As a shareholder, CalPERS has been pressing corporations for better disclosure of environmental sustainability risks, yet CalPERS has been a leader in not disclosing financial sustainability risks, as I explained a decade ago in Dow 28,000,000. The consequences have been terrible, especially for our state’s most vulnerable residents whose programs get crowded out whenever governments have to make up for CalPERS’s failures. Here’s what that looks like:

The good news is that CalPERS has a new CFO who recently admitted that CalPERS has been overstating the share of pension costs likely to be covered by investment earnings and who I…


Yesterday AB 20 died in committee. That’s good, because the bill was a one-sided attempt at campaign finance reform that banned donations from only one of the sectors that collects billions each year under agreements with the state and its subdivisions. Next time we hope the Legislature takes up a comprehensive bill that bans donations from corporations, unions and associations that receive money, or whose shareholders, employees or members receive money, under agreements with the state. Residents, not suppliers, are the customers who should be served by legislators. Political donations from suppliers of public services must be banned.

Originally published at https://mailchi.mp.


As usual, California’s latest Monthly Finance Bulletin is filled with data of great relevance to legislator responsibilities:

Jobs: California’s unemployment rate fell to 8.3 percent, still much worse than the national unemployment rate, which fell to 6.0 percent. Our non-farm job levels are still 1.6 million below the pre-pandemic level of 17.6 million and Personal Income rose mostly because of federal COVID payments that won’t always be there. Legislators should stay focused on making it easier to hire Californians.

Houses: Units authorized by building permits fell to 116,000, a fraction of what’s needed. …


Last weekend some friends asked me when California would “hit a wall,” by which they meant have so many governance problems that it would have no choice but to reform. I responded, “probably not in our lifetimes, if ever.” I explained that California is more like a frog slowly being boiled to death. This is what that looks like:

Because of legacy costs, other unproductive spending and special interest influence over government codes, already residents aren’t being well served even when the state is awash in revenue. …


Though we often disagree with them, we have great admiration for two groups — SEIU and the Construction Unions — for politically punching more than their financial weights. Both treat politics like a business and have chapters that persistently donate to lawmakers. You can be sure lawmakers pay attention when either organization pays attention to them. GFC modeled its chapter structure on theirs and aims to run things as professionally as they do.

On the other hand, some advocates punch well below their weight. Business is at the top of that list. Based upon its political weakness, one would never…


Recently CALMatters posted about the Lira family’s hellish journey through California’s Employment Development Department. Equally troubling is that contractors with EDD such as Deloittes and Salesforce under contracts that pay them millions are donors to elected officials.*

Deloittes and Salesforce might be perfectly capable contractors but they should not be permitted to donate to elected officials who are in a position to influence selection or to evaluate performance. The same goes for public safety and other unions who enter into contracts with the state worth billions. The Legislature should ban donations from corporations, unions and associations that receive money, or…


We have a lot of friends in the CA State Senate but we take issue with their recent assessment that “a decade of responsible budgeting enabled California to endure the recession.” That isn’t factual. Here’s how the 2020–21 Budget they enacted last June closed a forecasted pandemic-related deficit:

Only 16 percent of the solution came from Reserves, which are a consequence of responsible budgeting over the previous decade. 84 percent came from federal funds, deferrals, borrowing, new revenues, and hope for more federal funds. Now, fast forward to the present. The state budget not only endured the pandemic but has…


There are many things to detest about the recall but worst among them is special interests using the opportunity to improve bargaining positions. According to the SF Chronicle, a $250,000 donation has been made to the anti-recall campaign by PECG, a union representing engineers employed by the state whose current contract expires next year. Over the next year, PECG will bargain a new contract with the Executive Branch to which PECG just donated and then submitted for ratification to the Legislative Branch to which PECG is also a donor. …


92 percent of Californians have insurance coverage. The eight percent who don’t are primarily undocumented residents. CA has sufficient ongoing resources to cover them.

Concerns about covering the undocumented have centered on the risk that a new program, estimated to cost $3 billion per year, would add to the state’s structural deficit. But the program doesn’t have to add to the structural deficit. Funding can come from redirecting >$4 billion/yr being spent on unnecessary insurance subsidies for 300,000 retired public employees and their dependents. Right now the Legislature provides those subsidies even if the retiree/dependent is eligible for Medicare or…


According to the NYT’s Ezra Klein in The Best Explanation of Biden’s Thinking I’ve Heard, President Biden wants government to “deliver for its own citizens.” But that can’t happen in California without the Legislature. That’s because most domestic services are delivered by states. Paramount among those services is K-12 education, which California handled during the pandemic about as well as the Soviet Union handled Chernobyl and delivered poorly before the pandemic. Only the Legislature can fix that by fixing the Education Code, which currently serves and protects school employee unions better than pupils. One of the reasons for that is…

David Crane

Lecturer at Stanford University and president of Govern For California

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