ENRON & FRIENDS


August 17, 2003:  Well well well well well well well.  So now the electricity troubles are in the east.  It's early yet to get a clear picture of what caused this giant blackout, reminiscent of the legendary 1965 monster that was supposed to never happen again... but one thing that's being said is that it has a lot to do with underinvestment in transmission lines, which get short shrift because apparently the utilities see them as all expense and no profit.  Now, during the California crisis, inadequate transmission lines came in for some of the blame (among those not willing to say that generators were holding back production), but what actually happened was that the market manipulation games that drove the prices up created an artificially high demand for transmission line capacity, and despite the overuse of the large trunk lines, the system held up and kept working, even when one major north-south line failed.  So despite all the sneering that certain Easterners did about granola-eating California hippie tree-huggers being unwilling to build power plants, it turns out our power system is better put together than the one in the east is.

One thing that happened in the crisis here, by the way, is that the state bought some of the big transmission lines from PG&E.  Time will tell whether the utility or the government takes better care of it.

In the California recall election, the Republicans are not, after all, all piling in behind Ahnuld.  Bill Simon Jr., the loser of the last real election, is running against Schwarzenegger and intends to strongly emphasize the difference between their policy positions -- namely, the difference that Simon has one.  He says he's grateful that Arnold is in the race, despite the two of them going after the same pool of votes.  Davis's popularity numbers are now even lower than before the race started, and some Democrats are starting to think in terms of unifying behind Lt. Gov. Cruz Bustamante instead of doing the right thing and trying to get people to vote no on the pointless recall.

One thing Davis should do is call for debates early and often.  Most of the reasons he's unpopular are general unthinking resentments over things going badly, for reasons which are not the Governor's fault.  The more he and other Dems can talk out the actual issues and challenge their opponents for defensible alternatives, the more the public is likely to see how unpromising the recall is.  And if Davis can actually get Ahnuld up on a debate stage, of course, the likelihood is that the vacuity of the "pump up Sacramento" campaign is going to be all too apparent... which means Schwarzenegger probably won't do it, at which point Davis can gleefully rub it in that the tough guy is scared to debate him on real issues.  (Not that Davis is capable of doing anything in a visibly gleeful manner, but whatever.)

Unfortunately, Davis is going with a "rose garden" strategy of staying above the fight and just doing his job.  Dumbshit.

My own prediction, from the start, has been that despite Schwarzenneger being annointed by the media as the front-runner in the race (I just heard a Fox News guy call the race "his to lose"... and it should be noted that the state's newspapers have been generally hostile to Davis and Bustamante), he is not going to win, because the populace truly is not dumb enough to vote for someone that unqualified.  My friends think I'm being foolishly optimistic and uncynical about my fellow citizens.  I agree with Bill Simon (though the media isn't giving this any credence yet) that he could well be a more important challenger than Arnold.  Which is good for Davis, because election rematches are almost never upsets, the guy who lost the first one can be relied on to do even worse the second time.

[UPDATE]  Whoa, stop the presses -- the morning after I first uploaded this page, suddenly the news comes out that Cruz Bustamante has pulled ahead of Schwarzenegger in polls by three percent.  And as a result, there's immediate talk that all other Republicans in the race, including Peter Ueberroth and Tom McClintock as well as Bill Simon, are going to be leaned on by the state party to step aside.  Simon says nobody has tried yet to push him out of the way.  Bustamante, by the way, has come out swinging, saying that Davis's staff has tried to undermine him, despite his official position being that people should vote no on the recall, and vote for him only if they won't do that.  Davis's people deny it.  Democrats have also alleged that President Bush is quietly involved in the election behind the scenes.

No candidate except Bustamante has yet suggested a way to handle the current budget crisis any better than Davis did.  Bustamante is biting the bullet and calling for some raised taxes, as well as cuts.  Schwarzenegger has avoided saying anything specific at all on the issue.  His sole campaign promises so far are ones that would increase spending.

