** IF YOU’RE NOT LOOKING AT A CALIFORNIA TV CHANNEL, THE ARNOLD SCHWARZENEGGER STATE OF THE STATE IS LIVE AT 5:05 PM PACIFIC TIME ON THIS WEBCAST. I’ve been inundated with material, conference calls, and interviews today.

This would be a very expansive agenda, on familiar topics for NWN readers, for a Democrat, much less a Republican.

** SENATOR JOHNSON’S CONDITION NOW FAIR. The condition of Senator Tim Johnson, whose serious illness for a moment or two caused the Democrats’ newfound hold over the U.S. Senate to seem imperiled, and caused some glee on the right, with some bloggers predicting his demise or total incapacitation, has been upgraded by his doctors to “fair.”

** SCHWARZENEGGER ADMINISTRATION WEBCAST ON NEW GLOBAL WARMING STANDARDS FOR TRANSPORTATIONS FUELS. Live at 11 AM today. Schwarzenegger won’t participate himself, as he’s preparing for tonight’s State of the State address and keeping off his feet, per doctor’s orders. According to the Governor’s Office, Schwarzenegger will “establish a groundbreaking Low Carbon Fuel Standard (LCFS) for transportation fuels sold in California. By 2020 the standard will reduce the carbon intensity of California’s passenger vehicle fuels by at least 10 percent.  This first-of-its kind standard will support AB 32 emissions targets as part of California’s overall strategy to fight global warming.”

** REACTION TO THE SCHWARZENEGGER HEALTH CARE PLAN. The reaction is pouring in, fast and in some cases furious, to Governor Arnold Schwarzenegger’s health care plan. In what’s known as dramatic foreshadowing, noted weeks ago, Team Arnold had been talking up the themes of “shared responsibility” and “hidden taxes.” Shared responsibility meaning the need for all, including businesses not providing health care, to contribute to the solution. Hidden taxes meaning that Californians pay extra because of the lack of coverage for the uninsured, who nonetheless receive health care in hospital emergency rooms. About one in five Californians has no health insurance, the most of any big state.

Hence the underlying reality behind the formal unveiling of the proposal. There would be employer mandates to provide health insurance or, failing that, to pay into an insurance pool. Everyone will be required to have health coverage. Illegal immigrants would also be required to have health insurance, since they get expensive care anyway in hospital emergency rooms for which they don’t pay. (1994’s Proposition 187, which would have prevented this, was thrown out by the courts.)

From the right came cries of betrayal, about employer mandates amounting to a tax, especially if the employer does not provide health insurance and is then required to pay 4% of payroll into the state insurance pool. There was also great anger about the provision of health insurance to illegal immigrants — known in the more rightward precincts as “criminal aliens” — notwithstanding the fact that they can already get that health care, albeit at higher cost to the general public.

From the left, there was also denunciation. The AFL-CIO said that the 4% of payroll opt-out fee is too low. The California Nurses Association denounced anything short of its “single-payer” state-run health system. Others said that it’s a bonanza for insurance companies. But Schwarzenegger would require that 85% of health insurance premiums go to the provision of health care. And that insurrance companies provide coverage for all, regardless of pre-existing conditions.

A somewhat torturous path ahead seems likely. Democratic legislative leaders, who were mostly pleased, say the plan can be passed on majority votes of both houses of the Legislature. If so, the anger on the right is mostly irrelevant. That assumes, of course, that the employer mandates and fees are not viewed as taxes. A not dissimilar plan, SB 2 by retired state Senate leader John Burton, passed on majority votes and became law. It was only knocked down when it was narrowly defeated in a 2004 referendum. Following the late intervention against it of … Governor Arnold Schwarzenegger.

** Monitor computer memory prices on a daily basis. Prices are mostly stable.

** Track global and national energy prices in near real time via Bloomberg. Crude oil prices have dropped to $53 to $54 per barrel on milder than normal winter weather throughout much of the US.

January 9th, 2007

Westly Talks About The Future


2006 California gubernatorial candidate and ex-eBay honcho Steve Westly talks
new tech and the future.

Meeting on the day that his successor, John Chiang, was sworn into office, former California state Controller Steve Westly talked about the future, in general and his own. The ex-eBay honcho ran a near-miss campaign for the Democratic gubernatorial nomination last June. Now he’s going back into the technology business and looking to the future with a political action committee.

“I want to help young entrepreneurs build the companies of the future,” says Westly, “find the next eBay or Google in clean tech. We’re looking at firms in the solar area, in cars, in biofuels, all aimed at reducing global warming, increasing global security, and making California the leader again.”

Is another campaign for high office by the super-rich center/left Democrat in the cards? It certainly seems so.

In addition to new technology ventures and philanthropic activities, Westly’s next moves take the form of a political action committee, the California Leadership Committee. Westly’s CLC will focus on helping candidates from emerging communities (in terms of ethnicity and sexual preference) and moderate business types. In addition to financial help, Westly’s PAC will provide candidate skills training.

