What We Could Build With $64 Billion

AUDIO: A discussion of more useful infrastructure projects that could be funded with the $64 billion that is currently budgeted for the “Bullet Train” in California – 14 minutes on KFI Los Angeles – the John and Ken Show.

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Keeping Friends in the Age of Trump

AUDIO: Life behind the Blue Curtain – 13 minutes on KABC Los Angeles.

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The Opportunity Cost of High Speed Rail

AUDIO: A discussion of more useful infrastructure projects that could be funded with the $64 billion that is currently budgeted for the “Bullet Train” in California – 8 minutes on KOGO San Diego – the Carl DeMaio Show.

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How California’s Leftists Are Puppets of the Plutocrats

AUDIO: A lively discussion on pensions, pension fund solvency, and how leftists are being duped by oligarchs – 30 minutes on KUHL 1440 Santa Maria (Central Coast) – the Andy Caldwell Show.

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The Politics of Residential Water Pricing

California’s consumers already endure tiered rates for electricity consumption, where if their electricity consumption goes beyond approved levels, they pay more per kilowatt-hour. At least with electricity, there is some rationale for tiered pricing, because when demand exceeds capacity the utility has to purchase power from the grid at the spot market rate. But in the case of water that’s a much harder case to make. Water prices are negotiated far in advance by water utilities.

The reason utilities want to charge tiered rates is so they can discourage “over-consumption” of water, in order for them to avoid running out of water during times of severe drought. What happened repeatedly over the past few years was that suppliers to many regional water districts could not meet their contracted delivery obligations. Understandably, water districts want to reduce total annual consumption so, if necessary, they can get by with, for example, only 60% of the amount of imported water they would otherwise be contractually entitled to.

Punitive rates for “overuse,” however, will effectively ration water, as only a tiny minority of consumers will be wealthy enough to be indifferent to prohibitively high penalties.

There is a completely different way for water districts to address this challenge. An optimal solution to California’s water supply issues should incorporate not only conservation, but also increasing supply. And to fund new supplies of water, utilities should experiment with tiered pricing that only incorporates moderate price increases. Doing this would mean a large portion of consumers will […] Read More

Where Are Tax Increases Going?

AUDIO: Where are tax increases going? A report on 2015 data on average California public sector worker pay and benefits at city, county, and state agencies – 25 minutes on KOGO San Diego – the Carl DeMaio Show.

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Why California’s Global Warming Solutions Act is Misguided Policy

California policymakers are expanding their war on “climate change” at the same time as the rest of the nation appears poised to reevaluate these priorities. […] Read More

California’s Voters Just Approved $5.0 Billion in New Taxes Per Year

AUDIO: If public pension funds were subject to the ERISA rules that govern private pension systems, last year’s total payments into these funds would have been $37 billion short of what is necessary to keep them solvent in the long run – 8 minutes on KABC 740 Los Angeles – the Doug McIntyre Show.

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How Much Water Went Into Growing the Food We Eat?

The average household purchases a relatively trivial amount of water from their utility, when compared to how much water they purchase in the form of the food they eat. For this reason, reducing residential water consumption will not make much of a difference when it comes to mitigating the effects of a prolonged drought.

To illustrate this point, it is necessary to determine just how much water is available to Californians, and how much of that water is being consumed by residential households in California. When making this analysis, one must not only estimate how much water California’s households purchase from their utility, but how much water is embodied in the food they eat.

TOTAL ANNUAL WATER SUPPLY AND USAGE IN CALIFORNIA

Here’s a rough summary of California’s annual water use. In a dry year, around 150 million acre feet (MAF) fall onto California’s watersheds in the form of rain or snow, in a wet year, we get about twice that much. [1] Most of that water either evaporates, percolates, or eventually runs into the ocean. In terms of net water withdrawals, each year around 31 MAF are diverted for the environment, such as to guarantee fresh water inflow into the delta, 27 MAF are diverted for agriculture, and 6.6 MAF are diverted for urban use. [2] Of the 6.6 MAF that is diverted for urban use, 3.7 MAF is used by residential customers, and the rest is used by industrial, commercial and government customers. [3]

Put another way, we […] Read More

Who Wins and Who Loses in the Bubble Economy?

Earlier this month the California Policy Center released a study that 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 their most 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 overvalued today: Whenever new bonds are issued at lower fixed rates of interest than the bonds that were issued before them, then those older bonds that pay higher fixed rates of interest can be sold for more money than their original price. This is because on an open market, buyers will price a resold bond at a value calculated to equalize returns. When rates go down for new bonds, the prices for existing bonds go up. The problem is that back in the 1980’s, bonds were being issued at rates as high as 16%, and today, they’re being issued at rates close to zero. After a […] Read More