• Tag Archives Jerry Brown
  • Is California Bailing Out Tesla through the Backdoor?

    Tesla will lose federal subsidies; so something big needs to be done. The California state Assembly passed a $3-billion subsidy program for electric vehicles, dwarfing the existing program. The bill is now in the state Senate. If passed, it will head to Governor Jerry Brown, who has not yet indicated if he’d sign what is ostensibly an effort to put EV sales into high gear, but below the surface appears to be a Tesla bailout.
    Tesla will soon hit the limit of the federal tax rebates, which are good for the first 200,000 EVs sold in the US per manufacturer beginning in December 2009 (IRS explanation). In the second quarter after the manufacturer hits the limit, the subsidy gets cut in half, from $7,500 to $3,750; two quarters later, it gets cut to $1,875. Two quarters later, it goes to zero.
    Given Tesla’s ambitious US sales forecast for its Model 3, it will hit the 200,000 vehicle limit in 2018, after which the phase-out begins. A year later, the subsidies are gone. Losing a $7,500 subsidy on a $35,000 car is a huge deal. No other EV manufacturer is anywhere near their 200,000 limit. Their customers are going to benefit from the subsidy; Tesla buyers won’t.

    This post was published at Wolf Street on Jul 16, 2017.

  • Governor Jerry Brown of California Advocates the Overthrow of USA

    Governor Jerry Brown of California is committing Treason Against the United States. He is leading a confederacy against the Federal Government and should stand trial, but of course that would be controversial. After Trump rejected the Paris Climate treaty, which had never been ratified by the Senate, the European Union announced that it would work with a climate confederacy of secessionist states in the USA. This is clearly Treason and all Federal funds should be cut off from the secessionist governments of California, New York and Washington, who have unilaterally and completely illegally entered into a foreign treaty rejecting the President of the United States on the Paris Accord.
    U. S. Constitution – Article 1 Section 10 Article 1 – The Legislative Branch
    Section 10 – Powers Prohibited of States No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

    This post was published at Armstrong Economics on Jun 14, 2017.

  • $75,560: The Cost Of Housing A Prisoner For One Year In California

    Californians have grown accustomed over the years to massively overpaying for public services and infrastructure projects. In fact, one has to look no further than Jerry Brown’s two largest, ongoing pet projects, including the infamous ‘High Speed Rail‘ and ‘Delta Tunnels‘, for a couple of examples of California’s complete obsession with wasting taxpayer money.
    That said, the cost of providing the best healthcare money can buy and luxurious accommodations to the state’s 130,000 prisoners is starting to move beyond outrageous, even by California standards. As the AP points out today, Jerry Brown’s new budget allocates a staggering $75,560 to cover the cost of housing each resident of California’s state prison system for a single year.
    The spending plan includes a record $11.4 billion for the corrections department while also predicting that there will be 11,500 fewer inmates in four years after voters in November approved earlier releases for many prisoners.

    This post was published at Zero Hedge on Jun 5, 2017.

  • Really Bad Ideas, Part 2: Giving Up Without Admitting It

    Doing the right thing is hard for both individuals and their governments. Name the goal – maintaining a healthy weight, paying off high-interest credit cards, keeping debt-to-GDP at reasonable levels, whatever – and with each missed deadline or broken promise success recedes further into the distance. And the temptation grows to just give up and pretend that the goal never really mattered.
    This is happening everywhere. In the US, state and local pension plans are underfunded to the point of becoming a political (not just a long-term financial) issue. And governments, confronted with the resulting set of unpalatable options, are surrendering without admitting it. In California, for instance, the governor is proposing to fund part of its several hundred billion dollar pension liability by, believe it or not, borrowing more money:
    California Proposes $6 Billion Boost to CalPERS
    (Chief Investment Officer) – California Gov. Jerry Brown’s revised state budget proposes a $6 billion supplemental payment to The California Public Employees’ Retirement System (CalPERS), which he says will save the state $11 billion over the next two decades.