The most bogus aspect of the whole recall is that if Davis gets 49% of the vote, and Schwarzenegger gets 12%, Bustamante gets 11%, Simon gets 10%, and the small fry divide another 18%, then Schwarzenegger wins, despite Davis getting four times as many votes.  This is way worse than anything you can say about the Electoral College.  And if voting to keep Davis precludes you from voting for Bustamante (I'm not certain this is the case, but I would expect so), then Bustamante is likely to get fewer votes even if he has more supporters.  So my prediction that Ahnuld will lose may well go the same way as my 2000 prediction that Albert Gore would win the presidency: it might be right as far as who has the support of the majority of voters, but wrong as to who ends up in office.  This is certainly a good reason why the State Supreme Court should seriously consider the case to make the recall vote a simple yes/no, with the selection of the new governor happening separately, like in the March primary election.  That way, the winner is the one who is favored by the most voters; this way, it's not.

This recall is so toxic that even my local alt-weekly newspaper, which is normally quite respected and reputable, has come out looking like a bunch of dickheads.  Last week's issue had Gary Coleman, the diminutive former TV star, on the cover.  Gary, they announced, was running for governor!  They reported breathlessly on Coleman's platform, which was one random absurd piece of thoughtlessness after another.  For instance, Coleman wants to get rid of buses because they slow down cars.  But then it turned out that the paper had put together Coleman's campaign itself -- they wanted to make the whole thing look as silly as possible, so, in essence, they hired a washed-up actor to make a fool of himself and be laughed at, hoping that the derision he pulled down on his own head would rub off on the recall election itself.  From a personal ethics standpoint, this stunt leaves a lot to be desired... and from a political standpoint, isn't this the sort of thing we would expect from some right-wing kingmaker mogul like Rupert Murdoch or somebody?

Well, Coleman showed them.  The day the paper came out, he endorsed Schwarzenegger.

By the way, isn't it funny how a few months ago, all the right wing media shouting heads were telling Hollywood celebrities to stay the hell out of politics?  Now they all think Ahnuld is the hero who will save the state.  (How, by contributing his movie revenues to the budget?)

There is one good thing about the Schwarzenegger campaign.  It has to do with property taxes.  For twenty-five years, the elephant in the living room of California politics has been the fact that we completely fucked ourselves revenue-wise by passing that classic opening salvo of the eighties anti-tax revolution, the Jarvis-Gann Initiative, a.k.a. Proposition 13.  That one maneuver is at the core of most every problem the state has developed with budgetary matters.  What it was, for those not familiar with it (and the many who think you are) was a cut in property taxes, combined with a measure to stop property tax assessments from keeping up with the growth of inflation as long as the property stays under the same ownership.  The second part of this, not the first, is where the problem comes in.  You see, the long term result is that tax revenue isn't just cut once, but keeps on shrinking and shrinking.  Also, as I pointed out the time (though I was hardly out of high school then) and almost nobody else paid any attention to back then, the taxes paid by different people and different corporations get farther and farther apart, until you practically have no two people on the block paying the same tax rate... and this difference in rates tends to favor the advantaged, and to favor large corporations over small companies and individuals, because an outfit like IBM or Chevron or Lockheed Martin is far more likely to hold the same large plot of land for sixty years than a homeowner is, especially a less well off homeowner.  Prop 13 was the first of the great eighties-style grabs of extra privilege for the already privileged, the opening salvo of the modern class war.  (If you can call it a war when the other side isn't fighting back worth a damn.)  As befit a tentative opening shot, it was a subtle and indirect bit of assistance to the rich, not nearly as nakedly greedy as the stuff they pulled later.  (Like, for instance, last year.)  Anyway, for twenty-five years the great unspoken secret in California politics has been that we need to undo Prop 13, because it's the core of all the reasons why we have problems such as schools that used to be among the top few states in quality and are now among the bottom few.  My great fear is that our abandonment of decent education is eventually going to cause the state to abandon all its wealth and prosperity, which has mainly arisen from our rich crop of bright creative minds, and we'll end up as poor as Mississippi.  And nobody has dared to make a peep about this all-important issue, because the anti-tax faction has got every living politician buffaloed and terrified.

