President Obama apparently plans to appoint a committee to oversee the futures of General Motors and Chrysler, and the managers of those companies probably are rolling their eyes.
The reason Obama is appointing the overseers is because the government lent them $13.4 billion last year, and they are likely to want more this year.
That’s because business in the auto industry has been generally bad, and the car companies have been close to bankruptcy.
Even Toyota, long held up by critics of Detroit as examples of how a car company should be run, is running in the red.
GM and Chrysler got hit hard last year when fuel prices skyrocketed, and now that gas prices are back down, and people are kicking the tires of big cars again, the credit crunch is hitting the auto firms — a double whammy.
There’s a general feeling in Washington, D.C., that the people who run GM and Chrysler are idiots, and they probably aren’t perfect. But heaven help us if the government takes over those firms.
The history of the car business is replete with instances of people thinking they knew how to build and sell cars better than General Motors, Ford and Chrysler. (Ford didn’t get any money from Uncle Sam last year, so won’t get oversight — not now, anyway.)
Remember Packard? Remember Studebaker? Remember American Motors? Remember John DeLorean? Remember Henry Kaiser?
Time and circumstance happen to car companies, just like they do to other firms.
Detroit’s Big Three did well with their SUVs when fuel economy wasn’t a big concern. Toyota did well with its hybrids when gas prices went up. Now, hybrids are spending more time on showroom floors and many folks are glad they didn’t panic and sell their SUVs like a lot of drivers did.
The overseers from D.C. should watch the money, but shouldn’t try to design cars.
The law of unintended consequences always comes into play whenever the government becomes a big player in the scheme of things.
For example, a major bank that had accepted bailout money changed its plans to hold a national conference in Las Vegas after howls were heard from lawmakers and taxpayers.
“Don’t waste any of that money on conferences,” was the message the bank heard.
That message didn’t hurt the bank much.
But it certainly hurt the hotels in Las Vegas that would have benefited from the conferences being held there. It hurt the bellhops, the cooks, the wait people and the people who make the beds and clean the rooms. It hurt the casinos and the drink servers. It hurt the food vendors, the truck drivers, the gardeners and the janitors.
Las Vegas in good times might not have felt the cancellation very much, but these are not good times. Travel venues — even Las Vegas — get killed when the economy is in second gear, because it is easy to cancel a vacation.
I know this, because Mrs. Doud and I used to live in Lincoln City, a tourist town on the Oregon coast, and when Portland, Lincoln City’s biggest source of visitors, sneezed, Lincoln City would get pneumonia and almost die.
Small group meetings kept the lights on in that town, just as big ones keep the lights on in Las Vegas. A small group meeting in Lincoln City or any other coastal town would sell from 50 to 100 hotel rooms for two or three days straight. This would provide not only room rents, but business for the 54 restaurants in town, and for beach concessions, candy stores, coffee shops, service stations and antique stores.
And the people who attended the meetings not only learned what they were supposed to learn, but came away refreshed, renewed and ready to work harder and smarter.
Without group meetings, Vegas and Lincoln City also will need bailouts.
Hey, Gov. Schwarzenegger, you say you want to root out big-time government waste to solve budget problems? Well, listen up. You’ll be amazed at how much regular folks know about this and how they’ll expose it with only the slightest encouragement.
Here’s what happened when this column revealed a single type of wasteful government negligence: Dozens of readers responded with examples big-time squandered tax dollars.
J. Clark Kelso, the court-appointed chief of medical care in California prisons, estimated here last month that the prison system throws away at least $100 million a year because officials refused for decades to negotiate low rates with hospitals, as every insurance company does.
Readers followed with scores of tales of related waste, many of them accurate. This suggests legislators and the governor might get results if they’d only consult rank-and-file citizens in their alleged search for waste.
“I have nursed countless inmates and observed millions of dollars in excessive expenses,” emailed an intensive care nurse at a non-prison hospital in Vacaville. “Of course, the physicians order every test in the book for the inmates…
“In many cases, the inmate is either temporarily or permanently incapacitated. I have seen brain dead inmates with two officers watching them around the clock; often on overtime…”
Dr. Terry Hill, chief medical officer for California Prison Health Care, confirmed the nurse’s observations. “The rules of the California Department of Corrections and Rehabilitation require that where a prisoner is considered a risk to public safety (because of his crime), there be two guards at all times when the inmate is not in a prison facility,” he said. “The rules are inflexible. I would confirm the nurse’s statement.”