    This post was published at DollarCollapse on MAY 26, 2017.

  • California Governor Jerry Brown Slams Taxpayers As ‘Free Loaders’ For Opposing Higher Taxes

    Millions of Californians are outraged by a recent bill that would increase the state’s gas tax by 12 cents per gallon, and increase vehicle license fees by $50 per year. All told, the plan amounts to a $52 billion tax hike. The proposal has since been passed in the state’s legislature, despite the fact that a majority of Californians opposed the bill. The tax is so controversial that state senator Josh Newman, who helped it pass, may face a recall election in the near future.
    Amid this outrage, California Governor Jerry Brown defended the senator and the gas tax in a recent speech, during which he revealed how much disdain he has for middle class voters who are tired of being taxed to death.
    Republicans say budget cuts should be made to fund road maintenance. A failed GOP plan proposed last year would have tapped into cap-and-trade money used to lower greenhouse gas emissions, cut Caltrans positions and eliminated other positions that have been vacant. It identifies other funding sources, but doesn’t specify what programs would be cut if that money was diverted to roads.
    Brown said the plan is unrealistic.
    ‘The freeloaders – I’ve had enough of them,’ Brown said, adding that the approved tax and fee hikes bring those charges to the level they were 30 years ago if adjusted for inflation. ‘They have a president that doesn’t tell the truth and they’re following suit.’

    This post was published at shtfplan on May 17th, 2017.

  • California Admits State’s Contribution To Retirement Giant CalPERS To Double (As Recovery Takes Longer Than Expected)

    This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
    California’s recovery from The Great Recession has taken longer that Governor Jerry Brown imagined. Yet the slowness of the recovery hasn’t stopped Governor Brown from spending like the proverbial drunk sailor on big dollar items such as high-speed rail (for which Senator Diane Feinstein’s husband was award a near-billion dollar contract). But as an economist friend of mine in California said ‘What do you expect when the Democrats have a super majority in California’s governing bodies?’ And now Governor Brown is asking President Trump for financial assistance in building the high speed train (and pay off Senator Feinstein’s husband).
    When you spend like a wild man on government projects and combating poverty, something has to give. And one of the somethings is the California state pension program for teachers and public employees. Even big spender Jerry Brown has ‘suddenly’ realized that CalPERS was only 65% funded as of June 30, 2016 (CalPERS reported that the state plans’ unfunded liability totals $59.5 billion and is 65 percent funded, meaning that CalPERS only has 65 percent of the funding required to make pension payments to state retirees).

    This post was published at Wall Street Examiner on May 16, 2017.

  • California is Highest Taxes State in USA and should join the EU

    Governor Jerry Brown never saw a problem that could not be solved by just raising more taxes. This time, the state pension fund is going broke as we have been warning with the building Pension Crisis thanks to mismanagement and low interest rates thanks to Larry Summers. California has already increased its gasoline tax by 50% in the past decade. Now to bailout the state employee Pension fund, Gov. Brown has proposed a 42% increase in gasoline taxes and, get this, a 141% increase in vehicle registration fees. Nobody talks about cutting government employee pensions. NEVER! Why when you have a population to milk like the cow.

    This post was published at Armstrong Economics on May 14, 2017.

  • California Issues $1.25BN In Bonds For ‘Bullet Train’ Despite Trump Threat To Withhold Federal Funds