But finally somebody came out today and said the unspeakable: we are not making enough property tax revenue and we should raise property taxes back to a higher level.  Who said it?  A top adviser of the Schwarzenegger campaign!  Not just any random political flack either: this was Warren Buffett, the billionaire Wall Street financier.  Buffett gave as an example two houses he owns himself, one in Nebraska and one here: the tax rate on the former is about 2.9 percent per year, but on the latter he's paying only around 0.05 percent!  Even I didn't know it had gotten that bad.  When even a billionaire thinks taxes are too low, that's saying something.  (Billionaires traditionally don't like taxes, because under any sensible system they pay the most while getting less value for their dollar than non-billionaires.  Hence, like magic, we get a great big "popular" anti-tax movement... and Dubya selling tax cuts even when the public isn't wanting one.  You think the people behind Dubya believe that supply-side shit?  Or that cuts will create millions of jobs?  Hell no.)

There are indeed some advantages to political outsiders, no matter how ill-prepared they are.

After my long period without updates, there are still far too many corruption-related stories to cover.  I'll once again go for the abbreviated bullet list.  But I have to discuss one corruption item related to Iraq.

You've no doubt heard some moderate stink about how Halliburton (Dick Cheney's old company) got all the lucrative contracts in Iraq -- both for rebuilding the infrastructre (mostly the oil infrastructure, that is), and through its Kellogg Brown & Root subsidiary, for logistical support of the troops themselves.  Well, that story just got twice as good... no, three times as good.  You see, there wasn't really much evidence that the government was particularly playing favorites with Halliburton, it could just be a matter connecting two dots that look close but aren't linked... until now: the Bechtel Group, a company with a long history of enjoying a favorably close relationship with Washington when it comes to bidding on assorted contract jobs, is now complaining that the bidding process for Iraq is so tilted towards Halliburton that there's no point in them even competing for contracts any more.  That pretty much tells you how bad it is.  I mean, this is not an outfit that would want that kind of issue raised under ordinary circumstances.  In fact, for the oil contract, the Army eventually just shut down the open bidding process altogether, to make sure Halliburton got the job.

But if you think that's bad, here's the really awful part: it turns out that the Brown&Root people who are supposed to be supporting the troops aren't doing their jobs!  Increasingly, their people have simply been unwilling to go into the areas where the soldiers have no choice but to go, due to the possible dangers to life and limb.  So we are paying hundreds of millions for these clowns to do nothing, while the young people who put their asses on the line for freedom and democracy (at least, they hope that's what it's for) are left with no fresh food or no toilet paper or no mail or no landing strip for the aircraft that's supposed to be coming in tomorrow, or no shelter.  They end up living in squalor because the modular buildings they were supposed to live in went undelivered.  They end up begging their families or visiting reporters for such things as a box of nails to hold a wall up.  This shift to civilian support contracts is part of Donald Rumsfeld's campaign to modernize the military so it's "more agile".

Oh, and it turns out that the oil rebuilding part is somehow going to cost twice as much as they expected it to.  In spite of Executive Order 13303, which essentially protects any company involved in the Iraq rebuilding effort from any legal liability over anything, no matter how guilty they are.  You'd think they would know how to estimate the costs of rebuilding Iraq's oil equipment, since they already got hired for it once, after the last time Dick Cheney bombed the country into submission.  (And at which time, I'll remind you, doing business with Iraq was illegal.  No problem for them, all they need is an overseas front.)

A whistleblower has come out of the Pentagon, by the way, who points the finger straight at Donald Rumsfeld for all of the many sordid episodes coming out of, or leading into, the war in Iraq, including the misuse of intelligence reports to make Iraq sound like a threat: recently retired Air Force Lt. Col. Karen Kwiatkowski, a specialist in Middle East affairs.  She says that what she saw from the inside was "a subversion of constitutional limits on executive power and a co-optation through deceit of a large segment of the Congress."  Said Congress is likely to be very interested in her testimony next month.

Let us not forget that it was none other than Rumsfeld who helped arm not one but two members of the Axis of Evil, in the old days before we realized they were the bad guys.  Iraq in the eighties, and North Korea just three years ago, when a company called ABB, with Rumsfeld on its board, contracted to build two nuclear reactors there.

Now, a spray of bullets.  Eat lead, yankee dog!  I mean, eat phosphorus.  No wait, maybe I mean eat liquid crystals.

Here we turn toward state and local government matters: And with that, I proclaim myself as done as I'll ever be with covering the stories I missed during the six month gap in Enron & Friends production.  Now, on to new breaking stories.
 

 
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