More on our first Socialist President

According to the WP in the last days of the Bush Administration they imposed duties on Roquefort cheese, truffles, Irish Oatmeal, Italian wine and foie gras. The Post says this was in "retaliation" for European restrictions on American beef. Whatever the motive, it is a crock. This kind of tariff "tit for tat" never produces the desired result - at least for consumers. But then that is not the real purpose of tariffs.

Xenophobic Stimulus

The devil is in the details. Included in the House bill is a "buy American" provision for steel. It would prohibit the "shovel ready" projects from using non-domestic steel. Steel has pulled this kind of trick before. What nonsense.

The Legal Fight Today

The public employee unions and the Governor are in court today fighting about the two day a month furlough proposal. Personally, I hope the Governor's side is unsuccessful. That may seem strange. The Governor's proposal could reduce the state's huge budget deficit by about a billion dollars. (That is about 1/40 of what is necessary but it is a start.) My problem with the proposal is that it might be significantly disruptive for Californians who need to work with state agencies. DMV open two fewer days a month, for example, makes little sense to me. The better alternative is a reduction in force, layoffs. That is exactly what the Governor has proposed if he is unsuccessful. So let the unions win today and have the Governor follow through on his second proposal. Sounds like a win-win for Californians.

Where I hope the Governor is successful is in his attempt to dump the prison health czar, which is also in court. The federal judge who ordered Californians to spend an estimated $8 billions on prison health care way exceeded his authority. That order should be quashed.

Equity and the Stimulus

Andrew Dubinsky created the attached chart which estimates how the estimated $6700 per person Stimulus Bill will be paid for. That should not be surprising. I am not sure whether the analysis is complete. If most of this is being financed from debt, the real cost may be forwarded not by income class but to future inflation. If that comes the effect will not only reduce the propensity of investors to add capital to markets, it will also set up some longer term trends for the country which would transform the current slowdown to something akin to the 1970s or worse.

The Stimulus

I have been struck by some things on the stimulus package. For example,Paul Krugman (who thought his role during the Bush Administration was chief scold has become one of the chief toadies) , in a op-ed today, argues that the true cost per job is not $275,000 per job but only a mere $100,000. Krugman argues that the opposition's analysis of job creation provisions ignores that the jobs will be created over several years, so the cost is lowered. Let's ignore the efficiency loss created by any government program (which Krugman would dismiss as negligible) and wonder whether $100,000 per job is an reasonable cost for something created with debt.

Then there is the polling of the American people. Support for the proposal is over 50%, according to one poll (at 57%) but 41% of the voters are not confident that the proposal will spend money wisely.

Howard Gleckman of TPC (which remember is a Brookings-Urban Institute project) - "My sense is that, at best, the stimulus package will keep things from getting worse. Necessary, as they say, but not sufficient for recovery."

Between Gleckman and Krugman, there should be reason for pause here about the excitement for this massive measure.

News of their death

In the January-February edition of the Atlantic Michael Hirschhorn presents a brief but bleak picture of the print news business. He raises the specter that the Gray Lady (NYT) could fail in the coming months based on a declining subscriber base and ad revenue that seem to have fallen off a cliff. The announcement yesterday that Mexican billionaire Carlos Slim had lent the NYT a couple of hundred million dollars only reinforces the issues raised in Hirschhorn's piece.

Two things come to mind here. First, about a decade ago, I was at a Monetary Conference in Guanajuato, Mexico where Robert Bartley the Editor of the WSJ was also present. One afternoon as we were going to lunch I sat next to him and commented that I found the electronic edition of the paper invaluable. I asked him whether the electronic edition had cut into the print revenues.
He replied by asking whether I had dropped my print subscription. When I replied no he said "So we are making an extra $40 a year off you that we did not make before." This year I dropped my print subscription and kept the electronic one. I find increasingly that I get my financial news from the net and not from the print edition of papers.

Second comment, at a dinner I recently sat next to the Publisher of the Sacramento Bee, our local paper which is facing similarly bleak times. I expressed strong appreciation for many of the things that the Bee does for the local community and for the community of policy wonks who are interested in Sacramento. We need to think of ways to monetize the value of key columnists who have helped all of us think in new ways not about the immediate news but of the broader issues facing the state. One columnist in particular has been especially insightful about state policy and it would be tragic to miss his insights.

Clearly, the print media is going through an adjustment. Some of that adjustment has been self inflicted. At least two of the Times (NYT and LAT) moved increasingly to doctrinaire reporting in recent years and many readers were turned off by this kind of advocacy journalism. But a good measure of the problems have come about as a result of technological changes of which the print media had very little control. I have been a critic of the ideological drift of many news organizations and yet I recognize the genuine value that good reporting and analysis brings to the discourse in our society. Hirschhorn's piece is a sobering reminder of the stakes of both of these changes could have on the American system.

Timely, Targeted and Temporary

In the last few days I have spent a lot of time thinking about the stimulus bill. Both the one proposed by the Administration and the one proposed by the GOP. Over the next few days I will begin to lay out some concerns for this approach. But here are some initial thoughts.

#1 -Do Stimulus Packages Ever Work? The premise of stimulus packages is fundamentally a Keynesian notion - i.e. that government spending will encourage non-governmental economic activity to pick up. For them to work they need to be timely (they need to respond to current conditions. They should also be targeted and temporary - addressing only those areas that need the stimulation and only a temporary boost. The evidence suggests that most stimulus packages, going back to the massive expansion of government during the 1930s, are not effective in lifting the economy outside of the normal economic cycle. Most also seem to suffer from from a lack of focus - legislators are great at getting their pet projects called stimulus. One of the President's economic advisors (Christy Romer) has argued in a recent paper that all the attempts in the 1930s did not lift us out of the Great Depression. Robert Higgs of the Independent Institute, in a recent program on Econtalk, presented evidence that was true. Supporters of the proposals suggest that we cannot afford to "do nothing", that seems like a weak read based on past experiences of success.

#2 - Where are we in the cycle? We've had a tremendous dump in the world financial markets and how do we respond? Markets are inherently volatile. They go up and down. But any person's ability to project where we are in the cycle of markets is notoriously limited. The risk of injecting something at the wrong time offers the real possibility of encouraging an inflationary cycle which could be substantial. Hayek's notion about the "knowledge of time and place" suggests that we should be very cautious about centralized solutions.

A new meaning for "shovel ready"

The WSJ and others have described the flow of funds in the stimulus bill and it is amazing. Something in the range of less than 10% would be expended in the first year and less than a third of the spending would occur in the next fiscal year.

For the first time in our history the country faces annual trillion dollar deficits that possibly last for a couple of years and yet the stimulus bill proposes to spend only a tiny amount of the money in the first year. The rationale for this bill is to prime the pump for a sagging economy. Thus, when the bill was developing the various mendicants were asked to have "shovel ready" projects. In my naivete I had thought that meant projects that could be implemented quickly. I guess the term means projects ready to help the politicians load some more BS on their constituents.

The Acid Reflux Candidate

The California Attorney General has been making news lately. It should be understood that he is running for Governor and like all of his other stints in elective office, he always thinks about politics first. Initially Brown seems to be the front runner. I suspect that when Californians have a chance to think about the possibilities they will not be ready to see him back into the Governor's chair.