    For decades now the California bullet train has been the thorn in the sides of what few conservatives actually live in the liberal bastion of the West. And with cost estimates starting at $65 billion, and ranging to well over $100 billion, or about $7,800 per California household, it’s no wonder that fiscally responsible folks would be a bit reluctant to spend so much money on a service few will ever use and could threaten the solvency of their state as a whole.
    Be that as it may, seemingly no impediment, financial or otherwise, will stop Jerry Brown from wasting billions of California taxpayers’ dollars in pursuit of his pet project. Which is why it should come as little surprise that Brown has elected to proceed with a $1.25 billion general obligation bond sale today despite Trump’s threats to withhold federal funding for the project, a move which casts substantial doubts over the financial feasibility of the project as a whole. Per Bloomberg:
    California isn’t letting litigation or Donald Trump stand in the way of one of the most expensive and controversial projects in the U. S.
    The state on Thursday plans to sell $1.25 billion in taxable bonds to finance a $64 billion high-speed rail system, the first debt issue for construction since voters approved it nearly a decade ago. The offering marks a show of faith from officials that the project will proceed despite a lawsuit from a county and farmer opposed to it and roadblocks from the Trump administration, which has delayed a grant that would have benefited the bullet train running from San Francisco to the Los Angeles area.
    The general-obligation debt, backed by California’s full faith and credit, isn’t dependent on the success of the project, the first publicly financed U. S. high-speed rail line. Lack of federal support would push more of the burden on California to finance the project, which Democratic Governor Jerry Brown says will transform the traffic-choked state by increasing access to affordable housing and boosting local economies.

    This post was published at Zero Hedge on Apr 20, 2017.

  • Water Wars Coming To California? Is The Drought Really Over?

    In California, the poor growth and development policies that have resulted from a lack of vision have led-to and are continuing to lead Californians down a path of unsustainable growth and a widening gap between the demand and availability of critical resources, especially water.
    This gargantuan problem is augmented by a growing financial crises in California as evidenced by an out of control and growing debt problem. All the while, many elected officials in the State along with Governor Jerry Brown are thumbing their noses at the Fed and losing Federal funding for cities that obstinately insist on violating long-established immigration laws. Of course this too is not helpful to the growing State debt, which elected officials will certainly cast-off onto the weakening shoulders of taxpayers using a combination of direct tax increases and other legislative and regulatory ploys that also amount to taxes and less money in the pockets of the People.
    The term ‘drought’ has been used in reference to the severe water shortages that California is experiencing. But what is the real culprit or causation of the growing water shortage? Is drought caused by a lack of precipitation as most people believe? Or is the shortfall of water availability due to some other principal factor, such as water-use outstripping supply?

    This post was published at Zero Hedge on Mar 13, 2017.

  • California Governor Jerry Brown Admits To $1.5 Billion “Math Error” In State Budget

    Budgeting can be difficult, particularly for expansive state budgets that require a ton of inputs to support 1,000s of line items each of which can result in massive variances depending on the development of various economic indicators like interest rates, commodity prices, etc. throughout the year.
    That said, while forecasting variances are inevitable, we, as taxpayers, generally rely on our expensive budget office employees to at least present annual budgets that reflect sound mathematics and accounting principles. Unfortunately, that seems to be too much to ask of the math-challenged administration of California Governor Jerry Brown which decided to double count certain cost savings and simply “forgot” to incorporate other expenses altogether. Per the LA Times:
    Budget staffers said there were, in fact, two mistakes:
    – A double counting of state savings from a program that coordinates health, behavioral and long-term care services with local government. That error understated expenses by $913 million.
    – A forgotten state government cost from two counties – San Mateo and Orange – enrolling in the coordinated program, which meant missed expenses of $573 million.

    This post was published at Zero Hedge on Jan 20, 2017.

  • California to Pay Billions More After Calpers Cuts Assumed Rate (NOW A Warning?)

    This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
    US Pension Funds are massively underfunded and grow progressively more untenable with each recessiona and financial market downturn. Throw in an aging population, unrealistic return expectations and increased pension recipient demands, and we have party! And not the fun kind.
    (Bloomberg) – California will be forced to pay billions more in pension contributions for government employees after the state retirement system’s decision to lower its assumed rate of return. [The chief investment officer of the $303 billion California Public Employees’ Retirement System just recommended that it lower its annual assumed rate of return to 7 percent from 7.5 percent, which will require workers to contribute more money to the plan].
    California is already paying $5.38 billion to the California Public Employees’ Retirement System this year, and in fiscal year 2018 the state will need to add at least $200 million more. By fiscal year 2024 the annual tab will increase at least $2 billion from current levels. This all comes on top of increases already scheduled under the system, according to Governor Jerry Brown’s finance department.

