An Agenda to Fix California

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As a recall election looms and embattled Governor Newsom fights for his political life, the political ads, as usual, are expensive pablum. That’s what we’ve come to expect, of course, but this election is nonetheless more than a referendum on a failing governor and failing policies. It’s a chance to think about what California could be. Instead of candidates pledging to “lower taxes on the middle class,” which obviously isn’t a bad idea, contenders for governor might discuss very specific policies they would champion.

Moreover, as voters cast their ballots and decide whether or not to keep Newsom in office, they might think about which candidates they’ll support in the future. Do they want to continue supporting political mannequins? Talking puppets that spout focus group tested cliches when you pull a string in their back? Or candidates that may be a little rough around the edges, but possess the courage, the vision, and the attention to detail that California needs now more than ever?

Here, being as brief but as specific as possible, are some ideas to solve some of California’s biggest problems. Most of them are controversial. It would be nice to find a politician with the guts to espouse all of them, without equivocation and without exception.

Problem: Unreliable and expensive energy:

Solution: Upgrade California’s natural gas powerplants to run at maximum efficiency and without being shut on and off. End the restrictions on natural gas hookups in new construction. Keep Diablo Canyon nuclear power plant open. Streamline the permit process for additional natural gas and nuclear power plants. Allow additional extraction of California’s abundant reserves of natural gas and oil. Relax if not repeal the CO2 emissions targets pursuant to AB 32, the Global Warming Solutions Act of 2006. Continue to provide incentives for renewables, but recognize that an all-of-the-above energy strategy is an unavoidable necessity for developing nations with massive populations. Show the world how to do it in the most responsible manner possible. Restore abundant, affordable energy to Californians. Click here for more.

Problem: Scarce, expensive, rationed water:

Solution: Allocate a fixed percent of the state general fund to finance new investments in water infrastructure. Like energy, pursue an all-of-the-above strategy – runoff capture and storage, potable reuse of urban wastewater, off-stream reservoirs and expansion of existing reservoirs, percolation basins for aquifer recharge and recovery, and desalination. Invest enough to make the entire urban megapolis in Southern California independent of imported water. Streamline the punitive processes that make it take multiple decades to get projects approved. With all of this, again, set an example to the world of how to do it right. Restore abundant, affordable water to Californians. For more, go here, here, here, and here.

Problem: Congested, dilapidated, inadequate roads and freeways.

Solution: Recognize that smart roads are the future of transportation, not the past. Upgrade and widen all of California’s freeways. Recognize that automotive technology is in flux and repeal the zero emissions targets that prevent development of advanced hybrids. Develop protocols to designate smart lanes where next generation vehicles can convoy at high speeds. To make these investments cost-effective, reform the California Environmental Quality Act to reduce the time and expense of approving projects, and restructure CalTrans to outsource engineering and construction work to private contractors. For more, go here, here, here, here, and here.

Problem: Homes cost too much.

Solution: Increase the supply of homes by increasing density in the urban core, and building entire new cities along the 101 and I-5 freeway corridors and elsewhere. Quit pretending that California, a vast state that is only 5 percent urbanized, is running out of room for people. Leave existing suburbs alone and leave zoning decisions to local elected officials. Recognize that wood framed homes with reasonable outdoor space are what most families prefer, and that these homes are less expensive than metal and concrete multi-story structures.  It takes two weeks to get a subdivision approved in Texas, but it takes twenty years to do it in California. End the war on suburbia and eliminate the outrageous costs and delays for building permits. For more, go here, and here.

Problem: There is a crisis of law and order and homelessness.

Solution: Restore the ability of police and courts to criminally prosecute and incarcerate citizens for selling hard drugs, public intoxication, and petty theft. For those homeless that haven’t committed crimes, construct centralized shelters in less expensive parts of cities and require job training and sobriety as a condition of entrance. California has wasted tens of billions constructing shelters and “supportive housing” at a cost that averages nearly $500,000 per unit. This is incredibly corrupt and utterly futile. Use that money to build safe barracks and pay counselors and vocational instructors. Reopen the fire camps for the able bodied criminal homeless and put them back on the fire lines. Take back our streets. For more, go here, and here.

Problem: Our forests are incinerating themselves and the air is unbreathable.

Solution: Bring back California’s timber industry, which as recently as the 1990s was harvesting 6.0 billion board feet per year from California’s forests. Today, barely 1.5 billion board feet come out. Why weren’t there massive fires every year back in 2000? Because logging was keeping up with regrowth as recently as ten years earlier. But now, for over thirty years, it has been nearly impossible to log, to thin, or do controlled burns, at the same time as our fire suppression industry has become incredibly effective. The result is overgrown forests of tinder dry, overcrowded and stressed trees. Of course they burn like hell. The solution is to let timber companies reopen mills and start logging responsibly again. They will clear the powerline corridors and maintain the fire roads and fire breaks, just like they used to, in exchange for logging rights. Prevent fires. Create jobs. Generate tax revenue. Supply affordable, in-state lumber for housing. Win, win, win, win. Click here for more.

Problem: Our schools are failing low income communities.

Solution: Stand up to the teachers’ unions, by creating competition in public instruction. This can be accomplished by making it easier to open charter schools, and taking away the cap on how many charter schools can operate. It can be accomplished by creating education savings accounts for every parent of a K-12 student, allowing those parents to use that money for the school of their choice – public, charter, private, parochial, or even homeschool. Theoretically, such a program could be revenue neutral or even save the state money. At the same time, reform the public schools by requiring a longer period before teachers can earn tenure, by favoring merit over seniority in layoffs, and by making it easier to fire incompetent teachers. Other ways to rescue K-12 education in California would be limit union negotiations to pay and benefits and outlaw teacher strikes, and to empower parents to opt-out of exposing their children to sexually explicit or politicized instruction. Click here for more.

The tragic reality in California today is that an entire complex – progressive billionaires, public sector unions, powerful environmentalist lobbyists and litigators, with nearly universal support from the legacy media, social media, and academia – considers most of these solutions, if not all of them, to be extreme. They’re not. They’re moderate, common sense solutions to serious problems that are obviously not being adequately handled based on what this complex considers to be the conventional wisdom.

Imagine California’s future if these policies became reality. The solutions suggested here for energy, housing, and forestry would actually generate tax revenue, along with hundreds of thousands of good jobs. The solutions suggested for education are revenue neutral. To supplement private investment, the economic boom these solutions would impart to the state overall would generate the tax revenue necessary for public investment in water and transportation infrastructure.

Imagine a state where instead of importing energy from Venezuela, or electricity from coal burning states, or lumber from British Columbia, or lithium from West African mines owned by the Chinese Communist Party, we would be producing all of these essential resources right here. Imagine the prosperity this would create. Californians consume these resources. That is reality. And even if we streamline what are currently crippling regulations, extraction operations located here in California will respect workers and the environment far more than they are being respected anywhere else in the world.

On a foundation of new and broad based prosperity, California can then afford to leapfrog other states and nations. California can innovate with transportation tunnels under its cities. California can innovate with passenger drones occupying aerial lanes above its cities. California can fund research into fusion energy and satellite solar power stations. California can solidify its position as one of the wealthiest and most innovative places on earth, but at the same time a place where ordinary families have a chance again.

California can be a place where there is abundance instead of scarcity, pragmatism instead of ideology, and optimism instead of pessimism. These values used to define California. They can do so again. California’s future can be very bright indeed.

This is the conversation California’s candidates for governor should be having.

This article originally appeared on the website of the California Globe.

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Fiat Dollars to Finance Feudalism

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People throw political labels around a lot these days, to the point where they lose their meaning and impact. We’re trying to understand where we are headed as a society, but we get lost in the ideology labyrinth. And while we throw the labels around, some of us with certainty and others with caveats and nuance, reality marches on. And the reality is grim. We are being turned into livestock by oligarchs who share the perception that ordinary people are on the verge of becoming completely useless to them.

Who needs manufacturing workers when factories are within a decade or two of achieving complete machine autonomy? Who needs caregivers when robotics are within a decade or two of delivering androids that are smarter and better looking? Who needs universal healthcare that’s within a few decades of significantly extending the human lifespan, when all these billions of ordinary humans will do with their extra 50 years is eat, shit, and play games? Who needs billions of humans when their consumptive appetites are a pestilence on a brilliant blue planet?

What do you do, if you’re a multi-billionaire, and all of your multi-billionaire friends agree: It’s easier and better for us if we herd these useless billions into megacities, take away their jobs, give them a universal basic income, and cram them into subsidized apartments. We’ll immerse them in online fantasies, algorithmically calibrated to dopamine them into quiescence.

