RSA Animate - Crises of Capitalism- David Harvey

California Budget crisis

 Feeding the Goose that lays the golden eggs.

It is clear that the California budget is in crisis, and the issues were  clarified in the budget summit sponsored by Governor elect Jerry Brown on Wednesday, December 7. There are no quick nor easy solutions. We can not simply cut our way out of the crisis, budget cuts and lay offs make the recession worse.

School funding reveals the nature of crisis.  In the last two years the k-12 budget “solutions” have cut 4.6 billion dollars from the schools. We have larger classes and fewer teachers.  School reform has stopped- except for the politicians hot air.  School funding makes up a total of 30% of the state budget.  Any crisis in the state budget and any cuts in the state budget will make school budgets worse.

California will need to raise taxes to fund the schools and to repair the social safety net.  Anti tax radicals and Republicans  oppose any tax increases.   The state ‘solutions’ of the last three years depended upon receiving federal stimulus money.  The stimulus monies are almost finished and with the Republican winning control  of Congress there will probably not be more funds.

The California economy , if it were a country, would be the 8^th. largest economy in the world.   The California economy is larger than that of Brazil, Spain, Canada, India, Russia, Australia and most of the rest of the world.  California can and should use Keynesian economic policies to find  our way out of this economic crisis.  We are, of course, a state integrated into a national economy, so the collapse of the U.S. economy will have a direct effect on our ability to use Keynesian stimulus to grow the economy.   For description of Keynesian economics see here.  http://www.newdeal20.org/2009/07/01/keynesian-economics-101-894/

The world wide economic crisis was created by  U.S. finance capital and banking, mostly on Wall Street ,ie. Chase Banks, Bank of America, AIG, and others.   Finance capital produced a $ 2 trillion bailout of the financial industry, the doubling of U.S. unemployment rate and the loss of 2 million manufacturing jobs.  More than twenty-five  million people are out of work. 

Since we are integrated into the national economy and effected by the decline of the U.S. economy,  some stimulus money generated and spent in California will be spent in other states, thus stimulating other states- and of course money spent in other states will stimulate the California economy.  However, over 60% of all economic business is local.  Money spent in California will help the California economy to grow.  Keynesian stimulus will work- it just won’t work as directly as the original theory predicted.

The economic stalemate in California has produced school funding cuts far beyond reasonable levels.  At present,  the state ranks 47^th among all states in its per-pupil spending, spending $2,856 less per pupil than the national average. The Brown briefing at the forum  detailed our standing in class  size, counselors, and librarians. To continue on this path is to produce another Mississippi or Alabama for our children.

The finance capital collapse and theft on Wall Street produced this crisis, not immigration.   Now Wall Street has recovered, but the states and specifically California is left with the destruction.  The best available response is for California to tax and spend to stimulate the economy- that is Keynesian stimulus. The anti tax radicals and the Republicans will oppose this approach.  They must be defeated.  

Specific proposals :

            Enforce the current California law taxing the sales of goods by out of state companies ( such as Amazon)  over the internet.  Gain. 1.2 billion $.

            Pass an oil extraction tax.  Require that the oil companies pay taxes when they take our oil out of the ground and then refine it and sell it back to us.  Gain. Billions.

            Establish a  public state bank such as the Bank of North Dakota. Initially move 25% of all state revenue, receipts and reserves into this bank and 25% of all PERS and STRS funds. Manage the bank as a public service. Over time, finance state borrowing from our own bank.   Gain.  6% of the budget.

            Continue efforts to eliminate waste, fraud and abusive where it exists.  There may be legitimate savings here.  For example not paying $13.2 billion for a Bay Bridge that originally was to cost under $6 billion.  And, not paying to import the steel for the bridge from China.

            Many more sources of revenue need to be developed.  Unfortunately we have been thinking too small and looking in the wrong directions.  Please make suggestions.

            Unfortunately we would be unable to tap  a major source of potential revenue because it is tied to the national economy.  There should be a significant tax on the sale of stocks, bonds, and financial instruments.  The sources of this tax are in New York and can be easily moved around the globe.  Some planning is necessary to develop this source.  Potential Gain.  $30 billion per year.

A limit on Keynes.

            A major limit on the use of Keynesian theories within one state is that most states- particularly California- are not allowed to go into debt.  Keynesian theory and practice call for public expenditures  and going into debt to pay for these expenditures.  Of course California has been going into debt each year for the last three years, it is just that accounting moves have been used to disguise the debt.

Since the state can not go into debt it will need to use tax policy to raise the funds necessary for public investments.  The state has also been targeting particular industries, notably the film industry with tax subsidies and local governments have been providing tax subsidies in the form of enterprise zones.  Along with needed  tax reform, these forms of subsidies (debt) should be reformed to focus on economic growth.    Tax suggestions were in the prior section.

California currently sells bonds.  We could develop bonds for more public investment.  At present we pay bond holders a market rate. To achieve a Keynesian stimulus we could sell many more bonds in particular to  the public employees retirement system PERS  and STRS.  These are among the largest investment funds in the nation. Their investment strategies should be re designed to promote in state economic growth.  After all, the money in PERS and STRS is California money.  And, the best way to keep these funds financially solvent is to improve the California economy.  So, directing investment in a manner to promote growth would provide significant capital for public projects.  We could sell bonds to PERS and STRS at a better rate than they are presently getting.  Further, by working with PERS and STRS we could develop a system where they serve as a marketing director to sell state bonds to their members.  There are many people interested in investing in public bonds.

 After a 2-4 year transition period, a similar pool of available funds would develop in the new California Public Bank.

Alternative;

We can follow the process of Ireland and Greece and dramatically cut services and raise taxes and impoverish the economy.  Then, since the nation is poorer and has less income you will need to raise more taxes and cut more services all in an effort to protect the excessive profits of bankers and bond holders.

California can continue the current process of cuts and reductions.  The fiscal crises of the states – all the states- has caused major cut backs and retrenchment and made the economic crisis approach a depression.  The state cut backs are greater than the federal stimulus producing a prolonging of the crisis for working people.  Continuing on the present direction produces obscene profits for billionaires along with growing poverty and hardships for the majority.

Arguments against this view:

            Most academic economists will argue either that Keynesian economics does not work or that you can not apply Keynesian stimulus to a state rather than a nation in part because states do not have the levers of economic control.  Well, granted  you can’t apply Keynesian ideas to smaller states such as New Hampshire, Arizona, Mississippi or Alabama, but perhaps you can apply them in an economy as large as California.  If you can stimulate an economy in France,  Brazil,  or Canada, each of which are about the same size as California, perhaps you can stimulate an economy to growth in a state like California with a    $1.8 trillion dollar   economy.  It is worth a try.

Academic economists will dismiss these proposals as not possible.  They are by and large not interested  in the  looking at real alternatives to their present theories  like applying Keynesian economics to a state economy.  University departments and their publications  continue to promote the same  neo classical economic theories.  Recall, these are the very scholars who gave us the “myth of the rational market” and argued that markets would correct themselves we did not need governmental intervention.  Now, in this depression, we see the results of their theories.   Foundation based economists such as those in the Hoover Institute or the Peterson Institute, are funded by the super rich and are unlikely to see alternatives that would require significant taxation of the super rich. These economists  have, in fact, been deeply implicated in the construction of the new systems of technocratic  politics which serves  them well and the oligarchy.   Few seem predisposed to engage in self-critical reflection of why their theories missed the greatest economic crisis of the last 50 years.  

Sources

Gar Alperovitz, America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy.  (2005) John Wiley and Sons

Dean Baker,  Plunder and Blunder: The Rise and Fall of the Bubble Economy, (2009)

Justin Fox,  The Myth of the Rational Market: a History of Risk, Reward, and Delusion on Wall Street. (2009)

Jeff Faux, The Global Class War: How America’s Bipartisan Elite Lost Our Future- and What It Will Take to Win It Back. ( 2006)

William Grieder,  The Soul of Capitalism: Opening Paths to a Moral Economy. (2003).

Paul Krugman, The Return of Depression Economics and the Crisis of 2008.  (2009)

Nomi Prins.  It Takes a Pillage: Behind the Bailouts, Bonuses and Backroom Deals from Washington to  Wall Street. (2009)

Joseph E. Stiglitz.  Free Fall, America, Free markets, and the Shrinking World Economy.  2010.

Unemployment extension blocked by Republican Senator

The extension of unemployment was not passed in the U.S. Senate.  A vote on the extension was blocked by Republican  U.S. Senator Scott Brown of Massachusetts.
From the California Budget Project:

ALLOWING FEDERALLY SUPPORTED UNEMPLOYMENT INSURANCE BENEFITS TO EXPIRE WOULD COST JOBS AND COULD ENDANGER THE FRAGILE RECOVERY

Hundreds of thousands of jobless Californians who are struggling to find work in the weakest job market in decades face the prospect of struggling to make ends meet without Unemployment Insurance (UI) benefits just before the holidays. Unless Congress acts, emergency measures currently in place that provide additional weeks of federally supported UI benefits to unemployed workers who exhaust their regular state benefits are set to expire on November 30.1 Allowing these benefits to expire at a time when California’s unemployment rate remains close to the record-high rate reached only months ago would deliver a sharp blow to the economy and could endanger the fragile recovery. Absent Congressional action, more than 400,000 unemployed Californians will lose access to federally supported UI benefits next month alone.2 Without UI, these jobless workers would be forced to scale back their spending, which means businesses would have fewer customers and weaker sales – and that could ultimately cost jobs. For this reason, Congress should do what it has traditionally done during significant downturns in the economy: Continue federally supported UI benefits until the job market shows strong signs of recovery.