The former Stanford lecturer made some moves toward the end of his term as state controller before making his move to the next phase of his career. After pushing successfully to reinstitute the Ready Returns program, in which simpler tax returns are filled out using a state program if the taxpayer wishes, a program that had been killed by heavy lobbying from Intuit, the tax software maker, Westly moved against “alcopops,” a key source of teenage drinking, and in favor of investing in emerging markets. Alcopops are flavored drinks like Smirnoff Ice and Bacardi Silver, made with and marketed as distilled spirits, but taxed like beer. Westly got the tax board to move to change that.

On the powerful CalPERS (California Public Employee Retirement System) board, Westly finally got fellow board members to go along with investing in companies in emerging markets like China, Brazil, and Russia, so long as the companies meet social and environmental standards, as many do. “If you look at the indexes,” says Westly, “we’ve been losing $300 million a year for retirees by not investing in such companies.” CalPERS, influenced by organized labor, had previously declined to invest in such markets.

Westly himself improved dramatically as a candidate during the primary past, from his test market tour of rural Oroville and Chico at the beginning of February when the brand-new New West Notes checked out the new gubernatorial candidate, to the end of the primary campaign, when he was a pretty polished performer. In addition, his campaign was full of smart, technosavvy young people. I recall one of them, over a year ago, telling me about an event he’d shot on video, saying that he would “YouTube it.” Good idea, I replied, then quickly looked up the term to see what he was talking about.

For someone who spent tens of millions of dollars from his personal fortune and took a very slight lead into election day only to come up short, Westly is in remarkably good spirits. Perhaps that’s because he saved $40 million likely spent on what would have been a tough general election campaign against Governor Arnold Schwarzenegger.

Kidding aside, the former Stanford business lecturer is a generally sunny character. He was a good party soldier and helped Phil Angelides, campaigning for him around the state, including the Central Valley, where Angelides seldom ventured, and was on hand for that notorious rally at which 2004 Democratic presidential nominee John Kerry made his backfiring joke about poor students ending up stuck in Iraq. He also helped John Garamendi in his tough campaign for lieutenant governor against state Senator Tom McClintock, the state’s top conservative pol, as well as moderate Democrats Nicole Parra, running for re-election to the state Assembly in Bakersfield, and Lou Corriea, seeking a Senate seat in Orange County, all of whom won. He lobbied Schwarzenegger, with whom he has an amiable relationship, to sign another bill combating global warming, Bay Area Assemblyman Joe Nation’s AB 1012, which would require half the new vehicles sold in California to run on alternative fuels by 2020. (Schwarzenegger vetoed the bill but has since said he is interested in another version of the bill.) And he co-chaired the two winning transportation initiatives on the November ballot, Propositions 1A and 1B.

With regard to what might have been, I’m not aware of any high-ranking Republican strategist who does not think the governor’s race would have been a more difficult proposition for Arnold Schwarzenegger had Westly been the Democratic nominee.

** Governor Arnold Schwarzenegger and company will unveil and discuss his health care plan in this live webcast at noon today.
NOTE: I’m traveling most of the day today.

** New California Secretary of State Debra Bowen will be sworn in today during this 2 PM live webcast.

** Monitor computer memory prices on a daily basis. Prices are up on a few cheaper memory configurations.

** Track global and national energy prices in near real time via Bloomberg. Crude oil prices continue near two-year lows thanks to a warm winter overall.


Schwarzenegger: Scenes from an Inaugural. *

The reviews are coming in on Governor Arnold Schwarzenegger’s inaugural address on what he says is the need for a new post-partisan politics of the creative center and they are generally quite good across the board, with the notable exception of the distinctly rightward precincts of the Republican Party.

There the response has ranged from sulky to outraged among right-wing activists, bloggers, pundits, and safely gerrymandered politicians.

A critical reaction from some of the left will come as well, as the rubber meets the road. For example, the former action superstar is proposing to cut welfare payments to families failing to meet the law’s work requirement or which are here in Californian illegally. That move would save nearly half a billion dollars a year. Schwarzenegger officials say it would also stave off hundreds of millions in penalties from the federal government.

Under the national welfare reform of the 1990s, adult recipients are to engage in work activities. But California has one of the lowest rates of recipients meeting the work requirement in the country, only 25%. Liberal Massachusetts, in contrast, has over 60% meeting the work requirement.

Here is how the state government describes the program: “CalWORKs gives cash aid and services to families with eligible needy children deprived because of the absence, disability, or death of a parent or unemployment of the principal earner when both parents are in the home. Needy caretaker relatives of a child receiving either Foster Care or Supplemental Security Income/State Supplementary Payment Program benefits may also be eligible for cash aid.”

Democratic legislative leaders are already criticizing the move, as Assembly Speaker Fabian Nunez and Senate President Pro Tem Don Perata note that the governor will propose as part of his comprehensive health care plan that illegal immigrant children receiver health care even as he is proposing that their families have their welfare payments cut.

Nevertheless, the real dissatisfaction with Schwarzenegger’s post-partisan centrism is on the hard right. Conservative blogger Jon Fleischman’s Flash Report, for example, echoed with utterances of betrayal. Orange County Register writers erupted in the same vein. Schwarzenegger never mentioned the word “liberty” in his second inaugural address. He didn’t thank the Republican Party for his re-election.

