Seven years ago, when I was Deputy Commissioner of Corporations for the State of California, I can’t say that I anticipated a worldwide financial crisis as a result of sub-prime mortgage lending. But I did know that vulnerable populations were going to get sucked into dangerous financial transactions. Poor and middle-class families were going to suffer.
If there was one thing I wanted to achieve at the Department, it was educating the public about the perils and benefits of borrowing and investing. I put together a proposal called STOPP (“STatewide Outreach On Predatory Practices”), a $10 million education and enforcement program funded with the reserve the Department built up from licensing fees — in other words, no taxpayer money. Governor Gray Davis, to his credit, put my proposal in his budget:
Unfortunately, led by a legislator motivated, I think, more by ignorance than malice, a budget committee whittled the outlay to a few hundred thousand dollars. This despite the fact that the money could not be used for schools or electricity or anything other than costs associated with the Department’s mission, which is regulation of the financial industry. A couple hundred thousand doesn’t buy you much education in a state as big as California, so, as can be seen in the video at the top of this post, I focused our limited efforts on Latinos.
I was thinking about my time at the Department today because of the recent unveiling of a proposal to streamline the nation’s financial regulatory agencies. One of the explicit purposes of the plan, as reported by Edmund L. Andrews of the New York Times, is to “eliminate the inefficiencies of having 50 different state regulators, who have jealously guarded their powers and are likely to fight any federal encroachment.”
I’m as interested as anyone in getting rid of the patchwork quilt of standards that makes it hard for companies in any industry to do business in multiple states, but only if the national standards are strong enough. The standards with regard to securities weren’t strong enough in the Nineties, which is why it took the states to step in and police the market. The standards with regard to emissions aren’t strong enough, which is why Governor Arnold Schwarzenegger is suing the EPA.
I worry that the proposal to expand the Fed’s authority has more to do with protecting Wall Street than Main Street, but we’ll see how it all plays out. I still believe the best thing we can do for ordinary investors and borrowers is educate them. I just wish I could have done more to make that happen when I was in state government.
It’s not saying much, but Los Angeles is way ahead of San Francisco when it comes to a functional municipal legislative body. In the blogging department, however, as much as I appreciate the watchful eye our own bloggers keep on City Hall, only San Francisco has Melissa Griffin. A practicing lawyer who admits she spends way too much time watching San Francisco’s government channel, Melissa blogs with the voice of a Bill Maher crowd favorite and the reasoning of a Supreme Court clerk.
Here’s a recent excerpt from Melissa’s post on the San Francisco City Attorney’s opinion that Michela Alioto-Pier can’t run for reelection:
Last week, I saw a story in the Examiner about how City Attorney Dennis Herrera’s office issued an opinion letter saying that Supervisor Alioto-Pier is termed out and therefore ineligible to run for re-election in 2010.
Like a hug from my creepy Uncle Jabbo, something about that just didn’t feel right. My nerd alarm went off and I began to dig into this issue. (Spoiler Alert: As is sometimes the case, I disagree with the City Attorney’s office.) Allow me to lay the groundwork here:
According to section 2.101 of the San Francisco Charter:
“No person elected or appointed as a Supervisor may serve as such for more than two successive four-year terms. Any person appointed to the office of Supervisor to complete in excess of two years of a four-year term shall be deemed, for the purpose of this section, to have served one full term. No person having served two successive four-year terms may serve as a Supervisor, either by election or appointment, until at least four years after the expiration of the second successive term in office.”
Now, section 2.101 has been part of the City Charter since at least 1995 when the Charter was republished (and likely for much longer). And, as you can see, it contemplates a person being appointed to office and sitting there for more than two years. However, in 2001 voters (overwhelmingly) passed Prop C, which amended the Charter to limit the length of time an appointee to the Board (and some other offices) can serve before running for reelection. Specifically, appointees must now run for reelection within one year, but not less than 120 days, from the date of their appointment. So, it is now impossible for a “person [to be] appointed to the office of Supervisor to complete in excess of two years of a four-year term.”
Which brings us to the case of Supervisor Alioto-Pier. She was appointed to represent District Two in January 2004 to fill the seat left empty when Mistermayor was elected. Pursuant to the requirements of Prop C, she ran for reelection several months later, in November of 2004. Because Mistermayor had 2 years left on his term of office, the term that Alioto-Pier ran for and won was for two years. (She was re-elected in 2006.) Not even in my beloved bizarro world that is San Francisco could this be construed as being “appointed to the office of Supervisor to complete in excess of two years of a four-year term.”
It’s worth reading the rest here, even if only to wish your city government had a blogger who covered it like this. Melissa watches San Francisco government in action so we don’t have to. I’m very grateful.
The City by the Bay has a reputation for being a bastion of progressive politics, but you wouldn’t know it from the fight my dear friend Michela Alioto-Pier is having trying to make the board chamber wheelchair-accessible. John M. Glionna of the LA Times has the story:
What message, Alioto-Pier asked, does it send the disabled when the city’s highest perch of power is inaccessible to someone in a wheelchair?
