The Now Unhidden Costs of Desal in Marin

Posting these words of a friend:
Hello all,

One of the reasons, not the only of course, big money flows into campaigns the last minute is timing. Newspapers just don't have the staff available anymore to do the kind of investigative reporting we were accustomed to seeing. They don't have enough reporters to be able to send someone to the Civic Center daily to get copies of the 497s.

I have always been about full transparency because information is power, and in this day and age of communications, information can go viral in a matter of hours with YouTube and Facebook. Voters need to see where campaign contributions for candidates and measures are coming from so they can make up their own minds, informed decisions. That is the reason the California Fair Political Practices Commission exists and requires this kind of in depth public disclosure.

The MMWD is running Measure S, the bait and switch measure, competing with Measure T which was qualified by Marin's residents.

It's called the Committee to Support Marin County Measure S and Oppose Marin County Measure T. MMWD wants a shovel ready project with all plans, specs and state and federal permits in hand before having to go before voters for construction approval.

Campaign contribution information is available on-line at the Marin Registrar of Voters website and once late filings with the late contributions are added, it creates quite a mosaic of just who will benefit from the first of the desal plants proposed for our severely compromised Bay. MMWD's project is the stalking horse for desal projects proposed by four public agencies including East Bay Municipal Utilities District (EBMUD) and San Francisco Public Utilities Commission (SFPUC).

First, lets connect the dots then look at where the money is coming from. You know the old saying, follow the money.

Doug Linney, President of the EBMUD Board of Directors, is pushing desalination on his side of the Bay. He is also running the campaigns for Mr. Behar, President of the MMWD Board and Desal's major proponent, other MMWD incumbents and the Yes on Measure S, No on Measure T.

The SF PUC is Mr. Behar's employer.

Mr. Heliker, formerly the California Director for the Department of Pesticide Regulation, is the General Manager for MMWD.
Mr. Heliker is also the Assistant Treasurer for the Yes on S, No on T Campaign and actually the point person for the MMWD's campaign.

According to earlier FPPC filings, Yes on S, No on T:

Mr. Heliker loaned the Yes on S, No on T campaign $4,000 and contributed $1,000.

Friends of Hal Brown, $1,000. (that money originally comes from Hal Brown's contributors)

Friends of Steve Kinsey, $1,000. (that money originally comes from Steve Kinsey's contributors)

Conservation Strategies Group, $2,500 (MMWD's Desal Sacramento Lobbying and Consultant Group)

Gary Oates, Environmental Science Associates, $2,500 (MMWD Desal Consultants)

Northern California Carpenters Political Action Committee, $10,000

Late Filings, 497s:

Paul Heliker, Mgr. MMWD, $1,000. (cumulative, $6,000)

Kennedy/Jenks, MMWD's South San Francisco Desal Consultant, $5,000.

Jonathan Frieman, entrepreneur, $1,000.

Hanson Bridget, LLP, $1,000. (former Supervisor Gary Giacomini's law firm)

Marin Builders Association PAC, $1,000 (former Supervisor Peter Arrigoni is PAC Chair)

Remy, Thomas, Moose and Manley, Sacramento CA, $1,500. (MMWD's Sacramento Legal Consultants contracted with to advise and defend the Board on Desal)

CH2M Hill, $1,500. (MMWD Desal consultant)

The Dutra Group, San Rafael, CA. $2,500 (Pt. San Pedro Rock Quarry)

Simeon Realty Partners, San Francisco, CA $2,000. (reportedly owns the office building across from the Larkspur Ferry Terminal that sits on land that MMWD leases to them).

Northern California Carpenters PAC, $5,000 (total to date, $15,000)

The MMWD's Desal EIR states the small 5 million gallon per day Plant will allow for 13,800 new residential units and that equates to 28,000 new residents. Their optional 15 MGD Plant will supply enough water for 80,000 additional residents. This info is all readily available in the EIR and Legal Complaint.

Any Facebook or YouTube Techies out there?

Hiden Cost of Desalination

I took a look at our water bill today. It was a modest $33 for two months of water not counting the meter hook-up. I wanted to compare this to what it might be if MMWD builds a desalination plant. Using (in millions over 30 years) $100 for construction, $200 for financing, and $100 for operational expenses the total cost of the proposed desalination plant will be $400 million. MMWD now has 61,000 connections and sends a bill out every two months. The total yearly cost of the proposed desalination plant per connection is $218, or $36 per bill.

However Marin votes this November 2 our bills will rise. Costs go up. The current MMWD board has demonstrated a 15% conservation rate increased our bill 35%, and still faces a $2 million deficit. Much has been made of the restrictive language of Measure T. I think restrictive is really code for clarity and precision. The people have spoken when they signed the initiative to put Measure T on the ballot. Stop wasting our ratepayer dollars on a controversial plant that will double our water bills.

California Propositions

Prop 19 YES Regulate, Control and Tax Cannabis Act
We all know we need to stop the hypocrisy and legalize this plant’s use and production. Marijuana provides violent drug cartels with 60% of their money. This bill will put gangsters out of work. It allows for government to regulate and treat this drug’s use and just like alcohol.
[www.facebook.com/taxcannabis]

Prop 20 NO Redistricting Commission
The League of Women Voters backed the Citizens Redistricting Commission in 2008. Now before the CRC has begun its work Charles Munger Jr. has spent $3 million to change it. This bill is not supported by the League. While it does extend the reach of the CRC to Congressional Districts, it requires the CRC to consider living standards, economic segregation, when defining districts.
[http://www.noprop20.org/]

Prop 21 YES State Parks – VLF
This measure will keep our parks open, and our wild areas healthy. This $18 Vehicle License Fee (VLF) for most vehicles licensed in California creates a fund to operate and protect our state parks and wild life. Vehicles that have paid this VLF can enter State Parks without charge.
[http://yesforstateparks.com/]

Prop 22 NO City, Transportation, & Redevelopment Taxes
This measure prohibits state government from taking, borrowing or diverting taxes raised for local services and projects. However, this measure severely threatens state funding of education, healthcare and social services. This $2 billion restriction on the State Legislature would not be on the ballot if we had a majority vote for a state budget. Let’s fix the real problem, No on 22 and Yes on 25.
[http://votenoprop22.com/]

Prop 23 NO Suspension of Air Pollution Laws
This measure is being sold as a jobs bill when in reality this Texas oil funded bill protects their right to pollute. This proposition creates not one job, while the “green economy” it threatens has already created a million jobs in California. Save our climate and our jobs, vote No on 23.
[http://www.stopdirtyenergyprop.com]

Prop 24 YES Reverses Corporate Tax Loopholes
Here’s another reason for voting yes on Prop 25. To close a $20 billion budget gap in 2009 the minority insisted on a tax break to multi-state corporations. This measure overturns those tax cuts, scheduled to take effect in 2011, and will save our State Budget $1.3 billion yearly.
[http://yesprop24.org/]

Prop 25 YES Simple Majority Budget
Tired of a radical minority controlling the agenda in Sacramento and costing the State millions of dollars every day the budget is delayed? This bill does not raise taxes but it does require the majority to pass the budget on time. Legislators permanently lose their salary every day the budget is late.
[www.endbudgetgridlock.com/]

Prop 26 NO Redefines Mitigation Fees as Taxes
Alcohol, tobacco, and oil interests have funded this bill. By requiring a 2/3 vote for all mitigation fees this bill effectively eliminates the ability of local and state governments from charging businesses to pay for the cost of their operations.
[http://www.stoppolluterprotection.com/]

Prop 27 NO Overturns Citizens Redistricting Commission
Its time to give up the concept of safe seats for special interests. Let the independent CRC draw districts that are safe for those actively engaged in building a culture democratic participation in our state affairs.
Go to [http://wedrawthelines.ca.gov/] and
Check out the progress by clicking on the applicant pool links!!!

In Marin Municipal Water District Only

Measure S No MMWD Desalination Vote
The current Marin Municipal Water District board and its general manager, Paul Helliker -a chief proponent of the statewide lobbying group CalDesal- specially crafted the 24 words of Measure S to allow for unlimited spending on permits, engineering, engaging in contracts, and other unspecified actions prior to a vote.

Measure T Yes MMWD Desalination Vote
18,000 ratepayers signed the petition to put this measure on the ballot. Measure T’s 75 words lets us vote before the MMWD can approve, authorize, or undertake construction of a desalination plant; before MMWD engages in financing construction of a desalination plant, and before MMWD binds its ratepayers to any contract that relates to that construction.