It’s a scary vision. No life extension for the masses. No jobs. No incentives. We are entering a Brave New World. And when a member of the aging, quasi-sterilized human herd gets old, and their health fails, they won’t have a choice to fight to have a few more years. That’s uneconomic. A compassionate android will slap a VR headset over their eyes and insert a morphine drip into their antecubital vein, and like Edward G Robinson in the movie Soylent Green, they’ll slip away in bliss, experiencing a data driven, individualized equivalent of forests, rushing rivers, and majestic mountains, expertly curated just for them.

Time for a disclaimer, and to reiterate: This is not a conspiracy. It is a consensus, regarded by those who share it as a moral choice. A consensus that includes the leadership of virtually every significant center of institutional power in the Western World. Wealth is power, and the wealthiest people on earth today have more power than the average nation state. Wealth and power, to cite a recent example that ought to leave any objective observer both livid and terrified, was deployed by high tech billionaires and the companies they control to determine the outcome of America’s 2020 presidential election.

Wealth and power, deployed by pharmaceutical companies and the medical establishment, and with the absolute complicity of the corporate media and the high tech oligarchs, successfully suppressed early treatment protocols and alternative quarantine options, in order to shut down the nation, crush independent businesses, and engineer one of the biggest and most abrupt transfers of wealth in history: trillions passed from average citizens to the wealthy elite.

Wealth and power, expressed in the consensus shared by every major institution in the Western World, has decided that the “climate emergency” requires a radical restructuring of society, wherein middle class lifestyles are “unsustainable” and must be eliminated. These same institutions have determined that racial “equity” requires the abolition of merit, the obliteration of incentives, and the negation of private property, in favor of redistribution to make everyone equal. And to achieve this, destroy single family housing, construct “sustainable” apartment high rises, drive people off their land with regulations that only billionaires and mega corporations can navigate, and demonize and destroy anyone who objects by calling them “deniers” and “white supremacists.”

The ideology labyrinth does not explain this phenomenon. The intellectual resistance to this “reset” is focused on explaining it using obsolete terms, or, worse, terms that are, however accurate, mere distractions from beginning to cope with the onslaught. Calling it “socialism” or claiming it can be stopped if we all voted “libertarian” is the activist equivalent of masturbation. We are being turned into livestock. That is the reality. Theoretical analysis is futile. Practical countermeasures are necessary.

At the heart of the beast is a failure to regulate big finance in America. In the modern era, the financialization of the American economy began in 1980, thanks to policies approved by conservative icon Ronald Reagan. The debt binge that ensued leaves America’s Federal debt today at nearly 150 percent of GDP, with no end in sight. And to finance this debt, the Federal Reserve Bank prints money, and buys the U.S. Treasury bonds that foreigners no longer have an appetite for. The consequences, finally being realized, are inflation, since only devalued dollars can possibly whittle down the crushing debt burden.

But even this is a distraction. It wouldn’t require paragraphs, it would require volumes to explain the dismal science of fractional reserve lending and how it went from being a useful financial innovation to an instrument of economic war on the middle class. Instead, consider where most of this fiat money is going. It is being scooped up by banks that are, with access to funds that are for all practical purposes infinite, buying up America’s housing stock.

This fact does not get attention it deserves. America’s housing prices are being driven up not merely from overregulation, or thanks to foreign buyers driving up demand, but by international banks and hedge funds. Just as mega corporations with access to cheap borrowed cash are buying back their stock to create more market value which they use to acquire their competitors, big banks are buying up America’s real estate in order to consolidate and control the housing market. And it’s working.

One of the big players, using fiat money to turn us all into serfs living on the Lord’s Manor, is the Black Rock, the world’s largest real estate investor. For several years they’ve been on a buying binge, purchasing homes all over the U.S. With the expectation of inflation in the future, and all the money they need, they’re outbidding ordinary aspiring homeowners from Tennessee to California, from Arizona to the Carolinas.

Unlike stocks and bonds, where ownership is already concentrated in the hands of the wealthiest Americans, real estate ownership to-date has been widely held. Using fiat money, America’s multi-billionaires are changing that as fast as they can.

Turning America’s housing stock into rentals is only the beginning. In California, in order to deliver “housing equity,” a reparations bill is working its way through the state legislature that will authorize the state to purchase, outright, 45 percent of a home, allowing qualified applicants to purchase the other 55 percent. This will cut the effective price they pay for the home nearly in half, making it affordable. To qualify? The primary criteria is to be a “person of color.”

It isn’t hard to imagine the “public private partnerships” that will ensue, as progressive state and local governments, and presumably, Federal agencies, cut deals with massive real estate trusts such as the Black Rock, to create “equity” in housing. Fiat money enabled these real estate trusts to gobble up the homes, and now fiat money flows into the state treasuries via Federal stimulus payments to buy back some of them to help the disadvantaged. When if they’d just left the market alone, the price of homes might come back down to earth.

There’s more. In California, a package of bills is working through the legislature, yet again, that will allow multiple apartment units to be built on single-family lots. Anywhere. The reason for this is, of course, to save the planet and to promote racial equity. The practical impact? More investment firms will swoop in, financed with fiat money that’s supplemented by government funds, to buy single family homes that are worth more demolished and replaced than if they’re preserved. If you object, you’re a racist who denies the climate emergency.

This transformation of America’s housing stock into subsidized rental units owned by corporations and government agencies, the deliberate densification of American cities, and the push to drive rural Americans off their land, is quietly gaining momentum. It relies on fiat money that pours into mega corporations and state governments from the Federal Reserve. Unlike infusions of fiat currency in past decades that had some utility – winning the Cold War, going to the moon – this much bigger use of funds has no practical economic benefit. But that’s not its purpose.

The reason this money is being spent is to cram Americans down to a lifestyle that is “sustainable,” while at the same time transferring even more wealth and power into the hands of a new aristocracy. Fiat money to finance feudalism.

To avoid being turned into livestock, or, to abandon the metaphor, to avoid being turned into serfs, Americans have to worry less about ideology and more about practical solutions. Is putting a ban on any individual or corporation owning more than, say, a dozen income properties or 100 rental units “socialism?” Maybe. But the impact of socialism is felt most acutely when people have no ownership. And serfs own nothing. According to the new aristocrats, we’ll own nothing and be happy. But we will not be free.

Dispense with the labels. Join forces.

This article originally appeared on American Greatness.

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Social Conservative, Fiscal Liberal

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Much has been made of Kaitlin Jenner’s entry into the California gubernatorial free-for-all. Much of the political buzz about Jenner, notwithstanding her celebrity status, is that she is “socially liberal, fiscally conservative.”

This is supposed to be a magic formula that can transform politics. In places like California, a firm hand is needed on the financial tiller of this high-tax, spendthrift state, yet on social issues the successful politician must be equally uncompromising, i.e., anything goes.

It’s nothing new. Way back in 1980, the politically moderate congressman John Anderson defected from his Republican party to run against Ronald Reagan and incumbent Jimmy Carter in the presidential election. Anderson was also known as a “fiscal conservative and social liberal,” although it may have been a little easier to define those terms back in those days when we only had two sexes and the national debt to GDP ratio was only 32 percent.

So what is a fiscal conservative and a social liberal? Perhaps the socially liberal part of it is somewhat easier to imagine. In California, to be a social liberal is to accept a Byzantine and constantly evolving set of rules that include the following: Men can have periods and women can have penises, but all white people are immutably white and hence suffer from privilege, fragility, and unconscious bias. To continue, the social liberal believes that heroin or methamphetamine addiction is a legitimate lifestyle, and theft is typically not a crime, but a “poverty crime” that should be decriminalized. The list goes on. And on and on.

To be fair, Jenner has already had at least one “Nixon goes to China” moment, when she declared that transsexual women should not be competing in women’s sports. Maybe Jenner will confound the stereotypes. And maybe what was just described as “socially liberal” is a caricature that overstates reality. But social liberals have gone way beyond common sense and strayed into the realms of fantasy. And it’s destroying the nation.

The fiscal conservative label, at least to a conservative, seems more easily defended. But how it is expressed has done nothing to help Americans. Fiscal conservatism ought to mean cutting government spending, but all it has ever meant in reality is lowering taxes. The practical impact of “fiscal conservatism,” starting with conservative icon Ronald Reagan, has been to plunge the U.S. economy into the worst debt overhang in its history.

What about Social Conservative and Fiscal Liberal?