Schwarzenegger, as it happens, got 92% of the Republican vote last November. But it wasn’t all, or even mostly, because most Republicans simply disliked Democratic candidate Phil Angelides.

Most Republican voters agree with Schwarzenegger on the issues.

For example, if you listened to the activists, pundits, and conservative politicians elected from carefully gerrymandered districts, you would think that even having a minimum wage in California, much less raising it, is socialism.

But the truth is that most Republican voters not only support the minimum wage, but agree with Schwarzenegger that it should be raised.

Similarly on the greenhouse effect. It is a staple of right-wing punditry to claim that greenhouse gases are not causing climate change. But most Republican voters disagree. They support Schwarzenegger’s moves against global warming, by an overwhelming margin.

There’s more in this vein, on other issues, but you get the gist. The polling on such matters is very clear.

The folks on the right didn’t much like having Willie Brown emcee the Schwarzenegger inaugural, either. They, like some in the press, seemed to think that a friendship between the two men is a new development. It isn’t. They’ve been friends for years. On the NWN video accompanying this column, you’ll hear Brown joke with the inaugural guests about warning Schwarzenegger long ago that he shouldn’t become governor because the state is ungovernable. And he should know, joked the legendary former Assembly speaker and San Francisco mayor, because he’s done so much to make it that way.

Actually, Brown frequently worked closely with then Republican Governor Pete Wilson on a variety of matters. But even Wilson, who is more conservative than Schwarzenegger, was nothing like a favorite of the right.

Now they have a very popular governor to deal with who is not only disagreeing with their core tenets but promoting his views nationally and globally. Since California is a mostly, though hardly entirely, as partisans of the left have learned to their chagrin, Democratic state to begin with, it will make for an interesting dynamic.

The thing to keep in mind is this. While Schwarzenegger’s politics may have some tough sledding ahead in the inside baseball of the state Capitol and the two established political parties, it is much more popular with the people than either of their hardcore messages.

* NOTE: All video is shot handheld. Most of this video was shot, due to crowding, holding the camera over my head, looking at an angled LCD display to determine the shot.

** JOE BIDEN SAYS HE’S IN THE PRESIDENTIAL HUNT. Veteran Delaware Senator Joe Biden said this morning that he’s setting up an exploratory committee to seek the Democratic presidential nomination. Biden is the new chairman of the Senate Foreign Relations Committee, and has already traveled to the early Democratic contest states of Iowa, Nevada, New Hampshire, and South Carolina. He’s a strong opponent of the troop “surge” strategy in Iraq, and has promised extensive early hearings by the Senate Foreign Relations Committee on the collapsed Iraq policy. A definite dark horse, and not a man with a small ego, as it were, but skilled nonetheless.

** ARNOLD WANTS TO MOVE UP THE CALIFORNIA PRESIDENTIAL PRIMARY. In an item for the magazine’s Periscope section, Newsweek’s able Karen Breslau reports, as NWN has previously reported, that Governor Arnold Schwarznegger wants to move the California presidential primary from June to February. It’s one way in which he aims to influence the 2008 presidential election, in which he cannot run himself, having been born in Austria.

As readers know, the schedule has been altered on the Democratic side, adding Nevada — where I’m going later this week — to the early mix, in between the perennials of Iowa and New Hampshire. The Republicans have lagged on changing the schedule. Putting California up near the front of the pack would advantage big name and big money candidates. Though of course precisely who would be advantaged would be determined by where exactly California was in the process and who had done well coming into California.

Polls can change with lightning-like rapidity in presidential primaries, depending upon circumstance. But in my judgment, Hillary Clinton would be the most likely beneficiary of an early California primary on the Democratic side. On the Republican side, both John McCain and Rudy Giuliani are likely beneficiaries. Perhaps Giuliani more so. McCain is better organized than Giuliani, and organization accounts for more in the very early states. California could give Giuliani the opportunity to recoup and trump any early defeats at McCain’s hands. Or it could clinch the nomination for McCain, who also has strong appeal in the Golden State.

The former action superstar appears to have more key associates with McCain than with Giuliani. Yet he also appears to have better chemistry with Giuliani than with McCain. McCain did try to help Schwarzenegger salvage part of his “Year of Reform” special election initatives agenda in 2005, campaigning with him for redistricting reform.

Changing the primary date would require a two-thirds vote of the Legislature. Right now, I’d say that’s an uphill equation.

** 7 TO 24. No, it’s not a score from the NFL playoffs. Seven days till the season premiere of NWN’s official show, 24.

** CALIFORNIA INAUGURAL COVERAGE CONTINUES! Yes, it’s true. Inaugural festivities are not over yet. More coverage coming of the inauguration of Governor Arnold Schwarzenegger.

Plus, NWN will cover the inauguration of new Lieutenant Governor John Garamendi tomorrow. And new Attorney General and former Governor Jerry Brown on Monday. As well as, perhaps, the inauguration of a certain Austrian-born gentleman, also on Monday.

