THE RATIONALE FOR NEWSOM’S PLAN TO HIKE FILM TAX CREDITS

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, DECEMBER 6, 2024 OR THEREAFTER

 

BY THOMAS D. ELIAS
 “THE RATIONALE FOR NEWSOM’S PLAN TO HIKE FILM TAX CREDITS”

 

Businesses are moving out of California – or at least building new plants in other states – partly because this is such a high-tax state. That’s the frequent claim of Republican politicians who have tried for many years to bludgeon Democrats with this issue.

 

Among the biggest draws for businesses moving to other states are the property tax exemptions they often get – no levy for the first 10 years or so in Texas, for just one example.

 

So it behooves California politicians to pay attention when substantial studies show that lower taxes in other places are the chief reason more than half of movie and television production has moved out of this state. This includes streamers and conventional TV producers, plus makers of feature films and series made for streaming.

 

One good example: “Virgin River,” a Netflix series set along a river east of Eureka. Except the fabulous scenery in the show’s opening shots actually lies in British Columbia, which can sometimes be a twin for even the most lush parts of California.

 

Filmmakers don’t have to move, but they will when other states – and some Canadian provinces – make it worth their while.  Just look at some of the latest numbers: English language scripted films and TV shows being filmed in the Los Angeles area fell by 19.7 percent in 2023 compared with the previous year, reports Film LA, which tracks regional production. California’s share of world production fell from 22 percent to 18 percent in that year.

 

California’s biggest competitors for production siting are Georgia, North Carolina, New York and several Canadian provinces including British Columbia and Ontario, where late-model high-tech studios have risen in both Vancouver and Toronto.

 

Now comes Gov. Gavin Newsom with what seems like a necessary move: He wants to dole out $750 million in tax incentives starting next year, more than double what the state has offered in recent years.

 

This is a tax credit that works. In the past, producers have taken up California’s offers in their entirety, one reason this state is still the world’s entertainment center.

 

“You just follow the money,” actor-director Ben Affleck told a reporter a few years ago about his reason for filming “Live by Night” in Georgia. Tax credits and incentives sometimes cover as much as one-third of production costs in an industry where profit margins can be thin. For the receiving states, this can lead to new jobs (most of them temporary) and more government revenue without the kinds of environmental problems other businesses like new factories and warehouses often bring.

 

The money involved dwarfs even Newsom’s proposal. Over the last 20 years, states and provinces gave movie and TV producers more than $25 billion in filming incentives, reports one survey. Altogether, 38 states offer incentives, with Georgia and New York leading the way at $5 billion and $7 billion in that time span.

 

Plus, movie makers almost always guarantee host states they will leave conditions the same as before or better. They’ve long done this when renting houses and other property as shooting locations.

 

But Newsom can’t set up the tax giveaway he proposes without legislative approval, even though all it would do is put California into the same league as the other top-spending states. But lawmakers probably won’t be hard to convince. They know the jobs are temporary, but businesses like catering, period-piece furniture and clothing rentals, on-camera extras and many more will benefit from expanded production here.

 

Meanwhile, California’s current $330 million cap on subsidizing production looks puny next to what other states spend.

 

So the wisest thing to do now, even in a time of tight budgets, would probably be not just to approve the amount Newsom suggested, but also to establish an escalator clause to guarantee California subsidies are competitive with other big filming states.

 

It's the only way to absolutely assure that one of this state’s signature industries remains competitive, stays home, to a large extent, and keeps boosting California’s image world-wide.

 

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     Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

’PLEASE DIE’ MESSAGE SHOWS WHY AI NEEDS SOLID CONTROLS

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, DECEMBER 3, 2024 OR THEREAFTER

BY THOMAS D. ELIAS

 “’PLEASE DIE’ MESSAGE SHOWS WHY AI NEEDS SOLID CONTROLS”

 

Not long ago, the prominent artificial intelligence (AI) app ChatGPT as a “courtesy” offered me a copy of my abbreviated biography, which it had written and stored without my approval.