Think back to the thrilling days of Moonbeam - The Rose Bird Court, his odd and curious transportation expert who helped to create gridlock and who thought it was great public policy to allow infrastructure deteriorate and his numerous other flights of fancy during his eight years as Governor. It will give you a good idea about how he would govern if he were elected again.

Moonbeam is a self proclaimed intellectual who had a devil of a time passing the bar. His absurd arguments against Proposition 8 seem more motivated by politics than the law. No, Marriage, is not an inalienable right. Yes, on every issue where voters or legislators pass a measure - they discriminate against a minority. Let's hope the voters will not accept his shallow ravings again.

The Prop 8 disclosure suit

I think that some in the anti-Proposition 8 community have been reprehensible in their response to the voter's adoption of the issue on the November ballot. They have threatened some and harassed others. That notwithstanding the court should reject the challenge to the disclosure standards in Proposition 9. If individuals who have been harassed by the activists can discover who some of the cowards are who have disrupted supporter's lives, they have the option of suing. But the principle here is pretty clear. Disclosure standards should be maintained.

The Wrestler

John Serba, reviewer of the Grand Rapids Press, started his review with the following "What is professional wrestling, but a metaphor?" He then goes on to describe the movie which has garnered a set of awards as a "profound character study."

I am not sure if I saw the same movie as Serba, I found The Wrestler derivative and trite. It may be a problem that I thought the French and Italian directors who used this technique were as self-centered as Rourke's character. So it could be argued that I came to the movie with a prejudice against this genre.

The story is of a washed up wrestling star. It is a clip of life in the style of cinéma vérité. Rourke's character is fading fast out of the limelight and for about two hours he waltzes through relationships with a pole dancer (Melissa Tomei) and his daughter. The idea of this type of movie making was to capture the gritty reality of a situation. Indeed, in this movie there is a lot of realism - the characters bleed and sweat and vomit. But in the end none of the characters were compelling enough to me to wonder what would happen next.

My son in law, the movie exec, thought the movie would grow on me. He argues that the issue in the movie is Rourke struggling with trying to establish relationships (with the two women in his life) and ultimately deciding that in spite of risking his life (he has a by-pass about half way through the movie and is told not to wrestle again) he goes ahead with a big match harkening back to his glory days. The problem I have with that premise, is that none of the characters were compelling to me in any way.

One other criticism should be mentioned. The camera technique, to get the notion of realism, is jerky. The print we saw was grainy. I think the director was trying to capture gritty. In the end I think he was only able to capture "who cares?"

Kyhl Smeby

This afternoon was the funeral of a friend and mentor Kyhl Smeby. Kyhl was a member of my board of directors but also served the independent colleges in a number of other ways. He retired from the Bank of America, when it was a company to be proud of, as an Executive Vice President. He earned his college degree late in life.

There was a fundamental humility about Kyhl. He listened well and only gave advice when it was bound to help. He lost his wife of 57 years a couple of years ago. They were very much a pair and that seemed to start a decline.

At the funeral his son John told a story of him pursuing a bank robber to get his license plate. It was a revealing story on several levels. First, as noted above, Kyhl was a soft spoken many times self-effacing guy. But second, all the time that I knew and worked with him he was driven a a clear sense of values created in part by his faith.

Kyhl made real contributions to two independent colleges in California, to their board and to some wider causes for higher education. He also supported the local public television station and a couple of music organizations - he was a fan of opera, as am I. All of his contributions were made from a sense of service not a sense of resume building. It is a value that is less present than it was a generation ago.

A reminder to the RIAA

At the Inauguration four great musicians performed a remix of a classic Shaker work song or hymn called Simple Gifts. It was remixed by John Williams - who is a pretty famous composer. Williams wrote an introduction and then some variations to a very familiar tune that dates to the 19th century. My quibble with this musical event is not with Williams using a common theme - there are thousands of examples of that kind of remixing across the wide range of music. But in the current environment had a young person taken one of John William's compositions from one of his films and remixed it in the same way that Williams took this classic melody - you can be sure that either Sony (who has a lot of his music) or the RIAA would go after that young person.

Lawrence Lessig, in a relatively new book called Remix explains why the current copyright regime is destructive and ultimately doomed to failure. In the end, we enjoyed the performance at the inauguration yesterday but it was clearly something that had it been presented in a slightly different genre would have generated a bunch of legal mumbo jumbo.

A different way of travel

I travel a lot. No doubt about it. For the last couple of years I have traveled with something I call my 10 day bag. It is a duffle bag that is about half the size of a small roll away bag (I hate roll away bags) - I use it for any business trip that is less than 10 days - hence the name. While we were cleaning out the house in North Carolina, we encountered the way my ancestors traveled.

I had two great aunts (Aunt Dee and Aunt Noanie) both traveled a lot in the early part of the 20th Century. We found a collection of post cards from them from all over the world. We also found the trunks. Each of the big trunks weighed about 100 pounds. They were very sturdy. When these two women would go to Europe (which they did frequently) or to the Middle East (which they did at least once) or to Asia (again at least once) they shipped their belongings in this kind of container (bottom picture). They were bulky and impractical. I can only imagine what an airline would do if I showed up for a trip with one of these.

One of the fashions of the day was to attach stickers of the destinations that one visited on a trip. Both cases - the upper picture is of a regular suitcase - had the stickers plastered on them. The benefit of my approach is that I am very mobile. There are a couple of obvious accommodations that one has to make to my approach. I need on many trips to find a laundry. At the same time the bag is small enough so that I cannot on most trips take back more stuff than I brought. (If need be extra stuff can be shipped.) My 10 day bag is purposefully anonymous. Their trunks attested to their travel status. I found the contrasts interesting.

The President's Inaugural Address and the supporting characters

President Obama's speech was one of the most eagerly anticipated in recent history. So he had a pretty high bar to vault. As a former speech writer for some politicians I watch these kinds of events with more than a casual interest. Here are my thoughts:
1) The President is an accomplished orator. While there were few ringing lines in the speech I thought his delivery was almost flawless. Peggy Noonan, perhaps one of the greatest speech writers of our age said "It was a moderate speech both in tone and content, a serious and solid speech." And then she said "It was not a joyous, audacious document, not a call to arms, but a reasoned statement." I think her assessment was on target.
2) Unlike Reagan 1980 (which I liked a lot) there are not a lot of quotable lines or sound bites- but when you take the speech as a whole it's thematic content was excellent. That could have been deliberate or it could have been how the speech came out. Some of the conservatives I listened to today yammered that he was not up to the job in the speech - that is utter nonsense. Michael Medved commented that he thought the speech was not memorable - Medved may have wanted to have the six dandy lines. In this case Obama seems to have thought that the time for bites is over - when you read the text as a complete unit - I think it will stand the test of time.
3) We should make a pact to ban all future inaugural poets. There have been three previous ones. Kennedy used Robert Frost who was unable to read what he prepared so went to other verse. The other three were mediocre, at best. The one today was bizarre to the point of incoherence. Typical was the LA Times which concluded "Alexander's "Praise Song" simply didn't sing." The opening ("All about us is noise. All about us is noise and bramble, thorn and din, each one of our ancestors on our tongues. Someone is stitching up a hem, darning a hole in a uniform, patching a tire, repairing the things in need of repair.") was a glimpse of the shape of things to come. I thought the "poem" was pretentious doggerel.
4) I thought both ministers did an excellent job of catching the moment. Rick Warren surprised his critics, except for those who are unwilling or unable to see him as anything but a conservative Christian. Joseph Lowery, a founder of the Southern Christian Leadership Council, who is 87, showed himself to be able to pull off the cadence that Jessie Jackson has so long tried to do and fail. He had some humor but also substance.

