RUSH: George Will: Trickle-down misery in Los Angeles. Did you know that the mayor of Los Angeles, Antonio Villaraigosa, was a community organizer for 15 years for the Service Employees International Union? Damn straight, he was for 15 years. Los Angeles is a good example of what happens when you put a community organizer in charge. This is George Will’s Newsweek piece, which lost $28 million after their revamp. ‘To get from downtown to the residence of the man who, in 2005, became the first Hispanic elected mayor since 1870, you drive through a sliver of Korea. With 125,000 people packed into 2.7 of the city’s 469 square miles, Koreatown is typical of this polyglot city where more than 100 languages are spoken and nothing is typical except recentness: 46 percent of the residents are foreign-born,’ in Korea town. Maybe he means the whole city.
‘So when His Honor Antonio Villaraigosa was invited to appear at a recent rally protesting Arizona’s law concerning illegal immigrants, he went. But he stipulated: ‘I want American flags.’ He knows that protesting immigrants should not carry the flags of Mexico and other nations where they have chosen not to live. The city is chin-deep in California’s trickle-down misery, and last week Richard Riordan, who was L.A. mayor from 1993 to 2001, coauthored with Alexander Rubalcava — an investment adviser — a Wall Street Journal column declaring the city’s fiscal crisis ‘terminal.’ They say Villaraigosa should ‘face the fact’ that ‘between now and 2014 the city will likely declare bankruptcy.’ Villaraigosa says that will not happen. But look what has happened. For 15 years Villaraigosa was an organizer for the Service Employees International Union and the city’s teachers’ union. Now he is trying to cope with, and partially undo, largesse for unionized public employees: ‘I have to sign the checks on the front, not just the back.’ Riordan and Rubalcava say two numbers — 8 percent and 5,000 — define the city’s crisis. L.A. has conveniently but unrealistically assumed 8 percent annual growth of the assets of the city’s pension funds. The two main funds’ actual growth over the last decade have been 3.5 percent and 2.8 percent. And Villaraigosa added 5,000 people to the city’s payroll in his first term.
‘Nationwide, government employees are most of what remains of ‘defined benefit’ America. More than 80 percent of government workers have defined benefits — as opposed to defined-contribution — pension plans. Only about 20 percent of private-sector workers have defined-benefit plans. California’s parlous condition owes much to burdensome health-care and pension promises negotiated with public employees’ unions, promises that are suffocating the state’s economic growth.’ It all sounds Greek to me, except this Greek I can understand. ‘Riordan and Rubalcava suggest replacing defined-benefit pensions with 401(k) accounts for new public employees.’ Not existing, let’s change it for the new hires. ‘But when another product of America’s immigrant culture, Gov. Arnold Schwarzenegger, tried to do that, public employees’ unions squashed the idea.’
Sounds Greek to me, Greek that I can understand. ‘Riordan and Rubalcava say the retirement age for public employees should be raised from 55 to 65, employees should pay more than the maximum of 9 percent of their salaries for pensions, and the city should end subsidies of up to $1,200 a month for health insurance for those who retire before becoming eligible for Medicare. But even his ideas for nibbling at the edges of the fiscal problem by privatizing the zoo, the convention center, and city parking lots are opposed by the unions.’ Sounds Greek to me. A little bit left in this column. This is the sad state of affairs in Los Angeles. A community organizer for 15 years for the SEIU is now the mayor. It’s right in front of us, folks, what the left does. They’ll show us every day where they intend to take us.
RUSH: California state unemployment rate, 12.6%. Nationally, 9.9%. The city of Los Angeles, unemployment rate, where they speak 100 languages, 13 and a half percent. And who has been running the place, state and city, for as long as we can remember? It’s liberalism, folks.
