this context.
You see, I simply don't believe the NFL wants to put a team in LA. As long as the nation's second-largest market has no team, NFL clubs can use LA as a threat to extort better deals from their current home cities. "Give us a taxpayer-funded stadium or we're off to LA." See, e.g., the Viking's new deal.
Put a team here and clubs lose a huge amount of leverage. And so we'll never get one.