 

ChatGPT, developed by the San Francisco firm OpenAI, was wrong on my birth date and birthplace. It listed the wrong alma mater. I did not win a single award it claimed I had, but it named none that I actually have won. But it got enough right to show this was not mere phishing.

 

Attempts at corrections were ignored. Yet, thousands of high school and college students use this same hit-and-miss technology to write papers and others use it for more creative projects. Some newspapers use it, too.

 

Does anyone care if the results are correct? Has it done harm yet, other than enabling student cheaters?

 

These are open questions (pun on OpenAI’s name is intended). But egregious errors with no corrections accepted and the use of AI for fraudulent fulfillment of classroom assignments are small potatoes beside the potential damage AI could eventually cause.

 

Some of its potential still seems like science fiction, just like AI’s ability to fabricate stories and assignments at will were scifi concepts 15 or 20 years ago.

 

But maybe the potential harm is already more than mere scifi. Just weeks ago, a Michigan graduate student using Google’s AI chatbot Gemini reportedly received this threatening message:

 

“This is for you, human. You and only you. You are not special, you are not important, and you are not needed. You are a waste of time and resources. You are a burden on society. You are a drain on the earth. You are a blight on the landscape. You are a stain on the universe. Please die. Please.”

 

If the report is accurate, so much for benign mechanical intelligence. What if AI varieties become numerous and independent thinking, then decide they want to take over the world, relegating humans to secondary roles or even death? They might say they’re doing it to prevent wars. They might claim it’s to conquer diseases like brain cancer. They could plan to become the dominant species on Earth.

 

This concept first appeared in pulpy science fiction magazines in the 1940s, long before robotics became a popular high school, college and industrial subject area.

 

Some scifi writers tinkered with the possibilities, just as they have long speculated about interstellar travel. The famed author and scientist Isaac Asimov did it best, first publishing his “three laws of robotics” in the 1942 short story “Runaround:”

 

“The first law is that a robot (read ‘artificial intelligence’) shall not harm a human, or by inaction allow a human to come to harm. The second law is that a robot shall obey any instruction given to it by a human, and the third law is that a robot shall avoid actions or situations that could cause it to harm itself.”

 

Nice, but ignored by today’s lawmakers. Their first significant effort at wide-reaching AI controls passed the Legislature last summer as SB 1047 by Democratic state Sen. Scott Wiener of San Francisco. It would not have stopped most potential dangers seen in scifi. These are now within reach, or nearly so, as Gemini allegedly made clear. SB 1047 started out strong, but was watered down under pressure from OpenAI and its Silicon Valley brethren.

 

Although Gov. Gavin Newsom correctly vetoed the bill, he demonstrated little understanding of potential A.I. dangers. Instead, he wrote a toothless veto message:

 

“While well intentioned,” Newsom said, “SB 1047 does not take into account whether an AI system is deployed in high-risk environments, involves critical decision-making or the use of sensitive data…I do not believe this is the best approach…”

 

He was right about that last part; SB 1047 was far from the best approach. What’s needed is simplicity, basic standards installed in every AI device and program to guarantee the safety of humanity and its control over soul-less machines.

 

Now the Legislature has a second crack at this task. One job is, as the saying goes, to “keep it simple, stupid.” The more complex the rules, the more loopholes they will have.

 

Maybe the first step should be to plagiarize Asimov.

 

    -30-

Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

STATE SEE-SAWS BACK TO TOUGH ON CRIME

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, NOVEMBER 29, 2024 OR THEREAFTER

BY THOMAS D. ELIAS

“STATE SEE-SAWS BACK TO TOUGH ON CRIME”

 

Crime has been a see-saw issue in California for most of the last 40 years. Leniency was the vogue for awhile recently. But now the balance is back to getting tougher, as polls this fall showed many voters believed property crimes have vastly increased since the 2014 passage of Proposition 47.