She has promised to sue the city for its alleged violation of the Americans With Disabilities Act. And it wouldn’t be the first time she’s made such a threat: In 1993, as a domestic policy advisor to Vice President Al Gore, she successfully fought for wheelchair access to the White House.
Once you’ve taken on the West Wing Situation Room, she figured, it’s all downhill from there.
“This is worth the battle because it’s the law,” she said. “I don’t want to spend money that shouldn’t be spent. But if I need to get a judge to tell San Francisco what it should be doing, I’ll do it.”
…
[Mayor Gavin] Newsom chastised supervisors for requiring businesses to conform to state and federal disability access laws but acting as though they can ignore the laws themselves.
“This is demeaning to Michela and other disabled residents and I’m saddened by it,” he said. “Believe me, this ramp will be built.”
…
[Supervisor Aaron] Peskin suggested that supervisors could vote to permanently close off the president’s podium “as an artistic remnant of the way the city used to do business,” he said. “The sum cost to the city: zero.”
Alioto-Pier isn’t buying it. “After civil rights was achieved in the South, did they keep the separate black and white water fountains as a monument to the way we used to do business?” she said. “Implementing civil rights laws is never easy. But it’s worth it in the end.”
Colombian superstar Juanes heard about the recent saber-rattling in Ecuador, Venezuela and his own native country. So he decided to make a statement: a concert called “Paz sin Fronteras” (”Peace Without Borders”) on the border between Colombia and Venezuela.
As can be seen in the photo above, many Latin Americans joined him in making this statement. (As did a Spaniard, the inimitable Miguel Bosé!) Who says rock and roll can’t change the world?
Among the many reasons I’m not excited about either of the Democratic candidates for president is that they have caved on free trade. Governor Richardson was prepared to take the political risk of standing strong on trade in a Democratic way — the only way to create a win-win for American workers, developing countries, the environment, etc. But that’s a story for another day.
Believing in free trade does not mean accepting it as perfect, taking a laissez faire approach and letting the chips fall where they may. There is much that governments, companies and non-profits can do to build trust and minimize dislocation. In the U.S., one example is retraining workers whose jobs go overseas. An article about Guatemalan farmers supplying Wal-Mart in today’s LA Times brought to mind another proactive tool to make free trade work: technology.
The article, written by Marla Dickenson, describes some of the problems involved with reconciling high-tech supply chain magic and rural farmers in poor countries:
Among the biggest challenges is building trust. Nearly four decades of civil war ended in 1996, but it left Guatemala’s countryside bristling with social tension. Land disputes are common. Farmers are accustomed to contentious relationships with produce wholesalers, who buy their harvests.
Known here as coyotes, these middlemen often take advantage of farmers’ need for quick cash by paying them a fraction of the true market price, said Douglas Ovalle, who is coordinating [the Inclusive Market Alliance for Rural Entrepreneurs project]. The result is that farmers have no experience with binding commitments and feel little loyalty.
“If someone offers them 5 quetzales [about 65 cents] more, they’ll sell to them,” Ovalle said. “It’s going to be a challenge to change that mind-set.”
That passage brought to mind a story from C.K. Prahalad, author of The Fortune at the Bottom of the Pyramid. In it, he describes subsistence soybean farmers in Madhya Pradesh, India, being completely at the mercy of the mandi, the equivalent of Dickenson’s coyotes. Farmers had little choice but to bring their harvest to the nearest mandi and sell for whatever the mandi would give. The farmer, Prahalad writes, “was for all practical purposes a semi-indentured supplier to the mandi close by.” In order to ensure a steady supply of high-quality soybeans to its processing plants in India, a British company (ITC) installed a network of computers (”e-Choupal”) across the region, one in each farming village. A successful farmer in the region was trained to use the computer, by which he could share the going rate for soybeans at all the mandis in the area with his neighbors. Armed with this information, local farmers could decide when and where to sell their crops. Since the mandi created inefficiencies for ITC as well as the farmers, both the British company and the Indian farmers came out ahead.
Just as technology helps Walmart cut costs, it can help farmers in developing countries make a better living. Prahalad writes:
ITC’s e-Choupal takes the idea of explicit contracting and transaction governance capacity a big step forward. By providing access to information that the farmers can independently obtain, the system changes the inequities that the extralegal and the quasi-legal systems impose on BOP consumers and producers in developing countries. ITC still pays the taxes due to the government as if the trade did take place in the mandi. The government is happy with revenues. The traders are likely to be unhappy, as their ability to coerce farmers into selling at the price that they decided in the auction is getting eroded. The most telling comment was from a farmer on video by the researchers:
“I did not even know how to hold a mouse.”
Four months later:
“Even if they take the computer away, we will buy one. We need net connectivity.”
That summarizes is all.