When it comes to excessive blood tests and diagnostic scans, Hill also confirms waste. In this case, it’s because convicts often sue doctors. “We have some physicians who have been sued by inmates 100 times or more,” he reported. “Some of those complaints are valid; very many are very frivolous. One doctor got sued because he didn’t give an inmate long underwear. So the doctors are very defensive.”
A solid set of rules from the prison system could solve this problem by spelling out just what tests should be used in various circumstances. Do this, and prisoners would have to sue the state, leaving doctors to do their jobs less defensively and saving big bucks on tests.
Total cost of these forms of waste? There are no firm figures, but Hill estimates it’s at least in the millions of dollars, perhaps tens of millions.
From Pam Hurt, head of Robinson Textiles, a Gardena-based firm that is America’s second-largest provider of jail and prison uniforms and bedding, came this:
“The last time I checked the prices of the California Prison Industries Authority, it was charging $17.95 for one neon-green inmate coverall,” she said. “I sell them for $12.90. With 170,000 inmates getting an average of two new coveralls a year, you do the math on the waste.”
She’s got the price comparison right. Robinson sells coveralls to many California county jails and to state prisons around the nation for far less than this state’s prisons pay the state-run PIA, which gives inmate workers about $1 per day. State law makes prisons buy whatever they can use that’s made by the PIA. But the code section says nothing about pricing.
“The point of our programs is training, not profit,” says PIA spokesman Tom Collins. “We get inmates to interact in a professional manner with each other, their guards and their instructors. We provide training in skills they can use on the outside, things like underwater welding, carpentry and metal fabricating. We see about 25 percent less recidivism (repeat crime) from inmates who have worked in our industries than other inmates.”
But Hurt says sewing uniforms and blue jeans is not a skill prisoners can use on the outside anymore. “All our sewing is done overseas and that’s true of our leading competitors, too,” she said.
Then there’s the waste created by the sheer number of prisoners. “We don’t need all these punitive laws like three strikes and you’re out,” said reader Ray Procunier, California director of corrections under Gov. Ronald Reagan. Procunier is now retired and living in Grass Valley.
“When Reagan was governor, we cut the prison population by one-third and there was no increase in crime, not even a blip. I guarantee I could bring down today’s prison population from 170,000 to 75,000 and not hurt a soul in the process.”
If he’s right, the state could save more than $4 billion in prison costs, at the current annual average cost of $47,000 per prisoner.
The common thread among reader comments was that even in a day of budget crisis, politicians don’t ask constituents how the state could save money and avoid tax increases that no one really wants to pay. It turns out some of those people know more than any politico.
+ + +
Tom Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” now available in an updated third printing.
An unusual thing has happened, and you probably have heard about it.
No, I’m not talking about the trillion-dollar federal bailout, but that counts as very unusual — something to behold if it were stacked up in 100-dollar bills. How high would that be? About 789 miles.
The only reason I mention this is that if we piled up all that money (which would put a lot of people to work and help the economy), they might get hit by a satellite.
Two satellites, one Russian and the other American, collided in outer space, about 500 miles above earth. And when you figure how big outer space is (take my word, it’s big), you wonder how that could happen.
You can see why airplanes sometimes collide. They fly predetermined “highways in the sky,” and they converge at places where a lot of planes are landing and taking off.
Which is unlike outer space, which is filled mostly with … well … space.
When we send the space shuttle into outer space to meet with the International Space Station, we guide it right to where it is supposed to go. We don’t send it flying around space in hopes it will see the space station, sidle up to it and say, “Hey, sailor, how long are you going to be in town?”
Another unusual thing about the colliding satellites is that their accident was predicted by the people at the Jet Propulsion Laboratories. The Russians apparently lost control of their spacecraft, and it went drifting in the way of the American craft. When the two collided, they left a cloud of debris, which joins other space debris, which could get in the way of other spacecraft.
It sounds a little bit like what happened to the economy. I hope the people responsible for the Russian satellite didn’t get any bonuses this year.
Just when we thought we’ll be spared the usual Red Line vitriol on the MUSD lawsuit, we get a snarky letter that was a sorry attempt at redneck intellectual sarcasm in reverse. It was offensive, wrongheaded and not funnnny (said in a Borat voice).
Now with the point and counterpoint between the superintendent and plaintiffs, we’re back to kicking those damn lawyers, which begs the question as to why we are retrying the case this time in the court of public opinion. Not to worry, the final attorney fees price tag will be far less than demanded or didn’t the two attorney firms that the district retained to lose this case tell them?