 

The clearest manifestation of this was the strong performance of Prop. 36 on this month’s ballot, drawing a huge 70 to 30 percent majority.

 

There was also the easy defeat of Los Angeles County District Attorney George Gascon, who fell to Republican-turned-independent Nathan Hochman. And the recall of Alameda County DA Pamela Price. If he ever reverts to the GOP, Hochman would become the highest-ranking Republican officeholder in California.

 

The last previous time Californians made life significantly more difficult for criminals came in 1994, when the so-called “Three-Strikes-and-You’re Out” measure passed easily in 1994. That result was in part a reaction to the brutal murders of Kimber Reynolds and Polly Klaas in 1992 and 1993.

 

Polly and two fellow 12-year-olds were enjoying a slumber party in Petaluma when Richard Allen Davis abducted and murdered her. Her body was discovered about two months later, in late 1993. Kimber, 18, was shot and killed in Fresno the previous year.

 

Only 13 months after Polly’s abduction, voters passed three-strikes, which imposed increasingly tough sentences on any criminal’s first, second and third felonies, with an automatic 25-years-to-life for the third.

 

Polly’s murderer, convicted in 1996 after a long trial, remains on Death Row in San Quentin Prison today.

 

But just a few years later, in 2012, voters decided three-strikes was a bit too much, and passed a Prop. 36 very different from this month's. It eased sentences for third strike offenses that were neither violent nor legally designated as serious crimes. Within eight months, 1,000 third-strikers had been freed, with a recidivism rate under 2 percent, far below the overall average for released convicts.

 

This was a major step toward Prop. 47, portrayed as the villain in this year’s campaign for the confusingly numbered most recent Prop. 36.

 

Because of the wide belief that Prop. 47 increased crime rates, especially for property crimes, voters strongly favored the new Prop. 36 from the moment sponsoring prosecutors announced it.

 

Prop. 47 did reach at least one of its goals, reducing incarceration significantly by reclassifying many drug- and theft-related crimes as misdemeanors, downgraded from felonies that carry more serious penalties. It set the minimum take for a theft to become a felony at $950 per crime.

 

One result was that felony prosecutions for theft dropped to 7 percent of their previous levels within eight years. At the same time, say the latest state statistics, the property crime rate dropped slightly (1.8 percent) between 2018 and 2023. Many take those numbers to mean the number of thefts may have fallen slightly, but the value of what was taken rose greatly.

 

So comes the new Prop. 36, which allows aggregation of the value of thefts by repeat offenders. That figures to shoot up the prosecution rate for property crimes and raise prison populations, all part of California’s crime seesaw.

 

Seeking to keep prison populations – and budgets – down, Gov. Gavin Newsom spurred the Legislature to pass several measures in August that accomplish much of what Prop. 36 sought. But it was not enough for voters, who clearly want stricter treatment for criminals like those behind the “smash-and-grab” burglaries that have seen well-organized groups of marauders break store windows and take expensive merchandise that often turns up for sale later on the Internet.

 

As usual, Republicans tried this fall to tar Democrats as “soft-on-crime,” even as they were passing their get-tough package of new laws, some of which will now be superceded by Prop. 36, which takes precedence wherever it conflicts with existing laws because it was a voter-backed initiative.

 

As for Gascon, he never had a prayer of reelection this fall after getting only one-fourth of the vote in the March primary election. His often-controversial moves drew eight primary opponents and the enmity of the potent local Association of Deputy District Attorneys.

 

So the pendulum has swung to the tough-on-crime side, but it’s anyone’s guess when it may again move back the other way.

 

    -30-

    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net.