For a fiscally and environmentally responsible MMWD board vote for:
Peter Lacques, Frank Egger, Glen Dombeck, and Dr. Larry Rose

[http://marinwatercoalition.org/]

More on the Link Between Desalination and Unsustainable Growth

A few receivers of my request did not feel I made the link between the Marin desalination plant and unsustainable growth sufficiently clear.

Thank you for your considered response. You have raised a number of issues that I would like to take one at a time.
(1) Let me start with the “tying the hands” of the incumbent MMWD board. These are of course their words and their reason for putting a competing initiative on the ballot, one that allows the ratepayers to vote without tying the board’s hands.

When the incumbent MMWD board was presented with opposition to their plans they proceeded to approve a faulty EIR. That matter is now in the courts. When presented with the possibility of a petition drive they did nothing. It was only after the voters collected over 18,000 signatures did the incumbent MMWD board act. They had three options, accept the initiative’s mandate and give the voters their opportunity to vote before any new construction spending, place an immediate voter approval measure on the ballot, or they could put an alternative and competing measure on the ballot. They chose the third option, Measure S, to confuse the voters.

The salient differences between Measure T, T for thrifty, and S, S for spendthrift, are when the voters get to be heard, before or after more construction spending on the desalination plant. The incumbent MMWD board wants the freedom to spend up to $30 million towards the total $115 million for the plant. Just whose hands are being tied? Lets not forget that the San Ramon-Dublin Utility District fully completed their desalination project prior to hearng the voices of the voters. That facility is mothballed never having been operated.

(2) Your broad point regarding the watersheds of the Eel and Russian rivers and the groundwater basin of the Santa Rosa Plain is a great opening for addressing regional water planning. A Marin desalination plant is not part of the solution. Our planning and building codes need to be tightened greatly. They need to incorporate no new water use and extremely low carbon use. Both of these goals are attainable with current technology.

I fully admire the passion for protecting the Russian and Eel River watersheds. Many in Marin love the San Francisco Bay as well. It will be harmed by the proposed desalination plant’s discharge. The Potter Valley diversion does need to be stopped. In the long run it has not helped the Russian River watershed and apparently it is endangering that of the Eel River.

One of the members of the Sonoma County Water Coalition has presented a plan for a desalination plant for the Laguna Santa Rosa treatment plant. It like the Orange County plant could be used to recharge the Santa Rosa Plain Basin instead of sending the water to the Geysers. Before I would be comfortable with such a solution I would first insist on two conditions. As mentioned above the first would be that our planning and building standards be improved. Secondly I, as would most people, would want factual proof that the water would bee free of pharmaceuticals and other micro pollutants. Here is where your argument for comparative energy use is applicable. The Dublin-San Ramon plant gets 65 percent of its needed energy from its off-gassed methane and a fuel cell. With solar cells it could be totally carbon free.

(3) But Marin has options that do not require desalination. Two of our seven reservoirs are not currently being used. There is extensive leakage from the system that we have. And finally the people of MMWD love to conserve, so much so that MMWD has raised the rates 39 percent in recent years. The Fryer Report, found on the Marin Water Coalition website, provides the details.

For mush less than the full $400 million 30 year cost of construction, finance, and operation the same 5 million gallons a day could be had. But that is just the first phase of the proposed desalination plant. Fully developed its 15 mgd would increase the current 24 mgd MMWD water supply by 3/5. That is not drought protection, but an open door to unsustainable development. And that would be truly tying the hands of Marin, preventing the necessary changes that are required for reducing our GHG footprint. Melted ice caps will destroy the Eel and Russian Rivers, San Francisco Bay, and much of California.

Development along SMART and Desalination in Marin

Today there is a David versus Goliath struggle being waged in Marin. It is an extension of one that is underway throughout our state. It is an extension of our regional drive for sustainable development and greenhouse gas reduction. Marin’s Measure T was put on the ballot by over 18,000 signatures because the Marin Municipal Water District board refused to listen to its constituents. The local Democratic, Republican, and Green Parties of Marin have each endorsed T and oppose the dirty trick Measure S. Be assured that politicians who have supported the 2009 California Water Bill and the recently removed Proposition 18 are fighting this grassroots effort with all of their political and monetary clout. There is now a lobbing group, CalDesal, comprised of water agencies across the State to affect the public’s right to vote on water desalination and streamline regulatory control over this technology.

Measure T needs your support to assure its passage. We need $6,500 for leaflets and yard signs. We need $20,500 for mailers to contact targeted likely voters. As Marin and Sonoma Counties are poised for new development, we need to be cautious of what problems we create for the future. It has only been the economic crash of these past few years that has prevented the rush.

The fight over MMWD’s plan to build a desalination plant is in contrast to the sustainable planning now occurring in Sonoma County, as exemplified by Sonoma Mountain Village. Creating development plans that include proximity to transportation, employment, housing and living amenities is essential to sustainable planning, as are the components of the buildings and their planned energy and water use. Two years ago the voters agreed to create a sustainable mode of transportation that will link Southern Marin to Northern Sonoma. The seventy-two mile SMART corridor will provide the skeletal structure upon which we will make development decisions. This will provide the economic engine for the twenty-first century on Northern California’s coast. If our development plans build into them the doubling or quadrupling of energy use for the already largest user of energy in Marin County then we will have failed our future.

There are many environmental and economic reasons for not building the bay water desalination plant. We cannot let this water manufacturing plant go forward. But for me the most important reason is that it will subvert our efforts to promote Green Building Standards that the world can live with. Marin should be reducing our greenhouse gas emissions not planning to increase them. This is why I am devoting my efforts this election for Measure T and candidates that support it. Please visit the website below and give generously to our collective future,

Thank you, Dan Monte
to contribute to the Measure T campaign and our sustainable future:
[ https://www.completecampaigns.com/FR/contribute.asp?campaignid=PRTVAS ]

Letter to Woolsey regarding war and social spending

Dear Congresswoman Woolsey,
Our out of control war machine now consumes more than half of our discretionary Federal budget. It out strips Social Security and Medicare and Medicaid funding. This year Congress failed to create a commission to study our budget deficits so the President created his own National Commission on Fiscal Responsibility and Reform.
He then appointed former Senator Alan Simpson to head it up. Senator Simpson has described his mission as “saving the United States from insolvency by hacking away at entitlements,” reported James Ridgeway in Mother Jones. (March 2010) The budget deficit has nothing to do with these entitlements. Indeed it is borrowing against these trust funds that have allowed the deficit to grow so large.
People who attended your recent forum at the Redwoods reported that you believe that Social Security is safe from being cut back. While that might be true for folks over 60 that certainly is not the case for those younger. For them the retirement age has already been raised to 67 years, in itself a 13 percent cut in benefits.
It is time to stand for the working folk of this country and internationally. It is the rich who are avoiding fair taxation and who press hard for these wars of expanded control over natural resources. You are a great voice for peace in the House. You have made many speeches from the floor denouncing the wars in Afghanistan and Iraq. You have been a champion of the Employee Free Choice Act. Now you must stand for, protect and expand the only retirement savings most Americans have, their Social Security benefits.

The Sheriff’s Palace vs a Modest Neighborhood

I walk down my street, returning from the Santa Venetia Market. Children from the neighborhood are riding bikes and others are playing with their neighbor’s small dog. Our sidewalks are mostly unpaved and crowded with vehicles, some under the care of sidewalk mechanics.

Often in the summer this scene changes with events at the Civic Center, most dramatically for the Marin County Fair when large signs stand at the entrance to this street and those nearby ineffectually blocking access except to residents. Hordes pass through our community eagerly in the morning and tired after the fireworks.

There are gates now that keep traffic on the Presidents Streets from entering the jury parking lot but not the foot traffic. One of the wonders of this neighborhood is the closeness of the lagoon and its aquatic birds and broad lawns, and of the tidal marsh of San Pablo Bay. Often we hear the yaps of coyotes in the evening and twice now I have seen a mother hunting for her pup.

When I speak to my supervisor, Susan Adams, about the Sheriff’s new palace, literally fifty to a hundred times larger than the nearby homes, I come away from the conversation hearing only that the costs to the county have to be considered. There is no mention of the many people who live in these mostly small 1950 homes.

No mention of what impact the intense radiation will have on the children. No mention of the employees that will fill the tens of thousands of square feet our sheriff wants. Because of the increased traffic our streets will need to get paved sidewalks, our cars will need residential parking stickers limiting parking for many of us. Our nights will be dominated by the glare from the building and the din of the sheriff’s cohorts.