** ARNOLD’S DANCE MOVES. You already saw them, in the NWN video below. Those were the only dance steps Governor Arnold Schwarzenegger took on his big inaugural day. He moved slowly onto the stage for his inaugural ceremony on his new crutches, which he set aside while sworn in ceremonially by state Supreme Court Chief Justice Ron George. First Lady Maria Shriver helped him stand while he took the oath, using an old family bible from Austria, circa 1878. Schwarzenegger, who entered to the soaring, noble strains of Aaron Copland‘s “Fanfare for the Common Man,” did a good job delivering a very well-received inaugural address, but the strain from his painful injury was evident on his face. This speech, incidentally, is better, and was better delivered by Schwarzenegger, than his first inaugural.

While last night’s Inaugural Ball, dubbed the “California Dream Celebration,” was closed to the press save for a brief pool report (a pool report is when one or two reporters are ushered in briefly to report what was said in the main appearance for public consumption and gather factoids like the menu and who was wearing what, which is then sent out to the rest of the press so their stories are knowledgeable), reliable sources say that Schwarzenegger’s appearance there was a cameo affair. He sang a few lines of Paul Anka‘s customized version of the Frank Sinatra standard “My Way,” and thanked the crowd, which had no access to him at the splashy black tie gala (tickets $500 a pop). Maria Shriver, as she did at the environmental festival which Schwarzenegger had to skip on Thursday, reportedly picked up the slack, later boogieing on stage during Donna Summer‘s hour-long set.

This is all understandable, given the severity of Schwarzenegger’s broken femur during a pre-Christmas Sun Valley skiing mishap. But the accident cast a decided damper on the proceedings.

Despite multiple press reports about this Schwarzenegger inaugural being much bigger and glitzier than the first one, three years ago after the great California recall election of 2003, that’s simply wrong. The first one was much bigger and there were many more stars on hand. Remember, just because things are not advertised does not mean that they are not happening.

That said, Willie Brown was a big upgrade at the master of ceremonies spot over three years ago. It’s too bad he didn’t perform the honors at that massive outdoor ceremony. He certainly might have, given his longstanding friendship with the governor-elect (and yes, I’ll get to some stories about that, notwithstanding that erroneous LA Times report a few days ago that they became friends after Schwarzenegger was elected governor.) That inaugural was live on TV in many parts of the world, including Russia and Japan. Unfortunately, the emcee of the time was a Sacramento TV anchor who talked like a local booster. How about those Kings?

** WILLIE’S SHOW. Inaugural emcee Willie Brown, the legendary Democratic power broker who served a record 15 years as speaker of the California Assembly and eight years as mayor of San Francisco, got off some good lines yesterday presiding over the inauguration ceremony of Republican Governor Arnold Schwarzenegger. I’ll quote a few in a column. But he also had some miscues, which he’s smooth enough to glide over. Mostly.

Brown did not participate in any run-through for the inauguration ceremony. As a result, he missed two stage cues. In addition, Brown, whose poor eyesight years ago caused him to give up driving the flashy sports cars he long favored, managed to get the names of no less than four dignitaries wrong while introducing them. He mispronounced the last names of Assembly Speaker Fabian Nunez and incoming state Insurance Commissioner Steve Poizner, called Assembly Minority Leader Mike Villines “Steve,” and, somehow, mispronounced the first name of San Francisco Mayor Gavin Newsom. He called Newsom, the rising Democratic star he’s known since he was a child and backed to be his successor as San Francisco mayor, “Galvin.” (Newsom’s father, Billy Newsom, was a Jerry Brown-appointed state appelate court justice, close to the Brown family and a fixture in San Francisco political circles.) The preternaturally cool Brown later noted to an associate that he was actually somewhat nervous. Glad to hear it.

** Track global and national energy prices in near real time via Bloomberg. Crude oil prices moved slightly upward to $55 to $56 per barrel on word that OPEC may try to curtail production in an attempt to raise prices. The price is near a two-year low, in recent weeks due to warmer than normal weather in much of the US.

** SCHWARZENEGGER’S “POST-PARTISAN” INAUGURAL. Yes, the governor’s inaugural ceremony went off without a hitch, albeit with a hitch in his giddyup, as did the private luncheon afterward. (I was shooting video throughout the inaugural.) I’m a bit on the run here, and will have a fuller report tomorrow morning but here are some telling passages from Arnold Schwarzenegger’s second inaugural address, in which he called for a politics of the post-partisan creative center. His inaugural address followed the themes and reasoning of my earlier preview below.

Faith and hope are two qualities that are in short supply in the world right now. When I was a boy in history class in Austria, we learned about the Fertile Crescent, that region of the Near and Middle East where agriculture first flourished. 
 
Today, the region is fertile with bloodshed and hate. Further south in Africa is a place of genocide called Darfur. Imagine the terror of running for your life, but not knowing where to run to escape the killing, the disease, the hunger. There are such deep divisions in our human family. 
           