So here’s the skinny on the ongoing saga. While the board of trustees deserve a round of applause for taking a kneel-down, it wasn’t without drama. The original plan in the playbook actually called for the district to get up and run with the ball. Enough of the football metaphor, in peculiar Madera speak, not opposing the lawsuit doesn’t mean what it means. It’s akin to pleading no contest to a criminal charge and then insisting on proving one’s innocence. The end goal all along was to ensure that incumbents not be “disenfranchised” (tears optional).
Ultimately, history would not be denied — not in this season of change.
Know this, the lawsuit found the plaintiffs and not vice-versa. When the Latino community and advocates first got wind of a possible lawsuit, they met several times with plaintiffs and counsel and once with a board member urging them to mediate the matter in hopes of avoiding a Modesto redux. Offers to broker a mediation were conveyed to both parties before and after the lawsuit was filed.
A demand letter was sent to the district in May that was countered with a belated response demanding more information. A subsequent demand letter went unheeded before the lawsuit was filed. It doesn’t require a lot of mental heavy lifting to understand the California Voting Rights Act (sorry, instructions not included). It has been on the books since 2001. There is nothing cryptic, foggy, loaded or convoluted about the law. The mandates are straightforward. No need for an ecological regression analysis.
The numbers on their face were downright damning. When a jurisdiction that employs an at-large system has a paltry total of three minority candidates elected in 42 years that should automatically raise a red flag. When Latinos live in compacted communities that make up an uber majority and there has never been a Latino candidate elected from their side of town in the district’s entire history, both flashing red light and siren should be working overtime. (No, Robert Garibay is not the honorary trustee for the “Other Madera.” Ask Mr. Garibay.)
Proof positive of the polarized voting is the narrow victory (by a scant seven votes) eked out by Dr. Goodwin in 2006 which revisionists now tout as political progress. On the contrary, for a minority candidate to have any chance of winning, she must be a doctor, lawyer and mediator all in one.
The lawsuit ignited an angst that morphed into a case of persecutory syndrome among the ranks of those who continue clinging to politics of the past. The district mantra was to stop the disenfranchisement of incumbents. Too funny how irony is lost on folks who have had it their way all these years and the mere spectre of power-sharing triggers a reinventing of themselves as victims. You have to love the role reversal. God forbid those who are tasked to govern for all constituents should care one wit about Eastsiders who have been shut out of the process for over four decades. Where’s the love?
Talk about mixed messages, the district proclaims its desire for dialogue and then acts unilaterally. The proffered maps were comprised of different scenarios of gerrymandered districts which effectively preserved the status quo save for board member Adams’ seat. They were anything but a collaborative effort as promised. There was no consultation with plaintiffs. Moreover, the sole public notice was via posting at the district office and on it’s Web site, which was, you guessed it, English only. So much for transparency.
Unapologetic, at the Oct. 29 hearing, with allies and friends in tow, it was ready to power home its “save the incumbents” map until the county board shocked the district by refusing to rubber stamp it. If not for the county board’s prescience in sending the district a wake-up call, it’ll still be litigating instead of negotiating attorney fees.
Despite the hand-wringing, finger-pointing and claims of being blindsided, the advent of the lawsuit was long in the making and its outcome a foregone conclusion. Make no mistake about it, but for the lawsuit, MUSD would not be transitioning to district elections today. If you believe otherwise, in the immortal words of Carmela of “The Sopranos,” “I got a bridge I wanna sell ya.”
The disproportionate representation on the school board has been the proverbial elephant in the room since the district was established some 40-plus years ago and the fault line widens with each passing year. It inconceivable that anyone witnessing the sea of minority faces in district schools every day would not recognize the blatant disconnect between the governing board and the students and parents it purports to serve.
Gov. Arnold Schwarzenegger is threatening to lay off 10,000 state employees if a budget deal isn’t struck soon, and while that might be what has to be done, it doesn’t seem quite fair.
Unless, that is, those laid off include the heads of all state departments and all those who work directly for them, all the members of the Legislature, all the employees of the Legislature, and everybody in the governor’s office except the governor himself. We would suggest laying off the governor, too, but he takes no salary, so laying him off would save no money.
Such a layoff would have two effects: It would save a lot of money in the short term and in the long term it would show how well the various departments could get along without the big shots.
If a department started running as well, if not better, than it did when its executive director was in residence, that would tell us something. If it fell apart, that would tell us something, too.
