Last week, I said Governor Newsom was going to excuse his complete incompetence in handling the state budget by blaming Trump and his tariffs. Indeed that is exactly what his Department of Finance (DOF) did. Here is the quote from the summary of the May revise from DOF:

Those risks have now become a reality. Washington’s imposition of tariffs has driven a downgrade in both the economic and revenue forecasts. Combined with increased expenditure growth above the Governor’s Budget—most notably in Medi-Cal—the state must now close an estimated shortfall of $12 billion to balance the budget and provide for a prudent discretionary reserve. This will require difficult but necessary decisions to reduce ongoing expenditure growth

The only problem is that this is a completely false, politically driven narrative. We are told the state has a $12 billion deficit in the 2025-26 budget year, which doesn’t include the “cuts” the federal government is contemplating. One would think that if there is a deficit, that comes from an unexpected drop in revenue, at least that is… Read More

We all know the legend of Robin Hood. According to the story related to us when we were children, he “stole from the rich and gave to the poor.” Actually, that is not what he did. He stole from the government, the tax collectors for King John (what gives it away is the “King” part) and gave the money back to the taxpayers, that is, the people from whom the tax collectors took the money. Robin Hood was not a socialist, he was a tax protestor.

Dennis Moore, the legend whose story is told by the Monty Python players, is the story of the real evil of government. Monty Python always had the best political humor. Who can forget the parody of worthless government bureaucracies as portrayed by Ministry of Silly Walks? But Dennis Moore is often forgotten. Dennis Moore, we are told, began to steal from the rich to give to the poor, but he never stopped stealing from his original targets. Soon the rich from whom Dennis Moore stole were poor, and so, according to Monty Python, Dennis Moore then stole from the poor and gave to the rich (“stupid b*tch” as Monty Python tells us).

That is the evil of government. Taxes are a form… Read More

In a recent column about the ineptitude and waste in the Los Angeles homeless industry run by the Los Angeles Homeless Services Authority (LAHSA), I wrote that one can only imagine what is going on at the state level given the findings from the local level. It turns out to be absolutely correct and worse than we thought. The further the government gets from the voters the less responsive they are, and the accessibility to the elected officials becomes ever lower. With the virtual disappearance of the Sacramento Bee and the shrinking of other newspapers’ bureaus in Sacramento, investigation into the state government has shrunk significantly. Add to that the state government’s one-party control with the buddy-buddy attitude of their friends in the press, we knew that there had to be mischief going down from our elected officials that was unreported. Ricardo Lara was elected Insurance Commissioner in 2018. He has essentially been involved in California government his entire career doing what many career governistas do – move their way up the ladder through many positions. He worked as a staffer for a few powerful members of the California State Assembly… Read More

According to recent reports, California lost 21,800 jobs in February and 11,800 jobs in March. Getting behind those numbers, the report is even bleaker. In March, the state lost 26,800 private sector jobs, but added 15,200 “taxpayer-funded” (read bureaucratic government jobs). Since March of 2024, California has lost 164,700 jobs in private jobs (like finance, manufacturing, professional and business services, information, construction, leisure, and trade), while adding 56,000 jobs in government and 155,000 in “health and private education.” The canary in the coal mine that will lead to California’s economic collapse is that private jobs are disappearing and government jobs are increasing.

We are told that California added 46,300 jobs since March of 2024. But look at the jobs. The private economy pays for the government. Government pays for government employees and most of the health care and education costs. So, we have been losing “government revenue increasing jobs,” and gaining increased government costs in employees, health and education. Almost all of this occurring before Trump took office.

We are on… Read More

This time of year is always interesting in Sacramento. The California State Department of Finance (DOF) is about to release its “May Revise” of the State Budget for the 2025-26 fiscal year. In the budget process, the May Revise is the last piece of information necessary for legislative approval of the budget. The DOF issues its report, usually around May 10, then the Legislative Analyst Office (LAO) issues its analysis of the May Revise, then the Legislature enters the final lap of approving the budget.

Up to this point, the DOF issued its January budget, and the LAO analyzed that document, and the Budget Committees in both houses of the Legislature have broken out into their subcommittees, and each subcommittee has studied the line items in their policy area of the budget, and approved or disapproved the “budget change proposals” (BCPs) from the various departments of the state government. The BCP is the request from the various departments for money in the next year’s budget. It is important to note that the budget subcommittees do not review the entire budget from the departments, only the BCPs. If the subcommittees in the two… Read More

President Trump’s working with Elon Musk, a very wealthy business leader and CEO of a few major businesses he created, has been front and center in the news for a few months now. This is not the first time that one of our Presidents cast their fate with a major business leader. This is all laid out in Tevi Troy’s delightful new book, The Power and the Money. Troy, a presidential historian, has written four previous books and decided this time to take a unique view of the Presidency. He looks at the past 27 Presidents beginning with U.S. Grant and the major business leaders with whom they have interacted. There are legendary names such as Ford, Rockefeller, and J.P. Morgan. There are more modern names such as Jack Welch, Warren Buffet, and Lee Iacocca. There are the current leaders such as Musk, Gates, Cook, and Zuckerberg. This is not dry material. It is filled with fascinating stories of interactions between Presidents and people who provided them unique advice regarding the economy at the time. My favorite story is about the indomitable Lyndon Johnson and Hollywood legend Lew Wasserman. LBJ began to rely on Wasserman for advice and wanted access to him at… Read More

Over the last several weeks, we have seen the Democrats in Sacramento flail away at trying to fix California. Whether it is the rampant crime, particularly in our large urban centers, or homelessness, which seems to be pervasive, some rational Democrats come up with solutions, only to be overwhelmed in their own caucuses in the Legislature. The Democrats in the California Legislature are owned by the interest groups that make money from government, whether its the enviros who use the regulatory system to extort money from anyone who needs a government permit to do business or “progressive” criminal activists who have some sort of Victor Hugo-type Les Miserables belief that criminals engage in criminal behavior because they need food, and not because they are bad people. The last two or three weeks in the Legislature have shown how broken the Democrat majority in the Legislature really is.

The first thing to understand about legislative politics are that the committees in the Legislature exist to protect the interest groups that fund and support the majority from government policies that are good for the public, but bad for the pocketbook of these… Read More

I am on vacation lying at the pool. I usually do not take much “beach” reading with me. This time no Connelly or Coben or Silva. A couple books to review that friends wrote, The Road to Serfdom (yes, I was shocked I had not read it), a Peter Drucker Book and a couple of lengthy biographies. Not your typical pool reading. Likewise included was the latest book by U.S. Supreme Court Justice Neil Gorsuch. I want to share a story in his book Over Ruled. He tells the story of Marty Hahne who at a young age became addicted to Houdini and decided to become a magician. As is typical with someone who does magic tricks, he had a rabbit; the first being Charlie then Casey. Everything was hopping along until 2005 when a woman with a badge approached Marty after a children’s show at a library in Missouri. She asked to see his license. Stunned, he said what license? “For your rabbit.” Marty stated, “I could understand if I was using a tiger, but I was using a bunny rabbit. A three-pound bunny rabbit.” The woman worked for the U.S. Dept of Agriculture. Congress had previously passed a law that people using animals for research must have a license.… Read More