All in all, and with the exception of the poet, I thought it was a wonderful start. One line in Warren's invocation will, I hope, be carried on for some time - The California minister asked that the president be grants "the wisdom to lead us with humility, the courage to lead us with integrity, the compassion to lead us with generosity."

Some more reflections on my family

For the last several days my siblings and I have been breaking down a house that has been in our family for 85 years. That meant taking 6500 pounds of junk to the landfill. It meant taking about 1000 pounds of stuff to Goodwill - so much stuff that none of us will be able to claim it all.

But it also meant finding some odd and curious stuff. For example, it meant finding a Zilotone toy from the 1930s which still works. I also found a ton of other toys. We gave away a lot of them.

We also found two company logos for my great-grandfather's construction company. I took the one that was painted steel and one of my brothers took the one done as a mirror. He (Daniel Anderson Garber) was a founder of the Association of General Contractors. We found a typed manuscript of a trip that he and his wife took across the US and then through the Panama canal. (A lot of his commentary was about engineering - especially the Panama Canal) - but the trip stops when he gets back to Florida - I wonder how the rest of the trip went.

We each took a selection of furniture, china and linens and books and records - some important, most mundane. UPS got a lot of business but so will a local moving company.

We had (the four siblings) two excellent dinners at places we had eaten before - with a lot of good talk - about the economy, about the meaning of family.

My sister came in December and organized many of the books (that was a great contribution) - that part of the family were avid readers. I would have loved to have been able to go through those with more care than I did. I chose a set of Dickens (there were three) - each of them was well read. That part of the family would actually sit in the living room and read to each other. My two aunts who were the last residents of the house - told stories about that.

We found my mother's Master's hood from the University of Michigan - in Music and a ton of letters. My sister volunteered to take those and sort them over time.

One of my ancestors (William Penn Abbott) who was a minister who died in 1878, had a volume published at his death which records a lot about his life and also the funeral orations at his services and then I found a New York Times story on his death.

With all the stuff - I found myself less interested in the objects and more interested in thinking about my ties to this generation and to the several represented in this house. I found myself regretting that we did not have the great legacy from my father's side of the family - we know something about my grandparents but not much before then. On my mother's side there are stories going back well into the 1830s.

Making sense of your family

In the last couple of days I have been with my siblings in a home that my family has owned for the last 85 years. We are cleaning it out after my two maiden aunts died in about a year of each other. I have learned a lot about my family over the years through many stories that were told to me by one of my two aunts. My grandfather owned a construction company in North Carolina and was very successful. But he also had a reputation as somewhat of a person outside the mold.

The house has the accumulation of a number of generations of family junk and important stuff. We found a collection of political buttons and a bunch of childhood toys and records from about three generations (78s, 33s and CDs). We found a collection of letters that my mother wrote home from college and graduate school and he hood for her Master's from Michigan. There were tons of old magazines including one called St. Nicholas, a children's magazine that lasted from the 19th century into the mid-point of the 20th century. One treasure we found was a couple of well used sets of Dickens. The families that owned them actually read those books - several times. I love Dickens and would spend a lot of time talking with one of my aunts about his literature.

One of my favorite stories about my family relates to my grandfather. He, like me, did not like people to choose clothes for him. He had a neighbor who thought she was a whiz at fashion and said "Mason, I have an idea for a tie that I am sure you will like. On Christmas day he opened the package and when he discovered what the neighbor had done he asked his driver to put the tie on and go over to the neighbor's house with a small gift of the season. At one point my mother came to my house and insisted, despite my protests to buy me a bathrobe, I said I don't like people to buy me clothes - please don't do that. When she did I sent it back to the store where she had purchased it. I then learned the story about my grandfather; I realized that some of what we see as personality traits are indeed inherited.

But today I learned another story I had learned about him was not true. One of the family legends about my grandfather was that he was kicked out of VMI for blowing up the guardhouse. Indeed, he did the latter but he actually moved from VMI to Columbia to follow his heart - his future wife was in New York and Columbia was a better place for him to court his future bride.

There are lots of things in the house and I hope that by the end of the weekend that we can get most of the house cleaning out done. I am less concerned about the physical objects but what I saw in the last few days is that some physical objects also create an emotional connection.

Obamahype

The pre-game hype for the new administration has reached unparalleled heights. This morning I learned that the pre-inaugural events will begin to be covered a full 96 hours before the actual inauguration. CNN begins their (breathless) coverage on Saturday. While the change in administrations is a newsworthy event - the bigger the hype and expectations the wider possibility that if Mr. Obama stumbles, the faster he will fall. Avoiding the hype would be a good mantra for all the people he will bring to Washington and also for the average citizen. We should judge his results dispassionately.

Strong Mayors and Nonsense

The City of Sacramento is one of the largest cities in the state with a council-manager form of government. In the past election the voters, by a substantial margin, rejected a feckless incumbent for a new face, Kevin Johnson, the former NBA star - but also a local celebrity who has contributed successfully to civic life in a series of projects including something called St. Hope Academy.

Johnson immediately came in and proposed to go to a strong mayor model - which makes the mayor a separate office which the powers of an executive. Instead of being one among many, the mayor proposes policy and has the ability to veto council actions. If it works at the state and federal level - it should also be a good idea at the local level.

But the Stationary Engineers, Local 39 (those are the people who maintain boilers and air conditioning) Local 39 has taken an oppose position to the Mayor's proposal. "Local" 39 is a bit of a misnomer. According to their website "With the introduction of new first time agreements, we have added over one hundred new private sector jobs and countless public sector jobs to the workforce, amounting to some eight hundred new Local 39 Members through-out our jurisdiction." (That should give you an idea of their interests also.) Local in this case seems to be a lot of Northern California. In the last several decades all unions have been more successful in organizing in the public sector than in the private sector. Although their General Secretary and Business Manager firmly hopes that the Obama administration will lead to significant growth in membership.

The document is laughable in its arguments. For example, it suggests that the Mayor, in his executive authority would "no longer have to attend council meetings" and would become somehow less "accountable." In an executive form of leadership, the Executive and the Legislative branches are separated for good reason. The position paper of the union also suggests that giving one person a veto power (which can be overridden) would a) diminish the power of individual council members. It also suggests that the proposal requires no "documented" experience for the position of mayor. (Although under the current system there is no documented experience for mayor either.)