If the departments run well in the absence of their executive directors, it would show that the executive directors had been doing their jobs. Good executives make sure that in their absence, things run well.
On the other hand, if a department starts falling apart when the executive director departs, it may be time to start looking for a new executive director.
I’ve always thought the Legislature would work better if it were part time, with the Legislators paid as part-timers. In the beginning, Legislatures were part time, but eventually became full time when the Legislators got used to living the high life in Sacramento. Having a full-time legislature means the legislators have to look busy, and the result is a lot of laws we don’t need.
At least, that’s what I think. This might be a good time to put the idea to the test.
All comments are edited for length and content. Due to content or space limitations some comments may not be published Please limit your calls to two minutes or less.
A man said he “would like to correct Mr. Doud’s editorial of February 6, on the Darwin dilemma.” The caller mentioned “the simple phrase where he (Doud) says, ‘intelligent design adherence is the same as creation as to take a Biblical view where all life was created in a few thousand years.’ That is not the position of intelligent design adherence,” the caller said. “It doesn’t say the number of years the earth was created. It only says there is an intelligent design in creation, that it did not happen by chance.”
A male caller said he “didn’t realize Mexicans in this town were hated so much. Maybe they should get rid of them.”
He also responded to the lady last week that complained about cars parked on the lawns while driving down 4th Street. “Maybe she should be a good Samaritan and tell people to clean up their act.”
“It’s okay for the politicians to vote our taxes,” began a lady. “But those that are being checked to be put in office by (President) Obama are not paying theirs.”
“There is hope out there yet,” began a regular caller. “Obama promised us change is coming. The only thing I’ve seen so far is most people he is putting in his cabinet do not follow the law, do not pay their income tax and that’s a good thing for all of us. Maybe all of us won’t pay any income tax.”
A woman responded to last week’s call from a lady who liked the short hair Tribune columnist Leon Emo had as a child and ridiculed him for the current length of his hair. “I see Mr. Emo at least once a week and I happen to like his current hairstyle. His silver, flowing locks turn me on.”
A man suggested to “the city and county of Madera to make it lawful for cockfights and bullfights. They could hold them at the fairgrounds and people could bet on them. It’s a great tradition we Mexicans like to do. I think the law should be changed to allow this Mexican national sport to take hold in Madera.”
Again this week, several callers responded in support of the school district “and the kids of Madera.” All agreed, “because of the ($1.2 million) lawsuit filed by those three and their lawyers they would not vote for any of them.”
A man “checking today’s (Friday, Feb. 6) sports section where I read about Madera High’s basketball game and there is nothing in there at all. Once again, no reporting for Madera High (basketball). Madera South High School is just as glorified as it can be in there; they got blown out by San Joaquin Memorial. Maybe it will be in tomorrow’s paper. If that’s the case, then my bad. The reporting is painfully incorrect.”
A student “in sixth grade” said, “the teachers at Millview (elementary) are not prepared to teach and I want this to go in the newspaper.” The caller left their name.
“I’m calling about (mayor) Sam Armentrout,” began a man. “All this greening that involves energy savings cost and environmental benefits reminds me (of the saying) ‘I’m from the IRS and I’m here to help you.’ There is such a thing as going to far. Environmentalists tend to choke us off.”
“We are prisoners in our own neighborhood,” began a man. “The Sunday swap meet at the corner of Lincoln and Sharon Avenues is out of control. The City of Madera allows this operation to continue without nearly enough parking. The citizens and homeowners can’t even park in front of their own homes. This operation has outgrown its facilities and made our neighborhood a living hell. There is illegal parking in the alleyways, increased crime and illegal dumping. All we want to have is a peaceful Sunday like every other neighborhood in Madera.”
A man said, “I went to Town & Country Park Sunday morning for a walk. Graffiti was everywhere at the pavilion and picnic area on Granada. It is time for the cops to crack down there and everywhere. The poor parks (department) people, I am sure don’t have the time to keep removing that stuff. I went back in the evening just before dark, and in the same area a fight was going on with dozens of teenagers standing around. Come on, police department. Do something.”
A “new caller to the Red Line” touted the service of a local heating and air conditioning business (Name given). “I was very impressed with their service and also their service technician. It’s a good company with good prices.” (Note: the Red Line cannot promote businesses or companies)
Thank you for your calls. Remember, the Red Line is open for your messages 24 hours a day by calling 674-4478, or by logging on to maderatribuneredline.com.
A lot of folks are saying that the close-to-a-trillion-dollar government bailout now being debated won’t really do the economy much good, and they may be right. But don’t write it all off too soon.