So why not flip these concepts, and imagine a politician that represents themselves as a social conservative and a fiscal liberal? The first thing to recognize is a politician that identifies as a social conservative doesn’t have to represent the most extreme stereotype of a social conservative. That’s pretty easy these days. You can reject the idea of mandating transsexual indoctrination in primary schools and still have compassion for people who are different. You can oppose legalizing hard drugs and still recognize that mistakes have been made in the “war on drugs.” You can bring back broken windows policing without supporting mass incarceration.

An astonishing fact today is that a politician willing to take these moderate stands is still a pariah in the eyes of the “social justice” community. But Americans would vote, with great relief, for politicians willing to display even this much courage. What about a fiscal liberal? What might that mean?

Here again, being a fiscal liberal doesn’t mean you have to spend America into the ground. After all, the “conservative” presidencies of Reagan, GW Bush, and Trump did a fine enough job doing that, although Obama was a big help.

What a fiscal liberal could mean is simply to acknowledge that government spending has an unavoidable and often desirable role in American society. The fiscal debate has never been over government spending vs. no government, it’s been over what to spend money on, and how much money to spend. So a fiscal liberal can start by rejecting the libertarian fantasy that governments can be pared to the bone. They can’t. Admitting that can eliminate a time consuming distraction, and allow the focus to turn to where government money should and should not go.

Here, the combination of social conservative and fiscal liberal becomes potent. Because why on earth should the government spend money on programs that breed dependence on government? What social conservative would support such a thing? It isn’t necessary to become an extreme social conservative to save trillions. Start with a simple equation: No package of government benefits should be so enticing as to be preferable to what an American can earn from working.

Fiscal liberalism can enable discussions over what sort of government spending would genuinely improve national productivity and lower the cost-of-living for everyone. Instead of spending government funds on entitlements, spend the funds on infrastructure. Not the fraudulent, intangible “infrastructure” that social liberals in the Biden administration want to foist on the American people. Actual physical infrastructure.

Even in the good old days of genuine American infrastructure spending, there was waste and abuse. But the projects got done fast, and at prices, adjusted for inflation, that are a fraction of what similar work would cost today. The massive public works of the 1930s gave America bridges and dams and stadiums that yield returns to this day. Similar projects such as the interstate highways and pipelines built in the 1960s also continue to pay dividends. Sometime around the decade of the ’90s, America turned a corner. Before that time, as cities grew, tax revenues would pay for the new parks and connector roads, and help fund the utility conduits. Home builders could develop their land and the costs they passed on to the buyers were just the costs for the land and the homes. Today that’s a distant dream. But why?

A fiscal liberal and social conservative would spend the taxpayers’ money wisely fighting corruption and waste, because they’re social conservatives. But they would spend money in sums sufficient to make a middle class lifestyle affordable again in America, because they’re fiscal liberals.

Perhaps it’s time to try this on for size. We’ve tried everything else.

This article originally appeared on the website American Greatness.

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Newsom’s Latest Binge

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“It is our hope that all schools will be able to physically open for five days per week in the fall but local conditions will determine whether that is possible.”
– Cecily Myart-Cruz, President, United Teachers of Los Angeles (UTLA Update 5/14/2021)

It’s impossible to know what “local conditions” are going to look like when kids go back to school this Fall, but two things are certain: Whatever the United Teachers of Los Angeles want, the United Teachers of Los Angeles are going to get, and to the extent “local conditions” involves money, there’s going to be plenty of it.

California’s budget bonanza, just announced last week, capitalizes on conditions unique to California that in retrospect are obvious. The COVID lockdown may have decimated California’s working families and small businesses, but the explosion in online activity delivered stupendous windfalls to California’s high tech industry. In California’s top heavy income tax model, the more money California’s super rich make, the more money pours into the state treasury. And pour it did. Quoting from the May Revision of California’s 2021-22 state budget:

“Compared to a projected budget deficit of $54 billion a year ago, the state now has a projected $75.7 billion surplus. Combined with over $25 billion in federal relief, this supports a $100 billion California Comeback Plan—a once-in-a-lifetime opportunity.”

This hundred billion dollar binge is a welcome distraction for the embattled Governor Newsom, who faces a recall election later this year. And of course, spreading an extra $100 billion around the state should certainly offer short-term relief, even in California’s $2.7 trillion economy. But as always, how this money is spent is more important than how much is spent. For example, Newsom is dumping an extra $4.2 billion into High Speed Rail, but only another $2.4 billion to repair highways and bridges. And in a sop to the teachers unions, Newsom is dumping tens of billions of increased funding into California’s public schools.

For decades, the universal solution to improving public education in California has been to spend more money. Mostly prior to the COVID disaster, during the 2019-20 school year, the estimated spending in California’s K-12 public schools – when taking into account capital spending and the state’s supplemental contribution to CalSTRS – was already nearly $21,000 per pupil. So now that Newsom has these windfall revenues, how much more will K-12 students be getting?

The base for California’s K-14 student funding is governed by Prop. 98, passed by voters in 1988. The complicated formula is generally summarized as guaranteeing that 40 percent of California’s general fund budget is allocated to K-14 education. In Newsom’s original 2020-21 budget, the K-12 portion of Prop. 98 funding was $84 billion. In the May revision, this amount swelled to 93.7 billion. Per student, that represents a rise of over $1,500. But that’s not all.

According to Politico, Newsom has promised that $27 billion of the surplus will go to K-12 schools and community colleges, an amount well in excess of the Prop. 98 increase. According to Capitol Public Radio, supplemental Federal funding of $15 billion will be going to California’s K-12 schools. Newsom also announced “$20 billion to transform California public schools into gateways of equity and opportunity,” including establishing “universal pre-k and college savings accounts for 3.7 million low-income children in public schools.”

With the revised budget just released days ago, it’s too soon to specify to what extent some of these reported numbers overlap, but it is indisputable that Newsom’s new plan for California’s K-12 public schools involves spending spending closer to $25,000 per pupil than $20,000 per pupil. Will it ever be enough?

After the Binge Comes the Bust

The problem with setting up vast new categories of public spending on education – universal pre-K, college savings accounts, massive new hiring for school counselors and other support personnel, is that these new programs create new structural, perennial costs, and that additional burden makes it even harder to adapt when the economy slows down. And someday it will, even in sunny California.

Heading into the COVID pandemic, California’s state and local government budgets were already strained. A California Policy Center study conducted in 2019, looking at the most recent available data on the state’s finances, estimated the total state and local government debt at an eye popping $1.5 trillion. The chart used in that study is presented here:

While this data is now nearly four years old, the overall picture has not changed.  Californians have continued to approve new local bonds, almost all of them for K-12 construction, adding billions in new debt at much faster rate than old debt is being retired. At the same time, California’s beleaguered public employee pension funds, notably including CalSTRS, have failed to crawl up from their officially recognized funding at about 70 percent of what is required for long-term solvency.

This is the dismal balance sheet that is being ignored by Newsom, the California Teachers Association, and every participant in today’s spending binge. Optimism is easy when you’re intoxicated, but the morning hangover is as predictable as the sunrise. What goes up, must come down. And why should public schools cost so much in California?

Private Schools Cost Less. A Lot Less.

Relying on estimates from the Sacramento Bee, corroborated by California Dept. of Education data, there are roughly 475,000 K-12 students in California that attend private schools. Parents pay for their children to attend these schools because they offer a better education than the public schools. Otherwise, they wouldn’t pay the tuition. They’d just send them down the street to the local public school. And how much do private schools cost?

According to EducationData.org, the average tuition for a private school in California is $12,860 per year. That number is corroborated by PrivateSchoolReview.com, which offers a 2021 estimate of $14,821 per year. This is substantially less than California’s public per pupil spending averages, for a private school. Bearing in mind the handful of private schools that are catering to a wealthy clientele, skewing these averages, it’s important to explore some of the more cost effective private school solutions in California.

The availability of affordable private education in California is validated when reviewing a 2021 directory showing the annual tuition rates for 897 private schools. All located in California, there are 17 very expensive schools, with tuition over $50,000 per year, 26 with tuition over $40,000 but under $50,000 per year, 79 with tuition between $30,000 and $40,000 per year, and 113 with tuition between $20,000 and $30,000 per year. In all, only 235 schools, or 26 percent of the 897 private schools surveyed, had tuition over $20,000 per year.

Of the remainder, 456 private schools, or more than half of the private schools surveyed, had annual tuition of under $10,000 per year. This is a telling statistic. More than half of California’s private schools charge tuition that is less than half what California’s public schools spend per pupil. Moreover, it is possible this tuition could cost even less if California’s K-12 system of education were competitive.