Here is the real rub to the union - it claims that by allowing the Mayor, as Chief Executive of the City, to appoint all department heads, that could lead to croynism and "pay for play" politics. If all those arguments strike you as a bit bizarre - each could easily be countered- consider the real issue here. In a system with no locus of power, small groups with concentrated power have an inordinate level of power. As an individual taxpayer you may not care very much whether the operating engineers lobby to increase beyond reasonable limits the number of people employed in their profession on city jobs or pass an ordinance which requires slightly more expensive standards for construction. In both cases your individual interest in the issue is small - it might only cost you a few bucks a year and you have other things on your mind. But for the interest group those small increments mean a lot. In essence the system that Local 39 thrives in disburses costs and concentrates benefits for its members. A strong executive is the best option to counter that inordinate granting of power. If the mayor shows too much favoritism to a group, like Local 39, you can boot him out.

The strong mayor model depends on electing a strong mayor. If you get one like Johnson's feckless predecessor - no model will work. No model of governance is perfect but the strong mayor offers the best hope for the City of Sacramento to move forward, the nonsensical arguments of Local 39 notwithstanding.

Causes of the Budget Deficit

In the last few weeks, I have thought a lot about the current budget mess in California. In order to understand how we got here, I thought it would be useful to go back to the time that our current Governor assumed office. Revenue growth has outpaced expenditures but as the Governor has said expenditures have outpaced revenues. So his argument is basically accurate. Over the period that the current Governor has been in office the following changes have happened on state spending and revenues:

Note - the underlying rate of inflation has been a total of about 15% and the concurrent growth in population was a total of 4.5% - Domestic outmigration about equaled the level of international immigration over the period.
PERSONAL INCOME TAX REVENUES +56%
DEPARTMENT OF CORRECTIONS AND REHAB +116% (Inmate population has grown from 151,000 to 170,000) The cost per inmate is just under $60,000 per year. At the start of the Administration the cost was about $30,000 per inmate.
K-12 POPULATION began to decline in 2007 (by about 30,000) to 5.9 million Average Daily Attendance.
HIGHER EDUCATION ENROLLMENTS - Community colleges had a slight decline - UC was up by about 50,000 and CSU by about twice that.

One other comment - getting these numbers is not as easy as it sounds. All of the budget figures during this administration are in electronic form. Yet, prior year budgets are not easy to get on the net. A good deal of the analysis done in the process is more incremental than it should be - the general components should be known and explained over a longer time perspective than just a year or two of prior budgets.

Ballmer does it again

This morning, without admitting that he was wrong again, Steve Ballmer - Microsoft's bombastic CEO, admitted to the Financial Times that "iPhone and BlackBerry have "clear market momentum" in the smartphone business." He also said there will not be a Zune Phone (for those not in the know - a Zune is a device to play music, but it has not sold very many units, see iPod).

By this time his prognostications should be put on the funny pages not in the news. In the story he also said that music players would be succeeded by more "general purpose" devices like the iPhone and the iTouch. Gee, thanks Steve, we will keep that in mind.

The Minneapolis Fed on the Recession

The Minneapolis Fed did a release comparing the 10 previous recessions since 1946 to the current one. (You can see the full set of charts by clicking on the link.) The charts show both the length and depth of the recessions. Four charts are especially interesting. They show change in output and employment on a couple of different factors. The Minneapolis Fed is scrupulous in presenting the data as "real time" with very little comment. This recession is different in a number of ways from many of the previous recessions.

One caveat about looking at data. I have a favorite quote at the beginning of some speeches - Economists have successfully projected 11 of the last 3 recessions. It is unclear where the current trends will lead us. For example, the most recent unemployment data might either be comforting (we are very close to the bottom) or very troubling (this thing is really starting to become pernicious).

Some Thoughts about the California Budget

California recalled a governor in 2003 for a huge operating deficit. This year our current governor faces a deficit that could exceed $40 billion. Yet there is no clamor for his recall. As I have watched this develop, I have been amazed at how little historical perspective there is on the budget. A good way to judge the performance of an executive is to look at the choices that are made in the budget process. So I went back to the 2003 budget for some comparisons.

Here are some interesting numbers. First, in 2003, the State's General Fund was slightly less than $71 billion and the total state budget was just under $100 billion. About $7.5 billion of the budget came from bond funds. The Proposition 98 related expenditures amounted to a bit less than $44 billion. The rest of higher education spent a combined total just north of $10.6 billion. That included $680 million of student aid expenditures. General fund dollars for CSU and the Community Colleges were just under $2.5 billion and UC's General Fund support was just under $3.

In the coming budget year, assuming that the Governor's proposal was adopted, the General Fund would be at $95.5 billion. That is a fairly robust level of growth. The K-12 sector is actually getting a bit more than they did at $39.7 billion, which is $500 million higher than 5 years ago. UC has added about $300 million in funding since then. CSU has added $500 million and the Community Colleges about $300 million. Funding for Student Aid has increased by about $50 million. State funds for higher education have gone up to just over $13 billion, although a good deal of that growth has come in new bond funds.

Corrections is a big part of the change. In 1997 the corrections budget was $2.6 billion - this year it is proposed to be $9.6 billion and that is before any adjustments are made for the legal decisions on inmate health. The figure in 2003 was $5.3 billion. Growth also came for Health and Human Services expenditures which have grown from about 24% of the budget in 2003 to 30% of the proposed budget. So while there has been growth in education, a good deal of the growth has been in corrections and health and human services.

One perplexing issue is the rising costs of prisons. The budget seems to skyrocket in spite of a declining rate of crime in almost every category. According to the Uniform Crime Statistics in 2003 the state had 205,000 violent crimes. In 2007, the last available year for data, we had 191,000. The crime rate for violent crimes per 100,000 population has dropped from just about 600 to just over 520. The murder rate has dropped from 6.7 per 100,000 to 6.2.

I may have some more comments about this but the numbers lead me to believe that we are shifting priorities in curious ways that will not serve the state well.

Gran Torino

Clint Eastwood's new movie is stunning. Gran Torino starts off at the funeral of a retired auto worker's wife's funeral. In this movie Clint's character does not seem to fit in. He does not relate well to his two sons or to their families. He does not relate well to his neighbors who are Hmong. He is gruff to an extreme. But he brings a set of values that are often clouded by his use of epithets. Eventually, you see through the exterior to a man who has a very deep civic conscience. The movie is rated R for, according to one reviewer "Constant very strong language, including very ugly racist, sexist and homophobic insults, drinking, smoking, gang violence." Clearly, the character is not politically correct and this might well turn off some fans (although initial box office results suggest that audiences will see through the politically correct scolding).

In one account Eastwood's describes his political philosophy as "Everyone leaves everyone else alone." Yet, clearly this movie suggests a broader social responsibility. Eastwood's character begins with some notions of how the world should work but those notions change over the movie to include his new environment.

There are a couple of themes in this movie that are interesting and well developed. Kowolski's relationship with his biological family - he regrets that he cannot relate well to his two sons and their wives and children. One grand-daughter comes to his wife's funeral with dress which he thinks in inappropriate. One son tries clumsily to encourage this independent minded person to think about moving out of his neighborhood and into a senior home. But the tension with those people is unresolved throughout. The second theme relates to religion. In several of Eastwood's recent movies, he deals with Catholic tension. In Million Dollar Baby, the main character goes to mass each day and struggles with the decision of what to do when his fighter is paralyzed. In this movie, he is confronted with a young priest who tries to carry out Kowolski's wife's last wishes that he go to confession. The interaction between the priest and Kowolski is an interesting theme.