The California budget crisis

What caused this  budget crisis?

The proposed state budget takes 3.1 billion from k-12 schools, closes parks, forces state worker furlough’s and more.  County and city budget cuts reduce our police protection, cause limits on fire protection, and close mental health facilities pushing some of the mentally ill into jails and prisoners out of our jails early  on to the streets.

While  state budget reforms are needed, the basic cause of this crisis is the economic crisis in the nation.

 Crisis in the states.

The current  economic crisis has forced the cutting of higher education, of k-12 education, and of social welfare systems.  This crisis was caused by the greed and avarice of the financial class and aided by the politicians of both major political parties.

First came the housing bubble and the selling of near fraudulent home mortgages.  To make a profit m ajor banks and corporations looted the economy creating an international meltdown.  Now, they have been rewarded with bail out money.  The crisis was not caused by students, teachers, public employees  nor recipients of social security.   Now we have cuts in parks,  in universities, in nurses, libraries.  School children did not create this crisis.

The major bankers, finance capitalists in the U.S. robbed the bank last year  – and the federal treasury.  They took hundreds of billions of dollars.  – Goldman Sachs alone took $10 Billion.  For example,  Ken Lewis of Bank of America received an $ 81 million dollar pension.  They have not even been punished.  One thing we should do is arrest the top 100 executives and CEO’s of these companies, give them a fair trial, and throw them in jail.  Until we arrest some people – there will be no real changes.”

Our financial system as a whole crashed not because of one bank. Goldman Sachs ( with Meg Whitman on the Board) certainly played a major role as did JP Morgan Chase, Morgan Stanley, and CitiCorp, along with the many corporate finance institutions  like Bear Sterns, Merrill Lynch, Lehman Brothers, WaMu, Depfa.  We had a systemic breakdown because nearly all of our policy makers, academics, politicians, and pundits promoted  a failed, self serving  ideology of self-correcting financial markets. Finance  profiteers walked off with big bucks while contributing to the  crash  of the system.  

As of  this week we know that the TARP bailout of the banks worked.  While $700 billion was allocated to rescue the banks, now all but $50 billion of that has been repaid.  It was a successful intervention to stop the Wall Street Crisis.  But, now the crisis remains in the states, the counties and the cities.

While we look at the California budget crisis, lets keep the issues in perspective.  

School propaganda from the Governor's office

California has a Secretary of Education as well as a Superintendent of Public Instruction.  The Superintendent organizes the state educational programs and implements state mandates.  The Secretary of Education is an advisor to the Governor. The current Secretary is Bonnie Reiss, about the 5^th. Secretary under Arnold Schwarzenegger. 

Secretary Reiss has a letter to the editor in the Sacramento Bee of Tues. June 29, responding to an earlier column by Dan Walters about the state’s persistent high drop out rate.  The letter is a classic piece of propaganda.

You begin with the statement, “schools with effective teachers and effective principals do well and those with ineffective teachers and ineffective principals do not. “  She is correct.  But, in the service of propaganda, this statement tells only a part of the story.  It says something you agree with in order to introduce the propaganda message.  She then goes on to say, “It is time for California to join the national education reform movement  and change state law to move away from our current failed system that is based solely on teacher seniority.”  That is the propaganda piece.

Lets see. There are schools with high levels of drop outs, and schools with very low level of dropouts.  The high drop out schools tend to be in poverty areas and the low drop out schools tend to be in upper middle class areas.  Both groups of schools have precisely the same teacher seniority requirements.  That is, there is no evidence that teacher seniority leads to the high drop out crisis in California.

I have  taught in public schools and university teacher preparation programs for over 40 years and written books on this subject.  Lets look a little deeper.

California has had a chronic drop out problem since at least 1969 and the drop outs are concentrated in low income schools. The problem has not been improved.  In the last two years the Governor has cut $16 billion from school budgets, will that make matters better or worse?   As the Robles-Wong v California lawsuit asserts California spends $2131 less dollars per student than the national average.  (www.fixschoolfinance.org) Significant budget cuts increase class size. Large class sizes mean that many  2,3^rd, 4^th, graders are not learning to read well- even with good teachers.  These students will be your future drop outs.

Severe budget cuts at the high school levels produce immediate drop outs. Most counselors have been eliminated. California ranks 49^th. out of the 50 states in counselors per student.  There are few counselors to look after students who fall behind or get in difficulty.  California ranks 49^th. out of the 50 states in librarians.  Severe budget cuts eliminate supplemental support programs such as having probation officers working with the schools.  As a result you have more disruptive student in classes.  Even good teachers have difficulty when there are large numbers of disruptive students in classes.  More disruption leads to more students failing. There is more gang violence and more gang related crime as gang intervention workers are laid off. 

It is precisely the 30 year history of under funding our schools, accelerated under the Schwarzenegger administration that is the problem.  As described in prior posts, the state is not the blame for the economic crisis.  That was the work of the Wall Street bankers.  However, the state is responsible for the response to the economic crisis- and it is failing. 

The Crisis of Jobs

Excellent, valuable video:

http://www.aflcio.org/issues/jobseconomy/jobs/americaneedsjobsnow.cfm

Crisis in the UC's

And, they even mention the CSUs

Why Are We Destroying Public Education?
University of California Students and Staff Prepare for
System-Wide Strike to Protest Cuts

Democracy Now - November 17, 2009

http://www.democracynow.org/2009/11/17/why_are_we_destroying_public_education

The governing body of the University of California
system, the Board of Regents, is preparing to vote on a
major tuition hike for both undergraduate and graduate
students. Undergraduate tuition would rise an average
32 percent, while some graduate schools would begin
charging thousands of dollars for programs that are
currently tuition-free. The Regents are meeting
Thursday at UCLA, where students from across the state
are converging for what organizers have dubbed a
"Crisis Fest," including mass protests, civil
disobedience and teach-ins.


Guests:

Laura Nader, professor of social cultural anthropology
at UC Berkeley, where she has taught for nearly fifty
years. Earlier this year she co-authored a measure
approved by the UC Berkeley Academic Senate calling on
the school's athletics program to become self-
sufficient and stop receiving subsidies from student
fees.

Ananya Roy, Professor in the Department of City &
Regional Planning at UC Berkeley. She is canceling her
classes to take part in this week's strike.

Blanca Misse, UC Berkeley graduate student and
organizer with the Student Worker Action Team.

Michael Cohen, lecturer in American studies at UC
Berkeley and co-chair of the Solidarity Alliance, which
issued the call for this week's strike.


AMY GOODMAN: For our first segment today, a pivotal
battle over public education here in the state of
California. The governing body of the UC system, the
Board of Regents, is set to vote on a major tuition
hike for both undergraduate and graduate students.
Undergraduate tuition would rise an average 32 percent,
while some graduate schools would begin charging
thousands of dollars for programs that are currently
tuition-free. The Regents are also expected to approve
a new round of layoffs, furloughs and other spending
cuts.

The Regents are meeting Thursday at UCLA, where
students from across the state are converging for what
organizers have dubbed a "Crisis Fest," including mass
protests, civil disobedience and teach-ins. Here in the
Bay Area, students and university workers at UC
Berkeley have called a three-day strike that begins on
Wednesday. Two unions, the University Professional and
Technical Employees and Coalition of University
Employees, will be walking off the job to protest what
they call the UC system's unfair labor practices.
Dozens of faculty members have also signed on to
support the strike.

For more, we're joined by four guests who have been
involved in the calls for affordable and accessible
education at the UC, University of California, schools.

Ananya Roy is professor in the Department of City &
Regional Planning at UC Berkeley. She is canceling her
classes to take part in this week's strike.

Laura Nader is a professor of social cultural
anthropology at UC Berkeley, where she's taught for
nearly fifty years. Earlier this year she co-authored a
measure approved by the UC Berkeley Academic Senate
calling on the school's athletics program to become
self-sufficient and stop receiving subsidies from
student fees.

Blanca Misse is with us, a UC Berkeley graduate student
and organizer with the Student Worker Action Team.

And Michael Cohen, a lecturer in American studies at UC
Berkeley and co-chair of the Solidarity Alliance, which
issued the call for this week's strike.

We welcome you all to Democracy Now! This is a major
situation that has developed across California,
instructive for everyone. I want to begin with Ananya
Roy, if you can lay out the situation.

ANANYA ROY: Well, I think there is a very real crisis
in California, where continuing budget cuts have
devastated the infrastructure of public education, and
we have a governor who continues to call for deeper and
deeper budget cuts, even though there is nothing left
to cut. So we're clearly fighting for the ideal of
public education. We're fighting for the opportunity of
Californians and Americans to get a decent education.
But we're also fighting for the future of our
particular university, the UC system, and we're
fighting to be represented by leaders who believe in
and can defend the mission of public education.