RUSH: You know, folks, speaking of Greece, there’s another good comparison to what we’re doing in Greece. Greece is like the bailouts of General Motors and Chrysler, in effect. In fact, it’s probably more like GM and Chrysler than it is the bank bailouts. The banks didn’t want the money. Greece does. The banks paid the money back. Some of them didn’t want the money. But what was the General Motors and Chrysler bailout? What it really was was a bailout of the socialist unions and their health care plans and their pension plans, which is exactly what this money is going to do in Greece. There will be no austerity. We’re gonna bail ’em out. ‘We.’ The borrowing window at the Fed is open. You could retire at General Motors at 53 just like in Greece. That was threatened until we bailed out General Motors and Chrysler.
Yeah, right. Austerity is just around the corner. (interruption) Fifty-three, yeah. You could retire at 53 General Motors just like you can in Greece, with your pension and your health care and everything else. I’m 59. I could have retired six years ago. And we’re now paying for it. That’s what the bailout was all about. All of this is about bailing out government workers, government unions, and private sector unions that exclusively support and contribute to liberalism, socialism, communism. Now, what I want to know is how can Los Angeles be in such straits? … How can Los Angeles be in such terrible shape? They’re doing everything Obama suggested, are they not, the way Obama said he is going to lift the entire country out of our recession? They have raised taxes; they have hired a tremendous number of unionized government workers.
And you know there’s a story in the stack: Obama wants to speed up federal hiring. We’re not hiring federal workers fast enough. He wants to speed up the process. Well, Los Angeles has done that. They’re the country’s foremost leaders on taxing companies in the name of climate change. They are a barometer of cap and trade. They are exactly where we’re headed. They support green energy left and right, up and down. They are a sanctuary city, LA is, wonderfully overrun with hardworking, economy expanding illegal aliens. One hundred languages are spoken there. Where did they go wrong? I want Obama to tell us where Greece went wrong. Spain’s unemployment is 20%. I want Obama to tell us where Spain went wrong, and I would like Villaraigosa to tell us where he went wrong, because the Obama prescriptions are on display throughout Los Angeles.
And here’s more about LA. This is from the Heritage Foundation, the Morning Bell today: ‘On March 15th, appearing with labor and environmental leaders, Los Angeles Mayor Antonio Villaraigosa unveiled a new alternative energy plan that he said would ensure the Los Angeles Department of Water and Power would meet his goal of securing 20% of its energy from renewable sources such as wind and solar by December 31st. At the time, he claimed it would create 16,000 jobs and only raise consumer electric bills between 8.8% and 28.4%.’ Only! That was the good news! They were going alternative energy, green energy, to clean up everything and add 16,000 new workers — and it’s only gonna cost your electric rates to go up maybe 28%.
That was the good news. This is on March 15th when he made this announcement. ‘[L]ess than two weeks later those energy rate hike estimates had skyrocketed with the DWP saying it needed to raise rates by 37% in order to meet the renewable energy standards’ that Villaraigosa had established. ‘Los Angeles’ already shrinking business community revolted and by April Mayor Villaraigosa’s plan had been soundly defeated. What played out in Los Angeles is now about to play out in Washington. Sen. Jeff Bingaman (D-NM) has been marshaling his American Clean Energy and Security Act (ACELA) through committee and is set to move it to the floor soon. The heart of Bingaman’s plan is essentially the same as Mayor Villaraigosa’s: a renewable electricity standard (RES) that mandates sellers of electricity to produce a growing percentage of their power from renewable energy sources every two years.
‘And like Mayor Villaraigosa’s plan, Sen. Bingaman’s renewable energy standards would also mean higher electricity prices for all Americans. The inconvenient truth is this: nearly half of America’s electricity is generated from coal. Natural gas and nuclear energy add about 20 percent each. Most of the rest,’ and that’s 30% here, ‘is provided by renewable sources, primarily hydroelectric energy at 6 percent. Non-hydro renewables like wind, solar energy and biomass total only 3 percent. And this is after decades of existing generous renewable subsidies.’ We have been subsidizing renewable energy for decades and still it accounts for less than 10% of the production of our electricity nationwide. ‘If electricity created by wind and other renewables were cost competitive, consumers would use more of it without a federal law to force’ them to.