Eastwood has been successful in recent years in a couple of remarkable ways. First, he has produced a number of interesting movies. Some like Pink Cadillac, Absolute Power, In the Line of Power, and Million Dollar Baby include him as a character. Others like Bird, the Changling and Mystic River) show his directing talent alone. Second, in several he has directly addressed the issues of aging. His transition from the cowboy of the early era, to the tough cop Harry Callahan, through a series of new characters has been unique. In each stage he takes a part of what must be his real personality and mixes it with acting talent. You can see a part of Kowolski in A Fist Full of Dollars but you also see tremendous breadth in talent. As I have said many times before, the best movies involve a compelling story and interesting characters in an entertaining format. Gran Torino involves them all.

Perhaps my last Macworld

Today, I went to the last day of Macworld, the tradeshow for Apple products. I have been to almost every edition of this show in San Francisco. It was first done at the civic center and eventually moved to Moscone Center. At its' height it was a week of a festival of all things Apple. For the last couple of years the focus has been on handhelds - ipods and phones and touches. One year, the highlight of the show was Macporno (which my very young son thought was exciting and which seemed to do very high cash business). Last year showed the 3G and the MacAir - I bought both.

But this year the focus of the show seemed to be carrying cases. For the last couple of years the number of exhibitors has been declining. There are wider aisles and more blocked off spaces in the two halls.

There were a couple of interesting announcements including a major revision of iLife and iWork. I love iPhoto and Keynote and both have been improved. The iWork suite is being made a web application. (While I think the change is positive - it needs a couple of tweaks.) iPhoto got geotagging and recognition of faces (which Picasa has already). I was disappointed in that the company did not release a new version of the Mac Mini - it needs to have a much larger hard drive and possibly to integrate the features of Apple TV. A one terabyte model would be dandy.

Apple made the case that the original purpose of the show - to present new technologies - is made less important because of the web and the Apple store network. That has a lot of truth. But a second point was a gathering of the faithful. That function may also have been reduced as a result of things like Twitter and Facebook - electronic communities.

There is also talk that Apple will make a splash at the Consumer Electronics Show- which is in Las Vegas about the same time. The problem with that is that a lot of the CES is not of interest to me. One of the benefits of Macworld is that I could do it in a day.

Regardless of the reality, I enjoyed this rite of the first week in January. And if it does go away, I will miss it.

A reason for pause

The chart shows expenditures as a percentage of GDP, the RED is federal expenditures under four conditions. The purple adds in the 2006 figures for State and Local Expenditures, less transfer payments. The first column is 2006 levels. The second is the highest level achieved previously (WWII). The next two columns estimate the current budget and the current budget with the Obama stimulus package included. What should concern all of us is at what point do the levels of total commitment to governmental expenditure become disruptive to the private sector?

Bob Monagan

The first year that I was an undergraduate I also was the County Youth Chairman for the Goldwater campaign. It was an odd campaign that, at least in my area, had plenty of money but little support. But that year also introduced me a to person I worked with in a number of contexts over the last 40 years. His name was Bob Monagan. Bob had graduated from Pacific and after graduation and military service established an insurance practice in nearby Tracy. In a number of the roles I worked with him on - including things related to Pacific - he showed himself to be a firm and thoughtful leader.

Bob began his state service in 1960. He was one of the four "young turks" (the others being Bill Bagley, Jack Veneman and Hugh Flournoy - who died about a year ago). They first broke up the GOP caucus by changing the rules. Then they built a republican majority which eventually, at the end of the 1960s, elected him Speaker for one term. But his operating style was to work with across the aisle. A year ago at Hugh Flournoy's memorial, Bob and Bill Bagley regaled a small group about the exploits of the Young Turks. They worked together well. They were able to hold together in some pretty tough times, including a period where they defeated the then Speaker Jess Unruh when he tried to bully them on the budget.

When the GOP majority was defeated in 1970 he worked as an Assistant Secretary in the Nixon Administration. In the time that I was in Washington we interacted a lot - first when I was a congressional staffer and later when I went back to the White House. He offered some sound advice about forming a governmental agency - at the time I was working with Bill Simon on forming what would become the Department of Energy. After Nixon he went on to lead the California Manufacturer's Association.

Bob was a consummate pragmatist. That did not mean he was a consummate compromiser but it did mean he was willing to consider alternative ways of looking at the world. His view of the world was both well developed and measured. At some times I thought he was too accepting of government interventions but his view of the world was that governments, like other institutions, first ought to accomplish their intended missions. Goldwater said "to disagree does not mean you have to be disagreeable" - that about summed up Bob's approach to issues.

After he retired from the CMA he wrote a book about the legislature, called The Disappearance of Representative Government. In it he explained Monagan's laws. They were:
1) Campaign expenditures rise to meet campaign contributions; 2) The Republic cannot successfully survive with alienation of those who serve from those who elect; 3) Government by regulatory process does not provide the best result, just the average result; 4) Our democracy is unique; it has survived because it is representative with safeguards. Unfortunately, the safeguards are taking over; 5) Majority decisions are not always right, unless an inordinate amount of time and resources are used to inform the public; 6) There is a direct mathematical relationship between the number of legislative staff and the number of bills introduced; 7) All representatives are bad-except mine; 8) Legislation is accomplished by compromise; that is settling differences by mutual concessions. Unfortunately, many constituents feel that compromise is an act of treason; 8) There is no such thing as under-regulating. By nature of the process, regulators will only over-regulate; 9)In politics, luck is better than skill, anytime; 10) The business of the legislature will consume whatever time there is for it; 11) The tough legislative decisions are delayed until the last possible moment-or forever, if possible; 12) The initiative is a safeguard not a vanguard.

Bob also proposed in the book four initiatives. One would have changed redistricting so that the Senate and Assembly would be reflections of the congressional delegation (the Assembly would be twice the size of the Congressional Delegation and the Senate) and would require the Legislature to adopt by a 2/3 vote a plan for setting the districts that conformed to a set of rules similar to one man,one vote. A second would have re-established a part-time legislature and set legislator salaries at the rate paid to municipal judges and would have set expense payments at the rate other state employees get. A third would have restricted politicians from receiving campaign contributions until they declared for the office and that surplus campaign contributions be transferred to the state's General Fund. The fourth proposal would have required initiatives, once qualified, to be submitted to the legislature for review. The legislature could not make changes in the proposal but could issue recommendations and to disseminate information about the proposal.

For me Bob's most profound contribution came in his role as a Regent of the University of the Pacific. Bob became chair of the Regents at a time when the University was in crisis. It was in the process of moving one president out and selecting another. It faced tremendous financial challenges and the accrediting region was about to issue a significant sanction. The Regents at the time were severely divided. Bob led the process on the board to right all of those ships. A new, and excellent president, was chosen. The Regents began a process of strategic planning that helped clarify the mission of the University, focus its programs and raise a fair amount of money to accomplish its objectives. Pacific is a much better place because of his work there.

Bob had a pretty clear set of priorities in all the tasks that I worked with him on. But that did not deter him from listening to alternative ideas and even adopting them. That skill is in scarce supply in Sacramento and Washington today.