I think what has been quite unique about the struggle
is the coming together of students, faculty and workers
to do so. This particular moment before us is one where
students face unprecedented fee hikes, and this is very
much, therefore, also a student strike, students
fighting for their own future and for the future of the
next generation of students.

AMY GOODMAN: Blanca Misse, can you talk about the kind
of organizing that the students are doing right now?

BLANCA MISSE: Yeah. So, students began organizing in
the summer with the workers against the cuts, but they
started really organizing when the school started at
the end of August. And the kind of organizing is very
diverse, because it represents the diversity in our
campus. We have - we started general assemblies, where
all the students can come, discuss and vote together
what they want to do in a democratic way. And this
assembly has called for the 24th walkout and endorsed
the call of the strike of the unions, of the grad
students.

But we also are working with other groups that were
organizing in the university for years, that have been
dismissed by the administration of the university for
years, especially the groups of students of color that
have been fighting against the racist procedures of the
university, where a majority of community of color is
excluded from our university. We have only like one
percent of Native Americans and three percent of
African Americans. So all these groups are getting into
this fight against the budget cuts.

And we are calling to go on strike these three days.
Many things are prepared for these three days. One of
the big - the most important part will be canceling the
classes and having the students walking out and
participating in rallies and actions, but we also are
going to organize with the faculty these alternative
university teach-ins, thinking what will be the
university of the future, what kind of public
university we want to see on our campus.

AMY GOODMAN: What was the September 24th walkout
follow-up? What happened then?

BLANCA MISSE: So, after the walkout that gathered 5,000
people in Sproul, we host an assembly with all the
students that want to get involved. And we've been
meeting like every week, all the undergrads and grad
students, but we also tried to contact all the other
student groups and tried to organize even by buildings.
For example, the buildings of social sciences and
humanities have host building meetings and teach-ins,
so we can build like base solidarity with lecturers and
the staff that have been laid off in our departments.
We can hear from the unions. We can hear from the
faculty who want to talk also about how they see the
university changing or what kind of university they
would like to have.

And basically we've - and also we have been doing
outreach to the rest of sectors of public education.
One of the major efforts after the walkout was to
organize a education conference, mobilizing conference,
on October 24th, one month later, at UC Berkeley, that
gathered 800 students and teachers and workers from
public education, because we want to do this fight
together, as Ananya said. We are also hit by this
crisis of the state of California, but we're not the
only ones, and we don't want the state to divide us
again, to say "We have to take money from the community
colleges to give to the UCs, or take money of the UCs
to give to the Cal States." We want to be united in
this fight. So we started also the dialogue with other
sectors of public education.

AMY GOODMAN: Michael Cohen, what is the Solidarity
Alliance?

MICHAEL COHEN: The Solidarity Alliance grew out of a,
initially, faculty project of protesting the seizure of
emergency powers by UC President Mark Yudof. They began
to coalesce and discuss some possible responses and
began an effort to reach out to other constituencies on
campus. As soon as the unions on the campus learned
that there were faculty interested in joining cause,
the Solidarity Alliance grew rapidly and into a sizable
organization that represents all the heads of the local
unions on campus. Most of the student groups of one
kind, including the ASUC, which is the student
government bodies, but also the bridges, recruitment
and retention centers, the students of color
organizations, the General Assembly and SWAT are also
members. And group members of - individual members of the
organization SAVE, which is the faculty group, have
joined us.

And we are a consortium, or we are an alliance of
individual groups that have come together, because we
understand that in solidarity, in joining common cause,
we have strength enough to fight this, that the
university's typical procedures are to divide the
faculty from the workers and divide the workers from
the students and to divide the students from the
faculty. And as long as the three groups remain strong
and are - show their solidarity with one another, we
represent a formidable force on campus. And so, we
have - believe that we have the strength and the position
to call for this strike.

And many have joined us, and it has spread to the
entire UC system. And we believe that not only at UC
Berkeley do we - are we strong, but we - as Blanca said, we
need to expand beyond. I think we recognize quite
clearly that much - the propensity for some folks at
Berkeley is to seek a special dispensation, to seek a
kind of exceptionalism, that UC Berkeley, you know, is
the crown jewel of the UC system. And we recognize the
special place of Berkeley, but we're also very alive to
the fact that the farther you get away from the steps
on Sproul Plaza, the harder things are, and that in the
community colleges and the Cal State system, things are
in fact far worse, and that UC Berkeley and the entire
UC system has a special responsibility to join the
debate on behalf of public education statewide and, if
possible, to lead, but at a certain point to start the
conversation in a very aggressive way.

And if we have achieved anything in - with the walkout on
the 24th and with this strike, we have certainly forged
a strong alliance between workers, faculty and
students, which is something that has never happened in
the history of UC Berkeley - we've always been
successfully divided - but also that we have begun a
serious conversation about what the value and purpose
of public higher education is, to restore this question
of what role does the public play in all of this and
what is it about Berkeley that marks it as - and the UC
system, in general, that marks it as different, as
special, something that needs to be both preserved and
transformed, expanded, even in the conditions of this
severe economic crisis. Public education is needed more
now than ever.

AMY GOODMAN: Laura Nader, speaking about the history of
public education, the cutbacks, the priorities, you're
an anthropologist, a social cultural anthropologist.
Give us a little history on this struggle.

LAURA NADER: Well -

AMY GOODMAN: Go back as far as you want.

LAURA NADER: Now this debate has been with us as far as
the beginning of the country, when Thomas Jefferson and
some of the founders pointed out that you can't have a
democracy without public education. So some people
disagree, and they say public education is too
expensive. You have the profit model of education, or
you have the public model of education. The public
model says it's a public good. The private model says
it's a private good. And it's been going on.

So, 1868 our university was founded, and it was founded
as a public good. Everybody over the age of fourteen of
moral character could come to the University of
California. It was meant to be free. They didn't
achieve that completely. But even in 1952, it was only
$28 a semester. So we've gone a long way towards not
achieving a free public education, although poorer
countries than ours have free public education, both in
Latin America and Europe. So that's - in 1908, the whole
issue of whether you commodify education or not was
raised to the fore by Thorstein Veblen, a well-known
economist. It was picked up by Upton Sinclair, 1922,
and he was devastating, in his critique, of all the
things that we're critiquing today.

AMY GOODMAN: Upton Sinclair, who wrote The Jungle -

LAURA NADER: Yeah, he wrote The Jungle.

AMY GOODMAN:  - exposing the meat-packing plants.

LAURA NADER: And this book on education was called The
Goose-Step, interestingly enough. And he ran for
governor and almost won. So there was a lot of ferment
at that time. This is an old debate, back and forth,
worth fighting for.

Now, when Obama went to China - he was in China yesterday
talking to the students - one of the students said to
him, "You have things in the United States we don't
have. You have great public universities. You have a
democracy." I mean, that's what people see. At a time
when the United States is in trouble over being an
empire in Afghanistan and Iraq, here we're destroying
something that people all over the world admire. It
just doesn't make any sense.

Now what we need, I think, is transparency. Charlie
Schwartz in the Physics Department has been calling for
this for over a decade, trying to get the numbers that
are always hidden away, etc. We need transparency about
such things as intercollegiate sports, which is a
problem all over the country. And Brian Barsky and
Alice Agogino, these are people in computer studies and
engineering, they can add the figures, and the figures
don't make sense.

AMY GOODMAN: What do you mean?

LAURA NADER: The figures, it's supposed to
be - intercollegiate is supposed to bring in money to the
university.

AMY GOODMAN: Sports.

LAURA NADER: In fact, they're in debt, intercollegiate
sports. So we're subsidizing, the student fees are
subsidizing intercollegiate sports. And we're closing
libraries. So we had - the libraries are supposed to be
closed on Saturdays. There were some students that sat
in, professors that spoke. And a wonderful donor,
anonymous, gave money to keep the libraries open on
Saturday, but the university didn't fall into line and
open the libraries on Saturday. So these are issues of
transparency and accountability, fiscal accountability,
that are very important today.

AMY GOODMAN: Professor Roy, what is differentiated
education?

ANANYA ROY: Differentiated education is one where there
are differential fees imposed on students in particular
disciplines and professions, and this seems to be an
expanding option for our Board of Regents and for our
administrators, so the imposition of fees on students
in what are seen to be high-value disciplines and
professions, the arguments being that those getting a
professional degree from law or business, now from city
planning or architecture, can somehow earn more, and
therefore they should pay a higher fee. I've been
talking about this as differentiated education, because
it's similar to the creation of toll roads, to say you
have to pay a toll to enter this particular enclave.

What is quite stunning then this week is that the Board
of Regents will not only vote on the undergraduate fee
hike, which will have huge consequences on access to
public education, but it will also most likely approve
the expansion of differential fees in a host of
graduate programs throughout the UC system. And in some
cases, the Regents will have to violate their own
policy that prevents fees in graduate programs from
being higher than those in competing public
universities. In other words, the trustees of
university policy will declare exceptions to that
policy and perhaps ultimately discard that policy in
order to create this differentiated education.

Now, I have to note that about two months ago, the
Regents were talking about differentiated education and
differential fees at the undergraduate level in
disciplines like business and engineering. And they
have now seemed to have backed away from that, and
perhaps one of the reasons for that has been the
mobilization around these issues.

