I was wondering when some pragmatic souls in the California legislature would  step forward and give the voters what they asked for, a balanced budget with no tax or fee increases. Hopefully the legislators will present an accurate but conservative budget so that they do not have to go through this process again.

Reuters – Governor Arnold Schwarzenegger, optimistic California can finish its budget negotiations in a few days, is willing to reconsider his proposed cuts to education in hopes of averting a cash crisis, the San Francisco Chronicle said on Saturday.

California governor signals key budget concession (Reuters)
Sat, 04 Jul 2009 17:51:26 GMT

Clayton Williams stirred controversy during his 1990 campaign for governor of Texas with a botched attempt at humor in which he compared rape to weather. Within earshot of a reporter, Williams said: “As long as it’s inevitable, you might as well lie back and enjoy it.”

This week I was amazed that David Letterman would attempt a rape joke with a political twist. Almost immediately I was reminded of Mr. Williams fateful attempt at a rape joke. I was living in Texas at the time and it convinced me that Mr. Williams did not have the right stuff to be governor. Evidently a lot of voters agreed and the political career of Mr. Williams was over. When I looked up the quote on the Internet I found that there are people who have not forgotten the incident. My search turned up this 2008 post,  McCain Fundraiser: "Rape is like the weather" | Crooks and Liars. Its sad but both the NOW and I hope that people do not forget this botched attempt at humor for a very long time.

Last week’s code word was empathy. I made a mistake and spent a little time reading the comments on Volokh Conspiracy about empathy. When I was done my head was swimming and I was sure that this was another Obama word that is lost in translation. The chardonnay crowd thinks the word means a worldliness quality that a judge uses when the legal procedures do not lead to a neat and tidy decision. I cringe when I refer to judges and neat and tidy decisions in the same sentence. I do not think the average person shares this same understanding of the word. For the most part they are a lot more pragmatic group. Empathy is about winners and losers. If you are a white person in court case with a black person and the judge has “empathy”, you are screwed unless there is some obvious lapses in ethical behavior in preparing the legal case. A recent example of this is the Duke lacrosse rape case with the prosecutor, Mr. Nifong, and his supporters at Duke University. It is not much of a stretch to believe that their empathy for the alleged rape victim encouraged Mr, Nifong and others into unethical behavior. If you are a black person, you are finally going to finally get the benefit of the doubt that seemed to be routinely given only to white folks.

This week’s code word of the week is “complicated”. I heard a commentator say the New Haven court case was “complicated”. After a little research I figured out that the word must translate into “everyone get’s the shaft”. The New Haven case is a sad story with an ugly ending. On one hand the city, New Haven, tried to create unbiased system for determining whom to promote. They paid an outside contractor $100,000 to construct the test. Although they do not say it aloud, New Haven probably expected this extra expense was worthwhile if it was both fair to all parties and kept New Haven out of lawsuits. Well, the test did not work as expected. The minorities were under-represented in the test results. Confronted by a potential lawsuit by the under-represented minorities, New Haven felt obligated to throw out the test results and take their chances that the people who passed the test would not sue them. The people who passed the test and were now being denied their promotion sued. Without a doubt New Haven is the biggest loser in this sad affair. Everything went wrong and they are paying a very steep price.

One of the more interesting losers in this affair are the under-represented minorities. They failed to get enough people to pass the test so the city could avoid lawsuits. Now the city must re-design the test so a suitable representation of the minorities can pass the test. Yea, it will be a quota system in every way except by name. Those lucky few who do pass the second test will now suffer the stigma of a tainted victory and have the opportunity to work with bitter co-workers. Wow, I bet a few of them will wish they busted the books a lot harder before the first test.

In an unbiased world the people who passed the test would be the only winners. It ironic that of the three parties involved, these folks were the only folks who did their part well and their is no reward for a job well done. In this increasingly politically correct world, the failures of New Haven and the under-represented minorities demand that we fail the only party who did their part well. This reminds me of a King Solomon story about a child  that was claimed by two women as their child. Unable to break the deadlock between the two women, King Solomon threatened to cut the child in half. At this point the real mother stepped forth and gave up her claim so that her child would live. At last King Solomon had the proof he needed to identify the correct mother. This story is often repeated as an example of Solomon’s great wisdom. On the other hand we will never know whether King Solomon would have cut the child in half if the real mother had not committed the greatest sacrifice. In the New Haven case the courts have affirmed New Haven’s right to cut the child in half and we are all supposed to be happy. I guess this is what commentator meant by “complicated”.

Here is a strange thought. Considering that fiduciaries like Indiana are probably avoiding securities who are taking bailout money, is a federal guarantee of California debt a good thing or a bad thing for investors? If you are willing to view California as in the preliminary stages of bankruptcy like GM and Chrysler, you have to ask yourself if I buy some California debt will they treat me any better than they treated the Chrysler debtors? If your answer is no then it may be possible that a federal guarantee will require an even higher interest rate to overcome the increased risk that a federal intervention will leave you with a large loss. I suppose that fiduciaries outside of California are not very keen on California debt to begin with and the aspect of a potential loss from federal intervention in a bankruptcy proceeding probably make those securities really unappealing. It will be a very strange world if the only buyers for California debt is the US Treasury and CALPERS.

For nearly four-out-of-five U.S. voters, the problem is not their unwillingness to pay taxes. It’s their elected representatives’ refusal to cut the size of government.

Rasmussen Reportsâ„¢: The Most Comprehensive Public Opinion Data Anywhere

Once again I find the California budget crisis to be the most interesting news story not being covered. I guess that the lack of national reporting on this issue is for the greater good of the population. The people who did make comments about the failure of the California referendums to raise taxes sounded amazingly juvenile. They acted like there wouldn’t be any funding for the poor, education, or the myriad of state programs. This is not the first time a government had to cut or downsize programs but their responses made them sound like a kid who did not get all of the Christmas presents they asked for. The reality of the California budget crisis is that they still have a lot money to work with but it is less than what they are accustomed to. Since there is going to be less money the legislators are being forced to do the hard work assigning priorities to the programs and figuring which programs to cut. Some programs will be reduced. Some programs will be cut. Since businesses and families deal with this all of the time when the money is tight, it is understandable if the general population does not sympathize with the problem the legislators are facing.

The interesting aspect of this Rasmussen poll is that the political environment appears to have changed. The people are increasingly placing the blame of budget shortfalls on the politicians. I think the poll skirts around the more serious governing issue. I think many people are comparing how they have already made adjustments to deal with the recession with how various local and state governments are not making any adjustments. For a family who has already undertaken a family budget in an effort to cut down their credit card debt, it is difficult to grasp how the federal government’s complex solution of spending more and borrowing more is the appropriate response to this crisis. The California referendum vote loudly proclaims that the voters are not satisfied with a complex set of fee increases and taxes as a solution to the budget crisis. I think that this simple versus complex solution issue is at the crux of the Tea Party demonstrations. The federal stimulus package is a complex solution. The debt from the stimulus package is very easy to understand. The longer we wait for the vagaries of the stimulus package to resuscitate the economy and job growth,  the more appealing a simpler solution becomes to the voters. It may be unfair from the political class viewpoint to compare how a person handles their personal finances with how the government handles its finances but the people are increasingly voting to side with a simple solution they can understand. Get real, get simple, and balance the budget is the mantra at home. The question Rasmussen has not asked is, “If it works for me at home, why won’t it work for our government?” That presents a particularly thorny problem for a lot of politicians accustomed to selling the virtues of an increasingly complex set of government programs.