It is not just Susan Adams’ responsibility but all of Marin’s to consider the impact this facility will have on the lives of the residents of Santa Venetia. How will Marin protect this mostly quiet, very affordable and walkable community?

10 November Ballot Measures

Ballot # Vote Title
Prop 18 NO Water Bond (*Removed from Ballot)
Prop 19 YES Marijuana
Prop 20 NO Redistricting Commission
Prop 21 YES State Parks-VLF
Prop 22 NO City, Transportation, & Redevelopment Taxes
Prop 23 NO Stop AB 32 The Climate Bill
Prop 24 YES Reverses Corporate Tax Loopholes
Prop 25 YES Simple Majority Budget
Prop 26 NO Redefine State Fees Minority Rules
Prop 27 NO Overturns Redistricting Commission
Measures S & T No on S and Yes on T MMWD Desalination Vote

Prop 18 Vote NO * (Removed from 2010 ballot to be put on 2012 instead.)

Prop 19 Vote YES on the Regulate, Control and Tax Cannabis Act of 2010. We all know that we need to stop the hypocrisy and legalize the use and production of this plant. This measure provides for local government to control and tax its commercial use. Joseph McNamara, the ex-police chief of San Jose, argues in his SF Gate editorial; “The federal Drug Enforcement Administration estimates that Mexican cartels derive more than 60 percent of their profits from marijuana. How much did the cartels make last year dealing in Budweiser, Corona or Dos Equis?… It is worth remembering that our last three presidents, Bill Clinton, George W. Bush and Barack Obama, would have been stigmatized for life and never would have become presidents if they had been in the wrong place at the wrong time and been busted for pot during their reckless youthful days. Countless other Americans weren't so lucky.”

Prop 20 Vote NO on both Propositions 20 and 27. That’s the position of the League of Women Voters that supported the creation of the new Citizens Redistricting Commission. Proposition 11 (2008) created the new CRC, which comes into existence in 2011, to draw State legislative boundaries. Prop 20 was funded by Charles Munger Jr to the tune of $3 million and written to his liking. This bill does more than just extend to the new CRC the authority to draw the Federal Congressional districts, it restricts and redefines the terms under which the new commission must operate.

Prop 21 Vote YES to keep our parks open. The State Parks and Wildlife Conservation Trust Fund Act creates a new tax. The people of California rose up, collected over 750,000 signatures, and said tax us some more to keep our parks open. This measure proposes a very modest $18 Vehicle License Fee for most vehicles licensed in California. It raises this new money for a trust fund of about $500 million a year. It will offset some general fund money ($200 million) and eliminate some state park entrance fees ($50 million.) This measure will also add sorely needed new money ($250 million) to offset nearly a billion dollar backlog of maintenance and repairs.

Cars with California license plates will enter and park for free. Charges for camping and boat launching will still be collected by the state parks. Eighty-five percent of the $500 million trust fund will be set aside for park operation, maintenance and development, and fifteen percent will be used for wildlife conservation.

Prop 22 Vote NO on these restrictions on the use of taxes we are already paying. This measure is a zero sum game that pits the human needs of citizens against those of their agencies. It will prohibit the state legislators from taking taxes raised for cities services, transportation and redevelopment projects. This ballot measure severely threatens education, health and social services funding. If you are concerned about the quality of your roadways more than you are for your neighbor’s 3rd-grader having a good school year you might vote for this bill.

With this recommendation I have risked the friendship of those I have encouraged to run for city government. This measure would not be on the ballot if the State could pass a budget and raise taxes with a simple majority vote. But we have enshrined minority rule and elected a majority party unwilling to stand firm on its stated principles. The full fiscal impact on the State’s General fund would be a deficit at least $2 billion in most years and more in harder times.

Prop 23 Vote NO This measure suspends air pollution control laws (AB32, the Global Warming Solutions Act) that require major polluters to report and reduce greenhouse gas emissions until unemployment drops to 5.5 percent or less for a full year. Nothing in this bill creates a single job and for its supporters to call it the ‘California Jobs Initiative’ when in fact it is a ‘Lets Use More Fuel Act’ is a true act of duplicity.

Economic forecasters are not predicting a full year of the unemployment rate at or below 5.5 percent anytime in the near or far future. Some claim that California’s natural rate of unemployment is 6 percent. According to the LA Times (July 27), “The driving force behind the initiative is the oil industry, which has contributed more than $2.3 million to getting it passed. The biggest single contributor is San Antonio-based Valero Energy ($1.05 million, according to the latest state campaign disclosures), with San Antonio-based Tesoro Corp. in second place with $525,000.” This measure plays on the vulnerability of the unemployed. It will take some hard work to defeat it.

Prop 24 Vote YES and over turn these corporate tax loopholes. Our state legislature took an unforgivable action last year to pass a budget. It gave corporations $2 billion in tax cuts as part of the process of closing a $20 billion budget deficit. Thankfully over 800,000 Californians’ signatures were collected to overturn this tax give-away. A surprising feature of the legislated tax breaks is that it will allow for corporate refunds on taxes paid in prior years. Contrary to the current mantra California is a rich state. Our budget problems don’t stem from too much tax but from unfair taxes. Think Robin Hood.

Prop 25 Vote YES on these changes that allow for a simple majority legislative vote to pass a budget. This measure retains the two-thirds vote requirement for taxes-too bad. But late budgets alone have cost our State hundreds of millions of dollars. “’It’s time to end the budget gridlock and political gamesmanship that come with being one of only three states that requires a 2/3 vote to pass the budget,’ said California Federation of Teachers President Marty Hittelman. This will be our 23rd late budget in the last 24 years in California. Late budgets hurt our schools, our economy and the people that depend on vital services the state provides. A Majority Vote Budget is an important first step for common sense reform of the budget process.” Reported Steven Maviglio of The California Majority Report (June 16.)

Prop 26 Vote NO on this do-over on a corporate polluters relief act. In 2000 California had a similar ballot measure backed by the paint industry. They were angry over a fee charged against them to inform the public of the dangers of lead based paint. “The Tea Party movement appears to have a new member: the California Chamber of Commerce” wrote Andrew S Ross SFGate (April 15.) This measure will “…make it even harder, in some cases virtually impossible, for the cash-strapped state and localities to raise revenue.” The Chamber’s political action committee gave $1.2 million to the campaign.

The proponents of this measure claim that the legislature is redefining taxes as fees to circumvent the two-thirds rule. The reality is just the opposite. According to the Legislative Analyst’s Office, “This measure broadens the definition of a state or local tax to include many payments currently considered to be fees or charges. …the types of fees and charges that would become taxes under the measure are the ones that government imposes to address health, environmental, or other societal or economic concerns.”

“As long as there is a direct, legitimate connection between the fee and a benefit to the entity paying it, the fee would not be disturbed by the proposed initiative, proponents contend,” Capitol Weekly (June 13) John Howard. What the proponents have left out is that if there is a benefit to the public, like lead free children, the fee would required to be called a tax. Because of the negative effect on funding sources for our local governments some have called this the most dangerous ballot measure on the November ballot.

Prop 27 Vote NO on both Prop 27 and Prop 20. That’s the position of the League of Women Voters. Prop 27 rescinds the newly created Citizens Redistricting Commission that will draw the new redistrict boundaries of our State legislature after the 2010 census. According to the LWV this measure will “... allow politicians to draw their own districts to protect their jobs. It would take us back to the days when bizarrely shaped districts were drawn in secret, carving up neighborhoods and communities to keep incumbents safely in office. Vote no to keep the power with voters and the voter-approved independent Citizens Redistricting Commission.”

If I thought that the Democrats were doing such a great job I might vote for this bill. However, if I thought that the Republicans were to ever again get control of the State legislature I would vote against it.

Measures S Vote No on this totally unnecessary measure. If the Marin Municipal Water District really wanted to hear from its users on a desalination plant they would have put that on the ballot.

Measures T Vote Yes on this measure so that those who are paying the bill get a say on this controversial plan. The MMWD has already spent $5 million on studies and reports. How much more do they really need to spend before those paying the bill get to weigh in with their opinion? Stop this madness now. Let us vote now for a plant that Paul Helliker, the general manager, has stated in a public meeting -July 7 2010- has not been necessary for over 30 years.

I wrote these opinions for the MARIN ACTIVIST. The opinions are mine alone though others share the same.

The MARIN ACTIVIST is the newsletter created and published by the Social Justice Center of Marin. In order to get the MARIN ACTIVIST in the mail on a quarterly basis (or for sure biannually), you are urged to become a member of our SJCM organization the membership is $30 for single membership or $50 for a couple. $15 Low income. All contributions are acceptable, of course.