AMY GOODMAN: Professor Nader, for the last five years
Governor Schwarzenegger has attempted to eliminate
funding for the UC, University of California, labor
programs. Can you talk about this? Pressured by right-
wing Republicans and other opponents of labor around
the issue of the labor movement?

LAURA NADER: Well, you have to see that in perspective
also. The University of California has been dubbed one
of the worst employers in the state, and that's been
for a long time. So, Governor Schwarzenegger worsens
that situation by his dealings with labor issues. I
mean, people are working for the university because
they love public university and want to do something,
but they shouldn't be taken advantage of to the degree
that they are.

AMY GOODMAN: The proposal of the State Assembly
Majority Leader Alberto Torrico, who has proposed an
oil severance tax to benefit higher education,
Professor Roy?

ANANYA ROY: Yes, we had an important event on campus on
October 26, organized by faculty, students and workers.
And this is an important proposal, because in fact it
shows that there are ways of creating revenue streams
for public higher education in California. It's
important that, in fact, these funds would be divided
among the UC system, the community colleges and the
California State University system. This is not perhaps
the silver bullet that will solve the problem of public
higher education in California, but it demonstrates
that we have state politicians who are willing to step
up and come forward with solutions. I think what has
been perplexing for us is how and why UC administrators
have not, until now, been in conversation with some of
these state politicians around these proposals. In some
ways, it is the movement that has done the work for UC
administrators, brought the state politicians to
campus, formed these alliances, and we look forward to
doing a lot more of this.

LAURA NADER: But isn't the reason that the
corporatization of the university? You distance
yourself -

AMY GOODMAN: What do you mean by that?

LAURA NADER: That means that you give preference to
companies like BP to come on the campus, Novartis
before BP, and you want to get private money so that
they can call the tune. I mean, the head of the Regents
set up an institute, which you know, in the University
to study poverty. And who decided that? He just gave
them money, and he wanted to do poverty and development
and so forth. So who's calling the tune? Who's deciding
what an educational institution should be? The donors?
We're supposed to have arms linked to have a good, good
university. We don't have arms linked. If they had - if
they taxed the oil companies in California, we'd get a
billion dollars a year just from that. So there's no
effort being made by - I think that's what Ananya is
saying - by the university to connect with the
legislature and with the tax people to see how can we
raise revenues for our purposes.

AMY GOODMAN: Michael Cohen?

MICHAEL COHEN: Well, I think that this is important. I
mean, the state of California has real problems with
its revenue streams, in terms of its taxation policies
and the like. And we've seen, as your headlines
indicated there, the crisis is quite real here. And
this isn't something that is exclusively about
university policy. This is about students in classrooms
and workers who are being laid off, their unions are
being busted, so that, you know, enormous bailouts can
be given to private capital firms in California and on
Wall Street, and yet the public education system has to
suffer. And this bill that is coming due for
undergraduates and that the wages that are being
suppressed for janitors and for building maintenance
workers and technical and clerical staff, that burden
is being passed onto us, to the most vulnerable members
of the state of California and to the most vulnerable
workers at the University of California.

And so, we - they are going on strike to oppose this, to
resist this. The workloads that are being imposed upon
those who survive are so onerous, they are desperately
afraid to keep their job. And it's a tremendous act of
bravery for the unions on the campus. And I'm a member
of AFT. Blanca is a member of the United Auto Workers.
That the unions are very strong on campus, but they're
desperately pressed right now in a way that it behooves
the rest of us to stand up to come to their common
defense.

I mean, our students are, as well. They come to my
classes. We ask them, "How many of you are going to be
affected by a 32 percent fee increase?" And many of
them - and it is overwhelming the students of color, the
transfer students who come from the community colleges,
the first-generation college students, the returning
students, the student parents, all of them, that
universally raise their hand and say, "If they raise my
student fees over $10,000, I will probably not be back
next year." And we have to ask, will there be space in
the CSUs? They're cutting 40,000 people from their
enrollment. Will there be space from the community
colleges? They're going to vote in January to eliminate
their summer quarter, a full 25 percent.

AMY GOODMAN: Explain the CSUs.

MICHAEL COHEN: Sorry, the Cal State schools - San
Francisco State, Cal State East Bay.

AMY GOODMAN: And the difference between the Cal State
schools and the UC schools, the University of
California?

MICHAEL COHEN: There's a - the master plan of higher
education is a three-tier system in the state of
California. The community colleges are the largest, and
they are required, by policy, to accept all comers. The
Cal State system as the second-tier system, and
it's - they're very - there's a much larger number. I'm not
sure. Perhaps Professor Nader knows the exact number.
And then there are ten UC schools, the University of
California system, that ranges from Riverside to Irvine
to UCLA to Berkeley. And it's understood as a kind of,
you know, hierarchy and this tiered system.

But if you whittle away at the bottom, and the
community colleges disappear or are dissolving, and the
CSUs are dissolving and breaking apart, there isn't
going to be that funnel of students upward to the
system to UCs, in general, and that ladder of social
transformation, that great democratizing engine that is
the Cal State, the University of California system, or
California public higher education is dying. It's being
squeezed from within, because these cuts are being
imposed on us, rather than tax yachts or oil extraction
or reapportion the taxation system in the state of
California. Workers, poor students -

AMY GOODMAN: Does war fit into this?

MICHAEL COHEN: Clearly. I mean, California has always
been an economy that based itself, you know, on war and
the military-industrial complex. I think Professor
Nader certainly can speak to the reason why protests at
Berkeley are necessary. I think I - briefly, I mean,
protests at Berkeley are necessary, not because the
water produces radicalism or that there's something,
you know, that we just do at Berkeley; it's the nature
of the institution. In the '60s it was necessary to
protest UC Berkeley, because they were developing
atomic weapons. And now it is necessary to protest at
UC Berkeley because of what is being forced on us.

AMY GOODMAN: Professor Nader?

LAURA NADER: I think Americans - Americans really need to
wake up to the fact - Chris Newfield, a professor at
Santa Barbara, has written a book about the destruction
of public education in America. Forty years it's taken
to get to this point. But it isn't something that just
happened, and it isn't something that was unplanned.
People really do adhere to the model that this is
not - shouldn't be a public good. And if we continue in
this direction, there's going to be a two-class system:
those who go to college are going to be those who can
afford it, and those who don't are going to be the
middle class. And a few poor people will get a few
scholarships, so they can justify it. But this is
happening, and it's a major deal. Everybody in
California and across the country - this is something
that people admire our country for. Why are we
destroying it? It boggles the mind.

AMY GOODMAN: When I mentioned war, I meant the money
that's being spent by this country on war.

LAURA NADER: Of course.

AMY GOODMAN: And Professor Roy, maybe you can comment
on this and what is happening at the same time here at
home with the state budgets, with our educational
system. UC Berkeley is not the only one going through
this. For example, the news from the University of
Champaign-Urbana in Illinois: apparently, in this last
week - let's see if I can find the information - graduate
teaching assistants at the University of Illinois,
Urbana-Champaign went on strike yesterday after the
university refused to guarantee continuation of the
teaching and grad assistant tuition waivers.

ANANYA ROY: Yes, I do think we have to see this issue
in a national context. I teach a very large class on
global poverty and inequality this semester, 700
students packed into a classroom at Berkeley, which is
a class that will be on strike this week. How can we
not be? But we, of course, look at issues of poverty
and inequality here in this country, and one striking
trend is that between 2002 and 2007, the years of this
massive financial boom, recent studies show that two-
thirds of the income gains during that economic
expansion went to the top one percent of Americans.
That's stunning. But we also know the other side of
that, that when that bubble burst, there were massive
losses that were socialized, i.e. borne by the 99
percent, not by the one percent. So we are part of a
historical moment where there is deepening inequality.
And the issue is whether or not state policies,
government policies at various levels, from the federal
government to state governments, deepen those
inequalities further, or whether in fact we can have
instruments of opportunity and justice. And in this
context of inequality, one doesn't need radical
instruments of redistribution. One only needs a few
things, like decent public education or access to
healthcare or some sort of reasonable approach that
says enough of this massive spending on war.

AMY GOODMAN: I'm going to end - oh, yes, Professor Nader?

LAURA NADER: I just want to say, you're making the
point that everybody should be making every single day,
which is we're not connecting the trillions of dollars
for war with the fact that we don't have healthcare,
and we're now destroying public universities.
Connecting the dots is absolutely important to do.

AMY GOODMAN: I'm going to end with Blanca Misse.
Yesterday we were at the Free Speech Cafe at the
University of California, Berkeley, which honors the
free speech movement back to 1964. And for people who
aren't familiar with Mario Savio, who gave this famous
speech, where he said, "There's a time when the
operation of the machine becomes so odious, makes you
so sick at heart, that you can't take part, you can't
even passively take part, and you've got to put your
bodies upon the gears and upon the wheels, upon the
levers, upon all the apparatus, and you've got to make
it stop." What specifically are the actions that are
happening here on the campus at UC Berkeley and also at
UCLA?