    This post was published at Wall Street Examiner by Anthony B. Sanders ‘ December 23, 2016.

  • Only In California – Governor Jerry Brown Signs Bill To Regulate Cow Flatulence

    In yet another attack on California businesses, yesterday Governor Jerry Brown signed into law a bill (SB 1383) thatrequires the state to cut methane emissions from dairy cows and other animals by 40% by 2030. The bill is yet another massive blow to the agricultural industry in the state of California that has already suffered from the Governor’s passage of a $15 minimum wage and a recent bill that makes California literally the only state in the entire country to provide overtime pay to seasonal agricultural workers after working 40 hours per week or 8 hours per day (see “California Just Passed A $1.7 Billion Tax On The Whole Country That No One Noticed“).
    According to a statement from Western United Dairymen CEO, Anja Raudabaugh, California’s Air Resources Board wants to regulate animal methane emissions even though it admits there is no known method for achieving the the type of reduction sought by SB 1383.
    “The California Air Resources Board wants to regulate cow emissions, even though its Short-Lived Climate Pollutant (SLCP) reduction strategy acknowledges that there’s no known way to achieve this reduction.“
    Among other things, compliance with the bill will likely require California dairies to install “methane digesters” that convert the organic matter in manure into methane that can then be converted to energy for on-farm or off-farm consumption. The problem, of course, is that methane digesters are expensive and with California producing 20% of the country’s milk we suspect that means that California has just passed another massive “food tax” on the country.
    That said, many California dairies will probably elect to simply close down and move to other states as they did in 2015. Per the California Department of Food and Agriculture, all but 1 of California’s top 10 dairy producing counties saw a reduction in dairy production in 2015.

    This post was published at Zero Hedge on Sep 20, 2016.

  • Tent Cities Full Of Homeless People Are Booming In Cities All Over America As Poverty Spikes

    Just like during the last economic crisis, homeless encampments are popping up all over the nation as poverty grows at a very alarming rate. According to the Department of Housing and Urban Development, more than half a million people are homeless in America right now, but that figure is increasing by the day. And it isn’t just adults that we are talking about. It has been reported that that the number of homeless children in this country has risen by 60 percent since the last recession, and Poverty USA says that a total of 1.6 million children slept either in a homeless shelter or in some other form of emergency housing at some point last year. Yes, the stock market may have been experiencing a temporary boom for the last couple of years, but for those on the low end of the economic scale things have just continued to deteriorate.
    Tonight, countless numbers of homeless people will try to make it through another chilly night in large tent cities that have been established in the heart of major cities such as Seattle, Washington, D. C. and St. Louis. Homelessness has gotten so bad in California that the L. A. City Council has formally asked Governor Jerry Brown to officially declare a state of emergency. And in Portland the city has extended their ‘homeless emergency’ for yet another year, and city officials are really struggling with how to deal with the booming tent cities that have sprung up…
    There have always been homeless people in Portland, but last summer Michelle Cardinal noticed a change outside her office doors.
    Almost overnight, it seemed, tents popped up in the park that runs like a green carpet past the offices of her national advertising business. She saw assaults, drug deals and prostitution. Every morning, she said, she cleaned human feces off the doorstep and picked up used needles.
    ‘It started in June and by July it was full-blown. The park was mobbed,’ she said. ‘We’ve got a problem here and the question is how we’re going to deal with it.’
    But of course it isn’t just Portland that is experiencing this. The following list of major tent cities that have become so well-known and established that they have been given names comes from Wikipedia…

    This post was published at The Economic Collapse Blog on September 11th, 2016.

