Earlier this month the California Policy Center released astudythat provided additional evidence that the U.S. stock indexes are overvalued by approximately 50%, along with calculations showing the impact of a major downward correction on the solvency of California’s state and local government pension systems. Stocks are now at unsustainable bubble valuations.

Not covered in this study, but equally overvalued, are bonds, which pension systems misleadingly categorize as “fixed income” investments in their portfolio disclosures. CalPERS even went so far as to trumpet their success in earning a 9.29% return on “fixed income” investments in theirmost recent press release– a healthy return that offset losses elsewhere and allowed them to earn a marginally positive return of 0.61% last year. But “fixed income” investments usually refers to bonds, and bonds are also at unsustainable bubble valuations.

Here’s why bonds are… Read More

Back in 2012 we published an article entitled “The Forgotten 33%,” which included a graphic entitled “American Voter Breakdown 2012.” It depicted the U.S. electorate as comprised of 46% who pay zero nettaxes, 20% who work for the government and are net tax consumers, the 1% “super rich,” and the “forgotten 33%,” who work in the private sector and earn enough to be positive net taxpayers.

The point of the article, then and now, was that people with an intrinsic preference for big government comprise a super-majority of voters in America. But something has changed since 2012…

AMERICAN VOTER BREAKDOWN 2016

The emergence of Donald Trump and Bernie Sanders as serious contenders to become president of the U.S. reflects a growing awareness among voters in all of the above categories that things can and should be better. The… Read More

It should be an article of faith by now that in California, whatever the teachers union wants, the teachers union gets. It is nonetheless surprising that their reach might extend all the way to a recent decision by the San Francisco Unified School District board to rejectfifteen talented teachers who were part of “Teach for America.”

TheTeach for Americaprogram, similar to the Peace Corps, attracts some of the top college graduates in the United States to spend two years teaching students in underprivileged communities. Not only are these highly motivated and underpaid teachers committing themselves to work in schools with chronic teacher shortages, but they typically teach the subjects for which the profession has the hardest time finding teachers – in science, math, special education, and bilingual classrooms.

Never mind all that. Go away. Never mind that San Francisco Unified needs to fill 500 teaching jobs by August in the midst of a statewide teachers shortage. The union can’t accept “cheap labor” that might undermine their lock on the teaching profession.

If you review the candidate… Read More

If anyone is looking for evidence that government unions use their immense influence to support the growth of an authoritarian state, look no further than their unequivocal support for global warming “mitigation,” and all attendant agencies and laws to support that goal.

In 2006 California’s union-controlled legislature passed AB32, the “Global Warming Solutions Act,” a measure that was touted as a trailblazing breakthrough in the dire challenge to avoid catastrophic climate change.The premise behind AB32 is that CO2 is a dangerous pollutant, and that eliminating CO2 emissions is necessary to prevent the planet’s climate from overheating, with all the apocalyptic consequences; rising oceans inundating coastal regions, epic droughts cascading through the world’s fragile forests and killing them, extreme storms, acidic oceans, collapsing agriculture – the end of life as we know it.

Maybe that’s true – and maybe not – but how it’s being managed is a corrupt, misanthropic, epic scam.

If anyone is looking for evidence that… Read More

The modern history of the Silicon Valley arguably began in 1957, when eight young PhD graduates left Shockley Semiconductor Laboratories to launch the first high-volume chip manufacturer, Fairchild Semiconductor.Fairchild and its spinoffs, including Intel and Advanced Micro Devices (AMD), were the early participants in what became the most fervid ecosystem of fiercely competitive innovators the world has ever seen. Inspired by the mantra “better, faster, cheaper,” and fueled by billions in venture capital, the Silicon Valley is now the epicenter of the information age that has transformed ourlives.

With power, however, comes corruption. The Silicon Valley’s inspirational mantra has become challenged in recent years. High-tech products that used to sell because they were better are now sold because they are mandated by law. They sell not because they are faster, but because they are engineered to operate according to asocial or environmentalist agenda. And they are most definitely not cheaper, but instead cost far more than they should. And across the product spectrum from high-tech to low-tech, Silicon Valley leadership increasingly uses their… Read More

Two weeks ago, using information supplied by theCalifornia Taxpayers Association, we called attention to “$6.2 Billion in New Borrowing on June 7th Primary Ballot.” As noted, “Next week voters will be asked to approve 46 local bond measures totaling $6.18 billion in new debt, along with 52 local tax proposals. If history is any indication, more than 80% of them will pass.”

So how did they do?

The following table shows the results so far. With bonds, the trend is clear – they nearly all still pass. That’s partly because school bonds only require a 55% majority to pass, whereas with most tax increases, passage still requires a two-thirds vote.And while the rate of passage is lower for tax increases, the latest election shows two out of three passing.

Local Tax and Bond Ballot Propositions – June 7th 2016 Status of passage as of June 14th, 2016 … Read More

Nearly every objection that supporters of presidential candidates Trump and Sanders raise to the establishment are intimately associated with government unions. But neither the people’s voice, or that voice as it is reflected back to them by their populist heroes, articulates this fact.

(1) Do you want to reform Wall Street?

You’ll have to go through the government unions. Their union controlled pension funds are the biggest players on Wall Street. The union controlled cities that issue hundreds of billions in municipal bonds every year are a close second. Government unions benefit from the financialization of the American economy, even as it has wiped out the middle class. Low interest loans elevate prices for homes, which stimulates borrowing and consumer spending, which enriches corporations and the pension funds who invest in their stocks. High home prices raise property tax revenues. Low interest loans mean families can borrow more for college tuition – so unionized professors can continue to make six figure salaries for teaching a few hours a week, a few months a year.

(2) Do you want to restore reasonableness to… Read More

They areovershadowed by one of the most tumultuous Presidential primary campaigns in decades, but California’s June 7th primary ballot has local tax and bond proposals in numbers that, in aggregate, ought to be generating vigorous public debate. Next week voters will be asked to approve 46 local bond measures totaling$6.18 billion in new debt, along with 52 local tax proposals.If history is any indication,more than 80% ofthem will pass.

Tax activists and politicians who brand themselves as “tax fighters” often point to alarming levels of state government debt, along with state taxes that are among the highest in the nation – but when they do, they are calling attention to a surprisingly small fraction of the big picture. Because most of California’s taxes and borrowing are assessed and spent at the local level. A California Policy Center study from 2013 entitled “How Big Are California’s State and Local Governments Combined?,” using 2011 data, calculated direct state government spending at $54.0 billion. The… Read More