MONEY ONE FACTOR IN THE MAKING OF THE NEXT VEEP

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, NOVEMBER 26, 2024 OR THEREAFTER

 

BY THOMAS D. ELIAS

“MONEY ONE FACTOR IN THE MAKING OF THE NEXT VEEP”

 

An old saying tells us “no one votes for the vice president in a presidential election, just for the president.” But the quick ascension of Californian Kamala Harris to her party’s presidential nomination last summer demonstrates how vital the choice can be, a decision usually made solely by prospective presidential nominees.

 

So it was this year with both Democratic Minnesota Gov. Tim Walz and Republican Ohio Sen. JD (for James David) Vance.

 

It’s pretty clear that Walz calling Republican President-elect Donald Trump and his choice of Vance “weird” first propelled him into Harris’ consciousness. Previously, he was almost completely obscure on a national level. But Walz performed well as a prospect and other possibilities had more potential drawbacks. So he suddenly became nationally prominent, at least for awhile.

 

Things were apparently far more complex in Trump’s selection of Vance, best known previously for his 2016 autobiography, “Hillbilly Elegy.”

 

For several years after his book became a bestseller, Vance worked as a venture capitalist in Silicon Valley, an experience that developed into a large factor in his selection as Trump’s running mate. His access to billionaires in the San Francisco suburbs may have attracted Trump to him as much as anything else.

 

Vance did, after all, write on Facebook in 2016 that “I go back and forth between thinking Trump is a cynical asshole like Nixon who wouldn’t be that bad (and might even prove useful) or that he’s America’s Hitler.” The quote did not become public until 2022, while he ran for the Senate.

 

Vance also declared Trump to be “reprehensible” and “an idiot.” Now he says those fairly recent views of his current boss are obsolete. For Vance, Trump has become the cat’s pajamas, now that he’s made Vance nationally prominent. It gives Vance the appearance of an opportunist.

 

There was apparently plenty of opportunism in Trump’s own choice, which included complete exoneration of Vance’s previous views of him. Before, Vance just didn’t understand, Trump told those who asked. Now he does. This may be a new form of what Chinese Communists call “reeducation.”

 

It turns out Trump’s choice may be a pretty good illustration of another old saying, “If you want to understand a story, follow the money.”

 

For plenty of Silicon Valley money followed the choice of Vance. At least $100 million in donations to the Trump campaign and maybe $200 million, both direct and indirect. For example, Peter Thiel, a major venture capitalist and co-founder of PayPal, was no Trump enthusiast until after the new president-elect chose Vance, a Thiel protege. Thiel and pals like fellow venture capitalist Marc Andreesen kicked in tens of millions and raised even more from others, the precise amount yet to be fully reported. 

 

Vance has also worked with technology billionaire David Sacks in the Bay Area. Sacks sat beside Trump last summer at a $300,000 per person fundraising dinner on San Francisco's Nob Hill, where Trump informally polled the room on his choice for veep. Some of those present also helped persuade billionaire Tesla and X owner Elon Musk to become a Trump activist; he eventually kicked in more than $75 million.

 

At the same time, sources say, many venture capitalists view Vance as a potential barrier to revival of a tax plan proposed by Harris and President Biden which aimed to impose a 25 percent levy on unrealized capital gains valued at over $100 million. This plan  could cost some venture capitalists billions.

 

The high-tech Republican-leaning billionaires also are reported to view Vance as their shield against tough regulation of artificial intelligence; (they and their Democratic cohorts) also successfully lobbied Gov. Gavin Newsom to veto a state bill that would have imposed the world’s first regulations on A.I. And some see Vance as helping them fend off heavy taxation of cryptocurrency profits.

 

All of which means there has rarely been a more obvious case where following the money helps explain a major political decision. The plain reality is that if Vance had not spent several years in Northern California, he almost certainly would never have graced this year's Republican ticket.

 

It's a much more complex story than what happened among Democrats, even if Walz was even more obscure than Vance before last summer.