‘But renewable energy is not cost competitive, hence the need for government coercion to force the American people to buy it.’ Liberalism! ‘But just how much more will we have to pay for energy under renewable electricity standards?’ Keep in mind now we’re trying to revive an economy, ostensibly, with the cost of basic necessities set to skyrocket here. ‘There are federal studies of the costs of an RES that conclude that it would add no more than a few percent to electric rates. But these studies do not take the full cost of wind and other renewables into account, including the additional resources needed to overcome the intermittent and unreliable nature of wind energy or the construction of new transmission lines connecting rural wind generation to urban power needs.
‘Taking all these additional factors into account, the Heritage Foundation’s Center for Data Analysis has crunched the numbers and found that [the Bingaman bill] would: 1) Raise electricity prices by 36 percent for households and 60 percent for industry; 2) Cut national income (GDP) by $5.2 trillion between 2012 and 2035; 3) Cut national income by $2,400 per year for a family of four; 4) Reduce employment by more than 1,000,000 jobs; and 5) Add more than $10,000 to a family of four’s share of the national debt by 2035. The CDA report concludes: ‘Electric power is one of the most critical inputs to a modern economy. Thus, it is no surprise that forcing the cost of electricity to rise dampens economic activity.’ The bottom line is, it didn’t work in LA, it had no chance of working, and we’re about to do it here with the Bingaman bill and it’s not gonna work. It’s cap and trade.
All of this new spending, this delusional spending on top of delusional spending — the delusion being that this is fixing anything — has just got to stop. Liberalism, folks. This is not somebody’s wrong ideas of finance. It’s not somebody’s incorrect assumptions about business. All of these decisions are being made by political ideologues who haven’t the slightest idea what they’re talking about. They haven’t the slightest idea how to do anything in the private sector to make it work because they never have because they resent the private sector, and they have the gall and the arrogance to act smarter than everybody else, when they are blazing a trail of destruction wherever they go — and they wake up every day and they keep expanding the trail and digging it even deeper.
RUSH: John in Los Angeles. Well, it makes sense to start with somebody from LA. Welcome to the program, sir.
CALLER: Hey, Rush. Thank you very much. Glad to get through finally. I don’t know if you know this, but the things that you’re talking about are absolutely true about Los Angeles. I’m born and raised here, lived here all my life since ’66, and the programs, the things that they’ve implemented not only in Los Angeles, but at the legislature in Sacramento, we now have 12 and a half million people in LA and LA County, only 35% pay taxes, and you wonder why we’re in a fiscal mess? You know, they have these welfare programs for every social service you can think of, and all the jobs are moving to the city sector, and the private companies have gone. I’ve seen the Toyota plants close, I’ve seen Lever Brothers close, I’ve seen so many industrial plants close, the Chevy plants have closed, that the only thing left is the service sector and the city jobs, and that’s predominantly why I think we’re in the financial mess that we’re in.
RUSH: Well, I’ve been out to LA a lot. The country clubs are still open.
CALLER: Yeah, I mean, for the Hollywood types, but for everybody else, you look at the mortgage meltdown and everything that’s going here, and they try to sell you on the dream that you can still acquire what the Paris Hiltons have, but guess what? You’ve seen what’s happening now. You know, we have probably the second or the first largest foreclosure rate in the country. The taxes are horrendous. They can’t touch property taxes but they’re going after that. Sales tax is at 10%. I mean my parents didn’t even used to pay any state tax back in the sixties and the fifties and all that good stuff and here we are paying the highest taxes in the nation and now we’ve just become the largest welfare state in the nation.
RUSH: Yeah, you know what you’re describing here is just like in socialist countries everywhere, there’s no middle class anymore. You have the very poor and the very rich. The bourgeoisie have been killed off. They don’t exist.