And yet here in this nation-state of California , people from all over the world live in harmony. I call California a nation-state because of the diversity of our people, the power of our economy and the reach of our dream. Every race, every culture, every religion has been drawn to California . The commerce and trade of the nations of the earth pass through our ports. The world knows our name. We are a good and global commonwealth. Yes, we have problems that must be solved. But, it remains true . . . what a prosperous, peaceful, golden state in which we live and work and raise our families. We should never forget the joys and blessings of being Californians. …
 
In the 2005 special election, I took the wrong approach in trying to do these things.  But in my failure, I rediscovered my original purpose. Like Paul on the road to Damascus, I had an experience that opened my eyes. And what was it that I saw? I saw that people, not just in California, but across the nation, were hungry for a new kind of politics, a politics that looks beyond the old labels, the old ways, the old arguments.
 
The California historian Kevin Starr says that we must think of ourselves as belonging not just to the Republican Party or the Democratic Party . . . but to the Party of California . . . because California is a collective ideal worth preserving. The Party of California is beyond ideology and one to which all of us belong.
 
There are growing numbers of independent voters in this state. In fact, if the current trend continues, they will outnumber each of the major parties in 20 years. They like some Republican ideas. They like some Democratic ideas. They think some Republican ideas are too far right.  They think some Democratic ideas are too far left. And they rightly know that if you stick to just one party’s proposals you miss half the good ideas. …
 
Consider the danger of global warming. Imagine your child is sick with a rising fever.  If 98 out of 100 doctors said the child needed immediate treatment . . . and two doctors said the child was just fine . . . who would you listen to? The 98 or the 2?  Should we do nothing about global warming on the slim-chance a few skeptics who deny its existence may be right? No, we should not.
 
So this last year California passed the world’s most comprehensive plan to reduce greenhouse gases. Why? One.  Because it’s the environmentally moral thing to do.  Two.  Because, although the United States represents only 5% of the world’s population, we emit 25% of the greenhouse gases. And three.  Because California genuinely has the power to influence the rest of the nation, even the world.  
 
Now, capping emissions—the government stick approach—by itself could harm our economy, so we created a free-market system to trade emissions. By turning carbon into a commodity and trading it as a financial derivative, we have harnessed the self-interest of capitalism to heal the environment. And with the power of California ’s trillion dollar economy behind us, we have set something else in motion. We become the best place in the world to invest in new, green technologies. In time, this will further strengthen the foundation of California ’s technological economy.
 
Ladies and gentlemen, we face important issues that should unite us. I believe we have the opportunity to move past partisanship . . . past bi-partisanship . . . to post-partisanship. Post-partisanship is not simply Republicans and Democrats each bringing their proposals to the table and working out differences. Post-partisanship is Republicans and Democrats actively giving birth to new ideas together. I believe it would promote a new centrism and a new trust in our political system. And I believe we have a window to do it right now.
 
At one time, the greatest public policy innovations came from liberals, such as during the New Deal. Then the most innovative ideas came from conservatives, such as Ronald Reagan.  It is time we combined the best of both ideologies into a new creative center. This is a dynamic center that is not held captive by either the left or the right or the past. 
 
Centrist does not mean weak. It does not mean watered down or warmed over. It means well-balanced and well-grounded. The American people are instinctively centrist . . . so should be our government. America’s political parties should return to the center.  They should return to the center where the people are.
 
No one ideology can solve prison reform or immigration reform or any of the other challenges facing us. It will take the best ideas of everyone.  It will take creative thinking.  It will take negotiations.  It will take letting go of the past.
 
And what will be the result of our working together? Let me tell you my vision of California twenty years from now. It is a big vision.  In reply, some may say, “Arnold, it’s just a dream.” Well, yes, it is a dream, but how can we grow into something greater, something better, something more meaningful without a dream to guide us?
 
What would such a California look like? Well . . . our people, no matter their culture or religion, still live in peace. Their health is strong because of the air they breathe, the care they receive, the lifestyles they lead. Their children are educated in schools that open the doors to a productive and fulfilling life.
 
Because we rebuilt our infrastructure, we have the schools, the roads, the ports, the water, the levees, the communications to grow with prosperity. Because we committed ourselves to the environment, we lead the world in the transition from fossil fuels to clean energy, and, as a result, a clean-tech industry has sprung up creating jobs for our people. Because we were leaders in stem cell research, California’s bio-tech industry has boomed, offering new cures for spinal cord injuries, Alzheimer’s, Parkinson’s and other diseases.  Because we took action to correct our fiscal crisis, state government will have learned, once and for all, to live within its means. And because we strengthened and reformed representative government, our state’s elected officials now reflect the views of the mainstream, not the fringes. In return, our citizens once again have trust and respect in their government.
 
I ask you, why can’t California be this dream? The United States needs us to be this.  The world needs us to be this.
 
For billions of people around the world, California itself is a dream. They ache to have what we so often take for granted. If they simply could live here, work here, raise their families here, their dreams would be fulfilled.  So, to the cynics, I say do not dismiss dreams as idle visions.
 
Ladies and gentlemen, my dream is that California, the nation-state, the harmonious state, the prosperous state, the cutting-edge state, becomes a model, not just for 21st century American society, but for the larger world.
 
It’s been said that most places are united by their pasts . . .  but California is united by its future. Other places are united by what was . . . but we are united by what can be.