For example, an interesting 2018 analysis published by Education Next asked the question “Why Can’t the Middle Class Afford Catholic School Anymore?” The author surveyed the causes of tuition increases in Catholic schools. One of them, difficult to counter, was the gradual replacement of teachers who were members of religious orders or clergy with lay people. As they put it, there was “a decline in religious vocations and the subsequent disappearance of low-cost labor from priests, nuns, and brothers on staff.” But then the author makes a fascinating point, noting that as nationwide enrollment in Catholic schools declined from over 5.0 million in 1960 to just under 2 million in 2018, staffing levels stayed the same. Why?

The author speculates that a positive feedback loop occurred. As staff costs went up, to make ends meet, Catholic schools began to prioritize attracting affluent clientele. These affluent parents in-turn had an expectation of a high teacher/student ratio, which increased costs further, which created still more incentive to cater to parents with greater means. But in reality, as the author points out, the relationship between class size and educational opportunity is at best “complicated,” and in fact the quality of the teacher is far more determinative of student achievement than class size.

Don’t tell that to the teachers’ unions. Shrink the class size, hire more staff, spend more money. There is no amount of money that can achieve true educational “equity,” and for the education spending binge machine that Governor Newsom is feeding without reservation, that’s a good thing. Until it isn’t. School choice, in the form of schools of all types competing for students, cannot come to California too soon.

This article originally appeared on the website California Globe.

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Raising the Minimum Wage is Not the Answer

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If President Biden gets his way, the Federal Minimum Wage will soon more than double, from the current $7.25 to $15.00 per hour. To quote our Commander in Chief, “if you work for less than $15 an hour and work 40 hours a week, you’re living in poverty.”

To rehash the minimum wage debate would be redundant. Anyone with business experience should see what’s going to happen. Many small independent businesses, retail stores and restaurants that pay minimum wage, will go under. Meanwhile, major corporate chains will automate, shedding workers and raising prices, consolidating their grip on every market sector where they’re active. Unionized government workers will automatically get raises because their wages are indexed to the minimum wage – putting even more pressure on government budgets and taxpayers. People in the private sector who have dedicated decades towards learning a skill and as a result of this hard work can now earn $25/hour or $30/hour, will become justifiably disgruntled, because they will no longer be making much more than minimum wage. The underground economy will explode.

And so on. And then there’s the ongoing COVID inspired, enhanced unemployment benefits. Why work? Working is for chumps.

While reason and common sense seem to be wasted on the economic wizards that advise President Biden, the debate over minimum wage nonetheless should be viewed in its historical context. Below is an updated chart showing what the minimum wage would have been over the past several decades, if it were paid in today’s dollars.

As can be seen on this chart, if you believe in setting some minimum wage, there is an argument for raising to something over $10.00 per hour to keep up with inflation. During the 60’s, 70’s and 80’s, the inflation adjusted minimum wage fluctuated between $9.00 and $10.00 per hour. In 1968, the minimum wage, expressed in 2020 dollars, would have been $12.37. But to raise it to $15.00 per hour has no historical precedent. And then there is the geographical context.

Everyone, presumably including President Biden and his economic advisors, knows that the cost-of-living varies greatly from state to state. In California, where the median home price is now up to $654,000, the Federal minimum wage does not go nearly as far as it would go in West Virginia, where the median home price is $107,000. Moreover, the cost-of-living varies significantly within states. To use California again as an example, in the far north of the state, the median home price is “only” $350,000, whereas in the San Francisco Bay Area, the median home price is $1,225,000.

Raising the Minimum Wage is Not the Answer

The price of homes in California, rising far in excess of the rate of inflation, strongly suggests something else is at work to make life unaffordable for people earning minimum wage. Back in 1968, the minimum wage was $1.60 per hour and the median price of a home in California was $23,000. This means that the median home price was equivalent to seven years of income at minimum wage. Since the lowest home prices were well under the median, purchasing a modest home was within reach, or nearly so, to people earning minimum wage.

In 2020, by contrast, with the minimum wage at $7.25 and the median home price $654,000, the home-price-to-annual income (at minimum wage) ratio jumps to 45 years. Forty-five years. At $15.00 per hour, 22 years. The chances that a person can purchase a home today in California even when earning $15.00 per hour are exactly zero. What happened?

Home prices in California over the last several decades, and especially in the last twenty years, have jumped far faster than the rate of inflation. This is the result of years of restrictions on home building, combined with years of restrictions on resource development which increased the costs of construction materials, combined with years of additional mandates and regulations governing home design. And California’s legislature is just getting started.

California’s state legislature now mandates that all new home construction to be “zero net energy.” Think small windows, white roofs, automated lights that turn off if they don’t sense you in the room, all faucets and electric appliances remotely monitored by the utilities – imagine a host of dystopian algorithmic micromanagement of our lives – AND, think increased costs, even for energy. Whatever energy savings accrue to “zero net energy” households will be offset by “service fees.” Somebody has to pay for the “smart grid.”

Housing costs in California have also skyrocketed through land use policies mandating “urban containment” and through efficiency mandates, but it isn’t just housing. Water and electricity have also fallen prey to artificial scarcity. This is a gold mine for utilities, whose profit percentages are fixed by the PUC, but can make billions by charging more per unit. It’s a gold mine for government workers, who collect more in property taxes and utility taxes. It’s good for government pension funds, whose solvency depends on asset bubbles. But it has made California unaffordable for everyone else.

This is the model that needs fixing, not the minimum wage. Raising the minimum wage to $10.00 per hour would be reasonable based on its historical purchasing power. But the big changes have to come about through lowering the cost-of-living for ordinary Americans. These punitive runups in costs for essential assets – housing in particular – have greatly exceeded the official rate of inflation as reflected in the Consumer Price Index. It was a political choice. It can be unmade.

If the Biden administration and the Democrats running the U.S. Congress truly care about working families, they should pay less attention to the minimum wage and more attention to the policies – almost exclusively conceived and implemented by Democrats and their corporate allies – that have increased the cost-of-living. It is impossible to increase the minimum wage enough to counter policies that deliberately create artificial scarcity.

This article originally appeared on the website American Greatness.

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Money For Nothing

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During 2020 the U.S. Federal budget deficit was $3.1 trillion, equal to over 15 percent of GDP. The deficit hasn’t been this big since the end of World War Two. The difference between now and 1945, however, is deeply unsettling. Back then, Americans were a unified, patriotic people that had just emerged relatively unscathed from a horrific conflict that left most of the world in ruins.

In the aftermath of World War Two, the American economy exploded. Industries previously on a war footing turned to manufacturing automobiles and appliances that were sold all over the world. Government funded projects – from interstate highways to reservoirs and commercial airports – were built in record time. The economy boomed, unemployment was low and wages were high. The American middle class expanded to become a majority of the total population.

Today America’s economy is fitfully emerging from being nearly shut down in 2020. Entire economic sectors – travel, entertainment, hotels, food services, retail, small businesses – have been devastated with no end in sight. The windfall the lockdown imparted to high tech companies only served to increase their ongoing assault on legacy retail and media industries. The deficit spending that back in 1945 had been used to build a war machine and spawn countless spin-off technologies was used in 2020 to help ordinary Americans buy food and pay rent. And for that, too, there is no end in sight.

There’s plenty of room for debate in this scenario, of course. Economic growth is easy when you have minimal environmental regulations and not even one viable competitive foreign economy. And last year, when America’s unemployment rate soared to nearly 15 percent, “stimulus” checks probably prevented even greater hardship. But the path Democratic policymakers have chosen for the United States today – with barely more than a peep coming from GOP politicians to object – is not driven by COVID concerns and is completely discretionary. And it is a disaster.

If America were bent on national suicide, they couldn’t do much more than they’re doing right now. Stimulus spending, with an astonishing $6 trillion now committed, has been used to bail out state and local government budgets that have been in the red for years. The reckoning that should have confronted bloated public education bureaucracies and underfunded public sector pension systems has been papered over, literally, with money conjured out of thin air.

Other nations of the world have long tolerated America’s ability to sustain budget deficits because America invests in global security. Why should trading nations invest in their own navies to keep the sea lanes free from piracy and rogue nations? Why should Europeans worry about Russia going back into Eastern Europe? Why should Asians prepare to fight Chinese domination in the Far East? The Americans will do it.

America also imposes on its population punitive rates for life-saving medicines that it then exports to the world at bargain prices; another reason to let the Americans print money. And with or without those perks. America’s appetite for foreign products creates millions of overseas jobs, and America’s willingness to sell its real estate and technology to the highest bidder gives American dollars additional enduring value.

For better or for worse, these are the reasons America could run up Federal budget deficits without consequences. But America’s vitality as a nation was never as threatened as it is today. The financial algebra that is getting harder and harder to balance is only part of the problem. The culture that made America great is dying. America is now in the throes of what Claremont Institute Fellow Joel Kotkin recently called an “infantada.”