BLANCA MISSE: So, at UC Berkeley, the actions - the main
action is going to be the strike, which is, you know,
maybe the most radical action we can take in our
campus. That means picket lines in the mornings at 5:00
a.m. to shut down the construction sites, with workers
and students picketing. And it's not just picketing,
like walking around; it's also showing physical
solidarity. And besides that, we're going to have a
rally at noon the Wednesday. We're going to have a
march. And we would like to get out of the UC,
university, go to Berkeley City College, go to Berkeley
High School, to see how we can build a real solidarity
in this movement, how we can fight together for public
education. And we're going to come back and have a
meeting, an assembly, to discuss how we want to move
forward. There's going to be a tent city in the campus.

Tuesday in the morning - Thursday in the morning, we're
going to do all these teach-ins and open university
activities around the picket lines, so people don't
have to choose between education or a strike, because
this is a strike for education, and we don't want to
enter the game of the University that we are against
education by striking. We are striking because we care
a lot about public education, and we care about another
kind of public education maybe than the one they offer,
a real public education out of the corporate model.

And there's lots of actions that are going to be
planned, but it's important to remember that this is
not only Berkeley. In UCLA, there's going to be a huge
mass protest Wednesday and Thursday to protest of the
Regents meeting, to protest of the way this university
is structured, the way this university functions. But
also, at the conference of public education, we voted
to have solidarity actions across public education for
these three days of protest. So, for example, San
Francisco State University is going to do a huge rally.
And we don't know what else it's going to do. Maybe
they're going to just also walk out of the classes. We
know that San Francisco City College is also going to
hold a rally and a teach-in. We don't know what other
schools are going to stand in solidarity with us. So
this is just the beginning, because we're building for
a massive action in the spring, March 4th. We voted to
go on strike across public education.

AMY GOODMAN: Well, I want to thank you all for being
with us. It's been very interesting to come across the
country on our Breaking the Sound Barrier Tour and
begin right here, where there's so much activism that's
happening, and we'll certainly follow it through the
week. We'll be broadcasting actually tomorrow from
Stanford, and then we're moving on through California
up to Washington state and Oregon. I want to thank you,
Blanca Misse, for joining us, UC Berkeley graduate
student, organizer of the Student Worker Action Team;
Michael Cohen, lecturer in American studies at UC
Berkeley, co-chair of the Solidarity Alliance, which
issued the call for this week's strike; Professor
Ananya Roy is a professor in the Department of City &
Regional Planning at UC Berkeley, canceling her classes
to take part in this week's strike, no small event,
considering the class is 700 students; and Professor
Laura Nader, longtime professor here of anthropology at
UC Berkeley, where you've taught for nearly half a
century, earlier this year co-authored a measure
approved by the UC Berkeley Academic Senate calling on
the school's athletics program to become self-
sufficient and stop receiving subsidies from student
fees.

==========

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The Crisis of Jobs

A Wake Up Call on Jobs

by Robert Kuttner

President Obama has announced a White House Jobs Summit for next month. At least that's the beginning of recognition that the unemployment rate is unacceptable. The measured rate is now 10.2 percent, but if you count people who have given up or who are involuntarily working part time, the real rate is over 17 percent.
This spells political catastrophe for Democrats in the 2010 mid-term election, as foreshadowed by the recent losses in the New Jersey and Virginia governors' races. But Obama's top economic advisers, such as Larry Summers, don't seem to get it. They continue to resist the idea of a second stimulus package.
"I think we got the Recovery Act right," Summers recently told the Washington Post'sAlec MacGillis, adding, "We always recognized that America's problems were not created in a week or a month or a year and that they were not going to be solved quickly. We designed the Recovery Act to ramp up over time, through 2010, and to make sure that the investments we made were important for the country's future."
And other senior Obama officials such as White House Chief of Staff Rahm Emanuel and Office of Management and Budget Chief Peter Orszag are more concerned with cutting the deficit than spending more money to reduce joblessness. According to theWall Street Journal, Orszag is sympathetic to the idea of a commission to cap government spending and Emanuel is floating the idea of spending some of the money that has been repaid from TARP bank bailouts on deficit reduction.

But this is putting the cart before the horse. We need larger deficits now, in order to get a real recovery going, so that a healthy economy will allow us to pay down public debt later. Specifically, we need to focus on three big things:
State and Local Fiscal Relief. You often hear that outlays on public infrastructure are not a good source of stimulus because they take too long to plan. But emergency revenue sharing to states and localities takes effect almost instantly because it prevents cuts in existing programs and layoffs of existing workers. Today, states and localities are not only cutting back outlays because their constitutions require balanced budgets; they are raising taxes, usually regressive taxes. According to the Center on Budget and Policy Priorities, the three year state fiscal gap 2010-2012, will be at least $470 billion. So more than half of the federal stimulus is undermined by state and local belt tightening.
Accelerated Spending on Public Works. The Roosevelt administration, in an era before computers, got a lot of public works spending going in less than a year. There are massive unmet needs in public infrastructure. The Obama administration needs a short term and a long term strategy. Projects such as school repair and expansion, which can get underway in a few months, should get fast-tracked funding commitments right away. Longer term needs, such as smart electrical grids and modernization of water and sewer systems, expanded mass transit, and green energy, should be targeted for funding in 2011, so that plans can get on the drawing boards now.
Wage Subsidies. It is fashionable among American conservatives to make fun of the "rigidity" of European labor markets. But Germany today has a flexible and creative program of wage subsidies. The result is that the German unemployment rate has pealed at around 8 percent while ours has crashed through 10 percent. German companies suffering a downturn because of recession can get wage subsidies for their workers. Workers can also be put on reduced working time (kurzarbeit) and the German unemployment office will make up most of the loss in their take-home pay. According to the German government, a worker cut to 40 percent of his or her normal hours will end up with about 85 percent of usual take-home pay. Today, some 1.4 million German workers have been able to keep their jobs and most of their earnings thanks to thekurzarbeit plan. German firms keep their workers connected to the company, workers hold on to their jobs, and there are also incentives for workers on reduced time to use their spare hours to get additional training.
All told, we need additional federal spending in the range of at least $500 billion. But won't this increase the deficit? Yes it will, and that is the whole point. We are in a classic downward spiral of reduced household income and wealth, and a weakened financial sector. Many businesses face reduced consumer demand, compounded by a reluctance of banks to advance to any but the most blue chip borrowers.
In this climate, GDP growth can turn positive but companies are reluctant to hire. Full recovery will not resume spontaneously based on household or business demand, and the only source of increased demand to break the cycle is the government.
One of the most widespread and mistaken assumptions is that this bleak future is just baked into the cake. Because of the legacy of the financial collapse, and the limits of deficit spending, supposedly, we are just stuck with it. You hear that in testimony from Federal Reserve Chairman Bernanke, and it is repeated mindlessly by the media.
This fatalism is just plain wrong, and history's great counter-example is World War II. In 1939, unemployment was stuck around 16 percent. GDP growth after 1933 was solid -- 6 to 10 percent a year with the exception of 1937 -- but the wounded economy was just not generating net jobs. Many expert commentators of that era concluded that there was something about the maturity of capitalism, or the replacement of human workers by machines, that consigned the economy to a chronic structurally high, rate of unemployment.
Then World War II broke out. The US government borrowed huge sums to recapitalize US industry and re-employ and retrain US worker in war production, to employ 12 million men and women in the armed forces, and to invest massively in science and technology to develop advanced weapons and substitutes for materials in short supply. The unemployment rate dropped to 2 percent by 1943. Deficits were enormous, as high as 29 percent of GDP in 1942 (this year they will be about 10 percent) but the economy grew at 12 percent a year for the four years of the war, and the high unemployment of the 1930s never returned.
The deficit hawks of that era worried that the very large national debt would be a millstone around the economy. At the end of 1945, the debt was 122 percent of GDP, compared to about 55 percent today, but of course the end of 1945 was the beginning of the 25 year postwar boom -- the longest sustained boom in US history. GDP grew at 3.8 percent a year. The average deficit was about 1.1 percent, and with the economy growing much faster than the debt, the debt to GDP ratio declined to about 30 percent by the 1970s. So, we can grow our way out of debt -- but we need to get a real recovery going first.
If past Obama White House Summits are any guide, this one will invite a broad cross section of people: trade unionists and deficit hawks, investment bankers and labor economists, industrialists and Republicans; and everyone will speak of the importance of their pet project for job creation. That's not good enough. This is not a moment for another White House gab fest. It's a time for progressive leadership.

© 2009 Huffington Post

Robert Kuttner is co-founder and co-editor of The American Prospect magazine, as well as a Distinguished Senior Fellow of the think tank Demos. He was a longtime columnist for Business Week, and continues to write columns in the Boston Globe. He is the author of Obama's Challenge and other books.