** WILLIE BROWN IS AN OLD SCHWARZENEGGER FRIEND. Our friends at the LA Times reported a few days ago that legendary Democratic power broker Willie Brown, the former California Assembly speaker and San Francisco mayor scandalizing some by serving as master of ceremonies for today’s second inaugural of Governor Arnold Schwarzenegger, became friends with Schwarzenegger after his election three years ago.

Actually, that’s wrong. I’ll have some funny stories about their friendship in the inaugural round-up coverage. Another way of saying that you’ll get them when I’m not on the run myself.

** HARRY REID NOW HIGHEST-RANKING MORMON IN U.S. HISTORY. Fox News commentator and New West friend Karen Hanretty informs of something quite intriguing. Nevada Senator Harry Reid, the new majority leader of the U.S. Senate, is now the highest-ranking Mormon in American political history. (He’s also the first former chairman of the Nevada Gaming Commission to run the Senate, but that’s another matter.) With Mitt Romney‘s Republican presidential candidacy questioned by some because of his Mormonism, this is an interesting wrinkle.

** SCHWARZENEGGER INAUGURAL WEBCAST live at 11 AM.

** Monitor computer memory prices on a daily basis. Prices are up on some cheaper memory configurations.

** Track global and national energy prices in near real time via Bloomberg. Crude oil prices continue to slide — to $54 and $55 per barrel — on continued milder than normal weather through much of the US.


Governor Arnold Schwarzenegger at Brookins AME Church in South Central Los Angeles.

IN HIS SECOND INAUGURAL ADDRESS, which he will deliver this morning, Governor Arnold Schwarzenegger makes a decidedly post-partisan statement which is a forceful philosophical departure from the political method of the leader of his party nationally, President George W. Bush. It should come as no surprise, given what he’s been doing, but it marks the first time he has laid out this approach in such a high profile address.

It’s a statement from the creative center. As one source close to the governor notes, the speech is about the need to avoid appealing to extremes and the need to avoid allowing extremes to hold back necessary action.

“Centrist does not mean weak,” Schwarzenegger will say. “It does not mean watered down or warmed over. It means well-balanced and well-grounded. The American people are instinctively centrist . . . so should be our government. No one ideology can solve prison reform or immigration reform or any of the other challenges facing us. It will take the best ideas of everyone.  It will take creative thinking.  It will take negotiations. It will take letting go of the past.”

It’s not about “red and blue,” notes the Schwarzenegger associate. Team Arnold might say, had it not been said before by Gary Hart, that the goal is not to move left or right, but forward.

“We must think of ourselves,” Schwarzenegger will say, “as belonging not just to the Republican Party or the Democratic Party . . . but to the Party of California . . . because California is a collective ideal worth preserving.”

In fact, the speech is a repudiation of the principal tenet of George W. Bush-style politics, which, in the doctrine of Karl Rove, is to run and govern through motivating the base. It is also a repudiation of the same mirror opposite tendency on the Democratic side.

Schwarzenegger’s principal issues, associates note — such as infrastructure, the environment, and health care — were not selected from the standpoint of motivating the base.

Of course, Schwarzenegger has done things that motivate the base of the Republican Party. A tough on crime stance (though he has paroled far more often than former Democratic Governor Gray Davis), a harder line on immigration issues than most Democrats (in California, at least), a rejection of goofy laws, and a pronounced aversion to tax increases.

But his signature issues are not base motivators. And in major respects he is simply opposed to current White House policy, a sharp contrast to Bush’s much more conservative approach. Pro-choice rather than anti-choice on abortion, strongly pro-stem cell research rather than blocking such research, leading efforts to combat the greenhouse effect rather than denying its existence, rejecting those hard right stances.

Which is why the Democratic efforts to morph Schwarzenegger into Bush were such an enormously time-wasting and hideously expensive failure.

Notes a Schwarzenegger associate, “The campaign and the year in government flowed from the perception that people are tired of partisan division and battles between two extremes. There is a time for that sort of contest, when people want to see what contesting ideas there are from partisan warriors to deal with major problems. Then the time comes when people want solutions and action.”

In other words, a time for emerging consensus, if there are leaders to seek and achieve that consensus.

Here is what Arnold Schwarzenegger’s emerging consensus would look like, as he will say in his second inaugural address.

“What would such a California look like? Our people, no matter their culture or religion, still live in peace. Their health is strong because of the air they breathe, the care they receive, the lifestyles they lead. Their children are educated in schools that open the doors to a productive and fulfilling life.  Because we rebuilt our infrastructure, we have the schools, the roads, the ports, the water, the levees, the communications to grow with prosperity. Because we committed ourselves to the environment, we lead the world in the transition from fossil fuels to clean energy, and, as a result, a clean-tech industry has sprung up creating jobs for our people. Because we were leaders in stem cell research, California’s bio-tech industry has boomed, offering new cures for spinal cord injuries, Alzheimer’s, Parkinson’s and other diseases. Because we took action to correct our fiscal crisis, state government will have learned, once and for all, to live within its means. And because we strengthened and reformed representative government, our state’s elected officials now reflect the views of the mainstream, not the fringes. In return, our citizens once again have trust and respect in their government.”