Examples across America of what may as well be termed a rebellion of infants are plentiful. Leaders of the “woke” movement are not poverty stricken victims, despite their whining. They are tenured faculty at America’s most elite universities. They are lavishly compensated executives running the human resources departments of multinational corporations. Even on the streets, the violence and the vandalism is coming, as often as not, from people who take off their black bloc garb after their midnight “actions” and go to work the next morning.

These people, most of whom have more than average “privilege,” hate traditional American culture, they hate authority, and apparently they expect a perfect society. Their outlook is absolute; their capacity for nuanced reflection is nonexistent. They are infantile. They are expensive. They add no value to our civilization.

What of those American dissidents, more numerous than ever, that don’t still enjoy the dwindling fruits of America’s national vitality? What of America’s homeless population? These people could be helped, and help could come fast. Instead, tens of billions are wasted and the problem gets worse. The reason, justified by the new, woke arbiters of modern social justice, is because they must be provided housing that is far too expensive to be built in sufficient quantity, at the same time as they are encouraged to indulge whatever destructive lifestyle they wish to indulge. Heroin addiction? Free needles. Stealing and looting? It’s a “poverty crime.” Consider the alternatives.

One national guard regiment could move onto some sparsely populated tract of land in North Los Angeles County and construct a city within a few weeks. Complete with barracks, bathroom facilities, kitchens and clinics, the homeless population of Los Angeles, 50,000 strong, could be moved into this city within days. Meanwhile, the feckless crook that run Los Angeles, Mayor Eric Garcetti, proposes to spend yet another billion to help the homeless. For that kind of money, properly spent, these homeless could be moved into a supervised environment practically overnight. And magically, half of them would suddenly find relatives and friends with a roof, to avoid having to sober up.

“Freedom” and “Equity” for the homeless is costing the American taxpayer countless billions. The people who need help get next to nothing, while corrupt developers rake in most of the spending. The people who truly deserve help get even less. In the name of tolerance, infantile human urges are indulged and nurtured. Millions of lives are ruined. Thank the Democrats.

The monstrous scams that define America under Democratic rule, with the complicity of GOP politicians, are numerous. “Climate change” is yet another way America is destroying itself from within. Not billions, but trillions are going to be spent on projects that either accomplish nothing – injecting CO2 into underground caverns is a grotesque example – or displace cost-effective technologies like natural gas and nuclear power plants with unreliable and absurdly costly solar, wind, battery, and grid upgrades. These “renewables,” destined to be obsolete, embarrassing fads the moment breakthrough technologies like nuclear fusion are commercialized, are breaking American power. Pipelines are being cancelled so fossil fuel can only be transported by train, in an eerie parallel to a chapter in Atlas Shrugged. Productive wells are being capped. Vital infrastructure is being neglected, and the word itself, “infrastructure,” has become synonymous with fraud.

At staggering cost, America’s economy is being strangled by “climate emergency” zealots and opportunists. Thank the Democrats, and while your at it, thank Mitt Romney, Con Inc.’s favorite oligarch, and every other Republican coward who knows better but doesn’t say a word in opposition, much less actually do something to change the trajectory.

Race and gender obsessions are obviously additional sources of American infantilization – any ideology that trains people to take no responsibility for their success of failure in life is the epitome of infantilism – but it also imposes a devastating cost on the American economy. Wherever you turn, schools, jobs, contracts, the most competent applicants are turned away, because proportional representation in every institution at every level must be maintained. This is impossible. It is devastating. It destroys the character of those favored and embitters those who are denied what they’ve earned. It undermines American competitiveness. It introduces hideous waste. If nothing else does it first, “equity” at all costs will kill the nation.

Another mismanaged issue is immigration, where – sorry nativists – the problem isn’t that too many people arrive. It’s that too many of the wrong people arrive. America invites, either legally or defacto, immigrants that are not bringing the skills America needs today. Justin Webb, writing for Unherd, explains:

“The whole “bring me your huddled masses” schtick is a bit of a con. Nearly 30 years ago, a taskforce led by then congresswoman Barbara Jordan, a hugely respected African American Democrat, blew it apart with a detailed study of the people who actually came to Ellis Island. Jordan pointed out that they were in fact more skilled than the average American at the time. They were seamstresses and stonemasons, tailors and bricklayers. They had, in other words, the skills the nation needed. They were the cancer researchers of their time. This was not charity; it was nation building.”

When you wonder why America’s immigration policy no longer emphasizes “nation building,” just remember that if you criticize the disaster it’s become, you’ll be called a racist. For that, blame the Democrats. While you’re at it, blame virtue-signaling George W Bush, who wrote a new book that gives all those “racists” a good thrashing, but has little to say about why we must move to merit based immigration.

Across almost every sector of American society and across every policy that drives America’s destiny – infrastructure, public finance, education, housing, homeless, law and order, energy, environmental protection, race relations and immigration – Americans are spending far too much for what they’re getting. In many cases, the money they’re spending is making the problems – both economic and cultural – not marginally better at ridiculous expense, but worse. With Americans now able to collect more money by collecting government benefits than they’ll make working in a job, with “universal basic income,” with every new scheme, America’s once estimable character is being destroyed.

There’s a reason why America has been able to run up Federal debt and print money to cover the annual deficits, while still retaining a hard currency. It’s because Americans have always been a generous, creative, productive, fearless people, who have given the world much more than they’ve taken from it. Now that America has decided to spend its discretionary trillions on fostering dependence and division, its usefulness to the world deteriorates accordingly.

When you spend money for nothing, you become nothing.

This article originally appeared on the website American Greatness.

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It’s Not How Much You Borrow, It’s How You Spend the Money

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In barely one year, the America’s national debt has expanded by over four trillion dollars. It is now more than America’s GDP. But what is this debt buying Americans?

Debt hawks typically don’t differentiate between good debt and bad debt, but there’s a difference. The last time the national debt exceeded GDP was in the aftermath of World War Two. The return on that investment was not only a planet liberated from fascism and protected from communist expansion, but an industrial and technological supremacy that gave rise to an American economic boom. And with the post-war boom came deleveraging.

From a peak of 118 percent in 1946, the national debt was steadily whittled down. By 1950 it dropped to 86 percent. By 1955 it was down to 64 percent, by 1960, 53 percent. It dropped below 40 percent in 1966 and hit a low of 31 percent three times, in 1974, 1979, and 1981. But then what happened?

During the Reagan presidency, the decision was made to spend the Soviets into the ground on military technology, without seriously confronting or reducing the many new taxpayer funded entitlements ushered in by the New Deal and the Great Society. One might argue this first debt binge was justified. By 1990, the national debt was back up to 54 percent, but the Soviet Union was no more, and the United States became the lone superpower nation.

For a time, there was a so-called peace dividend. Ten years later, in 2000, national debt had only ticked up one percent, to 55 percent of GDP. But by 2007, after years of warfare in the Middle East, the Debt/GDP ratio had risen to 62 percent. By 2010, after the bank bailouts, it had jumped to 91 percent. Rising steadily throughout the Obama and Trump administrations, in 2019, and right before COVID came along, it had already reached 106 percent. Then, one COVID wracked year later in 2020, it exploded to 129 percent. There is no end in sight.

What are Americans getting today in return for all this debt? Clearly there is a way to claw this debt back down to size. The post-war boom in the 1950s and 1960s proves that. But the result of the investments made by the government during World War Two was America positioned as the only nation that wasn’t devastated by that war. America’s intact industries operated virtually without competition for nearly a generation, creating broad prosperity and government budget surpluses.

The explosion of middle class prosperity after World War Two was based on the United States operating from an unusual position of economic dominance that is unlikely to be repeated. In 1960 the United States GDP was an astonishing 40 percent of global GDP. In 2019, adjusting for purchasing power, the U.S. GDP was down to 16 percent of global GDP. America’s industries cannot pay the wages they did fifty years ago, because today they have to compete against peers. Back then, they had no peers.

This argument can be taken too far, however, because it becomes an enabling excuse to write off America’s middle class. Gains in productivity ought to make up for the loss of export markets. Claiming America’s quality of life is no longer sustainable is a lie. The benefits of cheap imports ought to be a lower cost-of-living. But what has happened is the opposite. Sure, televisions and smart phones are better-faster-cheaper every year. The price performance curve on high technology continues to follow Moore’s law. But it ends there. Why?