California can cut school budgets $6 Billion

June 3, 2009
Obama officials say California can cut $6 billion from schools
California can cut $6 billion from education through June 2010 without jeopardizing federal funds after the Obama administration on Wednesday approved the state's revised application for stimulus money.
Gov. Arnold Schwarzenegger's finance officials said last month that they mistakenly assigned $2 billion to California's education spending in 2005-06 when the money was actually spent in 2006-07. The error played a big factor in California's current budget discussion because the state cannot spend less on education now than it did in 2005-06 as a condition of receiving stimulus money.
Under the state's initial application, California could only have cut about $2 billion from the state's education budget through June 2010. But Gov. Arnold Schwarzenegger last month proposed cutting $6 billion from K-14 schools to shrink a $24.3 billion budget gap, alarming education advocates.
Schwarzenegger aides said that they mistakenly assigned $2 billion from 2006-07 to 2005-06 because technically the money was meant to "settle up" reduced education payments in 2005-06.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Assembly Speaker Karen Bass, D-Los Angeles, said Tuesday that they had no position on whether the state's new application should have been approved. But Steinberg said Democrats were not willing to cut $6 billion from schools.
School groups lobbied the Obama administration and questioned the convenient timing of Schwarzenegger officials discovering they had made an error favorable to more budget cuts right as they needed to make additional school reductions.
The Department of Education on Wednesday said that it concluded California's application revisions "are consistent with the manner by which state appropriations for 'settle up payments' are treated for accounting purposes."
Bob Wells, Association of California School Administrators executive director, said, "It's just a shame. I think it pretty much gives the green light to the state to continue cutting schools."
Wells said $6 billion in cuts would result in more teacher layoffs and larger class sizes. Schwarzenegger proposed giving school districts the flexibility to reduce the school year by up to seven and a half days in order to save money.
"The governor is fighting for California's fair share of Recovery Act dollars and is pleased that the administration approved our application," said Schwarzenegger press secretary Aaron McLear.
Categories: State budget
Capitol Alert. Sac Bee

There will be blood.

The party of NO won the election.

The budget reform proposals on the California ballot May 19,2009 failed and the legislature has the lowest approval ratings in modern history.
No more taxes.
No more cuts to my programs and benefits.
Now the budget crisis is bigger - $21.3 billion dollars.
California has long labored with the notorious 2/3 rule for passing budgets and raising taxes. The Republicans have used their 1/3 stranglehold – and the veto of the Governor- to stop resolving the budget crisis.
In this election several additional groups, notably SEIU, CFT, CFA, have demonstrated that they too can produce a stalemate, but , like the Republicans, they can not write a budget that will pass. Unless labor all pulls together- the Party of NO wins.
In 2003 the Party of No recalled Governor Gray Davis. There is no need for recall now. The state is $21.3 billion short for the next year. And, the minimum guarantee for schools has just been reduced. (see below)
According to Paul Krugman, the best case scenario is that the U.S. economy will emerge slowly from recession and continue in stagnation for several years. Under these conditions, state budgets will not recover. We will continue to have a fiscal crisis of the states.

California Budget and Education

State Superintendent Discusses Impact of Budget on Education

by Jack O’Connell
State Superintendent of Public Instruction

I’m pleased to see the Legislature finally put its differences aside and took action to end this protracted stalemate. While this budget is not ideal to any extent the uncertainty and instability for schools created by the lack of an agreement is over.
This budget will reduce the current year Proposition 98 funding level by $7.4 billion, which includes about $2 billion in reductions to program and revenue limit funding, as well as $4.6 billion in deferrals and the redesignation of funds. While the state budget agreement resolves the massive state shortfall, we must recognize that part of the solution essentially transfers our state cash flow problem to local schools and districts, and these cuts will impact our students.
The budget agreement also provides additional flexibility to transfer funding between about 40 programs which may assist school districts in continuing to provide the educational services their students need. I hope that district leaders will use this flexibility effectively to manage local educational needs while maintaining a focus on raising student achievement and closing the achievement gap.
I am glad that the budget agreement did not include the very successful class size reduction program in the list of categoricals subject to flexibility. Keeping class sizes low benefits students in the critical early grades when they are learning to read and establish a foundation in understanding mathematics.
Other vital programs, including child nutrition, special education, economic impact aid, our apprenticeship programs, and partnership academies also were not included in the new flexibility. These programs serve some of our neediest children and it is appropriate to preserve their effectiveness.
During the next few days, my staff will continue its review of the language in the proposed ballot measure affecting the Proposition 98 maintenance factor, which is intended to provide the $9 billion in repayments owed to public education. 

The painful budget process at our state and local school district level calls out for reform of California’s dysfunctional budgeting process. It is time for a sincere and frank conversation about reform. Central to this conversation is the idea of throwing out the two-thirds vote requirement to pass a budget and simply using a majority vote. Nearly every state in the nation and Congress, as well as counties, and cities use majority votes to pass their budgets. California should follow suit.
I understand that the minority party may feel that this would make them irrelevant to the process but, if anything, it would hold their majority party colleagues even more accountable.
Most importantly, a simple majority vote would protect our schools and districts from the instability they are forced to endure anytime the Legislature cannot reach a budget compromise.
It is time to bring about substantive changes to the way we do business in Sacramento – we owe the people of California this much.
Jack O’Connell is the elected State Superintendent of Public Instruction for the state of California.
Posted on February 20, 2009
And, a candidate for Governor.

State Budget and school funding

State Budget Requires Public Democracy Not a Cone of Silence

By Marty Hittelman
President
California Federation of Teachers

The Legislature and governor are on the verge of agreeing to a state budget that would not be in the best interest of most Californians. It would greatly harm public education, public health programs, and working people. It continues the financially disastrous tradition of reducing targeted taxes and creating new tax loopholes each year in order to convince Republican legislators to vote for the budget, a consequence of the state's dysfunctional two-thirds legislative supermajority requirement. The ‘budget’ bills also strip hard-won rights from working people that have nothing to do with a state budget, in order to satisfy a particular group of businesses.

The proposed reductions in education programs amount to more than $5 billion this year and $3 billion next year. This will continue to hamper our educators' ability to deliver the best education we can to the state's six million K-12 students and 2 million community college students. The CFT believes that education should be seen as an investment in California's future, not as a target for budget cuts. Students' progress will be slowed if the increased class sizes incorporated into this budget occur. In addition, the bill seeks to rewrite the guarantees of Proposition 98 to K-14 education without a vote of the people. This is clearly contrary to state law.

In creating so-called ‘flexibility’ for school district and college administrations to move funds out of categorical programs and into district general funds, the Legislature and governor do not solve the problem of our underfunded educational
system. Instead, this provides a tool for administrators to eliminate class size reduction (CSR), adult education, occupational skills, early childhood education, professional development, part-time parity pay and other necessary programs.

Most of these programs are directed at the needs of disadvantaged and working class students. Eliminating these programs along with cutting Prop. 98 is only taking California backwards. There must be an evaluation of specific categorical programs and a discussion of flexibility at the policy level. This decision should not be made solely for financial reasons.

We are opposed to the spending cap included in this budget. This spending cap creates a ceiling on future spending at a time when the economy is at an historic low. Under this spending cap, no improvements in any public services or public works infrastructure will be possible in the future, no matter how much the economy grows or how vital the need. The cap provisions also allow the Governor to make unilateral budget cuts without legislative approval-a direct assault on the balance between the Legislative and the Administrative branches of state government.

The proposed ‘single sales factor’ tax provision is a loophole worth over $750 million per year and will only help corporations avoid paying their fair share of taxes. This bit of chicanery comes on top of an accumulation of more than twelve billion dollars per year in lost revenue to the state of California over the past fifteen years. Each year, in order to convince enough members of the minority Republican Party to reach a two thirds vote for a budget, Democrats have agreed to tax cuts and new tax loopholes, mostly for the wealthy and corporations. Added together, these cuts amount to more than the current state budget deficit. During these extraordinary budget times, when education, our universities, health and human services are facing such deep cuts, this enormous tax giveaway is unconscionable.

Finally, the budget is no place to be eliminating hard won labor rights. Issues such as state holidays and overtime provisions for state workers should be bargained, not taken away in attempt to appease business interests. We are opposed to negotiating policy issues that have no relevance to the budget process.

The problems we see in this budget bill could have been addressed if there had been full and open hearings instead of secret legislative leadership discussions under a ‘cone of silence’ with the governor. The CFT believes that government functions best and in the interests of the most people when it is conducted in public, not behind closed doors. It also functions best when, as in virtually every
other state, it is run on the basic democratic principle of majority rule.

Unfortunately, that is not the practice today in California.

In short, we are disappointed with the work of the legislative leadership, and urge all legislators to vote ‘No’ on the budget package, and to tell their leaders and the governor to go back and do it right-and in public.

Marty Hittelman, a community college math professor from Los Angeles, is the President of the California Federation of Teachers (CFT) which is a member of the American Federation of Teachers (AFT). The CFT represents faculty and other school employees in public and private schools and colleges, from early childhood through higher education in California.

