Why is California the poverty capital of America?


From the Los Angeles Times

The generous spending, then, has not only failed to decrease poverty; it actually seems to have made it worse.

In the late 1980s and early 1990s, some states — principally Wisconsin, Michigan, and Virginia — initiated welfare reform, as did the federal government under President Clinton and a Republican Congress. Tied together by a common thread of strong work requirements, these overhauls were a big success: Welfare rolls plummeted, and millions of former aid recipients entered the labor force.

The state and local bureaucracies that implement California’s antipoverty programs, however, resisted pro-work reforms. In fact, California recipients of state aid receive a disproportionately large share of it in no-strings-attached cash disbursements. It’s as though welfare reform passed California by, leaving a dependency trap in place. Immigrants are falling into it: 55% of immigrant families in the state get some kind of means-tested benefits, compared with just 30% of natives.

Self-interest in the social-services community may be at fault. As economist William A. Niskanen explained back in 1971, public agencies seek to maximize their budgets, through which they acquire increased power, status, comfort and security. To keep growing its budget, and hence its power, a welfare bureaucracy has an incentive to expand its “customer” base. With 883,000 full-time-equivalent state and local employees in 2014, California has an enormous bureaucracy. Many work in social services, and many would lose their jobs if the typical welfare client were to move off the welfare rolls.

Further contributing to the poverty problem is California’s housing crisis. More than four in 10 households spent more than 30% of their income on housing in 2015. A shortage of available units has driven prices ever higher, far above income increases. And that shortage is a direct outgrowth of misguided policies.

“Counties and local governments have imposed restrictive land-use regulations that drove up the price of land and dwellings,” explains analyst Wendell Cox. “Middle-income households have been forced to accept lower standards of living while the less fortunate have been driven into poverty by the high cost of housing.” The California Environmental Quality Act, passed in 1971, is one example; it can add $1 million to the cost of completing a housing development, says Todd Williams, an Oakland attorney who chairs the Wendel Rosen Black & Dean land-use group. CEQA costs have been known to shut down entire homebuilding projects. CEQA reform would help increase housing supply, but there’s no real movement to change the law.

Extensive environmental regulations aimed at reducing carbon dioxide emissions make energy more expensive, also hurting the poor. By some estimates, California energy costs are as much as 50% higher than the national average. Jonathan A. Lesser of Continental Economics, author of a 2015 Manhattan Institute study, “Less Carbon, Higher Prices,” found that “in 2012, nearly 1 million California households faced … energy expenditures exceeding 10% of household income. In certain California counties, the rate of energy poverty was as high as 15% of all households.” A Pacific Research Institute study by Wayne Winegarden found that the rate could exceed 17% of median income in some areas.

Looking to help poor and low-income residents, California lawmakers recently passed a measure raising the minimum wage from $10 an hour to $15 an hour by 2022 — but a higher minimum wage will do nothing for the 60% of Californians who live in poverty and don’t have jobs. And research indicates that it could cause many who do have jobs to lose them. A Harvard University study found evidence that “higher minimum wages increase overall exit rates for restaurants” in the Bay Area, where more than a dozen cities and counties, including San Francisco, have changed their minimum-wage ordinances in the last five years. “Estimates suggest that a one-dollar increase in the minimum wage leads to a 14% increase in the likelihood of exit for a 3.5-star restaurant (which is the median rating),” the report says. These restaurants are a significant source of employment for low-skilled and entry-level workers.

Apparently content with futile poverty policies, Sacramento lawmakers can turn their attention to what historian Victor Davis Hanson aptly describes as a fixation on “remaking the world.” The political class wants to build a costly and needless high-speed rail system; talks of secession from a United States presided over by Donald Trump; hired former attorney general Eric H. Holder Jr. to “resist” Trump’s agenda; enacted the first state-level cap-and-trade regime; established California as a “sanctuary state” for illegal immigrants; banned plastic bags, threatening the jobs of thousands of workers involved in their manufacture; and is consumed by its dedication to “California values.” All this only reinforces the rest of America’s perception of an out-of-touch Left Coast, to the disservice of millions of Californians whose values are more traditional, including many of the state’s poor residents.

