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Archive for August, 2010

It appears that Aaron Corp is handling his much publicized transfer from USC to UR very well.

According to the Roanoke Times, Matt Barkley sent a congratulatory text message to Corp upon being named the starter for the Spiders.

The upcoming game against Virginia will be a real test for him.  The Spiders’ offensive line is relatively new due to the graduation of four starters from last year’s team.

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Mayor Villaraigosa is crowing about the recently approved proposal offered by the city to the EAA.

I think it’s more like eating crow.

Let’s see, the EAA members will now cover 5% of their health premiums; the contribution was zero.

The co-pay will go from $10 to $20 per visit.

What’s there to cheer about unless you are a union member or a politician who depends on the unions for support?

Here are some facts: A 2008 survey of the Bureau of Labor Statistics indicated that employees contributed an average of 19% for single coverage and 29% for family coverage in the private sector. In the public sector, it was 10% and 27%, respectively.  I don’t believe the rates have changed significantly; if anything, they have probably increased.

Regardless of which sector you compare the EAA to, its members got one hell of a deal.

Just imagine – the mayor wants to use the EAA agreement as a model for negotiations with the Coalition of City Unions. 

Such sacrifice.  To paraphrase Winston Churchill: never in the field of labor negotiations has so little been sacrificed by so few to the detriment of so many.

This concession is what Mayor Villaraigosa had the gall to hail as “unprecedented.”

Using the mayor’s own numbers, the annual cost of employee health care is supposed to increase by $153 million over the next five years.  Assuming all unions agree to a 5% contribution, it still means the taxpayers will bear $145 million of the increase.  That’s not much to cheer about.

Maybe the mayor and CAO Santana should have looked to the State of Washington before negotiating the softball contract with the EAA.

Governor Chris Gregoire wants state employees to pay 26%.  They currently pay 12%.

The negotiations will be brutal, but at least Washington is driving a hard bargain and not rolling over as Villaraigosa is.  In any event, Washington state employees will be paying considerably more than Los Angeles city employees.

It makes you wonder why City Hall bothers to negotiate.

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Busy day today.

I appeared on a broadcast of America’s Newsroom around 7:15 this morning Pacific Time.

It was followed by an appearance on the Fox Business Report. However, that segment was very disjointed due to a panel of guests who were arguing ceaselessly.  I cannot locate the video clip.  All I can say, it was tough to get a word in edgewise.

The subject?  The LACERS pension collected by the alleged Grim Sleeper serial killer – a pension he will keep even if convicted and incarcerated.

Also watch the interview with the LA Weekly reporter Chris Pelisek who covered the story.

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Corp to Start for Richmond

Former Southern Cal Trojan Aaron Corp won the starting quarterback position with Richmond.

http://www.youtube.com/richmondspiders#p/u/1/Znqy3XAslXQ

The Spiders open up against Virginia on September 4th.  The game will be carried on ESPN3.

For the Virginia perspective on the decision, follow this link:

http://www.nbc29.com/global/Category.asp?C=175568&clipId=5055793&autostart=true

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Voters in California could become victims of a classic pincer movement on November 2nd.

It’s a simple strategy that’s been used in warfare throughout the centuries.  General Grant would have appreciated the crafty maneuver shaping up in the Golden State.  General Lee would have appreciated it, too, but he never had the manpower to execute one (more about that in a later segment of my Civil War Sesquicentenial series).

There are two propositions that may undo the checks and balances that protect the taxpayers from complete fiscal chaos, as if the state isn’t already heading to hell in a handbasket. 

One arm of the pincer is Proposition 27 – Financial Accountability in Redistricting Act (FAIR).  The aim of this deceivingly named measure is to undo Proposition 11, which was passed in November 2008.  Proposition 11, authorized a citizens’ commission to redraw state office voting districts, rather than elected officials who have a vested interest in the outcome.

Congressman Howard Berman of Valley Village  is the driving force behind this measure, using FAIR, a coterie of self-serving politicians and other operatives (reportedly including Howard’s brother Michael), to confuse the public that Prop 27 is in the interest of saving the state money.  If 27 is saving anything, it is the political careers of many incumbents.