The Efficacy of Bailouts

CNN carried a story today about another request for bailouts. A spokesman for Hustler publisher Larry Flynt said “The porn industry has been hurt by the downturn like everyone else and they are going to ask for the $5 billion. Is it the most serious thing in the world? Is it going to make the lives of Americans better if it happens? It is not for them to determine.”

I wonder if he came to DC in a corporate jet.

The ultimate folly of all this talk is that if we do too many bailouts - and we are coming close - we ourselves will need to be bailed out. Flynt is an acknowledged pornographer - but some of his counterparts who have requested bailouts come close to his standards of public decency.

Update on Conference Rankings in Bowl Games

The SEC has one remaining bowl game for the national "championship." But for bragging rights the Pac 10 still has the only perfect record. The two SEC teams that lost weren't exactly impressive. Alabama looked pathetic against Utah. The one unanswered question in the BCS series after January 8, will be whether USC, which dominated Penn State, could have won against any team in January - as many commentators think they could have. In the Rose Bowl SC scored on 5 of its 6 first possessions. It was clear to any viewers had Penn State begun to come back the Trojans could have fired it up again. Until a playoff system is established we will not be able to answer the simple question of who is the best team in the nation.

The RIAA and Sanity (not often linked but possible)

WIRED carried a story today about the most lucrative MP3 album released on Amazon's music site in 2008. The most popular album was Nine Inch Nails’ Ghosts I-IV. In its first week it generated $1.6 million in revenues. It became the fourth most listened to album on Billboard's electronic charts.

Oh, by the way, the album was released with a Creative Commons License. The Creative Commons blog wondered why would people pay for something they can get for free. It argued "One explanation is the convenience and ease of use of NIN and Amazon’s MP3 stores. But another is that fans understood that purchasing MP3s would directly support the music and career of a musician they liked."

The RIAA does not seem to get it. But consumers do.

Proportions

The news leaking out on the Obama stimulus package is beginning to be interesting. The talk now is of a package that could approach $800 billion. It is estimated that 40% of that will be tax reductions. To put those numbers in perspective, that would amount to something in the range of $300 billion over two years or about $125 billion larger than the reductions made in the 2001 package first offered by the Bush administration or about $70 billion larger than the money included in the first two years of the 2003 package. From any perspective the size of the tax part of the package, indeed it could be said of the whole package, is larger than expected.

The Tax Policy Center (a joint project of Brookings and the Urban Institute) said in a post called "Lots of Buck not Much Bang" on the proposal "The research on the last three rebates suggests that people spent between one-third and one-half of the money within nine months of the time it got into their pockets. If Obama pumped $150 billion into these tax cuts and 40 percent, or $60 billion, got spent, the impact on the U.S.’s $14 trillion economy would be real, though modest." The comments on the business side of the proposal suggest that they created "head throbbing" in the analyst. The conclusion to the piece is dour "Let’s hope that many of these trial balloons crash to earth long before they have a chance to become law, though I fear they won’t."

Seven Pounds of Nothing

I think Will Smith is usually a very good actor, he mixes charm and presence to create characters that make me want to see him act again. His depth and breadth are wonderful. That is not true in his most recent movie, Seven Pounds.

On Movies.com - one writer said "I was very disappointed by this movie. It was extremely slow and unbelievably depressing. This movie was centered around dying and death. If you have lost someone recently or even in the past few years, please don't see this. I nodded off a few times and when I opened my eyes I could pick up where I had last shut my eyes and I could still follow the movie." That about sums it up.

The story is about a successful engineer who is involved in a tragic accident which kills seven people - his wife and six others - due to his texting while driving. He begins to part himself out - giving part of a lung to his brother, then part of his liver to another and splits his kidneys with another. But then he meets a beautiful woman who has a weak heart - so in a final act of atonement he kills himself to give her a new heart and at the same time to offer his corneas to a character played by Woody Harrelson.

The movie begins with fifteen or twenty minutes of disjointed flashbacks and then meanders through a somnambulant script that I guess was meant to be artistic but whose fundamental premise is false - could a person, even a seemingly successful one like Smith's character - go through this process? Any thinking person has figured out both the plot and the conclusion in the first 20 minutes - one wonders why we then stayed to the inevitable conclusion. For the rest of the movie the script becomes something to be endured - you know where it is going. I should have been cautious when I saw that Harrelson was one of the "supporting" actors. Smith has been in a lot of great roles - some comedies and some dramas. So it was especially annoying to see this wasting his tremendous talent.

I would avoid this movie.

The Attorney General and Proposition 8

The Sacramento Bee this morning lauded the courage of our Attorney General in the case to decide the constitutionality of Proposition 8. They said in part "Brown rightly notes that the Proposition 8 case poses a conflict between the constitution's Declaration of Rights (Article I, Section 1) and the power of the voters to amend the constitution (Article XVIII, Section 3)." It is pretty clear that Brown's new found position is more political than legal. The fight here revolves primarily around Article 1, the State Constitution's declaration of rights.

I voted against Proposition 8, because I do not believe that marriage should be in the state's declaration of rights. By declaring everything to be a right one risks vitiating the issues that clearly should be protected. But I also understand the other side's position.

On November 18, the Deputy Attorney General said "There is significant public interest in prompt resolution of the legality of Proposition 8. This court can provide certainty and finality in this matter." Brown had earlier promised to defend the "will of the people" on the initiative. Yet he has now backed away from that position and the Bee applauds that shift.

The Bee's support for Brown's position is based on two false premises. First, they seem to argue that Article 1 protects somehow a "right" to marriage. It is hard to find that in the Article. It states "All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy." Presumably the Bee is arguing that Proposition 8 somehow removes a "property" right. By adopting Proposition 8 the voters added a new Section 7.5 which defined marriage as only between a man and a woman. There was no withdrawal of property rights granted under statutorily established domestic partnerships. Section 31 declares in part "The State shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting." Notice that the section does not include sexual orientation. In short Article 1, is a) much longer than the protections granted in the US Constitution and b) relatively clear about a potential conflict if the language of the constitution is construed to command same sex marriages.

There is a second hitch in Article 1 which the Bee ignores. Section 4 of the article declares "Free exercise and enjoyment of religion without discrimination or preference are guaranteed. " Many of the conservative religious denominations argue that scripture or theology prohibits same sex marriage. Could overturning the Proposition lead to restrictions on the rights of religious groups to practice their faith?

The Bee claims that there is a conflict between the declarations in Article I and Article XVIII which allows amendments. The latter article is short, as it relates to the voter's authority to amend. Section 3 says "The electors may amend the Constitution by initiative." Section 4 declares that the amendment becomes effective if "approved by a majority of votes thereon." To establish the Bee's logic one would have to argue that marriage is somehow covered in Article 1 or that the initiative did not receive a majority vote.

There are some substantive issues facing the court for which an attorney general who was doing his job and not looking for his next would would express some legal thoughts on. If he believes that the plain meaning of Section 1 is to include sexual orientation in the meaning of the protected categories then he should express that opinion, although that would be a bit hard to establish. If he believes that marriage is a property right and therefore a distinction based on sexual orientation is inappropriate then he could also express that opinion. But that too would be hard to establish. If he believes that the voters have established a constitutional issue based on the limits of Section 4, the religious expression question, then he should argue that.