With a permanent majority in the state Senate and the Assembly, a prolonged dominance in the executive branch and a weak opposition, California Democrats have long been free to indulge blue-state ideology while paying little or no political price. The state’s poverty problem is unlikely to improve while policymakers remain unwilling to unleash the engines of economic prosperity that drove California to its golden years.


New California declares “independence” from rest of state


With the reading of their own version of a Declaration of Independence, founders of the state of New California took the first steps to what they hope will eventually lead to statehood. CBS Sacramento reports they don’t want to leave the United States, just California.

“Well, it’s been ungovernable for a long time. High taxes, education, you name it, and we’re rated around 48th or 50th from a business climate and standpoint in California,” said founder Robert Paul Preston.

The state of New California would incorporate most of the state’s rural counties, leaving the urban coastal counties to the current state of California.

“There’s something wrong when you have a rural county such as this one, and you go down to Orange County which is mostly urban, and it has the same set of problems, and it happens because of how the state is being governed and taxed,” Preston said.

Cal-exit? Meet the movement for California secession

But unlike other separation movements in the past, the state of New California wants to do things by the book, citing Article 4, Section 3 of the U.S. Constitution and working with the state legislature to get it done, similar to the way West Virginia was formed.

“Yes. We have to demonstrate that we can govern ourselves before we are allowed to govern,” said founder Tom Reed.

And despite obstacles, doubters, and obvious long odds, the group stands united in their statehood dream.

The group is organized with committees and a council of county representatives, but say it will take 10 to 18 months before they are ready to fully engage with the state legislature.

This is not the first effort to split up California. In 2014, Silicon Valley venture capitalist Tim Draper submitted signatures to put a measure that would split California in six separate states.

To Get Medicaid in Kentucky, Many Will Have to Work


From the New York Times

Kentucky will be the first state to require many of its Medicaid recipients to work or face losing their benefits after the Trump administration approved its plan on Friday.

Advocates for the poor threatened lawsuits, while Gov. Matt Bevin, a Republican, celebrated the approval as “the most transformational entitlement reform that has been seen in a quarter of a century.”

The plan calls for most Medicaid recipients who are not disabled and aged 19 to 64 to work at least 20 hours a week, beginning in July. In addition to paid jobs, they could meet the requirement through volunteer work, job training, searching for a job, taking classes or caring for someone elderly or disabled.

Pregnant women, full-time students, primary caretakers of dependents and the chronically homeless will be exempt from the work requirement, as will people deemed medically frail. But the Bevin administration still expects about 350,000 people to be subject to the requirement, which will be phased in around the state starting in July. About half of them already meet it, according to the administration.

“We are ready to show America how this can and will be done,” Mr. Bevin said at a news conference in Frankfort. “It will soon become the standard and the norm in the United States of America, and America will be better for it.”

Roughly 500,000 adults have joined Kentucky’s Medicaid rolls since the state expanded the program under the Affordable Care Act in 2014. Mr. Bevin has consistently attacked the expansion as a waste of money, questioning why “able-bodied” adults should be given free government health care that used to be largely limited to children, the elderly and the disabled.

He filed for federal permission to impose work requirements in 2016 — notably, instead of seeking to end the state’s Medicaid expansion altogether. And since then, more than a dozen other states have also sought work requirements or said they plan to. Several sought Medicaid work requirements during the Obama administration but were rebuffed.

The approval came just a day after the Trump administration gave states the O.K. to impose work or other “community engagement” requirements as a condition of getting Medicaid. According to the nonpartisan Kaiser Family Foundation, 60 percent of working-age Medicaid recipients who aren’t disabled already have full- or part-time jobs.

Under its plan, Kentucky will also require many adults who aren’t elderly or disabled to pay premiums of $1 to $15 a month, depending on their income. And it will disenroll people from Medicaid for up to six months if they fail to report changes in income or work status. Those who qualified for Medicaid under the Obamacare expansion will also have to “earn” dental and vision benefits, which they have been able to access freely until now, through activities like taking a financial literacy course or getting a GED.