Proposition 27 is the counter to Proposition 20 which expands the citizens’ commission’s authority to Congressional Districts.

It is interesting that Berman does not want to face his constituents in a town hall on this issue; however, when was the last time anyone recalls Berman hosting a  town meeting open to the general public?

By contrast, in the adjacent Congressional District to the west, Brad Sherman holds public meetings whenever he’s in town, as did his esteemed and admired predecessor Tony Beilenson. 

Berman is not new to redistricting gamesmanship.

Back in 2000, Sherman opposed Berman’s initial attempt to force him into a more competitive district while Berman cherry-picked his own.  Latino groups sided with Sherman because they saw it as an attempt to dilute the influence of their growing ethnic community. They threatened to sue if Berman’s plan was approved.  Berman backed down.

While Berman is attempting to return redistricting to partisan politicians through Proposition 27, the other arm of the pincer is Proposition 25

Mike Feuer (Assembly Member, 42nd District- straddling Beverly Hills to the Southeast Valley) is pitching this measure, which would lower the passage of a budget in the State Legislature to a simple majority vote.  A two-thirds vote is required to pass a budget today.

Mike is not the author of 25, but he is the face of it in my district, so I am singling him out.  I probably wouldn’t if it were not for his avoiding taking a stand on the citizens’ redistricting commission.

I actually support the concept of a simple majority threshold, but – only if redistricting remains with a citizens’ commission.  If it returns to the legislators, Proposition 25 will assure that the budget will be in full control of the ideologues, whatever the party.

If the shoe were on the other foot and the Republicans dominated, they would most certainly support a comparable scheme.

Back when Proposition 11 was on the ballot, Feuer attended a meeting of the Neighborhood Council Valley Village and was asked whether he supported the measure.  He said it did not make any difference to him.  Translated, it meant he was satisfied with the status quo of having his peers carve up the map like a Big Ben jigsaw puzzle.

About three months ago, Feuer sent a staffer to NCVV with handouts supporting Proposition 25.  I stated my support for the concept but would not back 25 without meaningful redistricting in place.  I reminded her of Feuer’s previous non position on Prop 11 and asked if he had come around to support a citizens’ commission.

At the next meeting, she reaffirmed Feuer’s ambivalence.

Drawing election maps is at the core of our democracy.  Anyone who is not disturbed by the outrageous district lines for both congressional and state offices is probably apathetic or a die-hard partisan of one party or the other.

Our current districts are handcuffs that prevent substantive compromise  and perpetuate ideological impasse.

It is unconscionable that Feuer elects to stay on the sidelines.  I can only speculate he does not want to get caught in a potentially hot crossfire.

It would not surprise me if he votes for Berman’s Prop 27; after all, it would enhance his influence as a member of the Assembly Budget Committee.

In summary, vote as follows:

Berman’s Prop 27:    Vote No

Feuer’s favorite Prop 25:   Vote No

Prop 20 (empowers citizens commission to also draw new Congressional District lines):   Vote Yes.

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You wouldn’t believe the country was in a recession if you visited the Barker Hanger at Santa Monica Airport this weekend.

Almost any conceivable prop or pre-production material from ABC’s recently concluded hit series LOST was up for auction.   I came away convinced that LOST fans are in a different economic bracket, immune to the severe prolonged (and still to be continued) real life financial crisis – LOST Worth. 

I had hoped to grab a piece of the series for myself – or more likely for my daughter, who was more obsessed with the six-season saga than I was. The two of us would have weekly telephone conversations about the latest episode and shared our predictions, almost all of which were wrong. 

I’ll miss that. We now we have more relevant issues to discuss, such as the economy. 

I’d prefer LOST. 

There were 1,174 lots available for bid; judging from the prices I saw today, the producers probably grossed at least $4.5 million.  Even a scrap of paper with an ambiguous note written to a couple of the characters commanded a few thousand dollars.  There was nothing on or in the note that would make anyone but a true fan connect it with the series. 