But the real reason why Brown changed his tune is based on politics not law. In 1978, Brown was one of the most vigorous opponents of Proposition 13. Part of the movement toward that initiative was his willingness to hoard several billion dollars at the state level, to assure that he would not face the problem his father had on deficits. When the voters adopted Proposition 13, Brown turned on a dime and championed its' implementation. He was then, as he is now, pandering to a constituency. That is not good lawyering and it remains to be seen whether it is good politics.

Slumdog Millionaire

A great movie, especially a drama, has a compelling story, a group of interesting characters and some interesting twists. Slumdog Millionaire has all that and more. It is built around a story of a person from India's slums competing for the equivalent of the top prize in India's version of the show "Who Wants to Be a Millionaire." The powers that be don't believe that the main character could actually win the big prize without help. The prize is $20 million rupees - worth about $416,000.

At one level this is a classic love story. But there is a more fundamental backstory - was the winner smart, lucky or was it fate that determined the outcome? While the story revolves around two brothers and a young woman from the slums, the supporting characters, including the game show host, add to the interest in the story.

A couple of cautions about the movie. First, because it is written about three characters from the slums - a lot of the beginning of the movie is violent - none of it is unnecessary but some viewers might be shocked. Get over it, all of the scenes are integral to the story. Second, the story unfolds in an intriguing manner. I don't want to give away much about the story - but it keeps you interested to understand what in the world will happen next. Finally, once the movie starts you will be held in your seat. So don't think that this movie will allow you to get up in the middle for a bio-break or additional snack. At the end of the movie, which has a wonderful conclusion, this was a movie where I wanted to linger. Good thing the credits part of the movie is also entertaining.

Run, don't walk to see this movie.

How should legislators be paid?

In recent weeks there has been some discussion about whether members of the California legislature should take a pay cut. One needs some history here first. In 1966 voters adopted a fairly substantial revision of the Constitution which among other things created the fulltime legislature. I think few voters today would buy the idea that we established a permanent improvement in legislative decision making.

California legislators are compensated in a couple of ways. First, they get a salary which is a bit under $120,000. But they also get a tax free payment to cover their expenses related to having two residences. That is currently a bit over $170 per day. But there is a glitch in the system. Per diem is paid in such a way that members a) get it full time for most of the first 6 months of the year and b) when the leadership is meeting, because they might get called back they also receive it. They also receive a state provided car lease.

Last December, when the state commission that was deciding on whether to give the members a raise, the Speaker's spokesman tried to make a comparison between the job that legislators do and those of top corporate executives. He said “If you compare it to the private sector, you’d be hard-pressed to find the 120 top officers of any corporation with a budget of $150 billion that would take the salary that legislators get and no pension or retirement benefits.” That may be technically true but its a silly comparison. When corporations show deficits of the size and persistency of our state budget, the senior employees and even directors get fired.

I guess I would make a couple of changes in the way members are compensated. #1 - I would raise their salaries. Perhaps to $150,000 or even a bit more. #2 - I would eliminate per diem. If they indeed bear expenses related to their profession, they can take those off their taxes the way the rest of us do. Per diem is a classic way for legislators to engage in rent seeking. It should simply be eliminated. #3 - I would eliminate the state car lease. If they need to drive to Sacramento or around in their districts, let them deduct the costs from their taxes. In both #2 and #3 - they would require pretty accurate records. #4 - I would require that any personal expenses from campaign accounts including things like meals and parking tickets (see the earlier post about Chair Rangel of the House Ways and Means Committee) be reported as personal income subject to a 1099. #5 - In any year where the budget is more than 14 days late, I would suspend their pay for the rest of the year. #6 Finally, in this budget year, I would have them adopt a reduction in salary from the base amount which equals to the net General Fund reduction from the prior year of spending. State employees are being asked to take a 2 day a month unpaid furlough and after all aren't our legislators also state employees?

The Case for Playoffs in College Football

The case for a playoff system in college football was made clearly last night in the Rose Bowl. The Trojans had six possessions in the first half and scored on five of them against Penn State. Gene Collier of the Pittsburgh Post-Gazette said it clearly “There will be no empirical evidence, however, for the sprung-to-life notion that USC is the best team in America, as that [title] will allegedly be determined in next week’s Florida-Oklahoma sprint-off. This is an unending shame, that college football, such fabulous theatre, ends not in a championship tournament but just another tiresome argument.” Yesterday's victory gave the Trojans a 24-9 record in the Rose Bowl.

The BCS is a joke. Pretty much everyone, except some of the southern coaches, believes it to be so. About a month ago a post on the internet made that point clearly by suggesting that the BCS would have ranked Germany No. 1 after WWII based on their only one loss and tougher schedule.

One other note about the Pac 10 - a lot of commentators have argued that the Pac 10 is a weak conference. That is nonsense based on this year's bowl results. The five teams from the Pac-10 went 5-0 in their bowl games. Here is how the conferences looked at January 1.

New Uses for the Zune

Over the week a story developed about a new use for the Zune, Microsoft's music "player" with pathetic sales. (Note: at the two year anniversary of the Zune, it had sold about 2 million units. During the same time period Apple has doubled its installed base to about 76 million units.) It seems that the 30 gig Zune freezes. Microsoft offered the following technical support:

1. Disconnect your Zune from USB and AC power sources.
2. Because the player is frozen, its battery will drain--this is good. Wait until the battery is empty and the screen goes black. If the battery was fully charged, this might take a couple of hours.
3. Wait until after noon GMT on January 1, 2009 (that's 7 a.m. Eastern or 4 a.m. Pacific time).
4. Connect your Zune to either a USB port on the back or your computer or to AC power using the Zune AC Adapter and let it charge. Unfortunately, according to message boards for the device, the "fix" did not work.

So in the spirit of assistance, there are at least 10 uses for a frozen Zune.

1. It makes a technocentric but very thick bookmark
2. Put it in your freezer for a couple of days and then use it to cool your liquid refreshments.
3. As a decoy. When you have friends from Microsoft, use wireless headphones, keep your iPod in your pocket but claim to be listening to the Zune.
4. As a skipping stone on the water (note this probably only works once, but then that follows a pattern for the device).
5. As a pretend iPhone, for people who simply don't get calls.
6. Drill a hole in it and use it as a Christmas tree ornament.
7. As a coaster.
8. As skeet. (Note this one probably only works once too.)
9. As a reminder of things not to buy a second time.
10. As the technical and non-caloric equivalent of V-8 (Gee, I could have had an iPod!)

Gee, I thought the Chair of Ways and Means dealt with tax policy

The SF Examiner carries a story about how the Chair of the House Ways and Means Committee uses his campaign funds, or at least part of them. He paid $1450 to cover parking tickets. Note that was for his PT Cruiser not for the Cadillac that is funded from taxpayer money. His spokesman said there was "nothing unethical" about using the funds in that way. I guess that guy studied ethic at the Blagojevich School of Ethics in Chicago. Note: the upper photo is one of Mr. Rangel.


Perhaps the larger question is why any member of congress needs to have a taxpayer funded auto. It's not hard to understand why only 20% of Americans believe congress is doing a good job (71% disapprove). However, with the way that districts are drawn, our members look back at those polls and say in the fashion of Rhett Butler, "Frankly, I don't give a damn."