Business as vacuum cleaner

Tax breaks for businesses, and the wealthy that own them, do not stimulate economic activity. Tax breaks for folks without enough to pay for the life necessities do stimulate economic activity. Tax subsidies directed at economic activity, i.e. point of sale credits and rebates, also stimulate the economy.

Often people view business (micro economic) decisions and governmental macro economic policy that affect those decisions without understanding how business decisions are made. There can be no other explanation for what now proposes to be sound economic policy regarding taxation. It is not only the right wing that believes that tax cuts will stimulate the business cycle. Many Democrats try to find a balance with business tax cuts and social service funding levels, without understanding that tax cuts to businesses will never revive a depressed economy, never increase hiring.

We can describe a business by using the analogy of business as vacuum cleaner. The vacuum is turned on when there are dollars to be sucked up. In that process the business uses energy, collects dust, and expends dollars to separate the dollars from the dust. The productive part of the business is the collecting the money, accomplished by hiring labor and purchasing materials of production from other companies, and providing demanded goods and services. The labor and materials are the dust and business tries to keep these costs to a minimum.

The important part about this analogy is that the purpose of the vacuum is to suck up money. Without the presence of money the business will not turn on, labor will not be hired, and materials will not be purchased. Of course there needs to be a minimum amount of dollars available or the business will just close up forever. But the issue here is how to stimulate a business to run more than it normally would given current depressed market conditions. Adding money directly to a business via a tax cut is simply adding more money into the vacuum cleaner without turning the machine on. Adding money directly into the vacuum is supply-side economic theory. It does not increase labor nor purchases of materials of production and it does not provide more goods or services. At best it rewards large and inefficient businesses. At worst it provides the wealthy dollars to create competition away from of our labor markets while increasing government deficits.

Demand-side economic theory attempts to get the vacuum to operate more, to suck up more money and dust. Consumption of dust, use of labor and materials of production is the point of demand-side theory. To accomplish this there needs to be more money in the general environment, it is called demand. One way to accomplish that is for government to purchase goods and services. Business will respond to this demand stimulus by turning on – hiring labor and purchasing materials – and sucking up those government dollars. Another means is for the government to directly place into the hands of people the dollars they require to fulfill their needs when they and do not have enough. This can be accomplished by direct cash grants such as unemployment insurance or general assistance payments, or by reducing tax withholding on lower wage earners. The important qualifier is that they are not able to fulfill their needs with their current income. Tax rebates for purchases, i.e. cash for clunkers and solar panel rebates, are essentially the government aiding the purchase of targeted goods and services by others.

Targeted tax breaks can be good for an economy and are sometimes required to increase economic activity. But across the board tax cuts only increase deficits, provide minimal stimulus, and will never pay for themselves.

A new way to view California's yearly budget process

Last night’s Marin Peace and Justice Coalition discussion of the California State budget forced me to reflect over our efforts of last year. Our fourth Monday forum, January 2010, was a great event. It provided a chance for many to talk back to an official and an opportunity to learn how the budget impacts our lives. But by the measuring stick of how we have moved our self-government forward it fell short. Here we are a year later and our Legislature and Governor are repeating the process again. This year’s Democratic scheme includes borrowing up to $9 billion and imposing a $1 billion oil severance tax to make the payments. Last year’s Democrats put Prop 14 on the ballot and gave away our ability to elect progressive members to State and Federal office.

Without diminishing our advocacy for services for those in need, for universal education, and gainful employment for all, (the list is long) I believe we need to broaden the conversation. Here are few ideas that have been kicking around inside my head for a while now.

I would like to propose that we use the momentum of this yearly event to craft something permanent, an action plan that will span many years, a document that envisions a sustainable lifestyle for all Californians, a budget that will implement it, and a revenue stream that will support it. The Green New Deal for the North Bay was a beginning example that needs to be built on.
[ http://www.greennewdeal.info/ ]

The specter of 12 percent unemployment, and that rate will be rising, makes me question why we tax labor at every point in our economy. The corporate right has convinced most of us that taxing capital gains is a double taxation of the same money, as in all profits are returned as dividends and are taxed as personal income at some point. But their point that all economic income derives from our collective economic endeavor is not far off the mark. Maybe we should be taxing based on revenues, as a measure of how much of California’s infrastructure is used. Let’s not tax labor any more than we tax the physical material used in production. Let’s not tax profit which rewards the inefficient. Let’s tax revenue and financial transactions as they represent use of the commons. We can use taxes on income, profit, property, sales, and resource use to balance our economy so as to encourage the productive sector that we will be relying on for most of our state budget.

I have spent all of my 62 years as a California resident. I remember the best educational system in the country and it was essentially free all the way through college. I remember that for most 40 hours of work was sufficient to provide for a family. Now it takes 80 hours or more. It is important that we not just focus on current economic schemes to avert this or that crisis but that we describe what life values we can sustain. Until we know what we want it is difficult to demand that our elected officials work for it.

Re: Israeli Attack on Gaza Freedom Flotilla

Voices Raised in Protest at White House Rally,
Re: Israeli Attack on Gaza Freedom Flotilla

Compassionate people are rightly concerned about rocket attacks on the people of southern Israel. It is a valid fear that the Israeli government plays upon just as our government played on our fears after the attacks of 9-11. On the matter of this humanitarian aid flotilla, if Israel wanted to verify that no weapons were headed to Gaza they could have relied on cooperation with their ally Turkey instead of aggression on unarmed people.

The government of Israel needs the conflict with Gaza. Rockets from Gaza validate settlements in the West Bank and East Jerusalem. Just so the actions of a few Saudis were used to justify an attack on the people of Afghanistan, Iraq, and Pakistan. These confrontations promote the increasingly unsustainable war budgets that are required by capital’s profit driven need to exploit human and natural resources. Israelis have their ‘Greater Israel’ and Americans have our ‘Capitalism,’ now perversely called ‘Freedom’ and or ‘Democracy.’

These rallying cries justify war and divert us from our humanity. Our goal as proponents of peace is to define peace as sustainable co-existence that recognizes rights of others to lives of fulfillment and recognizes that collectively we are dependent upon the natural world.

There is no difference between the overthrow of the democratic governments of Haiti and Honduras, the subjugation of the Palestinian people, and of capital’s savaging of human culture and the natural world.

[http://blog.pdamerica.org/2010/06/voices-raised-in-protest-at-white-house-rally-re-israeli-attack-on-gaza-freedom-flotilla/ ]

Regarding the recently passed Prop 14 in California

Our California legislators are because of term limits merely placeholders waiting for the next political gig. Mostly in Marin and Sonoma counties they are compassionate and liberal yet they are unwilling to do anything that will spoil their chances for another job. And that is why we will never get the budget and the revenue to support it that is necessary for working individuals and families. Our limited democracy is set up to sell commodities and support the corporations that profit from these transactions. It is not organized to support a sustainable and fulfilling life for the citizens. There is no other way to view this state, that would be the 35th most populous with the 7th or 8th largest economy, other than that the fruits of this our collective effort are unfairly distributed.

Regarding Proposition 14-the open primary ballot measure, I have heard our budget process called compromise under duress and a gun held to their heads, but the fact remains that the California Democratic Party reached out and pulled the trigger. I believe they wanted to do this for a very long time. It must be extremely frustrating not be able to fix the financial situation in this state. And any of these legislators that grew up in California must remember when college was tuition free and we had the best schools in the nation and we were rich, not perpetually on the brink of bankruptcy. Or a cynic could say that the CDP was concerned by the growing progressive movement in the party combined with the deteriorating financial conditions of the majority of Californians that they needed a means of preventing the dirty hippies from spoiling the profit feast.

Regardless of their motivation the CDP choose to sell out the likes of Lynn Woolsey and Barbara Lee and all of the minor parties for the possibility of more moderate Republicans coming to Sacramento.

Who is the real Mr. Huffman

My impressions of Jared Huffman have been mixed since I met him in December of 2006. I moved from being not impressed at all to loving his stated position on water in California. His recent statement regarding the budget priorities have given me hope. But my hope is cautioned with great skepticism. I am really writing this to gain some clarity regarding Mr. Huffman. Here’s why.

A favorite politician of mine has been known to say, whiskey is for drinking and water is for fighting over. At the Glaser Center in 2007 Jared spoke eloquently about the need to reshape our development policies and the need to treat our water supply in a sustainable fashion. His wonderful generalized statements don’t match with the following actions.