Posted on February 13, 2009
From: California Progress Report

State of the Schools in California : O'Connell

State of Education Address, February 3, 2009 Excerpts
Superintendent O'Connell on the status of education in California.
Back to State of Education Address, February 3, 2009
Good morning. Thank you all for being here.
Today in California we face a defining moment for public education. We gather at a moment of great uncertainty. But I want you to know that I stand before you today hopeful. Hopeful for the future of our country, hopeful for California, and hopeful for our public schools, even at this difficult time.
Yes, these times are turbulent with no clear skies ahead. The national economic downturn and the budget shortfall facing our state are creating havoc in every one of California's schools and districts. Every teacher, every principal, and every superintendent I speak with wonders how we will make it through the next school year.
Friends, the state of public education is precarious. Beyond the immediate crisis, and even more alarming to me, is the long-term future of our common education system. If we continue down the road we are on our public schools and our state itself face certain, perhaps irreparable, damage.
Let's look at the immediate crisis: With more than half of the school year completed, our schools are faced with staggering, immediate budget cuts. The budget being negotiated may result in current-year reduction to education funding of $10 billion. These cuts are nothing short of breathtaking:
Hayward Unified plans to lay off as many as 170 teachers and increase class sizes from 20 to 32 students.
In Merced, as in many other school districts, school bus transportation is on the chopping block.
In Lake Elsinore, not only are veteran teachers being given incentives to retire, schools are putting duct tape over light switches to save on electricity.
And on and on all over this state.
And as painful as these midyear cuts are, we can expect worse over the next two years: Larger class sizes and fewer classroom aides. Outdated textbooks, longer bus rides or no buses at all. Less support for English learners and for our neediest schools. Fewer librarians, counselors and nurses. Districts are choosing between hiring a math teacher and buying math books. Most tragically, these cuts come at the same time that the need for investment in better schools and more support services has grown.
The number of homeless students in our schools increased nearly 19 percent in the 2006-07 school year, and we know that percentage is rapidly growing. Hunger is also on the increase. Our schools served 28 million more free school lunches in 2007-08 than the year before. Historically, subsidized school lunches have increased by 1 percent a year. Between September 2007 and September 2008, we saw an alarming 12 percent rise.
The students behind these percentages are the students who need more time in school, not less, more adults on staff who care, not fewer.
We know downturns like this hit the most vulnerable among us the hardest. It's the children in our schools struggling to learn the English language or those who come from poverty or who live with a learning disability that will be the first to feel the pain of cuts. Sadly, this comes after a long-term California focus on closing achievement gaps that is just now starting to show modest progress.
Let me be crystal clear, all of our progress as a high-expectation state is at risk unless we commit ourselves now to being innovative, flexible, and focused as never before. It is time for us to prioritize and to focus on only those things we know are working to close the achievement gap and help all students succeed.
Read the entire statement at www.cde.ca.gov

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Economic crisis and the schools

Where We Stand _CTA.

January 15, 2009

California schools and students are suffering, and local school districts are already at the tipping point. The $3.5 billion in cuts made last year have led to larger class sizes, more than 10,000 layoffs of teachers and other education support staff, and the further elimination of art, music, and career technical education programs. Some schools have even shut down their libraries. The governor’s latest budget proposal would just make things worse.

The Governor’s proposal to cut an additional $10.8 billion over the next 18 months is an irresponsible assault on California’s students and schools. And adding further insult, the governor is redefining Proposition 98, the state’s minimum school funding law, to take $7 billion from our schools that would never be repaid, in direct violation of the constitutional guarantee. Lawmakers need to raise revenues and solve California’s budget problem without further detrimental cuts to an already underfunded public school system.

These additional cuts will further devastate schools and colleges, causing thousands of additional layoffs, even larger class size increases, more program cuts, and possible school closures. Some local schools are talking about increasing all class sizes to 40 students, while others are planning to eliminate all sports programs. The cuts proposed by the Governor will totally change public schools in California as we know them, robbing our children of a well-rounded education and leaving an academic scar on an entire generation.

It’s long past time for lawmakers to stop playing partisan politics and pass some revenue increases. Investing in public education is the best investment we can make in the future of our children and our state. We warned the Legislature last year that relying on more borrowing would just make the situation worse – and it has. Every day they don’t take action, our kids pay a bigger price.

Education Week recently released a report that shows California has dropped from 46th to 47th in per-pupil funding, and lags behind the national average by $2,400. Those figures don’t even include the latest cuts or indicate where the state would be ranked under the governor’s new proposal. Lawmakers should be working to improve support for students, not making things worse.

The governor’s proposal to cut the school year by five days does nothing to improve student learning. California students cannot continue their recent progress if the state takes away important instruction time. The governor’s proposal hurts students in poorer communities most by eliminating all funding designed to help lower-performing schools.

CTA opposes any changes to the state’s successful Class Size Reduction program. Smaller class sizes are key to improving student learning, especially for ethnic minority children and English learners. The governor’s proposal for complete and permanent “flexible” use of all categoricals is simply encouraging school districts to rob Peter to pay Paul. The fact is, flexibility without adequate funding provides false hope that schools can do more with even fewer resources.

The use of deferrals and accounting gimmicks in the Governor’s proposal further shortchanges schools this year and will lead to cash flow problems for school districts. It pushes the problem down the road and does nothing to address the need for new and reliable revenue sources for public schools.

For our community colleges the proposed cuts could reduce enrollment by at least 5 percent, force community colleges to turn away nearly 263,000 students, and seriously impact thousands of unemployed Californians who recently enrolled to seek training for new jobs.

The Governor’s proposed 10 percent cut to the UC and CSU systems would be devastating. The California State University announced the cuts will force CSU campuses to turn away at least 10,000 students who apply for admission next fall. It is the first time that the nation's largest four-year university has officially endorsed a system-wide concept of refusing admission to eligible students.

California budget failure

Since 1978 – Proposition 13- the California public schools have been under funded. Since the mid 1980’s California has had a dysfunctional prison and parole system with a constantly increasing budget.
The current legislature and the prior legislature can not pass a budget significantly as a consequence of the 2/3 rule. And, the Governor’s office issues press releases but provides no leadership.
Each side guards its territory and vilifies the other side. But, the state is not being governed.
Special interests pass laws but the public interest is being ignored. Over time an un governed state declines economically- as California is declining.
The public disapproval ratings of the legislature and the governor reveal that the voters recognize this incompetence.
The political stalemate in Sacramento makes the national recession worse. More workers will loose their jobs, more school budgets will be cut.

"Without an immediate fix to the state's estimated $40 billion budget deficit, California could run out of cash next month. State finance officials warn that the state would have to give IOUs to state vendors and elected officials, as well as delay refunds for taxpayers."
Perhaps we should respond in kind. Perhaps all of the taxpayers in the state should send in IOU's rather than their tax payments.
We would hope that soon some adults begin to provide leadership in Sacramento.

California budget crisis

Tell Lawmakers to Protect Schools and Reject GOP Budget : California

Relying on more borrowing, California Republican leaders have announced a state budget plan that fails to include the revenues necessary to address the funding crisis facing California California's students and schools. The GOP plan would cut more than $10 billion from schools and community colleges – undermining the future for an entire generation of students.

Email your legislators today . Tell them to reject the Republican budget plan and to support additional revenues to prevent deeper cuts to our public schools.

Read more about the state budget crisis and how it impacts your school district.

CTA and the Education Coalition unveiled “Holiday Wish Lists” for local schools in the midst of the devastating budget cuts. Events were held this week in San Francisco Francisco, Chico and Fresno Fresno.

Economic crisis and state budgets ; increasing democracy

Strengthening Progressive State Power Should Be Priority for D.C. Leaders
Monday, November 18, 2008
Increasing-Democracy


BY Nathan Newman
Strengthening Progressive State Power Should Be Priority for D.C. Leaders

With conservatives losing the presidency and democrats controlling congress, we are likely to see a significant redeployment of conservative political energy into the states. There are still 33 state governments where Republicans control either a governorship or a legislative chamber, and other state political bodies are still controlled by conservative Democrats.

We are already seeing rightwing forces shift to state level policy campaigns. In fact, multiple conservative commentators have begun to openly discuss that the states will be their key target in the next few years. William Kristol, editor of The Weekly Standard and considered one of the key intellectual leaders of the neoconservatives, recently wrote that conservative resurgence will start in the states: any "comeback will surely be successful practical governance at the state level." Peggy Noonan, a speechwriter for the first President Bush, wrote in the Wall Street Journal that "I believe renewal and reform will come from the states" and "the new emerging Republicans are likely to come in the end from the states."

One example of this renewed focus on local politics is the recently launched " American Solutions" organization, started by Newt Gingrich. The organization's goal is to mobilize the "513,000 elected officials in America, from school board to city council to county commission to state legislature." Gingrich is in many ways returning to his original path in rising to power as Speaker of the House of Representatives, which began with his leadership of GOPAC - an organization dedicated to training state leaders and winning control of state governments - and successfully fueled rightwing power across the country.

With the recent loss of federal power, we will no doubt see conservative leaders at the state level launching local attacks on immigration, gay rights and other issues as a wedge to win local power and to undermine support for federal progressive policy in the media.

Progressive leaders nationally and locally need to take this conservative focus on local politics seriously. Progressives need to be proactive and build a "collaborative federalism" that reinforces progressive policy not just in D.C. but in statehouses across the nation. This Dispatch details why state policy will remain central to national policy debates, how New Deal and Great Society progressive leaders made strengthening progressive power in the states a central focus of their work, and what a progressive collaborative federalism policy would entail for the incoming President and Congress.


States Will Remain Central to Policy in New Era



As we described last year in our Why States Matter Dispatch, most pundits and analysts underestimate the dominant role states have played and continue to play in much of domestic policy.