Footage reportedly from an Iranian drone of USS Eisenhower in the Persian Gulf.

** A SECOND U.S. AIRCRAFT CARRIER BATTLE GROUP TO THE PERSIAN GULF. As discussed here last month, reports today have it that, according to “senior Pentagon officials,” a second US aircraft carrier group will be sent this month to the Persian Gulf. The USS John Stennis, homeported in Bremerton, Washington, is slated to join the USS Eisenhower and her group of escorting and supporting vessels, already on station in the Persian Gulf. The move is meant as a show of force to Iran, whose current president brandishes a nuclear program.

** KATIE LEVINSON JOINS THE GIULIANI TEAM. Katie Levinson, most recently crack communications director for Governor Arnold Schwarzenegger’s re-election campaign, has just signed on as a senior advisor to former New York Mayor Rudy Giuliani, a prospective frontrunner in the race for president next year. Levinson was a top communications aide in the Bush White House and at the Republican National Committee, serving as liaison between Bush/Cheney Administration officials and the broadcast media, handling surrogates, and various aspects of broadcast media operations.

Levinson will organize Giuliani’s communications operations. Her hiring comes at an intriguing moment for Giuliani. He runs well in trial heat polls in early states and nationally against Senator John McCain, and also does quite well against prospective Democratic opponents. But there are underlying questions about his candidacy and whether Giuliani is ready for the rigors of a highly competitive campaign, stirred anew by that mysterious 140-page campaign document reported on this week in the New York Daily News. Levinson has been through the mill, and even has experience with potentially embarrassing, surreptitiously obtained materials, in this case the notorious private audio files of Schwarzenegger, which at first seemed embarrassing but after a while came to nothing.

** The Wall Street Journal reports that the retail sales picture over the holidays was decidedly mixed. The economy may be cooling. Retailers reported middling gains in December sales as many stores took heavy discounts on toys, big-ticket electronics and winter apparel. After scooping up Black Friday bargains on flat-screen TVs and appliances at the start of the holiday season, shoppers reined in their spending during the first weeks of the month, and persistently balmy weather forced department stores to take markdowns on sweaters, coats and other cold-weather gear.

Increased use of gift cards, however, appeared to lift sales during the week after Christmas, giving hope that continued redemptions in January will help shore up profits. Wal-Mart Stores Inc. backed its fourth-quarter earnings outlook, noting that shoppers armed with gift cards have been snatching up post-Christmas deals on electronics and fitness equipment.

December sales at stores open at least a year — or same-store sales, a closely watched measure of performance in the retail industry — rose 3.1%, according to an index of 55 chains compiled by the International Council of Shopping Centers. That result fell short of the 3.5% gain recorded in the year-earlier month, as well as the 3.6% pace same-store sales had logged year to date.

** FIELD POLL ON HEALTH CARE. A continuation of the Field Institute’s California Poll released this morning indicates strong voter support for a system of requiring employers to provide health insurance or pay into a fund to buy insurance. The poll shows substantially less support either for a government-run health care system or a free market solution.

The employer mandate approach was in SB 2, carried by then state Senate leader John Burton in 2003 and signed into law by then Governor Gray Davis. While campaigning in the recall, future Governor Arnold Schwarzenegger said that he was against it at the time, saying the economy wasn’t strong enough yet for it. In 2004, rather late in the game, he came out in favor of the referendum to repeal the law, which passed narrowly.

Here’s what the Field Poll says: By a greater than two-to-one margin (52% to 24%) voters support reforming the health care system through greater shared employer, government and individual responsibilities rather than replacing the current system with a new government-run system covering all Californians. Another 18% favor relying on free market competition to improve the current insurance system.

Three specific reform proposals aimed at providing greater health coverage for Californians are supported by at least three in four voters state wide.
• Nearly eight in ten (78%) endorse the so-called “pay or play” employer mandate, which calls for requiring employers of twenty or more employees to provide health care insurance for their full-time workers or be required to pay into a state fund that would provide insurance for their employees.
• A 76% majority backs expanding the eligibility of existing state government health insurance programs for low-income people to provide coverage for more people without insurance.
• A similar level of support (75%) exists for the idea of offering part-time workers and other uninsured residents a choice of health plans on a family-by-family basis, with costs shared among employers, government and individuals.
Majorities of voters across virtually all major political and demographic subgroups of the voting population favor each of these three proposals. Two other health reform proposals are supported by slightly smaller majorities, while another divides voters about evenly.
• Sixty-eight percent favor the idea of requiring that every Californian have health insurance either from their employer or another source, and offering government subsidies to low income residents to assist them in paying for it.
• Six in ten (61%) back the idea of encouraging individuals to put money into a tax-free health savings account to pay for regular health care bills, accompanied by the purchase of a catastrophic insurance policy to pay for major medical bills.

• The idea of consolidating all of the money and resources now spent by employers, individuals, government and insurance companies to operate the current health system and replacing it with a new state-run system covering all residents divides voters, with 47% in favor and 49% opposed.