The country has a long history of bailouts.
When the West was being developed, the government bailed out many poverty-stricken farmers by promising them land if they would go west and settle it. That went pretty well, although nobody consulted the Indians, who decided to resist. The farmers were bailed out again, this time by the army, which fought the Indians who were trying to defend their land.
Railroad builders were bailed out early on when the government granted them land on which to construct their rails. As a result, the country got railroads, and the railroad builders got rich.
Farmers were bailed out with price supports, many of which still exist, and with government-funded research which has improved agriculture for well over a century.
Rural communities were bailed out by the Rural Electrification Administration, which brought electricity to farms and small towns.
In the Great Depression, the government bailed out banks by coming up with the Federal Deposit Insurance Corporation; bailed out farmers and businesses again by building dams to produce electricity, to provide flood control and to provide irrigation; and bailed out senior citizens by coming up with Social Security.
In fact, when you think about it, very few people haven’t been bailed out by the government at one time or another in our history.
Of course, it hasn’t come cheap, and it hasn’t always been easy politically.
One person’s needed help is another person’s irresponsible giveaway, and politicians always are wrestling with that reality, as they are right now.
I don’t know why the heads of those big banks in New York are so upset about getting their salaries capped at $500,000 annually if they accept government funds. I wouldn’t mind that at all. If the government gave me money and then said I couldn’t pay myself more than $500,000 a year, I’d be ecstatic.
That would mean I could raise my salary to $500,000 a year, which would be a heck of a raise, let me tell you, and I’d have government money to make sure the paychecks wouldn’t bounce.
I realize some of those bankers were used to making a lot more than $500,000 a year. That much probably seems like pocket change to them. But when their banks have turned into big losers, how can those bank chiefs say they are worth all that money?
They always can turn down the rescue packages from Uncle Sam, but what then? If they go out of business, they might be headed for other jobs which might pay less than $500,000. They might wind up as tellers again, and it’s my understanding tellers don’t make that much.
If they look at all the angles, $500,000 a year might not seem so bad.
In ancient Japan, if you ran an operation into the ground, you were expected to commit hari kari. I’ll bet all those guys who did that would gladly have taken $500,000 a year instead.
The boards of these companies also are learning something, which is that they have to stop rewarding big shots for behavior that also doesn’t reward shareholders.
Goldman Sachs, which got $10 billion in bailout funds last year, is desperately trying to pay the government back. It doesn’t like Uncle Sam looking over its shoulder. And, its CEO, Lloyd Blankfein, made $68.5 million in 2007. He just doesn’t want to take a chance on a retroactive pay cut.
As the Madera Irrigation District approaches the 2009 irrigation year, we are entering what looks like one of the three driest years in the district’s history. There are three parts of a drought to look at: rainfall, snowpack and contact issues.
Rainfall — We all must only look at what has fallen so far this water year in Madera — 3.63 inches against the normal amount of 5.24 inches.
This has two effects. The first is: the soil profile is dry, meaning crops will need to be irrigated earlier and need more water. Second, we only need to look at the amount of water which has flowed into Hidden Dam and the Fresno River.
Hidden Dam water comes from rainfall (no snow) and 2,000 acre feet have flowed into it this year. With last week’s rain, we added 1,500 acre feet more, to equal 3,500 acre feet of usable water this year. In a normal year, there should be around 20,000, acre feet bringing the dam to about 25 percent full instead of 7 percent capacity as it now stands.
Snowfall — This is the water we get from Friant Dam. The January first snow report was 87 percent snowpack for the date in Friant watershed. But we didn’t have any snow in January. If you want to play in the snow, they tell me, you have to go to Fish Camp for a little snow. So some projections show a 25 percent of class one water, which is maybe a 30-day irrigation season for MID. Yes, this can change if February and March rain and snowfall come.
Contract issues — This is a subject which comes from the fact that our water in Friant is in exchange with the Exchange Contractor in Firebaugh to Los Banos.
With the problems in the Delta with the court ruling on endangered fish (Delta smelt, etc.) and low rainfall state wide, the question is whether the Bureau of Reclamation can deliver the 660,000 acre feet of water to the Exchange Contractor, which is a dry year amount of 75 percent of their contract.
So, what I am saying is, that each water user of water in Madera — homeowners, farmers, and businesses — will need to make the most beneficial use of our water, whether from underground or canal in this time of drought.
Carl Janzen, board chair Madera Irrigation District