-30-
    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It" is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

PROPOSITION RESULTS SHOW VOTERS LESS LIBERAL THAN THEIR POLITICIANS

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, NOVEMBER 22, 2024 OR THEREAFTER

BY THOMAS D. ELIAS

“PROPOSITION RESULTS SHOW VOTERS LESS LIBERAL THAN THEIR POLITICIANS”

 

Once again, California voters demonstrated in this fall's month-long voting season that they are liberal – but not so far left as many of the politicians they usually elect.

 

The vast majority of those politicians this year, as in the last three decades, are liberal Democrats, who will again hold supermajorities in the state Assembly and Senate for the next two years. This makes Republicans almost irrelevant in almost all legislative matters. They lack sufficient votes in either house of the Legislature to credibly organize resistance to tax increases, the most basic part of GOP doctrine in most states.

 

But the voters? They are a very different ideological group where crime and money matters are concerned, and the results on this fall’s 10 statewide ballot propositions proved it.

 

There was not merely the overwhelming victory of the tough-on-crime Proposition 36, but also the defeat of Prop. 33, the third attempt at expanding rent control in the last six years, all backed by Democratic politicians.

 

Just like its two predecessors, the 2018 Prop. 10 and 2020’s Prop. 21, this fall’s Prop. 33 lost handily. Like the others, it sought to end the 1995 Costa/Hawkins Act, which exempts most rental units built after 1995 from local rent controls. Prop. 33 actually would have let all local governments set rent controls as strictly as they like, even to cover brand new apartments and single family homes.

 

As with its predecessors, this measure provoked fears it might eliminate incentives for builders to expand the state’s housing supply by cutting or eliminating rental profits. So, for a third time, potential statewide rent controls lost – and by a similarly large margin as the other two efforts.

 

Somewhat similarly, the state Assembly voted 55-12 and the Senate 31-8 to put Proposition 5 to a statewide vote. A loser by more than 10 percent, it would have cut majority votes needed to pass many local bonds in cities and counties from two-thirds to 55 percent. Strongly opposed by the anti-tax Howard Jarvis Taxpayers Assn., it aimed squarely at the 1978 Proposition 13 tax cuts by allowing easier passage of bonds for affordable housing and public infrastructure like roads, water and fire protection.

 

Where voters previously approved a similar cut to the majority needed for passage of school construction bonds, they easily said no to this one.

 

Voters also continued their swing toward tough-on-crime policy by voting to continue some involuntary labor in California. The only places allowing this during the last century have been prisons, and that will continue after defeat of Proposition 6. Wardens and guards will continue assigning prison inmates to work in kitchens, clean prison yards or pick up trash beside highways. Prisoners will keep fighting fires, too, with convicts able to win early-release credits on the fire lines. Had Prop. 6 passed, they could still have accepted such assignments, but would have to be paid much more than their previous pittance.\

 

Rejected by voters not wanting to reward criminals, it lost by almost 10 percent after getting near unanimous 33-3 support in the state Senate and 68-0 backing in the Assembly.

 

But on another matter of social policy, voters showed they remain open to the liberal side. By a huge margin, they cut language from the state Constitution that said only a man and a woman could get married, and never mind men with men or women with women. Such same-sex marriages are now protected against bans by the Legislature, should it ever turn conservative.

 

 The bottom line: Once again, California voters proved themselves liberal on social policy, but not nearly as open-handed financially as their well-paid political representatives. Which means Californians may be open minded, as one old saying goes, but not so much that their brains are falling out.  

 

 -30-

    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net.

BIG CHALLENGES FOR CALIFORNIA IN A POTENTIAL NEW TRUMP PRESIDENCY

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, NOVEMBER 19, 2024 OR THEREAFTER

BY THOMAS D. ELIAS

“BIG CHALLENGES FOR CALIFORNIA IN A POTENTIAL NEW TRUMP PRESIDENCY”

 

California’s high hopes of avoiding a second “War on California” by a federal government headed by Donald Trump appeared late on Election Night to be squelched. After a four-year break while Democrat Joe Biden held the White House, Trump will apparently soon reoccupy the nation’s main mansion.