There’s a reason Americans can’t afford homes, healthcare, or college tuition. There’s a reason Americans are being required, more than ever, to ration their use of energy and water, while paying more for what they are allowed to consume. It is because of artificial scarcity, engineered by government in partnership with financial special interests. America’s unaffordable cost-of-living is politically contrived to protect the dollar.

Economic historian Adam Tooze, in his book “Crashed: How a Decade of Financial Crises Changed the World,” makes something plain that ought to be obvious but is instead hotly debated: money is a political construct. How is it that America is allowed to print as much money as it wants to, running up trillions in federal debt? The reason is because the dollar is the transaction and reserve currency of the world, and foreigners know they can use American dollars to buy American assets: Real estate, technology, raw materials, agricultural products. There’s more.

In what is dismissed as pointless neglect of needy Americans, but is actually part of a strategy to maintain the dollar’s status as a desirable international currency, the U.S. spreads hundreds of billions around the world every year. This takes the form of direct foreign aid, workers in the U.S. sending their earnings to relatives abroad, military personnel spending dollars in local communities overseas, and drug cartels profiting off America’s insatiable appetite for narcotics. In 2008, the U.S. Federal Reserve transferred hundreds of billions of dollars to foreign central banks as part of its response to a global liquidity crisis that threatened to crash the whole system.

But the biggest way dollars are exported abroad, year after year, is through the American consumer’s desire to find the cheapest imported product to stoke their materialistic lifestyle. America hasn’t had a trade surplus since 1975. In 2020, its trade deficit was $679 billion. And to balance America’s trade deficit, America’s assets, all of them, are for sale to any foreigner with dollars in their pocket.

Asset Inflation Keeps the System Running

By erecting prohibitive barriers to new housing and infrastructure, usually justified on environmental grounds, but also through byzantine layers of conflicting bureaucratic regulations, America has legislated and litigated its way to near paralysis. But this conveys tremendous upside for existing financial and political elites. Real estate portfolios, public utilities, public bureaucracies, and heavy industry all see the value of their services and their assets appreciate. At the same time, homeowners are able to borrow against their rising home equity to purchase foreign imports, sending dollars overseas. Then those dollars come back in the form of foreign investment in American real estate, bidding prices up even further.

All of this is a political construct. Monetize the world with dollars. If the dollar devalues against foreign currency or against commodities including gold, just print more. If inflation hits, good, because all that dollar denominated debt will get wiped away, and manufacturing jobs will migrate back onshore. As long as property in the U.S. can be purchased with dollars, and as long as the U.S. remains a haven of relative political stability and relative individual freedom, the global appetite for dollars will remain. How long can it go on?

Depending on who you ask, this could collapse any day, or it could go on for a very long time. In the last “normal” year, 2019, according to the Congressional Budget Office, the Federal budget was $4.4 trillion, revenues were $3.5 trillion, and interest on the Federal debt was $375 billion. Put another way, in 2019, Federal debt service was 8.5 percent of expenditures and 10.7 percent of revenues. In 2021, at a 2 percent rate of interest, Federal debt service is going to run around $600 billion, probably around 15 percent of revenues. This is a manageable burden. Moreover, to the extent the Federal Reserve Bank steps in to purchase Federal debt directly, this will mitigate how much of the Federal budget has to go out in payments on Treasury Bills.

The bigger problem with America’s Federal debt isn’t that it can’t be sustained indefinitely. The problem is America’s deficit spending is not being put to productive use, which means there won’t ever be another economic boom big enough to begin to finally reduce the debt. The defense budget is being squandered on foreign military operations instead of being invested in technological supremacy. “Infrastructure” spending goes to pay consultants, bureaucrats, litigators, public employee unions, and projects without genuine utility. America’s ability to live off the capital endowment built primarily in the 1930s and 1960s is coming to an end.

While libertarians may find the second half of this statement this deliriously misguided, it is a tragic waste of deficit spending to emphasize ongoing unemployment compensation instead of providing ample funding to go back to the moon. America’s Federal COVID relief spending is about to break five trillion dollars, but they can’t spare more than two or three billion towards a moon mission. This is a preposterous travesty. Being first in space yields spinoffs of spectacular value to the nation. Paying people more to stay home than to work will destroy the nation.

The biggest danger to America’s future isn’t deficit spending. It’s what we’re doing with all that money. Instead of fixing our schools to have a skilled workforce, and instead of reducing unemployment benefits to have a motivated workforce, we are paying billions to the teachers’ unions and trillions to the unemployed. Meanwhile jobs are unfilled for want of qualified applicants.

If you are going to spend money you don’t have, spend it on things that are real and build national wealth. That would not be foreign adventures and domestic entitlements. It would be pure research, space industrialization, and military supremacy. It would also mean investing cost-effectively in genuine practical infrastructure, instead of the monstrosity currently marinating in Congress, yet another boondoggle that has made the very word “infrastructure” synonymous with fraud.

Until Bitcoin or Rubles or Yuan can be used to purchase a villa in Montecito or a compound in Montana, don’t write off the ability of America to print as many dollars it wants. But that day will come, if trillions are deployed in ways that are precisely the opposite of what is needed to maintain a healthy nation and a hearty people.

This article originally appeared on the website American Greatness.

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Why America’s Elites Want to End the Middle Class

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A recent essay by Victor Davis Hanson entitled “Radical New Rules for Post-America” lists “ten new ideas that are changing America, maybe permanently.” Hanson offers a thorough description of what’s wrong: Fiscal and monetary negligence, selective enforcement or nonenforcement of laws, anti-white racism, rights and privileges for immigrants over citizens, an infantilized culture, hypocrisy, urban chaos, censorship and cancel culture, politicized “science,” and “woke” as the new religion, with Big Tech as the clergy.

While there may not be a more cogent description of the new and radical rules Americans face these days, Hanson’s covering familiar territory. But why? It doesn’t require a conspiracy theorist to suggest these wholesale shifts in American culture are not happening by accident. It doesn’t even necessarily require nefarious intent, at least not among those people occupying the highest rungs of power and influence in America. What motivates the vast majority of the American elite, billionaires and corporate boards alike, to approve of these radical changes?

One answer boils down to this: They believe the lifestyle of the American middle-class is not sustainable, because the planet does not have the carrying capacity to extend an American level of consumption to everyone in the world. By dividing and confusing the American people, while wielding the moral bludgeons of saving the planet and eliminating racism, policies can be implemented that will break the American middle class.

In the name of saving the planet, for example, new suburbs will become almost impossible to construct. Single family detached homes with yards will be stigmatized as both unsustainable and racist, and to mitigate these evils, subsidized apartments will replace homes, with rent subsidized occupants. As America’s population grows via mass immigration, the footprint of cities will remain fixed. The politically engineered housing shortage will force increasing numbers of Americans into subsidized housing. All of this is already happening, but it’s just getting started.

Similar cramdowns will occur in all social amenities that consume resources. Land is just the primary example, but water, energy, transportation will all be affected. This new political economy will also depopulate rural areas, through corporate consolidation of farmland as regulations and resource costs drive small operations under, and through punitive regulations and insurance burdens driving people out of the “urban wildland interface.” Outside of major cities, for the most part, the only people left will be extremely wealthy landowners, and corporate employees.

Joel Kotkin, who has studied and written about demographics and migrations for years, recently authored a book called “The Coming of Neo Feudalism, a warning to the global middle class.” Of all the shorthand descriptions for the political economy that is coming, feudalism may be the best fit. As Kotkin puts it:

“The new class structure resembles that of Medieval times. At the apex of the new order are two classes―a reborn clerical elite, the clerisy, which dominates the upper part of the professional ranks, universities, media and culture, and a new aristocracy led by tech oligarchs with unprecedented wealth and growing control of information. These two classes correspond to the old French First and Second Estates.

Below these two classes lies what was once called the Third Estate. This includes the yeomanry, which is made up largely of small businesspeople, minor property owners, skilled workers and private-sector oriented professionals. Ascendant for much of modern history, this class is in decline while those below them, the new Serfs, grow in numbers―a vast, expanding property-less population.”

Both Kotkin and Hanson assert that the trend towards feudalism can be reversed if people understand what is occurring and react effectively. To that end, it is necessary to understand that behind the obvious benefit these new rules have in service of the elites and their interests, there is a moral pretext. How solid is that pretext, that America’s middle class is not sustainable?

The following chart shows American energy use per person over the past twenty years compared to China, India, and Nigeria. Although expressed in kilowatt-hours, the chart is referencing all forms of energy consumed, merely using kWh to normalize everything – oil, gas, coal, nuclear, hydro, renewables – into a common unit.