Jared Huffman’s support for the water bill of last year was played as providing environmental controls on the delta waterways. It’s a complex bill and I don’t claim to understand its ramifications very well, however Food and Water Watch (FWW), a group I am beginning to respect, is mounting a campaign against the bond measure that the water bill generated because they believe it will put California water under the control of private interests. I think that Mr. Huffman was the only state legislator from the north coast to vote for this bill. I think that this bill will eventually allow for a peripheral canal to drain the SF Bay estuary.

Since I have moved back to Marin I have been educated around Marin Municipal Water District’s attempt to build a desalination plant, a project also opposed by FWW. I am a builder or was until recently. My first impression of this concept was positive. But now that cities and counties across the state are trying to cut back on their carbon footprint I find it unacceptable that MMWD is planning to double its greenhouse gas output. And that’s only if it builds the smallest of the planned desalination plants. If Marin were incapable of finding water for the current residents by any other means I might be persuaded that this is a reasonable thing to do -- although the treatment of our wastewater would be my first option as it is the much more environmentally sustainable thing to do. However, MMWD’s customers have been conserving water at rate greater than the desalination plant will produce, and there are many more options for the district to conserve further.

The only possible rationale for building this project is that it will allow for development of the bay front wetlands. This is an unsustainable policy that asks current users to fund the development projects of the landed gentry. What this has to do with Mr. Huffman is that he appears to be the kingmaker behind the scenes for this project. These are two strikes against him and in my tally sheet that’s all that is needed to strike out. The desalination plant is now on hold supposedly because the water users have been able to conserve. But in reality the reason is that 4 of the 5 board members are up for re-election this November and a grassroots initiative has collected enough signatures to require future voter approval for this project.

I have been down the road before of having some bright lawyer espouse squishy good feelings about policies only to see the reality dash the common folk on the tines of the powerful. It is not the balanced budget that is proposed in May just before an election that matters. It is the budget and all the other deals that will be produced later in June, or July, or even August that scare me. Last year’s deal included Prop 14, which it seems will pass. This open primary bill robs me of my right to freely associate with members of my own party.

Every day I work with people totally dependent on a state budget for health and human services. Their caregivers are very concerned about the funding of these supportive programs. Mr. Huffman is being challenged this year, even if ineffectively, because of his votes that cut these programs. Part of the problem with term limits is that by the time we get to know a candidate and understand how they will operate in the long run they are termed out and running for another office. Term limits and the 2/3 rule on budgets and taxes won voter approval because Democrats did not stand on principle but gave in to what seemed expedient for the short term. That’s the Democratic Party way. We cal it Realpolitik as if spelling selling-out improperly will make it OK. And when we say we want to take the party back it is in part from those who are wiling to give away long term gains to the powerful for short term self interest.

The Gaia Principle

When faced with overwhelming oppositional force I do what I can. At this time of our culture of death, of war and corporate greed, of an unresponsive government by and for the rich, I choose to connect with those close to me. I walk my precinct. Last night I met a group that also chooses to focus on the present and close. These were transition and sustainability and resiliency movement folks with much more optimism than me. They gave me some hope. I watched the movie DIRT with them at a church, where the only god spoken of was Gaia.

For this last month I have been struggling with images of our earth and life on it coming to an end as a result of human nonsensical activity, specifically from the Gusher in the Gulf but also in anticipation of a renewed nuclear energy plants. In its arrogance the Obama administration believes in the mostly male driven theory that everything can be done even stepping close to the edge of disaster because the men in charge intend to be in control.

The movie was of the opinion that if humans choose life for the dirt beneath our feet, if we nurture it by avoiding chemical farming, that the earth, or Gaia, in response will heal itself from the ravages we have inflicted upon it for the last 15,000 years. Well maybe, but there was a lack of conversation about the other 70 percent of the earth’s surface, our oceans, and of our atmosphere. We are consuming fossil fuels, ancient sunshine from tens of millions of years ago, pumping carbon into the atmosphere but also into the oceans. The source of the majority of our breathable oxygen, the oceans have filled themselves to capacity, absorbing of as much carbon dioxide and excess heat as they can. They are acidifying and like the dirt, the living part of our land, are dying.

I am a believer in modern day myths, stories taught us that come from our science. As a species we claim to know what happened as far back as the birth of the universe. I think it was a Pope Pius that attributed to the theory of the Big Bang the creationist theory of the separation of light and darkness. In a real way it is only the scientists that do the experiments and work with the results that can claim the knowledge of our modern life. The rest of us are either believers in their work or believers in some alternative story. My beliefs include the story of the meteor that struck down most living organisms about 65 million years ago. Like the pope’s view of the Big Bang, myths can generate great power when their stories of ancient periods combine with current events. That meteor struck just a few miles from where the Deepwater Horizon well is spewing the fossilized remains of million year old life.

See the movie DIRT, and buy organic.

Know Your Neighbors

The results from walking my neighborhood precinct for the Right to Vote on the Desalination Plant are found in more than just the number of signatures I collected. Three hours of walking netted 25 valid signatures, plus those that two neighbors will give me when they return the petition forms they offered to circulate. Most of the people I talked to signed and some went into their house to get their roommates to sign also. Today I will walk again.

The other more important result came because this was not the first time I contacted these folk. Last month I had walked my neighborhood precinct for a very hotly contested supervisor race. This classic local contest is between a candidate backed by a very big business and the landed gentry versus a candidate of the environmentally concerned grassroots.

I received a lot of push back because my candidate has taken an unpopular stance in my neighborhood. Her missteps in office have left the door open for the opposition. She allowed the other candidate for big business and the ‘develop land for private profit’ forces back into the political arena.

In the spirit of full disclosure she knows I am actively organizing to change her position and that of the rest of the board of supervisors regarding my neighborhood. My house, literally, and my neighborhood are divided.

But yesterday my reception in the neighborhood was much warmer. Once folks realized that I was walking for another cause they were willing to listen. And something happened for me. These folks were no longer the opposition, no longer unclear thinkers, nor did they have a heated rejection of my existence on their doorstep.

What I learned is what I have been preaching but not practicing for some years now. When you walk your neighborhood and get to know your neighbors on a political level you become a powerful new form of opposition media. You become a means to put humanity into the political discourse. You open doors with folks that you disagree with on some issues and agree with on others. You build trust. You break down isolation.

Rose Aguilar said at a recent forum of people she interviewed for her book, “Red Highways: A Liberal's Journey into the Heartland,” once you get past the sound bites you hear a more true story. I found this to be true yesterday.

I owe thanks to an organization and two great political women who a few years ago separately taught me about walking a precinct. Thank you Barbara and Liz. And thank you Know Your Neighbor.

On Ron Paul's "End the Fed"

Libertarianism scratches at my core values
Ron Paul got a lot of traction this last Presidential election and I suppose it had to do with his anti-war stance and with his supporters’ limited understanding of his Libertarian views. To his credit he stands out amongst members of the House as one of the few with lots of integrity. I read his book because a good friend, David, asked me to and wanted to know what I thought of “End the Fed.”

Ron Paul and I must have some things in common. We both think that wars are mostly fought for the benefit a few greedy men and we try to have an in depth if layman’s understanding of the economy. And apparently we both think that there is something terribly wrong with our financial system starting with the Federal Reserve Board.

Ron Paul’s Libertarian view is that all people need to provide for themselves and live with the consequences of their actions. I am no Libertarian. I’m for a more-perfect-union for the benefit of the general welfare sort of guy. I reside somewhere on the left fringes of the Democratic Party. Big government is the people’s business formed to protect us from the tyranny of governments and large corporations alike and from the most terrible consequences of our own mistakes.

Monetary Verses Fiscal Policy
Being a small government sort of fellow, Ron Paul concentrates on what is called monetary policy, the control of the money supply. This is the stuff of the Fed. Another policy arena that government engages in is called fiscal policy. That would be the taxing and spending part of securing the blessings of liberty that our government is organized to do. Libertarians think this second realm of government is essentially theft of citizens’ private property and is immoral. But the point of his book is that government control of the money supply, monetary policy, is the most powerful and effective means that the government uses to do its stealing. Ron Paul’s views don’t allow him to comment much on fiscal policy other than to say, don’t do it. Not much of a book there.

Free Market Religion
He treats the market place, the “Free Market”, as if it sprang into being just after god stole a rib from Adam to create Eve. To him the marketplace is a priori of all commerce. Except those under the sway of the Libertarian ideology know the marketplace is neither free nor did it exist prior to the collective labor that brought it into existence. Libertarian ideology requires immutable market forces to be inviolate for anything good to come from the human condition. According to his views all attempts by human society to set rules by which we engage in commerce are flawed solely on the grounds that they modify these free market forces. He believes that all regulations on the market place should be limited to fraud prosecution and contract enforcement, and limiting currency to gold.