States' Dominance of Domestic Spending: In total, states spend over $2 trillion each year on a range of programs - almost three times the dollar amount of non-social security domestic programs administered at the federal level (see chart to the left). Critical programs like Medicaid, worker's compensation, public schools, unemployment insurance, most of our criminal justice system, and most aid to the poor are administered not from D.C. but in the states. For example, Indiana, Michigan, New York, Ohio and South Carolina have insolvent unemployment insurance funds and will have to borrow money from the federal government because due to increased unemployment numbers, more money is going out than is coming in from business taxes.

The public employees who actually do government work day-to-day, such as school teachers, cops and program case workers, are overwhelmingly employed at the state and local level. State and local governments employ 18.6 million people - over nine times as many as the federal government - which employs just over two million public employees.

Regulatory Power at the State Level: As we described in our 2006 report, Governing the Nation from the Statehouses, conservative leaders have long understood that even without control in Washington, D.C., states have key regulatory power over the economy and society beyond their budgets and spending power:
Contracts and Corporate Accountability: Through state law and liability rules, the states regulate trillions of dollars of commerce in the economy. State courts reported 17 million civil cases in 2003, including contract, tort and real property disputes.
Criminal Justice: While there were 170,535 federal prisoners in 2004, this is dwarfed by the 1.9 million prisoners in state and local prisons and jails.
Public Pension Funds: While D.C. is debating whether to take equity stakes in private companies, state public pension funds control well over $2 trillion in financial assets.
Employment Rights: While the media focus remains on the application of federal civil rights or labor laws, these only protect employment relative to a baseline of job protections determined by state law.
Conservatives understand the power that states wield and progressives, especially those in D.C., need to take it seriously as they formulate policy.


Strengthening Progressive Power in the States Central to New Deal and Great Society Goals





In some cases, as described in our 2006 Governing the Nation from the Statehouses report, state regulatory power has been used for rightwing purposes, while in others it has strengthened long-term progressive goals. As progressives in D.C. assess their priorities, they should recognize that one of their longest enduring legacies would be to strengthen progressive power in the states, a legacy that will last if or when progressive dominance at the federal level might yield in the future to conservative opposition.

New Deal and Great Society Strengthened Collaborative Federalism: Despite some conservative myth-making, the period before the New Deal was not some heyday of "state rights" and decentralized power in America. In fact, the federal courts rather ruthlessly struck down state law after state law as overridden by federal power under the Constitution or by existing federal statutes.

David Walker in his book The Rebirth of Federalism describes how under the New Deal, instead of perpetual conflict between federal and state powers, the nation saw the rise of a cooperative federalism where federal and state governments shared many responsibilities in a collaborative system. The New Deal Supreme Court not only expanded regulatory authority for the federal government, it specifically empowered states to act in areas like the minimum wage and child labor, and was far more willing to allow states to regulate in areas where the federal government was also taking action. Additionally, despite an increased proportion of spending by the federal government, the majority of domestic spending remained at the state and local level. And as highlighted above, much of this increased federal spending was devoted to direct aid to the states, deepening the collaborative nature of spending in more and more functions of government.

Even as New Deal strength ebbed in the 1950s, this increased power exercised in the states allowed new progressive coalitions to emerge in multiple states, enacting civil rights laws, electoral reforms and other progressive policies that would presage the rise of the Great Society in the 1960s.

In turn, a large focus of the Great Society was on strengthening the tools for progressive governance in the states. Grant-in-aid programs from D.C. to the states increased 68% in real dollars between 1964 and 1968, with a fairer distribution of dollars that reflected the population of each region receiving aid. On the legal front, civil rights laws and the "one person, one vote" decision expanded grassroots democratic power and strengthened progressive mobilization in states across the country.

By the 1970s, reformed state governments were increasingly seen as drivers of innovation in policy, with progressive consumer, environmental and workers' rights movements flourishing at the state level even after the Reagan era began. While federal commitments to social justice would recede with Reagan's election, states could still take advantage of ongoing federal grant programs embodied in Great Society policies such as Medicaid to promote progressive innovation at the state level.


Battles Over State Policy Critical in Shaping Progressive Comeback Nationally



It is worth considering that the present national comeback of progressives in D.C. was built on successful state campaigns made possible by the legacy of past progressive eras that strengthened the power of progressives at the state level:
State campaigns for the minimum wage became a key arena for progressives to emphasize fair wages as a "values" issue that can rally supporters. The rise in the federal minimum wage rate was driven by state after state leading the way in raising their own minimum wage. And even when the federal rate rises to $7.25 per hour next year, eleven states plus the District of Columbia, covering 26% of the U.S. population, will still have a minimum wage rate higher than the federal level.
Similarly, universal health care was put back on the national agenda after demonstrated state-level successes, such as the Illinois AllKids program to provide health coverage to all children and debates on more comprehensive coverage programs in states from Massachusetts to the proposed Healthy Wisconsin initiative.
And while federal legislators were gridlocked on debates over climate change, states in New England have already started a "cap-and-trade" auction to limit climate change emissions with other state regions beginning to join them.
These examples all served to contrast the potency of progressive problem-solving versus conservative federal inaction on critical issues as we approached the 2008 election. While there is now great hope for escaping the perpetual political gridlock at the federal level, the states will continue to serve as incubators of new policies and a check on future inaction at the national level long into the future.

Danger of federal preemption: Despite their "states' rights" rhetoric, conservatives at the federal level have increasingly recognized this emerging progressive power in the states and have sought to limit or flat-out block state authority to protect consumers, workers or the environment at the state level. A 2006 Congressional report found that the U.S. House and Senate voted 57 times in the previous five years to preempt state laws, limiting state action on air pollution, contaminated food and Internet "spam."

Even without new federal laws, industries have used executive branch regulations to strike down state consumer protections. As we detailed in 2007, the effects of such federal preemption can be profound. As predatory lending expanded across the country, states sought to enact laws to limit such abusive subprime mortgage practices, only to see many of those laws blocked by federal courts based on Bush administration claims they were preempted by federal law. Preemption arguably cost the U.S. economy the trillions of dollars lost in a subprime meltdown that might have been prevented if states had been allowed to lead on a crisis they recognized far earlier than federal officials.

Reversing this rising tide of preemption of state policy should be a priority for incoming federal officials.


What the Feds Can Do to Strengthen Collaborative Federalism





State leaders and advocates need to reinforce the message that any new era of progressive governance in America needs to focus not just on immediate solutions to problems we face, however crucial they are, but also on strengthening the power of communities and states to solve problems in the future in a progressive manner. Elements of such a federal program would include:
A revitalization of revenue sharing, including a stimulus funding critical state initiatives: With states reeling from lost revenue due to the escalating recession, it is critical for federal officials to recognize the key role of states in funding essential programs, from education to transportation to health care to public safety, and that a key progressive federal goal must be bolstering the revenue of states. Any immediate stimulus will fail if expanded federal funding is just counterbalanced by spending cuts at the state level, so aid to the states should be part of a balanced economic rescue package. Beyond that, the federal government should systematically restore federal revenue sharing in order to bolster funding for priorities shared by all states, allowing consistent federal revenues to complement local revenue sources that wax and wane based on local economic conditions. Additional federal revenue sharing is especially critical in addressing the problem of unfunded federal mandates.
Structuring federal policies to promote innovation at the state and local level: Health care, education, public safety, labor rights, consumer protection, civil rights and a host of other programs inherently involve collaboration between officials and institutions at both the federal and state level. We need to move away from the situation we saw when states were trying to expand health care coverage for children and their parents under the framework of the SCHIP program only to see federal policy limit both funding and flexibility of states in implementing policy. Instead, new federal legislation and regulations should be informed by what has worked in the states and strengthen the ability of state and local governments to innovate in achieving new policy goals promoted at the federal level. Progressive federal policy should ideally provide both adequate funding and a level playing field of regulation within which states and municipalities can customize implementation to serve the particular needs of their communities.
Limiting preemption of state and local policy: One critical change progressives should make at the federal level is an end to the increasingly routine preemption of state and local policy. Congress has passed dozens of laws this past decade which have restricted the ability of state governments to protect consumer safety, defend labor rights, or stop corporate abuses. This is on top of President Bush and increasingly conservative courts reinterpreting previously enacted laws to shut down progressive state policies, most notably the gutting of predatory lending laws that protect against abuses in the mortgage industry. Progressive federal leaders should commit to promoting federal policy that acts as a floor for regulation, while allowing states and local governments to provide additional consumer, health, environmental and labor protections on behalf of working families. Both the president and congress should explicitly limit preemption to cases where state and local laws conflict with federal law, not just to where states have enacted policy in an area related to federal policy.
This new collaborative federalism compact needs to involve more systematic consultation with state leaders and locally-based organizations on federal legislation affecting state and local powers. Especially in a time when we need all institutions working together to revive the national economy, creating a new collaborative federalism needs to be a priority to sustain any new progressive era.

Resources



William Kristol, Weekly Standard - "Beyond Doom & Gloom: On the governors, Sarah Palin, and challenges ahead"
Progressive States Network - Governing the Nation from the Statehouses
Progressive States Network - Why States Matter
David Walker - The Rebirth of Federalism
Progressive States Network - Predatory Lending Bubble: How the Feds Preempted State Law
U.S. House, Minority Staff of Government Reform Committee - " Congressional Preemption of State Laws and Regulations"