The internet really drove the process…and the prices.  I estimate the take would have been less than half my estimate without on-line participation.  Truly an auctioneer’s dream. 

I was pre-registered as a live bidder but never had a chance to wave my paddle.  A white flag would have been more appropriate as the prices escalated in seconds to four and five figures. 

Pictures speak louder than words, so here are a few pictures of the bidding screen showing the items and the winning bids. 

One of Ben Linus' costumes for $3,500

Dharma Rum for $3,000

Hatch computer- $16,000; with me, priceless

Paul and cast member - now that's really priceless

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Corp picks up at around the 2:30 mark.

http://www.youtube.com/richmondspiders#p/u/3/Ph15GX0IXII

Also, the video of the first scrimmage is now up. 

It is difficult to tell who is taking the snaps due to the red practice jerseys worn by the quarterbacks.  I believe Corp is predominately in the first half.

I was more impressed by the running plays, but since this was the first scrimmage that’s not surprising.

Regardless, the video provides up-close coverage; football junkies should enjoy it.

http://www.youtube.com/richmondspiders#p/u/14/0in0q92i5tk

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A grievance committee headed by former Studio City Neighborhood Council member Jane Drucker released its findings regarding the removal of Michael McCue from the SCNC Board last April.

The point I and many others made in the weeks following the proceeding, including those who attended the removal hearing, was that there was no specificity in the removal petition.  In other words SCNC acted spuriously.

The grievance committee concluded that the petition lacked specifics.  The lack of detail made it impossible for McCue to prepare a defense going into the hearing. 

In other words, he had to wing it.  That’s not justice.

Ms. Drucker also warned the Board that removal actions affect stakeholders and must be weighed carefully.  A neighborhood council “is not a private club” where members can be removed simply at the discretion of the board.

About twenty-five stakeholders attended the meeting, which was quiet and well-run – in sharp contrast to the removal hearing, which was poorly managed and raucous, including an inflammatory statement by a  board member that punctuated the travesty that evening.

Although the grievance report contradicts the SCNC’s decision, nothing can undo the train wreck the board created.

But there is still time to make amends.  The eight members who voted for removal (including one who was defeated in the last election) should do the right thing and issue a public apology to the stakeholders and Mr. McCue (who reclaimed his seat in the election).

As I stated before, no neighborhood council is prepared to deal with a removal, much less one lacking basis. 

Of even greater concern was the role played by the City Attorney’s Office.  SCNC should have been advised to step back and reconsider.  Instead, it appears the council was given a green light – perhaps a dim green light, but it still amounted to tacit support. 

The grievance committee deserves the thanks of the stakeholders for not only finding against the council’s deeply flawed process, but, more importantly, for recommending by-law changes to prevent a reoccurrence.

There was a little turnover on the SCNC as a result of the election.  Perhaps more sensible views will prevail going forward.  Let’s hope so.

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George Steinbrenner was a winner in my book. 

He resurrected the New York Yankees franchise when he purchased the team from CBS in 1973 for $10 million.

CBS ran the team as if it were just another television program.  The network’s corporate management just did not appreciate the potential from marketing the Bronx Bombers’ winning tradition.

George did and the rest is history – the most successful sports franchise since the gladiators of ancient Rome.

But “the boss” was not only a winner in life; he might be the biggest winner ever in death.

By passing on to the big ballpark in the sky in 2010, he beat the death tax.

Back in 2001, Congress decided it was time to phase out the controversial estate tax (also referred to as the death tax).  The exclusion that shields decedents’ assets was gradually increased from $675,000 to $3.5 million in 2009, then the tax was completely phased out starting in 2010.

However, Congress was reluctant to go the whole nine yards in 2001 and left the door open to revisit the tax in 2010.  It was assumed a future Congress would reconsider the long-term future of the tax before the sunset date. The economy and wars in Afghanistan and Iraq probably contributed to shelving any new legislation, or perhaps Charles Rangel was too busy relaxing at his beach house in the Dominican Republic.