Good as Gold?
This Libertarian position that gold should be our currency is based on the belief that there would then be no need for governmental regulations i.e. no need for the Federal Reserve Board. Gold is not subject to inflationary pressure, there is a limited quantity that cannot be increased by changing its price. Governments can’t print more of it whenever they want. I will agree with Ron Paul that monetary policy can also be used to concentrate the wealth of a nation into the hands of a powerful few and to facilitate the waging of wars. But monetary policies -inflation or contraction of the money supply- can be used to distribute the wealth of a community and create capital reserves so that its economy can function for the benefit of the citizens. There are also beneficial fiscal policies such as minimum wages, government provided universal healthcare and even fire and police departments, and social security payments, that provide for the general welfare. These are all socialistic statism in Ron Paul’s terms.

Real Values
The commodity based currency argument in “End the Fed” chooses gold because of its historical use. Generally for commodities to be used as currency they need to bear intrinsic value, be durable, easy to use, and not easily duplicated. Oil has some of these qualities and functions in our economy in a similar fashion with similar effects. Economists from Karl Marx to Ron Paul and in the middle Paul Samuelson, Nobel Laureate of neo-Keynesian economics, agree that real value resides in products of human endeavor including precious metals. Simply put, economic value resides in physical objects that arrive in the market place.

There are many other forms of value such as the intrinsic value of nature. Some have even attempted to place economic value on undisturbed nature, such as forests, for their protection. The Bretton Woods agreements of 1944 did not consider this form of value in its deliberations on formulating economic activity to the great harm of the environment, less developed countries, and especially to non-monetized indigenous cultures. We have values at the core of our belief systems that are much more powerful than any reasoned argument. If David hadn’t asked me what I thought of “End the Fed” I would not have been able to read it. Libertarianism scratches at my core values too deeply.

The Case Against the Federal Reserve Board
Yet I can agree with Ron Paul that there are good reasons to want to end the Fed. I think that it needs to be overhauled or a new agency needs to be created to replace it. The Fed operates in secrecy and rebuffs all attempts at oversight by congress. It was set up to be free of political pressure. In reality it is free from view of democratic oversight. It operates for the benefit of the powerful few. My problem with the very rich is not that they can buy lots of toys; it is that they buy lots of politicians. They use their wealth as a political tool to subvert the democratic process.

Citigroup, a Federal Reserve member, produced a 2005 memo stating that the US of A is not a democracy any more but a plutonomy, a society governed by the very rich. It states that the top one percent owns more productive wealth than the lower 95 percent. The richest ten percent account for 47 percent of all income and 57 percent of all wealth. It praised this condition to its investor class. It bemoaned the fact that the rich still only had one vote each. Our country now has a greater concentration of wealth in the hands of a few then what caused the Great Depression. The founders of this country and subsequently following presidents including Lincoln, both Roosevelts, and Eisenhower agree that democracy cannot survive in such a situation. The last forty years have seen the destruction or non-enforcement of our labor and anti-trust laws. The Reagan revolution cut taxes on the wealthy by 50 percent and raised them on the working poor by doubling the Social Security and Medicare withholdings. We have allowed the wealthy to concentrate their wealth and political power so that we are now all serfs of corporate masters. And the current Fed sustains this system. Its secrecy ensures the continuation of the powerful. It refused to allow this closely held corporate structure to die of its own weight in September 2008. Alan Greenspan and Ben Bernanke, the previous and current Fed Heads, are followers of the libertarian school of thought. As much as Ron Paul decries their actions at the top of the Fed he praises their earlier writings.

Limits to Monetarism
There are plenty of good reasons for Ron Paul’s outrage at the government’s shifting of wealth into the hands of very few and powerful people. He struggles to attribute this solely to government manipulation of the money supply. I agree that monetary policy is available to be abused for these ends. We lost the fight for a democratically organized economy long before these monetarists took over the Fed. We are now two years into the worst financial crisis in the last 70 years and all congress has accomplished was to give nearly a trillion tax payers dollars to their corporate donors. The Fed has admitted contributing an additional couple trillion to the pot, but refuses any audit by congress. Some estimates place the Fed and Treasury guaranties to financial institutions at over 20 trillion dollars. I understand the fury of the TEA party crowd and their love of Ron Paul. They rail against strong unapproachable forces that control their lives in secrecy. But they are misguided to believe that a society without rules of conduct to promote the general welfare would be better. Bad government not big government is the problem. Ron Paul uses their ignorance as do the large corporations and their lobbyist friends. The TEA partiers are in the grasp of their predators. When Milton Friedman tried these monetarist policies in actual countries, Chile and Russia, they failed miserably at creating an economy that served the people’s general welfare.

You Can Bank on It
Ron Paul mentions the evils of fractional reserve banking that arise when paper money is used but fails to explain what that means. Feudal society and outright slavery were once the norm of human existence. Barter was the means of trading. Even taxes were paid to the manor master by giving over the actual product of labor. Few people had gold; it was scarce. The aristocracy and wealthy merchant class developed a method of storing their gold in armored warehouses. Instead of paying for their wants by removing the gold from these safe banks they would sign over a certificate for a portion of their holdings to another. The banking industry and paper money were born from these beginnings. Early bankers realized that their depositors were not likely to concurrently remove their gold. These banks were a safe haven for this precious commodity. People began to rely on the paper certificates of deposit, backed by the gold reserves for their financial dealings.

Let Me Loan Your Money
Fractional reserve banking is simply making loans with depositors’ money, while holding a fraction in reserve to cover what some depositors might want at any given time. Its effects on the supply of money can be explained by an example. We can use a metaphor of a small isolated community to represent the whole. This isolationist view represented our economy fairly well until the effects of globalization outsourced our work and factories to countries with lower standards of living.

In a village reside 100 folks, and it is a very democratic society. They all have savings of $10 that they have deposit in the one bank. The bank has $1,000 on deposit. The village weaver, baker, and candlestick maker each employ two people. In order to buy materials from other villagers to make their products and to pay their employees they borrow money from the bank. The banker knows that she can lend out $900 of her $1,000 deposits because everyone in the village is hard at work and has no reason to remove their $10. She keeps 10 percent in reserve. The shepherd, the farmer, and the beekeeper are each paid $200 for their wool and grain and wax respectively. They deposit this income into the bank which now has deposits valued at $1,600. And the six employees are each paid $50, which is automatically deposited and brings the banker’s total value of deposits to $1,900. To keep this banking system metaphor simple each of the three material suppliers and the six employees deposit all of their income back into the bank. No one moved out of the village with their $10, nor did the banker take any salary for her efforts.

This is the expansion of the money supply that Ron Paul decries as immoral theft of value from the original depositors. His outrage is not at the villagers going without food, or warmth, or from the light that was produced. This borrowing and re-depositing cycle can continue many times, comparatively devaluing each of the $10 deposits but creating a vast array of products in the process.

Historical Expansion of the Gold Supply
Furthermore paper money is not always the culprit. Changes in the supply of the commodity currency are also in play. The Fed was set up to regulate how much of their deposits a bank could lend and what fraction must be held in reserve. The Fed was put in place ostensibly to maintain calm in our financial markets so that capital would be reliably available to the candlestick makers of the world.

In Ron Paul’s view banks could only loan stockholders’ investments and not the deposits of savers. His reserve rate would be 100 percent. The amount of money would always stay the same. Well, there were times in history when gold rushes occurred and inflation was caused and the lives of many hard working folks were improved. Those times were also marked by the destruction of the indigenous cultures that resided on top of the gold. The Spanish Monarchy lost power from the inflation caused by the discovery of gold in the Americas; and the mercantile English rose to dominance. Some economists have pointed out that spikes in the price of another commodity, oil, have directly preceded all recessions of the last fifty years. Too much capital is pulled from the system, creating a deficit of money for production; it takes time for the economy to adjust. The Fed was caught in a bind during the late 1970’s. Volker was trying to stem the tide of the Johnson-Nixon inflation by limiting credit at the same time that more money in the system would have eased the price increases on oil. Energy is a commodity currency of industry.