  • California Just Passed A $1 Billion Tax On The Whole Country That No One Noticed

    The California State Assembly recently passed a bill that received minimal recognition by the press, outside of the state, but has substantial negative consequences for basically everyone in the country. Once signed by Jerry Brown, the bill, known as AB 1066, will make California the only state in the entire country to provide overtime wages to ag workers after 8 hours a day or 40 hours per week. This change will add about $1BN annually to the cost of growing food in California which will ultimately be passed along to consumers. And since eating isn’t really optional, this is effectively a $1BN tax that California has decided to levy on the entire country. Worse yet, increasing food prices is essentially the most regressive form of “tax” possible given the disproportionate share of wages spent on food by low-income families. And, while you may not know it, California is an agricultural powerhouse that produces roughly 1/3 of all vegetables consumed in this country and 2/3s of the fruits and nuts.
    Now, we know what you’re thinking…why would everyone be entitled to overtime pay at 40 hours per week except farm workers? Well, there is logic behind the exclusion and it has to do with the seasonality of farming. Unlike most industries, farmers are not able to spread their labor needs throughout the year due to harvest schedules and the perishable nature of their crops. But farm workers aren’t the only ones excluded from overtime pay. In fact, California has established special overtime rules for hourly workers in a number of other highly-seasonal sectors, including firefighters, actors and ski-resort employees, to name a few.
    As you can see from the chart below, the total number of people working in the ag industry in California spikes by about 33% starting in May every year and remains elevated for about 6 months through October. We’ve only graphed 2015 but the seasonal ramp is very similar every year.

    This post was published at Zero Hedge on Sep 2, 2016.

  • Worst ‘Zombie States’ in America ‘Deteriorate Faster, Further’

    Moral Hazard Spreads: TBTF States? During the Financial Crisis, it was California that made the headlines with ‘out-of-money dates’ and fancy-looking IOUs with which it paid its suppliers. The booms in the stock market and the startup scene – the state is desperately hooked on capital-gains tax revenues – but also housing, construction, etc. sent a flood of moolah into the state coffers. Now legislators are working overtime to spend this taxpayer money. Gov. Jerry Brown is brandishing recession talk to keep them in check. Everyone knows: the next recession and stock-market swoon will send California back to square one.
    Now Puerto Rico is in the headlines. It’s not even a state. And it’s relatively small. But look at wild gyrations by the federal government and Congress to deal with it, to let the island and its bondholders somehow off the hook.
    But Puerto Rico may just be the model. Big states are sliding deeper into financial troubles, particularly New Jersey, Connecticut, and Illinois.
    These three states hold the top positions in the ‘Zombie Index’ that Bill Bergman, Director of Research at Truth in Accounting, developed two years ago. California is in 7th place. Whew!!!

    This post was published at Wolf Street on June 23, 2016.

  • California Tax Revenues Miss Projections By $1 Billion As Residents Flee The State

    Tax revenues for the state of California have come in nearly a billion dollars below projections, which is causing Governor Jerry Brown to amend his $171 billion spending plan that was just proposed in January.
    As Reuters reports, California’s tax revenues came in $869 million less than forecast for the first four months of the year. Governor brown is now expected to cut some of the proposed spending increases in education, healthcare and infrastructure as a result of the miss.

    This post was published at Zero Hedge on 05/13/2016.

  • California Governor Jerry Brown Signs $15 Per Hour Minimum Wage Bill (Admits ‘May Not Make Sense’)

    You have to love California Governor Jerry Brown. He didn’t think the California Legislature’s $15 per hour minimum wage proposal may not make sense, but he signed it anyway.
    In 2014, the Congressional Budget Office estimated that raising the minimum wage from $7.25 to $10.10 would increase the incomes of the poor by $5 billion per year – a little over $100 per poor person annually. But the $15 minimum wage would simultaneously eliminate 500,000 jobs altogether.
    So, if you are a survivor of the $15 minimum wage, you are a winner. But if you are one of the ones who loses your job …

    This post was published at Wall Street Examiner by Anthony B. Sanders ‘ April 5, 2016.