The Bevin administration has estimated that the plan will result in 100,000 fewer Medicaid recipients after five years and save $2.4 billion, mostly in federal Medicaid funds. But Mr. Bevin couched the policy change as a moral rather than a fiscal decision, saying he did not care about the savings and saw it as an opportunity for Kentucky’s poor “not to be put into a dead-end entitlement trap but rather to be given a path forward and upward so they can do for themselves.”

Advocates for Medicaid beneficiaries said they disagreed with the Trump administration’s assertion, in approving Kentucky’s plan, that work requirements were consistent with the goals of Medicaid because work could improve people’s health.

“Considering that it will seriously harm over 100,000 Kentuckians, in violation of numerous provisions of Medicaid law, we are very seriously considering taking legal action — and as we analyze the meager legal rationale in the approval itself, it seems inevitable,” said Leonardo Cuello, director of health policy at the National Health Law Program, an advocacy group for the poor.

Emily Beauregard, the executive director of Kentucky Voices for Health, an advocacy group, said the state had provided little information about how it would make sure people were complying with work requirements, how exemptions would be determined and other details.

“We’re anticipating Kentuckians by and large are going to be extremely confused and worried about what they’re going to face and whether or not they’ll continue to have coverage,” Ms. Beauregard said. “They’ll be looking to advocates and enrollment assisters and their providers for answers, and at this point we don’t have any.”

She added, “The idea that we are encouraging work and independence, then taking away the health care that makes people more employable and better able to function — none of this adds up to something that’s going to be good for Kentuckians or our economy.”

But Hal Heiner, Kentucky’s Education and Workforce Development secretary, said during Mr. Bevin’s news conference that there was “an abundance of jobs” available to Medicaid recipients, as well as resources to prepare them.

“We have the jobs, we have the tuition resources, we have the job coaches in our career centers all across the state,” he said, “and now we’ll be able to connect the dots.”

Other state officials said the state was building an IT system to track people’s compliance with the work and premium requirements and participation in activities, like taking the financial literacy course, that would earn them points toward dental and vision care. They did not, however, provide a cost estimate for building and maintaining the administrative infrastructure necessary to monitor compliance with the new requirements.

Kentucky’s uninsured population has dropped more than almost any other state’s under the Affordable Care Act, and several studies have found significantly increased access to primary care, preventive screenings and care for chronic conditions there since the Medicaid expansion. But the state’s population remains unhealthy overall, which Mr. Bevin pointed to as proof that the Medicaid expansion was not working.

“The idea that we should keep doing what we’re doing is an insult to the people of Kentucky,” he said.

Sheila Schuster, a longtime health care advocate in the state, said she saw it differently.

“The administration has their chicken-and-egg story completely wrong — they say people need to work to get healthy,” she said. “We all know that health is the foundation from which people go to school, go to work and keep their employment. So I’m afraid the administration is not only going backward, but doing it for completely the wrong reasons.”

Such opposing views were evident in comments people posted on Mr. Bevin’s Facebook page during his news conference, which was livestreamed there. “ABOUT TIME to get others to pull their weight!” one viewer in favor of the new requirements wrote.

“I feel this is wrong,” another said. “Wouldn’t they not be in Medicaid if they could get a job?”



Do police have the right to go on private property — uninvited and without a warrant — to search a vehicle?

That’s the question the U.S. Supreme Court will be asked to answer when the court takes up the case of a Virginia man who was arrested after a police officer walked onto his driveway and pulled back a tarp covering a stolen motorcycle.

Arguments are scheduled Tuesday in a case that could test the boundaries of an exception to the Fourth Amendment’s requirement that police obtain a warrant before searching a person, their home, papers or personal effects.