Community Currency
Ben Bernanke believes that there needs to be an end to fractional reserve regulation. I believe there needs to be an end of Bernanke at the Fed. Our village banker is using a 10 percent fractional reserve rate. She held $100 dollars of the $1,000 on deposit in reserve. Regulating this fractional reserve system controls the supply of money. The village bank’s deposits grew $900, an increase backed by the notes of credit from the weaver, baker, and candlestick maker. She can now lend on this $900 increase in deposits. The village house builder and electronic supplier can now borrow $810 from the bank, leaving another $90 in reserve. The house builder got $500 and the electronic supplier got $310. The TV man got less because the community banker felt that the village needed a new house more than it needed a TV, and because the electronic supplies had to be purchased outside of the village. Local and state run banks can make these types of decisions. Part of those funds, the $110 for electronic parts, would not be deposited into the bank but would leak out of the system. The bank got another $700 in deposits this time from the lumberman and the employees of the builder and the TV guy. This cycle can continue, and if it does so fifty times without leakages the money supply increases to nearly $10,000. The US of A economy has for the last 30 years been experiencing not a leak but a flood.

Ron Paul looks at this and claims that the depositor’s money is now only equal to what was $1 when the money supply was $1,000. He claims this inflation of the money supply that allows for production and reduces the value of the savers’ accounts is theft. Are all those employees with jobs and all that bread to eat and those warm blankets and homes that provide comfort really just victims of robbery? You can’t eat paper money but you can eat bread.

Money, Wars, and Theft
Ron Paul’s argument gets a lot of support when he stands against war. I applaud him for that. But he is wrong to suggest that wars are the result of inflation of the money supply. The evil does not reside in the money supply but in the intentions of those who wish to wage war. And this being a democracy it resides in all of us who do not prevent the warmongers. The traditional trade-off, guns or butter, is obviated by governments’ ability to print money, that is true. Waging the Vietnam War and the Great Society’s War on Poverty simultaneously drove an inflationary wave that knocked out Presidents Ford and Carter from second terms. Just so Bush’s wars and tremendous tax giveaways to the wealthy might well doom Obama’s hopes at a second term. Wars are always immoral and driven by greed. We the People are stoked with fear and sated into acquiescence with cheap products into complicity.

Ron Paul is right that all government expenditures require expansion of the money supply for war or for welfare. Real wars and real poverty are the true evils and an immoral distribution of wealth is their cause. Without controls the wealthy become so powerful they use the nation’s resources for their own benefit. If the money supply is not managed properly crises do occur. We can attribute our current crisis to the Bush administrations unfair regulations of the economy. But this unfairness was not all monetary policy but fiscal policy as well. It started long before Bush-43. Regan, Bush-41, and Clinton all contributed to this process. Unfair taxation, not enforcing labor laws, anti-corruption laws, and anti-trust laws, and tax giveaways to the uberwealthy were also to blame. Indeed the Bush administration so desired to transfer more wealth to the wealthy it waged real wars on the people of Iraq and Afghanistan. Bush demonstrated that he only needed to frighten a 268 people, 218 House members and 50 Senators, to wage war in this world and steal our country’s wealth. In “Capitalism- A Love Story” Michael Moore suggests that Goldman Sachs, from both inside and out of government, engineered this recent crisis to become the dominant world financial power. Naomi Klein’s book, “The Shock Doctrine,” which I have not read, explains the utility of crises for taking power, liberties, and wealth from people. Thom Hartman’s book “Screwed, The Undeclared War Against the Middle Class,” explains in simple language how our economy has been hi-jacked.

Jimmy Steward to the Rescue
Ron Paul decries borrowing and spending if it increases the money supply. He believes people should only spend what they can save. The character Potter in Frank Capra’s “It’s a Wonderful Life,” personifies this position. This is a story about a small building and lending company threatened by a run by its depositors. Jimmy Steward’s character, George Bailey, says about his father who started the company, ”But he did help a few people get out of your slums, Mr. Potter, and what's wrong with that? … You - you said - what'd you say a minute ago? They had to wait and save their money before they even ought to think of a decent home. Wait? Wait for what? Until their children grow up and leave them? Until they're so old and broken down that they... Do you know how long it takes a working man to save five thousand dollars? Just remember this, Mr. Potter, that this rabble you're talking about... they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath?”

Inflating the Bubble Until It Bursts
Our village banker kept her reserve rate at a conservative but standard 10 percent and the money supply could have grown from $1,000 to $10,000. If she had chosen 5 percent the money supply could have grown to $18,000. A few years ago I worked with a man who told me that the fractional reserve rate was below 1 percent. That rate would have allowed our village’s money supply to surpass $40,000. Derivatives, especially securitized mortgage loans, that we have heard were the cause of this crisis, inflated the money supply. These instruments turned mortgages into certificates traded in a similar fashion as stocks, bonds, and treasury bills. This provided more capital to the banks allowing them to make even more loans. A sort of double dipping in the amounts held in reserve. I have heard that the total value of derivatives amounts to 100 times the size of the world’ s real economic activity. Has our Fed guaranteed that amount? We won’t know because it operates without oversight or congressional direction. But you can bet we will be the ones required to make good on this guarantee.

Our village banker, unlike our current government, managed the money supply to keep folks employed and kept controls on the flow of money outside the system. The paper itself has no intrinsic wealth except for wallpaper. But it represents the collective value of the economic activity of the village. The last four administrations, in cahoots with the Fed, allowed for the movement of value away from commodity production. Indeed they encouraged the export of jobs. This globalization has impoverished the American worker much more than inflation. Consequently, economic growth in this country has been limited to the financial sector on Wall Street not on our main streets.

A Call to Action
On the January 26, 2010 Daily Show, bailout watchdog and financial reform advocate Elizabeth Warren told Jon Stewart that "this is really the moment" that will determine the future of America's middle class -- the system must be fixed or "the game really is over." Warren, who chairs the Congressional Oversight Panel created to monitor TARP, said: "It is simple. This is America's middle class. We've hacked at it and chipped at it and pulled on it for 30 years now. And now there's no more to do. Either we fix this problem going forward or the game really is over." Huffington Post 1-27-2010


Quotes from “It’s a wonderful Life” were found on Wikipedia.
Ron Paul’s concepts are taken from his message in “End the Fed.”
Citigroup Research, Equity Strategy, Revisiting Plutonomy: The Rich Getting Richer. You can google this.
Bernanke, end reserve regulation Rawstory Stephen C Webster 3-18-2010. You can google this.

A chance to Learn and then to Act

For those in PD-Marin. Two issues that we have taken a stand on are featured at this months MPJC program

Monday, March 1
Marin Peace & Justice Coalition

Special Event:
6:00 PM Pot Luck
7:15 PM Program

Petitioning for Water and Democracy
Two Ballot Initiatives:
Opposing Desalinization in Marin,
and Favoring the California Democracy Act

Get on board with signature gatherers working for upcoming ballot initiatives.
The "Responsible Water Initiative" gives residents of Marin Municipal Water District the right to vote on whether or not to build a controversial desalinization plant. The desal plant is now being fast-tracked by the MMWD Board.
Adam Scow from Food and Water Watch will speak.
Zhenya Spake will facilitate a discussion and role play on the art of petitioning.

Also, a speaker promoting the California Democracy Act will cover this important initiative to change the state constitution: "All legislative actions on revenue and budget must be determined by a majority vote." This would end gridlock of state spending, etc. Let's do it!

Where:
First United Methodist Church of San Rafael (in the basement)
9 Ross Valley Drive
the west end of San Rafael,
at the corner or Greenfield and Ross Valley Dr.,
just off the Miracle Mile (Fourth St.)
across from Bedrock Music and not far from Cafe Gratitude.

Tuesday the eternally bankrupt Oakland Tribune tried to school us on good economics and used as a foil healthcare reform being proposed in the California legislature. The Trib stated that in these hard economic times we cannot afford such expenses. The fact of the matter is that in the much better economic times of 2006 when both the Assembly and the Senate passed this bill the Trib was against it then just as it is today.

In the 1200 days since Governor Schwazenegger vetoed then SB840, 144,000 Americans have died because they lacked adequate access to healthcare. That translates into roughly 18,000 Californians. Americans now have the most expensive healthcare system on the face of the earth, nearly twice what other industrialized countries pay, and yet we allow members of our society to die preventable deaths for the profit of a few. These 18,000 deaths are on the hands of the Governor because he wanted to please the insurance industry profiteers.

I am not surprised that a failing business, one that has monopoly status, has got it all wrong. They are failing because what they pass off as information to the residences of Oakland and the broader Bay Area is so inaccurate. Newspapers are not failing because paper is expensive. They are failing because they have concentrated their ownership into the hands of a very few corporate giants that are not in the business of an informed population, and we just don’t want to read their lies anymore.