What is notable on this chart is that Americans have successfully reduced their average energy consumption over the past twenty years, although not by much. But where will American energy consumption eventually level off? How much lower can it go? Notice how China, a nation with more than four times America’s population, has tripled its per capita consumption of energy over the past 20 years, yet still only consumes one-third as much as the average American consumes. India, a nation nearly equal in population to China, is way behind but destined to catch up fast. The average Indian today consumes less than one-tenth what the average American consumes. What will happen in the next twenty years?

If these comparisons aren’t dramatic enough, notice Nigeria’s stats. With a population that has just topped 200 million, Nigeria is the demographic heavyweight in Africa, a continent where the population is projected to double to more than 2.5 billion by 2050. As of 2015, the average Nigerian only consumed one-thirtieth as much energy as the average American consumes.

Energy is the prerequisite for economic growth. If you have abundant energy, you can have abundant water, transportation, communications, light, heat, mechanized agriculture, refrigerated medicines; everything. And the cold fact confronting America’s elites is this: For everyone on earth to consume half as much energy as Americans consume, total energy production worldwide would have to more than double.

Can America’s middle class sustain its current lifestyle while consuming half as much energy as it does today? Or is it feasible for energy production in the world to not merely double, but quadruple? And if that can be done, is it possible without paying too high a price in terms of environmental impact? And if it cannot be done, can the American experience, which is to enjoy a lifestyle many times greater than that enjoyed by most of the rest of the people on earth, be justified? And if so, why?

These are tough questions. Unequivocal, simple answers to these questions do not exist. But the conventional answer that motivates America’s elites must nonetheless be challenged, because until it is, they will cloak their consolidation of power and their elimination of America’s middle class in the moral imperatives of saving the planet and eliminating racism.

It may seem illogical to suppose the “systemic racism” canard is more easily disposed of, but that’s only because racism, by design, is the ongoing obsession in American media and politics. Despite this well engineered obsession, resolute opposition to “anti-racist” racism is growing because it is an obvious lie. Racism, from all sources, still exists. But systemic racism against nonwhites, from every angle you look at it in modern American society, simply does not exist. Politicians, journalists and academics need to find the courage to explain the facts, and turn the tide. It can be done.

Saving the planet, on the other hand, is a moral imperative with ongoing urgency. This urgency can be divided into two broad categories. The first is the traditional concerns of environmentalists, to preserve wildlife and wilderness, and reduce or eliminate sources of pollution. While environmentalists, especially in the United States, often go way too far in addressing these traditional concerns, these are genuine moral imperatives that must be balanced against the economic needs of civilization. This is an important but manageable debate.

The second, new concern of environmentalists, however, is the “climate emergency.” Grossly overblown, hyped for reasons that are transparently opportunistic, fraught with potential for tyranny and punitively expensive, the “climate emergency,” more than anything else, is the moral justification for destroying the American middle class.

In the name of saving the climate, fossil fuel development is being restricted despite the fact that fossil fuel – coal, oil, and gas – still produces 85 percent of worldwide energy, with nuclear and hydropower making up another 11 percent. If energy production is going to double, which at a minimum it must, how on earth will that be accomplished without fossil fuel? It is impossible. And the planners who are cramming down fossil fuel development worldwide know it. By creating shortages and raising prices for everything, they intend to reduce median rates of consumption in America to a fraction of what it is today, and render a middle class lifestyle completely out of reach to the average American. And in doing so, they’ll amass even more wealth for themselves.

There is another path. By focusing on the most likely predictions instead of the most catastrophic, nations can focus on climate resiliency – something which is a good idea anyway – while continuing to develop clean fossil fuel while also continuing to develop leapfrog technologies such as nuclear fusion. The environmental benefit of this approach is tangible and profound: with energy comes prosperity, with prosperity comes lower birthrates. With energy, inviting urban centers are possible, and urbanization takes pressure off wilderness. In both cases, with abundant energy, people voluntarily choose to limit their family size and move to cities.

There is a moral case for fossil fuel that can outweigh the supposedly moral case against fossil fuel. Americans have to be willing to fight that fight, along with every other tyrannical edict attendant to the “climate emergency,” starting with the restrictions on urban expansion and the single family home.

With adherence to the principles and culture that made America great – competition, private ownership, rule of law, minimal corruption, and rewarding innovation – America’s middle class will survive and grow. But feudalism is a viable alternative, especially lucrative to the multinational corporations and globalist billionaires that will never call it by that name, hiding instead behind a moral masquerade.

This article originally appeared on the website American Greatness.

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Public Infrastructure is not a “Progressive” Abomination

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President Biden spent a surprising amount of time during his belated first press conference talking about infrastructure. Many of the points Biden made echoed remarks Trump has also made. Paraphrasing from the transcript, about 53 minutes into his press conference, Biden said:

“We are now ranked 85th in the world in infrastructure. The future rests on whether or not we have the best airports that are going to accommodate air travel. Ports that you can get in and out of quickly. What’s the first thing that business asked? What’s the closest access to an interstate highway? How far am I from a freight rail? Is there enough water available for me to conduct my business?”

Biden’s solutions won’t be ideal. If work is authorized by Congress, it will be padded with hundreds of billions going to the public bureaucracies and to the inevitable environmentalist litigants. The work itself will be done under project labor agreements that will also add hundreds of billions in costs. And additional hundreds of billions will be wasted on absurdities, such as “sequestration” projects to inject CO2 into underground caverns.

If Trump were able to manage federal investment in infrastructure in a 2nd term, he would have set more useful priorities. He would have prioritized airports, seaports, roads, rail, the power grid, and he would have fought the pet projects of environmentalists and their corporate allies. He would respect labor, but he’d be a tough negotiator, and he would have hammered on the construction contractors to keep prices down.

Trump also would have streamlined the expensive bureaucratic process, something he pursued throughout his first term. A key moment in that effort was a press conference in 2017 where he stood next to two piles of printed regulations. The first, four stacks of pages about a foot high, was labeled “1960.” The second, five stacks of pages about eight feet high, was labeled “Today.” This crippling level of bureaucracy is a big part of why American infrastructure has fallen so far behind.

When trying to define the optimal role of government and the threat posed by progressive ideology, public infrastructure is being unfairly attacked. A practical policy agenda for conservatives would be to enthusiastically support public investment in infrastructure, but at the same time, to fight inappropriate infrastructure and to fight the entire system that has developed to make infrastructure cost far more than it should.

An apt comparison to illustrate good vs bad infrastructure can be found, predictably enough, in California, where the cost effective public works of the 1950s and 1960s stand in stark contrast to the billions wasted today on projects that either have no practical benefit or spend decades in the planning and approval process and never get built.

In 1968, in a process that took only five years from concept to completion, the San Luis Reservoir went online in Central California. Constructed at a cost in today’s dollars of $2.3 billion, this massive off-stream reservoir has a capacity of 2.0 million acre feet. It is a vital storage link in the massive California Water Project, an engineering feat almost unrivaled anywhere on earth. Today, a proposed sister reservoir, of equal size and design, has been approved and in the concept stage for over a decade, with hundreds of millions already spent on “planning.” Facing additional years of litigation and bureaucratic inertia, it is currently projected for completion in the 2030s at a cost, undoubtedly underestimated, of $5.2 billion. It will probably never get built.

This transition is complete: Government getting public works were done on time and at a reasonable cost back in the 1960s, public works today are for the most part neglected. The projects that do get completed often offer little in practical benefit to society, at costs that are scandalously overblown. This transition from useful to useless is not restricted to water projects in California. It is a story that has been repeated across America.

The fight that needs to be waged is against the three headed monster that has stopped sensible public works in its tracks: out-of-control environmentalist litigants, a byzantine and contradictory array of crippling regulations distributed through countless regulatory agencies, and labor unions that have become unreasonable and often complicit in backing projects of marginal value.

Unfortunately, the movement that might be most effective in that fight for badly needed new infrastructure, America’s conservatives, faces withering ridicule and “principled” objections from libertarians. Today, according to many influential libertarians, if you favor appropriate public investment in infrastructure, you are a progressive.

This is ridiculous. Obviously there should be a vigorous debate over what sort of infrastructure justifies public investment. But at some point, the role of government is to socialize the costs of amenities that the private sector is unwilling or unable to provide. Freeways and water projects are examples where public investment at the least needs to supplement private investment, in order to prevent imposing a prohibitively high cost to the consumer.

The solution for libertarians, apparently, is for the private sector to build everything, including infrastructure. But how does this work, when someone attempting to build a freeway must negotiate with ten thousand separate private landowners? How can any ribbon of public infrastructure, whether it’s a freeway, a railroad, a pipeline or an aqueduct, possibly ever get built without recourse to eminent domain?