** Monitor computer memory prices on a daily basis. Prices on some cheaper memory configurations are up.

** Track global and national energy prices on a near real time basis via Bloomberg. Crude oil prices continued their drop, to $55 and $56 per barrel, on continued milder than normal weather.

January 4th, 2007

Arnold’s Green Day


Governor Arnold Schwarzenegger’s signing of the landmark greenhouse gas emissions bill on San Francisco’s Treasure Island symbolized a figure sharply at variance with stereotyped expectations.

Today is what might be described as Governor Arnold Schwarzenegger’s “Green Day.” At least, it would be, were he around for it.

Schwarzenegger rained on his own parade just before Christmas when he suffered a badly broken leg in a Sun Valley skiing mishap. Doctor’s orders following last week’s surgery to repair his broken femur are keeping him away from day one of his inaugural festivities this week, including the only event open to the public on his schedule, a veritable festival of environmentalism outside the state Capitol.

First Lady Maria Shriver, former NBA star Vlade Divac, and comedian Bob Saget will try to pick up the slack, with Schwarzenegger pal Rob Lowe, the former West Wing star, also canceling to work on his new TV show. (Shriver will also sub for the governor at a dinner tonight for big money donors at a posh Sactown eatery.) But while Schwarzenegger, who will have to take things much easier than anticipated for his own inaugural festivities once he does arrive on Friday, won’t be on hand for the solar and biofuels displays, the fact he’s sponsoring such an event as a signature of his inauguration is noteworthy in itself.

It doesn’t fit the caricature many held of Schwarzenegger, some due to his own actions in being the principal popularizer of the Hummer SUV, the gas-guzzling civilian version of the military Humvee, one of which the Terminator star was the first to obtain in streetworthy form. But beyond the Hummers, few could get around the stogie-smoking, leather jacketed, cowboy booted image of the action movie superstar. Being pro-environment means being a girly man, right?

In conversations in 2002 and 2003, as he prepared to run for governor, the former Mr. Universe made it clear that he intended to cast a green shadow on the Capitol once elected. He said that he wanted to champion efforts to combat the greenhouse effect, which then Governor Gray Davis was only then beginning to embrace, and to expand the use of renewable energy sources such as wind, solar, biomass, tides, and geothermal.

But his big environmental event of the tumultuous 2003 recall campaign on the coast was mostly drowned out by anti-recall protesters. And his green message during his early days as governor was mostly drowned out by his own staff, most of whom did little to further his environmental direction.

During his first year as governor, there was a memorable moment when Schwarzenegger asked what was happening with his big solar energy bill that he promised in the campaign. Whoops! No one had prepared it. One was hastily cobbled together, but went nowhere.

His second year as governor was taken up with the so-called “Year of Reform” agenda, some of it borrowed from the old second term agenda of former Governor Pete Wilson, whose more conventional staffers then dominated the Governor’s Office. That agenda — of redistricting reform, merit pay and tenure reform for public school teachers, reining in public pension spending, centralizing budgetary controls, diminishing the ability of unions to contribute money in political campaigns — was largely laid out his 2005 State of the State address.

That was a speech that quickly came to be seen as the start of Schwarzenegger’s lurch rightward, a seemingly bizarre move in a mostly Democratic state.

Ironically, that State of the State would have had a very different cast to it had Schwarzenegger done what he initially intended to do. Use it to also lay out his call to sharply reduce California’s emissions of greenhouse gases.

Had he done so, it would have been harder for political opponents to cast all of the reforms he was calling for in his “Year of Reform” — not all of which were necessarily conservative in nature — as right wing in nature. But Schwarzenegger was talked out of the anti-global warming move by his then top staff.

In the middle of 2005, Schwarzenegger did issue a major call on greenhouse gases, at a United Nations conference in San Francisco. And his big solar energy bill was finally put together in bipartisan form, authored by Democratic Senator Kevin Murray and Republican Senator John Campbell, now an Orange County congressman. But both were overwhelmed by the intense partisan wrangling which he had, at least in part, instigated himself.

2006, of course, was another matter, with the Million Solar Roofs plan and major moves against greenhouse gases enacted. Those included the comprehensive anti-global warming bill by Assembly Speaker Fabian Nunez and LA Assemblywoman Fran Pavley, whose first big 2002 bill to cut tailpipe emissions Schwarzenegger in conversations of the period with me vowed to defend from the administration of President George W. Bush. And legislation from Senate President Pro Tem Don Perata to ensure that California curtails its reliance on imported electricity from dirty coal-fired power plants.

While he has done other important things on the environment, such as mountain and ocean conservancies, Schwarzenegger is not a a down-the-line environmentalist. Some of his appointees, to the Coastal Commission and other regulatory bodies, are scored as being too pro-business. Not surprising in that he has cultivated a close relationship with the California Chamber of Commerce and is a big promoter of business. And his rating from the mostly pro-Democrat California League of Conservation Voters — bound early on to promote his establishment Democratic challenger, outgoing state Treasurer Phil Angelides — was middling, around 60%.

But on the big, futurist environmental issues, Schwarzenegger has been a radical departure from stereotyped expectations of him.