CALLER: Rush, and you’re going to laugh at this. Do you want to know what California considers a rich person, as far as when it comes to taxing? If you make income of over $47,000 a year in California, which is the highest in probably the second or the first highest place to live when it comes to the cost of living, that if you make $48,000 a year or more you’re considered an upper echelon person. Me and my wife make over a hundred thousand dollars together, and we barely scrape by just on the cost of food, the cost of gas, the cost of insurance, the cost of everything, and I think the states like Texas and Florida and other states that don’t have state income tax are seeing the mass exodus of people who have been born and raised here or who have equity in their homes that are selling them ’cause they’re bubbling this market up right now —
RUSH: Right. Well, now, here’s the point of all this. The point of all this is, people say, ‘Why isn’t there a mass exodus in California? Why don’t people leave?’ People are. Taxpayers are leaving. You heard him, 35% of the people that live in LA pay taxes. So you get the very rich and you have the very poor, the middle class is gone, and people don’t want to leave, it’s a beautiful place. People born there love it. Doesn’t matter what part of the state they were born in, Northern California, Central Valley, Monterey Bay, all of that, down to San Diego and LA, they love it. And it’s a beautiful place. The state debt is just out of control. I have people say to me, ‘But, Rush, I’ve been hearing my whole life about the national debt and I’ve been hearing about all of these things that are going to supposedly result in giant catastrophe, and it never happens.’ Well, the reason that it never happened is because we were always attempting to do something about it. You remember the serious efforts at deficit reduction. In the mid-nineties, when the Republicans ran the House of Representatives we actually did balance the federal budget a couple years and we actually did enact welfare reform, which at the time succeeded in getting a lot of people off welfare and back to work and it was a good thing. But the left: ‘That’s stigmatizing, making people work, why, that’s easy for you to say. This country doesn’t provide decent paying jobs except in unions, what do you mean, make ’em go to work?’
The bottom line is there’s no effort here, no effort at all to stench the bleeding here. It’s purposely being made worse. Now, you see what’s going on in the European Union. I don’t mean to really harp on this, but whatever you think of Wall Street, would you rather have Barack Obama and anybody in his administration managing your financial portfolio, your retirement, or would you rather have the guys at Goldman Sachs doing it? Now, you may have been told that you should hate the people at Goldman Sachs, but who would you rather have in charge of growing your money pile? I damn well would prefer anybody at Goldman Sachs to anybody in this administration. Now, the problem here with Greece is, if they don’t even go through the motions of pretending to deal with this, nobody is gonna invest in anything — I don’t care what people think of government spending and how important it is, if you don’t have people investing in things they think are going to show a great profit or return, then you’re not going to have any growth of any kind to speak of, and if people don’t have the confidence to invest in something — like who wants to buy an LA municipal bond right now?
Now, you might have been talked into hating investors, and you might have been talked into hating speculators, but the sad reality is that these people are great indicators of where strength and weakness is. And right now nobody wants to invest in the euro. And these are window dressing type efforts to make it look like we’re doing something about it, just like the TARP bailout was and stimulus, it was an attempt to make the world, the ChiComs, everybody else, ‘Okay, we’re taking it seriously now, we’re really doing something about it, but we keep contradicting ourselves because while we present this picture doing something about it, we pile on another deficit-exploding piece of legislation called Obamacare.’ And now we’re ready to put cap and trade on the top of it and now we’re talking about amnesty for illegals and flooding the country legally now which is going to depress real job creation for the middle class. At some point none of this stuff is sustainable. It’s not that the irresponsibility of past years didn’t matter. It’s that we’ve got a bunch of people running the country and running the world who are doing all of this on purpose because they are delusional and think this is what’s good. They think that this is the best way to provide for a population of people. And they bring with them their biases and their bigotry and their incorrect assumptions and their prejudice.
Their bias and prejudice and bigotry is against achievement. It’s against traditional achievement, traditional institutions that have defined greatness in a free country, ours. They hate it. They think it’s the root of unfairness. They think it’s the root of injustice. They think that it is the root cause of racism, sexism, bigotry, homophobia, all of the isms and they are hell-bent in a moral superiority way that they’re going to fix this. Something has been wrong for over 200 years and they’re finally going to fix it, except we see what their repairs lead to. The only bright spot in any of this, and it’s not very bright, the only bright spot in any of this is that for once and all who these people are is wide open, it’s right in front of our eyes, plain as day. The path of destruction that they cause is happening to real people more and more each and every day, and we cannot miss it.