These concepts, public investment and eminent domain, are anathema to libertarians. But while conservatives should recognize the value of libertarian philosophy – limited government – the operative word is “limited” government, not “no” government. America’s infrastructure has been neglected for decades, and libertarians are not helping.

Moreover, this philosophical schism isn’t just about infrastructure. It’s about finding a balance between public and private ownership, while honestly confronting the inevitable fact that finding a perfect balance is impossible. Shall the government – allied with powerful corporate interests and billionaire “philanthropists” – set aside 30 percent of the land in America as protected wilderness? Because that’s what they’re trying to do, and most of us would consider that overkill. Conservatives should join with libertarians in opposition, not because some land shouldn’t be preserved in public trust, but because 30 percent of all land is way too much.

What conservatives must admit is that libertarian values may be a vital part of any governing philosophy, but they’re not the only value. Conservatives, who are accused of this all the time, should own up to their belief in a strong government. The critical, difficult question is for what, and how much? Libertarians, in their purity, largely avoid this meeting with reality.

Once you’ve gotten out of the way the delusion that conservatives don’t want a strong role for government, it’s easier to assess the true threat coming from progressives. In the case of infrastructure, progressives join with conservatives to want more of it, but what do they want? They want to continue to tie all development up in knots as part of their extremist positions on environmental and labor issues. They want development to include useless projects, or projects hopelessly skewed towards creating “equity,” and “environmental justice,” instead of projects that benefit the most people for the least amount of expense. But that’s just small element of the progressive threat.

The priority for progressives is directed at social issues, with “solutions” that require a grossly inappropriate expansion of government. Moreover, it is the role they envision for government that is of more concern than expansion per se. Progressives are attempting to divide the nation into groups separated by race and “gender,” they are attempting to train the individuals in these groups to resent members of other groups, they are promoting a narrative that taints America as an inherently racist and oppressive society, and their goal is to use the government to enforce equal outcomes, “equity,” across all identifiable groups, regardless of the cost.

This lunacy, being promoted by progressive activists and their opportunistic cohorts across nearly every American institution constitutes an existential threat to the liberty and prosperity that to-date we have taken for granted. It represents an expansion of government beyond the wildest nightmares of conservatives and libertarians alike.

Perhaps it is healthy for libertarians to urge conservatives to question public spending on infrastructure and other national priorities. And perhaps conservatives need to acknowledge libertarian concerns, while at the same time fighting hard for government spending on infrastructure that the nation badly needs, and fighting against useless projects and wasteful spending.

If supporting public funding for infrastructure is “progressive,” fine. In that context, libertarians may use that term to stigmatize conservatives. But the true progressive threat to America is far bigger than whether or not the federal government spends a trillion dollars on infrastructure. Along with powerful allies – who are using them – progressives are actively working to reduce the rights and freedoms of American citizens, along with their prosperity and their sovereignty. Right now, they’re winning.

For the first time in history, a huge cross section of America’s elites, using progressives as powerful pawns, are not working in the interests of the American people or the American nation. They have pledged their allegiance to international corporations and transnational institutions. The solution for conservatives that love their country is not to eliminate government. It is to take their government back, and use it to again represent the interests of the American people.

This article originally appeared on the website American Greatness.

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California Agencies Fail to Submit Timely Financial Data

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With Californians about to enter their second year of restricted economic activity, and with all the resulting financial anxiety and hardship, it’s unfortunate that accurate and timely financial information isn’t available for the vast public sector. While public sector budgets and projections abound, actual audited financial data for recently completed fiscal years is subject to unnecessary months, if not years, of delay.

One of the few areas of excellence in California’s vast public sector bureaucracies is its public pay database. Initiated under former California State Controller John Chiang and continued by Betty Yee who replaced Chiang in 2015, this “Government Compensation in California” website offers an unvarnished and detailed look into how much we pay our public servants. That’s a look worth having, especially for 2020, a year that saw private sector workers and small business owners watch their income and wealth slip away. But don’t hold your breath.

The raw data the state controller makes available can be sorted by agency, it includes a record for every full or part-time state or local public employee, and for each record there is considerable detail, including base pay, overtime pay, “other” pay, deferred pay, health insurance, pension fund contributions, and more. To be sure, the data isn’t perfectly consistent or complete. Pension fund contributions may or may not include the payments to reduce the unfunded liability, despite the fact that the unfunded pension payment is now usually twice as much, or more, than the so-called normal pension contribution. The data also doesn’t include the cost of prefunding retirement health insurance benefits, or include any attempt to put a value on the unusually generous paid vacation, personal, and “9/80” (salaried professionals that work 9 hours a day for 9 days, then take every 10th day off with pay) benefits afforded California’s public servants. Nonetheless, it is an extraordinary window into the biggest line item expense in California’s state and local governments, personnel costs.

Using this data, which is updated yearly, the California Policy Center produced a series of summary reports in 2020, showing average pay and benefits for various classes of full-time public employees in 2019. In July they produced an analysis of City and County worker pay, and in November, when that data came available, they produced an analysis of State worker pay. But what about California’s system of K-12 public education?

It turns out, as disclosed on the state controller’s summary page for K-12 payroll data, only 26 percent of the school districts have reported so far for 2019. This compares to 481 cities reported (there are only 482 cities in California, that’s 99.8 percent reporting), and 57 counties reported (that’s all of them, the “city and county of San Francisco” reports as a city). So what’s holding up these school districts? But when it comes to sluggish financial reporting, the public education bureaucracy, which has maintained full employment despite a harrowing reduction in services, is just the tip of the iceberg.

None of the financial reporting by California’s public sector comes even close to what is routinely expected of publicly traded corporations. Public sector accounting, in general, is a mess. Payroll data, because it is so straightforward, ought to be available within a month or two of year-end. Why can’t public agencies report their payroll data to the state controller at the same time as they issue W-2 forms to their employees, something that has to be done by the end of every January? Why can’t these files be consolidated and available for downloading within days after they’re submitted to the state controller’s office?

Why aren’t we already analyzing 2020 pay and benefits for California’s public sector workers? Why is the relatively “prompt” reporting of California’s cites, which requires us to wait until July, considered acceptable?

In terms of timely reporting, public sector financial statements just as bad, if not worse. Setting the standard for poor performance is the state itself, which proudly released its Comprehensive Annual Financial Report in late October, 2020, for the fiscal year ended June 30, 2019. It took the state controllers office nearly a year-and-a-half to publish a report of their financial performance. This means that at best, any in-depth detailed financial information about the State of California is well over a year out of date. By the time the fall of 2021 rolls around, even if it’s a normal year, information about the financial performance of state agencies will be well over two years out of date. This same dismal performance afflicts nearly every city and county in California.

Similar delays occur with financial reports for the pension systems serving California’s public employees. At first glance, the nearly six month lag between the fiscal year-end for CalPERS and the release of their Comprehensive Annual Financial Report seems to be not so bad. It compares quite favorably to the state’s performance which takes almost three times longer. But why can’t California’s pension systems release these reports within 60 days of their fiscal year-end, which is a legal requirement for large publicly traded corporations?

Moreover, the “only” half-year lag between the fiscal year end and the issuance of CAFRs for California’s public employee pension systems is misleading. One of the most critical variables in the financial status for these pension systems is the calculation of their unfunded liability, which is the difference between the total value of their invested assets, and the total actuarial liability which is the present value of the pensions the system will eventually pay to their current and retired employees. For CalPERS, and this is typical, that calculation, updated yearly, lags a full year behind the financial statements. Which is to say the “Actuarial Accrued Liability” for the CalPERS pension system, as first reported on November 20, 2020, was not showing that value as of June 30, 2020, but for June 30, 2019 (ref. CalPERS CAFR page 126), an entire year earlier.

The significance of this delay in reporting such a critical variable is not diminished because it’s so abstruse. Hundreds of billions of dollars are in play. By the time the Fall of 2021 rolls around, and we’re all trying to figure out just how far in the hole the COVID-19 pandemic has put our public employee pension systems, we will still be relying on calculations that were updated over two years earlier, before any of these economic storms were even on the radar.

Public sector compensation. Agency financial statements. Pension fund statements. In all these areas, California’s public agencies are providing financial information that is only available months, if not years, later than the reports required of publicly traded companies. Blame normal public sector bureaucratic inertia, not helped by the need to run everything past government unions. And compared to other states, when it comes to providing public sector financial information in a timely manner, California is at the back of the pack.

Here in California, the epicenter of high-technology and the information revolution, the expectations we place on our public sector financial professionals are rooted in the middle of the last century. We can do much better.

This article originally appeared on the website California Globe.

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