Friday, October 31, 2008

Pelosi, Feinstein, Newsom for Prop 1A

NOTE: We've moved! Visit us at the California High Speed Rail Blog.

At a press conference in San Francisco today Speaker Nancy Pelosi, Senator Dianne Feinstein, and San Francisco Mayor Gavin Newsom all spoke out in favor of Proposition 1A. Their presence ought to dissuade some of the Prop 1A critics who claim that federal funding is uncertain - in 2009 these two members of Congress will be among the most powerful politicians in America and will be in a VERY strong position to help fund California High Speed Rail. They emphasized the environmental and the economic benefits of the project, and DiFi had some strong words for the HSR deniers:

One newspaper said now is not the time because we can’t afford it. I would say we can’t afford not to do it.

Which is of course the truth. As Paul Krugman explains in today's column deficit spending by government to prime the economic pump is an absolute necessity for getting the country out of the recession.

It's not just leading national politicians and Nobel laureate economists making this point. Average Californians grasp the necessity of passing Prop 1A as part of an overall economic stimulus program, as shown by this letter in the Modesto Bee:

California has budget problems because our legislators have been unable to control spending growth and have been unwilling to raise taxes. The current budget uses gimmicks and tricks and is unbalanced. Our state government is dysfunctional. Killing beneficial infrastructure projects will not solve California's problems. We need to invest in California. In the long run this will lead to better lives for the state's residents and will result in increased state and local tax revenue. We need to approve the high-speed rail measure, and we need to demand that the Legislature do its job. These are compatible goals.



Thanks John for helping inject some common sense into the debate. Killing Prop 1A will do absolutely NOTHING to help California's economy or budget. Nothing at all. Especially when you consider that the cost of doing nothing is not zero - whether it's the cost to consumers of higher gas prices or the cost to the budget of expanding roads and airports, Prop 1A and HSR is the affordable solution.


Brandon in California said...

Good post.

Additionally, Obama said this today concerning his energy independence as beig a priority (#2) if he is elected President:

"We have to seize this moment, because it's not just an energy independence issue; it's also a national security issue, and it's a jobs issue. We can create 5 million new green energy jobs."

bossyman15 said...

did he say what was his priority #1?

Rafael said...

@ brandon, bossyman15 -

in the interview with CNN's Wolf Blitzer, Sen. Obama said that stabilizing the financial sector would be his top priority if elected. Initially, he said investing in energy independence would be his second priority and an income tax cut his fourth. He then corrected himself, saying that the tax cut might well be needed asap to stabilize the financial sector.

In his op-ed, Paul Krugman suggests that the banking sector is reporting reduced demand for loans from businesses and consumers with good credit ratings. If so, then the crisis has now moved beyond a credit supply crunch. In effect, the private sector appears to have decided that a total-debt-to-GDP ratio of 356% has proven unsustainable. In plain English, that means both the federal government and the private sector have been living above their means since the 1980s and especially since 2000 and, now it's time to reduce total debt by $10-$20 trillion. That will likely take not months but years.

Meanwhile, the combination of bailout money and the Fed's extremely low interest rates are giving banks an excuse to keep LIBOR rates high. Many US mortgages and hence the foreclosure rate are tied to LIBOR, so perhaps the Treasury should reserve its largesse to banks that are actually lending to other banks again, rather than focus on fresh loans to businesses and consumers in the short term. The priority needs to be reducing the foreclosure rate so the toxic derivative assets that caused the meltdown become tradeable again.

It's worth pointing out that high foreclosure rates have also landed 1 in 5 US homeowners in negative equity. California is among the hardest hit states. Krugman also suggests that a broadly based income tax cut might be too blunt an instrument to do much good right now. People who are still able to meet their mortgage payments aren't desperate for an additional $100 or so each month. What this group needs most is for real estate values to bottom out and begin recovering.

Therefore, the focus should be on creating jobs in the hard-hit construction sector so those folks can avoid defaulting on their mortgages and regain health care coverage. IMHO, Sen. Obama would do well to stick with his original priorities but expand spending plans for energy independence and electric cars to sensible electric high speed rail projects.

On the other hand, it may not be productive to actually use all of the $700 billion in the TARP. Of the first slice of $250 billion, some $163 billion has been allocated to date - half of it for shareholder dividends, not fresh loans!

The President could release an additional $100 billion by certifying that they are needed - a decision he ought to but is not required to clear with whoever the President-elect turns out to be. The balance of $350 billion is subject to additional appropriation by Congress.

Note that Secr. Paulson also appears to have given the nation's nine largest banks far more generous terms for their preferred shares than Warren Buffett was able to negotiate. The difference is greater than the entire projected cost of the California HSR project!

Tony D. said...

Of course I agree wholeheartedly with this post. My concern is that your average Californian will be "scared" into voting against Prop. 1A because of CA's budget issues/overall economy. Most of us who blog here know the truth. What about the masses? In response to Moreshed stating declining support for Prop. 1A (, hopefully we'll get passage somewhere in the low to mid 50's come Tuesday (obviously down from the 62% of this Summer). Prop. 1A needs to pass!

Anonymous said...

Does anyone here really believe that CHSRA doesn't think Prop 1A is in trouble?

Why do you think they on an emergency basis collected about 1.5 million and wrote a check for 1 million to a media house to get radio commercials running at the last minute.

If this had been planned all along, they wouldn't be doing this at the last minute, when close to 1/2 of voters have already cast ballots.

Did anyone else catch Kopp now saying they expect the Feds to fund 50% of the project -- that was on KCBS on Sunday.

Anonymous said...

Umm it wasn't an emergency basis. The campaign only has so much advertising money so they need to concentrate it in the area in which it is most strategic (ie, the last few days before election day).

Anonymous said...

Here is an Audio only from Joe Vranich.

Vrnaich is co-author of the Due Dilligence report with this blog keeps saying is nonsense.

Kevin Gong said...

That's because the Due Diligence report IS nonsense. A critical reader (in the intellectual sense, not the partisan sense) quickly realizes that there is a strong bias against the project, and that the figures quoted are cherry-picked and in some cases, completely made up.

And again, Joe Vranich is not an impartial expert by any means. He calls himself an expert on rail travel, but his expertise consists of criticizing Amtrak and rail projects nationwide on the basis of long distance routes, management practices and subsidies as a government corporation. In fact, he wants to reprivatize rail travel, even though no private entity in their right mind would run regular rail service on the infrastructure we have now. These are all talking points from his book on Amtrak by the way.

HSR opponents who believe in Vranich's philosophy on rail are fundamentally against rail travel in the US in the first place.

Anonymous said...

We are going to win...the great young vote will pass this ...I cant wait for Thursday

Anonymous said...

because Thursday will be the 2 day of the party!!!!

Anonymous said...

New Field Poll shows Prop 1A with less than the 50% needed for passage

Rubber Toe said...

Hey Morris,

How about this angle...

New Field Poll shows Prop 1A "no voters" with less than the 50% needed to vote the proposition down.

It's all about the wording and spin, isn't it? You are going to be one disappointed pup come Wednesday morning...


Brandon in California said...

It looks like HSR is ahead by 5 points to me.

Spokker said...

It's so sad that Prop 10 is leading yes in the polls. I'm surprised children's hospitals is winning by so much. I thought we were voting all bonds down lol.

Spokker said...

"It looks like HSR is ahead by 5 points to me."

Yup. There is no doubt that support was dropped. No shit. Look at the economy. But that it's still winning in the polls despite the economy is promising.

Anonymous said...

If people want to be against HSR, then they should at least be fair and be against freeways too!

Rafael said...

CALPIRG video for prop 1A - get out the student vote!