But let’s go back to the economic argument that the Trib brought up. There are only 34 countries in the world with more people than California but only seven with larger economies. California has lots of money. It is just not fairly taxed. SB810 the successor to the twice-passed SB840 would cut the total cost of healthcare for Californians dramatically. And while doing so it would allow everybody who lives here full and comprehensive care. It would do this at a tremendous savings to local governments and agencies, from cities to school and fire districts. These employers yearly savings would be about $2,000 per employee. For example the County of Marin has estimated that it would have saved $9 million each year if the Governor had signed the bill. The larger Sonoma County’s estimate was $37 million yearly. The medium size City of Rohnert Park’s estimate was about $1 million.

Private companies would also be big savers. Health insurance and the human resource expenses to manage it cost employers 20 percent of their payroll. SB810 would drop that to 8 percent with an employee contribution of 4 percent. But the legislature could decide that this tax on wage earners is unfair and spread the tax to all California income. Then the tax rate would drop dramatically.

The overall savings to the California economy both private and public is in the billions of dollars. Instead of attacking a creative plan to solve a crisis that is both killing Californians at a rate of 6,000 a year and bankrupting many tens of thousands more the Trib should be asking local governments just how much of their citizens tax dollars they would save if the Governor signs the SB810 this time. They might even want to ask their own accountant that question. Maybe they could forestall another bankruptcy, and we might start reading their paper again.

OK I forgot to address the Kaiser issue. Is this really an issue. All Kaiser healthcare providers including their hospitals will continue if they so choose. Their insurance business will not provide for coverage as it won’t be needed anymore. Single-payer means you get to keep your own doctors and nurses, just not the non-productive insurance plans.

Write the Oakland Tribune and tell them they are full of it.

"Editorial: California health care bill is not going anywhere"
[ http://www.insidebayarea.com/search/ci_14264540?IADID=Search-www.insidebayarea.com-www.insidebayarea.com ]

Republican Economic Model

On Meet the Press today Governor Arnold Schwarzenegger outlined the flawed Republican economic model. Unfortunately that model has become accepted very broadly in American consciousness even among liberals and progressives. Basically the economy is in the doldrums so you can’t raise taxes because that will hurt business and in turn cause them to lay off workers. The Republican solution to a bad economy is to give tax breaks to businesses so that they will hire more workers. Giving tax breaks to businesses during a crisis is similar to giving money to thieves to police crime-ridden neighborhoods.

I heard a variant that economic policy recently from a Green-Democrat, can’t decide which to be. If we raise taxes in California businesses will move elsewhere. I have a very different view. My 30 years experience as a small business owner and employer tells me that I would make my hiring decisions based on my customers’ ability to pay for my service, and not ever because a tax break was available. Tax breaks were great and I used them when appropriate but mostly they just changed the way my books were organized.

Additionally this is a first year lesson in college level economic courses. Demand drives the business cycle plain and simple. Thom Hartman hammers this home often enough on his program. Wages are demand; when they go up folks have the ability to buy more and that causes the supply to increase. There are other means of getting money into the hands of consumers and that would be through social spending. But inflation and budget deficits are a real concerns that need to be addressed. If the social spending is based on borrowed money then deficits an inflationary cycle will occur. This applies in the same way to war funding, hence the 70’s economic crises.

Cycles naturally occur. Wages do not keep up with productivity, governments cut back on purchases and business inventory increases, production orders decrease and folks get laid off. The widening gap between earned wages and productivity of the workers is the driving force of economic doldrums-recession-depression or what ever you want to call it. The destruction of work related laws and the consequence of reduced labor union membership is the direct cause of this economic crisis; brought to us by the same folks all tax breaks are aimed towards. FDR broke the cycle in part by funding the creation of 4 million jobs in one month late in 1933.

It is very clear to me why Republicans want to defund public education, $9 billion in California’s 2009-2010 budget alone. They don’t want an educated work force that can understand the lies they spread. But why so many Democrats give up the fight and repeat those same lies is a mystery to me.

Dan Monte
http://busmansmuse.blogspot.com/
join me at facebook

inspired in part by: google these sites
[ Calitics:: Businesses Need Customers Not Tax Cuts ]
[ Daily Kos: Roosevelt created 4 million jobs in one month (updated) ]

What are reasonable expectations of the Democratic Party?

If I am to remain a political activist then it will be as a progressive, one who organizes society for the benefit of those that sustain it. But my power to act is drawn from an emotion. I found myself arguing for the virtue of anger the other day. The setting was a New Years Day celebration attended by Marin progressive activists. Folks were making statements regarding their hopes and wishes for the new year and one participant related a story of two wolves that reside in all of us, love and hate. The story goes that the wolf you feed is the wolf that will dominate you. Anger was attributed to the hate wolf. I guess that the struggle is not resolved inside me because I spoke up for the power of anger to overcome the most desperate feelings of powerlessness. I am fully aware of the karmic implications of living solely on anger. I do nurture my love wolf, but as any abused spouse will tell you, I also nurture the hate wolf by continuing to engage in a relationship that perpetually lets me down.

I am a Democrat, addicted to the party’s promises of change. Like all addictions an addict needs to hit bottom before making a successful effort at breaking the compulsion that underlies abuse. And clearly the progressive movement has been abused by the Democratic Party for many years now. The twofold source of our compulsion to continue this relationship is that it seems to be the only viable alternative to the Republican Party and the Democrats had been out of power for some time now. There are only two political slogans when it gets right down to the nitty-gritty of a campaign, ‘change’ or ‘stay the course.’ How will the Democratic Party run on ‘stay the course’ when it’s right-wing is destroying the coalition that brought it to power? Stay the course and escalate the wars of the Middle East? Stay the course and sell our population into slavery of the financial and insurance industries?

I was motivated to become politically active by a fear that was a mixture of both love and anger. I feared for the loss of those things I loved most about this country and I was angry that our institutions were not acting to protect us from horrible criminals. Progressives were promised that those who committed crimes would be held accountable if we worked hard enough to give the Democrats a majority. Then we were promised structural changes that would benefit the majority of the people and hold businesses to task for their predatory practices. The Democrats did win, historic victories, but their promises did not come to pass. Progressives were shut outside the gates of power. And now my anger is turned toward those who I allowed to abuse me.

I now must find an ally with the strength to overcome the false promises of those who have proven themselves unworthy of my trust. A coalition needs to form that will deny the Democratic Party any further victories unless progressives take positions of power. Proximity to power is a strong intoxicant and collective action is a sure means of attaining strength. I will stay in the game because there is a chance an effective coalition can be created. There are too many scenarios whereby interest groups will find the presence of mind to act in unison. I became active with the Democrats because at the time that party included more progressives than any other institution. And in California progressive democrats pose a formidable block.

The New Year’s Day gathering comprised mostly Green Party members. I am ideologically aligned very closely with that party’s tenets. I view the Greens as disaffected Democrats, the abused who have begun the healing process by leaving. I am a fellow traveler of the Progressive Democrats of America and their Sonoma and Marin chapters. I am working at building Progressive Democrats of Marin into a more active organization. PDA emphasizes working to effect change to national policy by their ‘Inside and Outside the Party’ strategy. These two organizations combine nationally about 500,000 members. I have also been associated with Democracy For America. This independent Democratic group holds great promise and they train progressive candidates, I have attended often, at all levels of government. DFA has nearly 500,000 members. These three organizations are dwarfed by the size of MoveOn. They boast a membership of nearly 5,000,000. These groups have a commonality in that their membership have joined them to effect progressive change in America. When talking of size of membership it is important to keep in mind that only 50 million Americans have elected 50 senators, 21 Republicans 27 Democratic, and 2 independents.

Progressives have many other potential allies. You will find in much of my writing rants against a certain type of union activity. Don’t confuse that with being anti-union. Unions function as industry lobbyists and they provide for their membership. In the 30’s and 40’s and into the 60’s unions had a third function, they struggled for democracy in the workplace for all workers. An example of a union that is still doing so is the California Nurses Association. They are a leading force for national healthcare reform. Another example of the third function was the United Farm Workers Union movement. They weren’t just bringing better wages but also civil rights to their workers communities. Our communities need to use unionization to retake our democracy. When the union movement focuses its efforts on the narrow economic interests of its membership it divides the working class. It does the work of the anti-democratic owner class. There are many single issue organizations that will join efforts because of the Democratic issues to protect the environment and civil and human rights, even though the Party often does not follow through on its commitments.

Somewhere amongst these many millions hides my ally, a coalition to change the Democratic Party.