    Strict gun laws, asinine and superfluous regulations, a second-rate education system, domineering labor unions, unpayable public debts, rotting infrastructure, and mind-boggling housing costs. Which state are you thinking of right now? Is it California? I bet it’s California.
    Over the years the People’s Republic of Kalifornia has developed quite the reputation for oppressive rules, dysfunction, and unsustainability; both financially and environmentally. Financially speaking the state has been on the precipice for some time. In recent years several of their cities have declared bankruptcy, and overall the state has one of the highest debt per capita ratios in America. It’s a big effing mess with no clear solutions in sight. There really isn’t any way that California, the biggest economic powerhouse in America, can sustain its current course.
    California can however, hasten its demise with crackpot left-wing policies that are sure to ruin their economy, like raising the minimum wage.
    A deal to raise California’s minimum wage to $15 an hour by 2022 was reached Monday by Gov. Jerry Brown and state legislators, making the nation’s largest state the first to lift base earnings to that level and propelling a campaign to lift the pay floor nationally.

    This post was published at The Daily Sheeple on MARCH 30, 2016.

  • Reinventing the Neel

    As you probably heard by now, Neel Kashkari was named president of the Minneapolis Fed.
    Ordinarily, when a regional Federal Reserve bank gets a new president, it is not national news. Patrick Harker at the Philly Fed – crickets.
    But Neel Kashkari is something of a celebrity. Most recently, he ran for governor of California. He had some good ideas that didn’t involve raising state income taxes to exorbitant levels. He even beat incumbent Governor Jerry Brown so badly at their only debate that Brown refused to participate in any more debates.
    But in the end, it was hard for Kashkari to shed the Republican stigma in California – even as a pro-choice, pro-marriage-equality Republican. He lost, but not ignominiously. Nobody expected a Republican to win in California.
    Before that, Kashkari ran equities at PIMCO (a big deal), but most people remember him for being the administrator of TARP, otherwise known as the Troubled Assets Relief Program, otherwise known as ‘The Bank Bailouts,’ conducted under Treasury Secretary Hank Paulson in 2008-2009.
    Before that, Kashkari worked at Goldman Sachs.
    Pretty good resume for a guy who is 42. I am 41, and I’ve done some cool stuff, but not that cool.
    Outside of the resume bullet points, who, exactly, is Neel Kashkari?

    This post was published at Mauldin Economics on NOVEMBER 12, 2015.

  • What Does California Gov. Jerry Brown Know about the Next Crash and Recession that We Don’t?

    California was America’s Greece in 2009. It had excellent wine and olive oil. But tax revenues were collapsing. The deficit ballooned. Its credit rating was cut to the lowest of any state in the US. It couldn’t borrow at reasonable rates. And when, under Gov. Arnold Schwarzenegger, it couldn’t pay its bills with real money, it sent fancy-looking IOUs to its suppliers.
    Today, California is flush with money. The economy in the coastal areas has bounced back. Unemployment, while still high in some areas, continues to drop. The budget is on its second annual ‘surplus’ in a row. Capital gains taxes from the booming tech sector, the soaring stock market, the white-hot property sector, and all kinds of other investment activities, on top of some ‘temporary’ tax increases, triggered a flood of revenues – $6.7 billion more than Brown’s office had estimated just in January.
    OK, no one can figure out how to deal with the unfunded pension and healthcare liabilities. But what the heck, lawmakers at the Democratic stronghold are now fighting over how to spend the ‘surplus.’ They’ve got till June 15 to figure it out and pass a budget or their pay will be docked.
    Gov. Jerry Brown, sworn in for his fourth and final term in January – he’d served two terms in the 1970s – is putting his stamp of frugality on the budget, trying to stem the flood of spending proposals. But lawmakers need to be reelected, votes need to be bought, special interests need to be satisfied, and so the money needs to flow.

    This post was published at Wolf Street on June 11, 2015.