The exception dates back nearly a century, when federal agents did a warrantless search of a suspected bootlegger’s car looking for illegal alcohol. In that case, the Supreme Court found that a vehicle could be searched without a warrant as long as police have probable cause to believe it contains contraband or evidence of a crime. The court reasoned that because cars are readily mobile, they can be moved before police are able to obtain a warrant to search them.

The Virginia case started with two high-speed police chases of a distinctive orange and black Suzuki motorcycle.

This Dec. 6, 2011, photo provided by McGuireWoods law LLP, shows attorney Matt Fitzgerald. The U.S. Supreme Court will be asked to decide whether police have the right to go on private property without a warrant to search a vehicle. Fitzgerald, an attorney with McGuireWoods, said the prominent Richmond law firm asked the Supreme Court to hear the case because lower courts have been split on whether the automobile exception applies on vehicles parked on private, residential property. Arguments are scheduled for Tuesday, Jan. 9, 2018. (McGuire Woods LLP via AP) (Associated Press)

During one chase, an Albemarle County police officer wrote down the motorcycle’s license plate and recorded images of it with his dashboard camera. The plate number led police to a man who said he sold the motorcycle to Ryan Austin Collins after telling him it was stolen.

An officer then looked at Collins’s Facebook page, which included several photos of an orange and black motorcycle parked in the driveway of a house his girlfriend rented in Charlottesville.

At trial, Collins was convicted of receiving stolen property and was sentenced to three years in prison, with all but two months suspended. He was not charged with eluding police.

Matthew Fitzgerald, an attorney with McGuireWoods, said the prominent Richmond law firm asked the Supreme Court to hear the case because lower courts have been split on whether the automobile exception applies on vehicles parked on private, residential property.

Fitzgerald argues that the exception does not apply in the Collins case because the motorcycle was parked within feet of the house. He argues that that falls within the curtilage — the immediate area around the house — so should have been protected by the Fourth Amendment search warrant requirement.

If officers are allowed to search vehicles within curtilage without obtaining a warrant, they could also creep into garages and carports to look for contraband in glove boxes, Fitzgerald said.

“This area around your house is really important. And so whether police come onto your property with probable cause alone and search your vehicles wherever they find them is something that should matter to a lot of people,” Fitzgerald said.

“If the vehicle exception applies wherever you find the vehicle, then that is a big hole in the warrant requirement.”

The Virginia Supreme Court, however, said that the officer’s warrantless search of the motorcycle was justified, finding that “there is no reasonable expectation of privacy in a vehicle parked on private property yet exposed to public view.”

The Virginia Attorney General’s Office argues that the officer had “undisputed probable cause” to believe the motorcycle was stolen and had twice escaped police by taking off at dangerously fast speeds of up to 140 miles per hour.

After walking onto the driveway, the officer lifted its cover, recorded the license-plate number and vehicle identification number, and after determining that the motorcycle was stolen, replaced the cover.

“The officer’s daytime search of the motorcycle was brief, unintrusive, and limited in scope,” Acting Solicitor General Trevor Cox wrote in a brief filed with the Supreme Court.

Because of the automobile exception, “he was authorized to do it before the vehicle could be moved and elude police once again,” Cox wrote.

The case that prompted the Supreme Court to establish the automobile exception dates back to 1921, when Prohibition banned the manufacture and sale of alcohol in the U.S. Federal prohibition agents stopped two suspected bootleggers driving on a highway from Detroit to Grand Rapids, Michigan.

There was no visible contraband in the Oldsmobile roadster, but when one of the agents pounded his fist on the rear seat, he noticed it was harder than usual. He cut open the seat cushion and found 68 bottles of whiskey and gin.

The defendants tried to have the evidence suppressed, but the high court found that a vehicle could be searched without a warrant if there is probable cause to believe it contains evidence.

Cornell Law School professor Sherry Colb, whose research centers on the Fourth Amendment, said it’s surprising that the Supreme Court hasn’t settled the issue earlier.

“The automobile exception has been with us for a while, and this one area has remained unclear — whether the automobile exception to the warrant requirement applies to an automobile on a private driveway,” she said.