 Whatever the reason, the law remained unchanged, although there are several alternatives on the table right now (I’ll cover them in another article later this year).

 As it stands, the tax is scheduled to kick back in next year when the 2001 law sunsets.  The exclusion will be a mere $1 million.  Steinbrenner’s estate probably well exceeds a billion dollars, in no small part due to the Yankees.

Had he died in 2011, Steinbrenner’s heirs would have been subject to paying at least $500 million in estate taxes!  There’s no telling what would have transpired for the Yankees – possibly sold to pay the tax? 

Thanks to George’s good timing, Red Sox fans’ fantasy of breaking up the Yankees will be filed under fiction, alongside “The Year the Yankees Lost the Pennant.”    The Devil undid the Pinstripers in the novel (made into the successful musical “Damn Yankees“), but if Steinbrenner could beat the taxman, old Satan would amount to as much competition as the Baltimore Orioles.

For some, 2010 could pose a moral dilemma.  What if a parent with a large estate is suffering from a terminal illness with death being the prognosis within several months?  The most perverse heirs may pray for death before 2011 rings in.

It’s an ugly thought, but it will probably occur in some minds.

Death and taxes will always play a part in our lives – and no one is getting out of this life alive.  That is a 100% certainty.

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Double, double, toil and trouble; fire burn and caldron bubble.”

There has been some pretty nasty bubbling in recent decades.

There was the tech stock bubble.  The growth was unsustainable and it popped.

There was the housing bubble.  The growth was unsustainable and it popped.

The next one to go?

Government employee unions….for the same reason.

This does not mean unions will vanish, anymore than tech stocks or homes did, but just as the other two represent a much smaller component of our net worth these days, unions will have less relevance and strength than they currently enjoy.

Government unions grew too large and too fast for their own good, creating a labor bubble that covers states, counties and cities.

While union membership has declined precipitously in the private sector since the eighties, it has grown unabated in the public sector. 

The bubble has been dangerously inflated by politicians all too eager to pander for support and contributions in what has to be the most symbiotic relationship next to prostitutes and johns.

All unsustainable structures come to an end, usually crashing and burning under moderate pressure like many third-world buildings do in an earthquake. A comparable fate awaits municipal, county and state unions.

The big question will be whether the labor bubble will undergo a double-pop or a single one. Just as economists debate whether there will be a double-dip recession, I wonder if we are heading for a two-popper on unions and their contracts.

Consider the recent failed negotiations between the City of Los Angeles and the EAA union. It didn’t sell, shot down by three of four negotiating units.

Let’s say all of the civilian unions agreed to a similar deal, a deal that required only modest concessions (a little less than 10% of gross wages for pension contributions) and still provided low-cost health care.

Call it pop number one. It would be felt by the employees as they contributed more of their own money.  Although many would have to rebalance household budgets, they would still have jobs and excellent benefits.  The city’s residents would still benefit from services.

Higher employee contributions, as the 9% of gross called for under the EAA proposal, would put off the day of reckoning for the unfunded pension liability by a few years. However, just as mortgage-backed securities rated as investment grade imploded because of the sub-prime loans that comprised the underlying assets, the true unfunded liability of the pension plans would become evident once the current 8% rate of return  assumption, used by LACERS and other plans, was exposed as a complete fraud. 

Pop number two would be  louder and stronger as the city and the unions would be forced into another round of negotiations.  This time, there would be layoffs to go along with higher contributions.  Some services would have to be outsourced to the private sector.

If the provisions of the EAA deal are the most conservative the city can negotiate, then our elected officials are not serious about pension reform.  They are only serious about buying another term in office, leaving their successors with the clean-up.

Union leaders should take note that the successors will probably be less accommodating than the present cast of characters.

The net result will be much smaller unions, which translates to less political leverage, which leads to irrelevance.

Accept significant concessions now – ones that shore up the plans for the long-term, or risk the irreversible demise of your unions.

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