Claiborne Pell

Claiborne Pell died today at the age of 90. I worked with him, although not for him, in the 1972 cycle of the reauthorization of the higher education act. I was the only staffer that worked for both sides of congress during the process. During the year leading up to that first Reauthorization of the Higher Education Act, the Senate began its actions first. There was an interesting group of members of the Labor and Public Welfare Committee - Pell, from Rhode Island; Winston Prouty, who was the ranking member on the subcommittee from Vermont and in many ways had a similar demeanor as Pell; Jacob Javits, who was ranking on the full committee and an energetic leader in the committee and in the Senate. In that era, while they had significant disagreements about policy, they learned how to get along.

Pell was first elected to the Senate in 1960, Prouty in 1958 and Javits in 1956. Pell graduated from Princeton. Prouty had spent three years at Yale but then graduated from Lafayette, Javits graduated from NYU. Pell was an aristocrat, no doubt about it. Pell's family wealth came from a land grant from George III but also from a part of tobacco (Lorillard). His aristocratic nature was in no way negative. In committee hearings he drank only sparkling water, Vichy. There is a great story about him campaigning in one of his campaigns, and asking an aide for some rubbers. The aide came back with a pair and Pell asked “To whom am I indebted for these fine rubbers?” The aide said he had gotten them from Thom McAn. Pell supposedly replied to the aide “Well, do tell Mr. McAn that I am much obliged to him.” Prouty came from a relatively wealthy family, which owned a lumber mill. He, like Pell, had gone to prep school. Javits grew up in a hard-scrapple New York. He and his brother were lawyers. Pell and Prouty were republicans and Pell was a democrat but both the members and their staffs worked well together. I worked for Prouty. I don't think that any of the three were especially close personally - they did not seem to socialize. But they did try to work together. The staffs would frequently communicate on common issues such as higher education. That was encouraged by our respective bosses.

In 1971, when the Senate began to move a bill, a number of colleges were arguing for more direct aid to colleges from the federal government. A group of Catholic colleges argued in a report, called The Red and the Black, that without direct federal support they would fail. The major supporter of the direct provision of aid to colleges was Edith Green, a democratic congresswoman from Oregon who chaired the House subcommittee on Higher Education. Although she went to Wilamette and Stanford her undergraduate work was at Oregon. Pell rejected the arguments from the Catholic colleges and supported the creation of a new direct grant pro gram to students that is now called the Pell Grant, originally at $1400 per academic year.

The senate did a series of hearings to look at the issues for the upcoming bill including considering direct aid. Over the Spring came to a bill which created the Basic Education Opportunity Grant (BEOG now Pell). Green's subcommittee went a different way and proposed to add more aid directly to colleges. But Green's GOP members did not go along with the chair. In September of 1971 Prouty died and I went to work for Marvin Esch who was, like Prouty, the ranking member on the higher education subcommittee in the house. Al Quie, was like Javits, was a GOP ranking member on the full committee and from Minnesota. Marvin Esch, who had been a college professor in Michigan before being elected to the House was the ranking member on the subcommittee. They worked well together.

When the two bills went into conference (at that time conference committees were held in private) the committee finally got down to the key issue. Green proposed to have her approach prevail, expecting that she could get some of the GOP in the Senate and all of the House members to support her. But as the roll was called, beginning with Quie and Esch, Green lost. Pell prevailed and the rest is history.

Pell was, like Prouty, not much of a public presence. Neither seemed to care much about the making the news. Both cared a lot about policy. Pell did not avoid making news, indeed, during one confirmation hearing in the Clinton Administration he made a minor splash to help Roberta Achtenberg get confirmed as the first openly lesbian presidential appointee. But in that case as in the rest of his career he did his job with grace and intelligence. Prouty was succeeded by Robert Stafford, who carried on the tradition of intelligence in the Senate. Stafford was replaced by Jim Jeffords who in turn was succeeded by Bernie Sanders. Vermont senators seem on this seat to come from the lone house seat in the state. Javits' successor who beat him in 1980 was Alfonse D'Amato who was then succeeded by Charles Schumer. All three can be described as a lot more flamboyant than either of the New Englanders. But Javits, as opposed to his immediate successor and successor once removed, had the integrity of his other two colleagues. Pell, who had a strong interest in public support for the arts, once commented that he did not think much of some of the grants of the National Endowment. But he knew the importance of the separation of powers - his job was as a legislator.

The last time I saw Senator Pell was a few years ago. While his health was diminished he retained his grace. I am not sure that the current US Senate could find a place for someone like Pell, or for that matter, Prouty or Javits. Each were able politicians but they cared enough about the process to be able to disagree without rancor.

Sacramento Ball Drops

On New Year's Eve we went out with a couple that we have spent New Year's for the last couple of decades. This year's festivities included three events. The first was a strange play at the B Street Theater. I only got to see the second act because I was trying to get a note out to clients about the Governor's budget proposal - which was released yesterday. (No this post is not about that proposal - which for the most part was rather uninspired. No wonder the approval rating for the Governor is only slightly higher than the Legislature.)

Then we went to a really fine dinner at Lucca's. The restaurant is unpretentious. We had thought about going to another place called the Firehouse but they had a very expensive set dinner which our two wives thought was not for us. So we chose Lucca's instead. The food and service were great. While they had some special items on the menu they also offered the normal menu. Lucca's is a place where you can enjoy a meal because they never rush you. And the ambience of the place is that it seems to have been designed to do just that. So we had a wonderful time.

There were lots of cameras for this event. I had my new G-10, which I continue to be very pleased with. My friend had his Nikon with a fast set focus lens. His wife had a small Canon. So some of the time was spent matching photographs. My friend has become a better photographer in recent years and even has a starting business in wedding photography.

The supposed highlight of the evening was to go see the first "ball drop" in Sacramento. (Note the first picture is not about a star in the East - that is not for five more days anyway.) The electronic image of a cube (not a ball) was on the top of an empty bank building (does that say something about 2008?) and the crowd began to gather at about 10 PM. Since it was near my office we went into it. Unfortunately, unlike my old office, since the current one is in the basement (we call it the "lower level" and it has plenty of natural light) we could not have seen the festivities. The crowd was mostly younger than us. There was a fair amount of very restrained drinking around us. One foursome had brought a bottle of Champagne and another had a flask. (It does get cold in Sacramento at this time of year.) But the crowd was very well behaved.

Although there was one annoyance. I am not sure how many people were squeezed into the mall. But people were packed in pretty tight. For the fifteen minutes before the ball(Cube) dropped groups of people would squeeze where no person could possibly move to get from one side to the other. Some moved laterally while others tried to advance to the front. There was a lot of jostling.

In the end the drop was a non-event. New Year's at this point in life is more about friends than events. The drop was supposed to be the same height as the one in New York's Times Square. If that is true, I am pretty sure I will never go to TImes Square either. When the thing descended there was first a countdown and then it dropped into a lighted display of 2009. Whoopdie Frickin Doo! I am not sure what I was expecting but as we were leaving I thought a lot about the cattle feedlot near the Harris Ranch. I think I now know how they feel when the place is full.