RUSH: Snerdley asked me at the top of the hour: How come people aren’t leaving Los Angeles? How come they’re not leaving California? I have a lot of people that complain about it every day but they never leave. ‘The number of people leaving California for another state outstripped the number moving in from another state during the year ending on July 1, 2008. California lost a net total of 144,000 people during that period — more than any other state, according to census estimates,’ and from a July 2009 NBC affiliate Los Angeles TV report: ‘Cost of Living Sucks; Everyone Leaving California.’ So people are vamoosing. They are getting out of there. All those things that I just cited about how you try to fix the economy — balance the budget, welfare reform, all of the traditions that have defined greatness and prosperity — those are the things that ‘Barack Hussein Obama! Mmm! Mmm! Mmm’ is dedicating his life to rolling back. Make no mistake about it.
RUSH: Jim in San Bernardino. It’s great to have you on the EIB Network, sir. Hello.
CALLER: Hello, Rush. Longtime listener. It’s great to talk to you.
RUSH: Thank you very much, sir.
CALLER: (garbled connection) Hey, I work for a company that builds wind towers in San Bernardino County, and I’ve only been with the company for a short time. It’s a union company, and in December we had like a layoff of 50 people, and now probably in June or July, we’re completely out of wind tower work. We had a meeting with our general manager a couple of weeks ago and he said that after these few towers we’re working on are completed there’s really nothing forecast for the future.
RUSH: That’s right, because they —
CALLER: So we’re already anticipating that we’re going to have a layoff here at the plant where we make wind towers, and that’s about 200 people.
RUSH: Well, we know that because that mayor had to cancel his green energy program two weeks after he announced it, because everybody figured out that the utility prices were going to go up 38% for it. So here you built a bunch of useless wind towers. Folks, whose ideas are these? Whose ideas? The whole notion of green energy, what’s the foundation? ‘Clean energy.’ What is this? What’s it based on? It’s based on primarily a belief that everything about America is wrong, dirty, unjust, and unfair.
Here’s Sue in Spokane, Washington. Sue, welcome to the EIB Network. Great to have you here.
CALLER: Thank you, Rush. Nice to speak with you.
RUSH: You bet.
CALLER: I was calling regarding the people leaving California, and I can speak from experience that over the last few years, we have felt the rush of California folks moving up here. It’s changed the dynamic of the landscape here in this area, as far as they’re buying up what used to be farmland and building their beautiful homes here because they made so much money flipping their house down there and now they’re changing this land. They’re bringing their philosophies up here with them also. One of the things I mentioned we can’t use Cascade dish detergent up here anymore because the environmental movement feels it’s too much phosphorus.
RUSH: I remember this. We’ve reported on this and now you don’t have clean dishes.
RUSH: You gotta use worthless dishwater detergent in your dishwasher. I remember this story.
CALLER: Yeah, but they’re moving here. They’re changing the dynamic of this land.
RUSH: Spokane, that side of Washington, is pretty right leaning, but the left’s moving in there.
CALLER: They’ve been moving in for a while. I feel that they were… You know, they flipped their houses, made a lot of money, moved up here and brought all their ways with them because they corrupted it down there.
RUSH: See, isn’t that fascinating? In and of itself, isn’t that fascinating? These are the people that helped lead the destruction of LA, and then they complain and whine and moan about it and blame other people in their delusion, and they move somewhere else, and then go pollute that area with the same kind of belief system that destroyed their original ‘habitat,’ if you will. (interruption) Slash-and-burn? It is! It’s like the Drive-By Media. You know, the Drive-By Media shows up to a story, they destroy everybody involved in it, create havoc and a mess, and responsible adults have to clean it up. Meanwhile, the Drive-Bys are heading down the road to the next story.