It also summarizes the kind of forward-looking thinking we need from Democrats. Not “dump NAFTA.”
I get asked all the time who I like, Hillary or Obama. I always answer Richardson. So whether Obama pulls Texas out of his hat today doesn’t matter much to me. But I’m happy to highlight Joe Cutbirth’s examination of Obama’s Texas strategy in today’s Huffington Post because of the light it shines on my pal James Aldrete:
Write it down. Stamp it. Earmark it, and commit it to memory.
If tracking polls hold, Barack Obama should clench the Democratic presidential nomination on Tuesday by carrying the popular vote in Texas. And if that happens, it’s going to be largely due to the media campaign and placement strategy crafted for him by Aldrete, 41, the most talented political ad man of his generation in Texas.
Some of my best friends are media consultants born in the Sixties, all capable of winning any race at the highest level. I wish they were already in charge. James is in that category. But if Latino votes are the obvious key to a win, then Aldrete is an obvious choice. Even many Latino consultants peddle occasionally self-interested and often stupid strategies when it comes to communicating with Latino voters. Aldrete is one of the few who gets it right. In Spanish and in English.
I have long thought that generation is the key to understanding the political behavior of ethnic voters in the United States. Immigrants may identify strongly with one party over another (like Cubans with Republicans or Puerto Ricans with Democrats), but later generations all move to the mean. Cuban immigrants, for example, may be single issue Fidel Castro voters and therefore Republicans, but their children and grandchildren are more worried about education and health care and are therefore open to Democrats. Mexican immigrants, to use another example, start off strongly Democrat, but later generations start worrying about red-blooded U.S. issues like taxes and are more likely than their parents to consider Republicans.
Since they first began arriving in the U.S. after fleeing Vietnam’s communist regime in the 1970s, Vietnamese immigrants — much like the Cuban refugees who settled in Florida — have developed a political profile that is almost monolithically Republican, identifying with the party’s historic anti-Communist stance.
Now, after years in which they were eclipsed by their more dominant Republican counterparts, Vietnamese Democrats are beginning to emerge in Orange County, home to the nation’s largest Vietnamese American community with a population of more than 150,000.
Some observers have speculated that simmering tensions between Latinos and African-Americans will hamper Barack Obama’s efforts to secure Latino votes in California and elsewhere. As evidence, these commentators point to academic sociology studies as well as lower-level elections in Texas and Florida.
I believe that what stands in the way of Barack Obama and the Latino vote in California is not ethnic tension but rather Hillary Clinton’s head start. The graph above shows where Clinton and Obama were with Latino voters in California who had just participated in the November ‘06 elections. Clinton’s name recognition was 94 percent, with 56 percent of Latino voters viewing her positively and 22 percent negatively. Meanwhile, Obama’s name recognition was only 45 percent, but more than 4 times as many Latino voters viewed him positively (26 percent) as negatively (6 percent).
In my mind, the following two ideas are not mutually exclusive:
1. Many working-class blacks and Latinos are competing for an ever-shrinking slice of the economic pie, and
2. Latino voters are open to the idea of voting for Barack Obama.
One reason I think they are not mutually exclusive is because many of the competing Latinos are not citizens, let alone voters. According to the Census, only 39 percent of Latinos in the United States are eligible to vote and only 13 percent reported voting in 2006. The Latinos who vote in presidential primaries are not undocumented immigrants packed into migrant farmworker housing. Instead, they tend to be U.S.-born English-speakers moving up the socioeconomic ladder.
What voters want and expect from presidential candidates is very different than what they are looking for in municipal candidates. Obama’s resources will give him the opportunity to make his case to Latino primary voters who are open to what he has to say. His challenge is much less his ethnicity than the fact that Latino voters in California already like Clinton and, if the stories from yesterday’s Nevada caucuses are any indication, she is speaking to Latino voters about the issues that matter to them. As J. Patrick Coolican and Michael Mishak of the Las Vegas Sun reported:
This was evident in Clinton’s campaigning the past 10 days, when she aggressively courted Hispanics and hit the issues they cared about. Lately, that means the economy and the mortgage foreclosure crisis, which is hurting working-class Hispanics especially.
The LA Times has run two stories recently about Mayor Antonio Villaraigosa’s political future. Today’s story quotes a professor from my wife’s alma mater:
“His political capital is a lot like the California housing market. It has taken a hit lately,” said Jack Pitney, a professor of government at Claremont McKenna College. “Politically he still has an impressive house, but the house isn’t what it was a year ago.”
The graph above shows Villaraigosa’s political capital in a survey I conducted earlier this month with 406 likely 2009 voters in Los Angeles (±5 percent margin of error). Having worked for candidates running against Villaraigosa twice in the past, I’ve never been a member of his fan club. On the other hand, once he won election I very much wanted him to succeed as mayor — having called this area my home most my life, I do love LA. All to say, I look at those numbers and think Professor Pitney has got it right.