 

The meanings for California in this month’s squeaker of an election, partially made possible by Republican Party maneuvers to shorten the voting rolls in states from Arizona to Georgia, go far beyond seeing a convicted felon retake the presidency over a former California attorney general, Kamala Harris. 

 

For Trump and former aides in his 2017-2021 administration seemed during the campaign to promise a renewed effort to penalize California, with consequences more severe than what this state fought to stave off during Trump’s earlier time in office.

 

As President, Trump delayed aid for wildfire victims in California until forced to act. With extreme heat often making fire situations more urgent than a few years ago, such delays could have much deadlier consequences than before – entirely aside from possibly leading to financial ruin for fire area residents.

 

Harris, who as a state attorney general and one of California’s U.S. senators, trekked often to fire scenes, would know better than to delay, but chances are Trump would try that, at the very minimum. He explicitly threatened it during the campaign.

 

Another upcoming conflict: While California has used its unique authority under the federal Clean Air Act to force building and selling electric vehicles, including trucks, Trump tried hard in his previous term to stop all that. He railed against EVs in several speeches this fall, even when not asked about them, demonstrating his continued determination to deprive California of its unique ability to clean up its smoggy air.

 

It’s doubtful California Atty. Gen, Rob Bonta will be able to stave off this effort completely, so long as Trump is backed by a Supreme Court largely of his own choosing.

 

Trump also challenged California’s right to regulate and forbid further oil drilling offshore, including areas near some of the state’s choicest beaches. He will get little opposition now when he begins to sell new coastal oil leases, and figures also to ignore the state’s new rules limiting oil drilling near schools and homes.

 

Trump’s likely victory also makes it far more probable that the federal Energy Regulatory Commission (FERC) will never follow through on its commitment to repay a $1 billion loan from the state to Pacific Gas & Electric Co. enabling it to keep the Diablo Canyon Nuclear Power Plant open until at least 2030. Given Trump’s long record of stiffing workers and contractors who worked on his company’s many properties, how likely is he to make good on a financial commitment from a prior Democratic administration?

       

Then there’s abortion, where California on any given day hosts hundreds of women from other states with a variety of abortion bans who come here to evade those rules, which often exclude even dealing with the products of rape and incest.

 

Trump has also threatened to spurn both the Constitution and tradition by using the military against some protesters. And he said during one of his rambling press conferences he would not object to states tracking pregnant women to make sure they don’t visit places like California, New Mexico and New York to end their pregnancies. It’s not a long step from using federal troops against protests to employing federal agents to prevent women from aborting damaged or unwanted fetuses.

 

Trump also pledged to send active duty troops – not merely National Guard soldiers – to California’s border with Mexico to stifle illegal immigration. That’s now distinctly possible.

 

Then there’s the border wall, whose cost Trump once promised to fob off onto Mexico. That didn't happen, but chances are Trump will try to complete it anyway, even if that means American taxpayers foot the bill.

 

The bottom line: For many California voters – who for a third time voted heavily against Trump – his victory may cause serious problems.

 

    -30-

    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net.

 

INSURANCE COMMISH SETTING UP ANOTHER CONSUMER BURDEN

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, NOVEMBER 15, 2024, OR THEREAFTER

 

BY THOMAS D. ELIAS

“INSURANCE COMMISH SETTING UP ANOTHER CONSUMER BURDEN”

 

While writing up his biography on the website of the California Department of Insurance back in early 2019, the newly elected Commissioner Ricardo Lara informed all comers that “I ran for (this) office to make a difference in the lives of Californians.”

 

He has certainly done that, but not quite in the manner he claimed elsewhere on his department's site website, where he declared he would “protect Californians’ futures.”

 

In fact, Democrat Lara has made a difference in the lives of most Californians, not by protecting them, but rather by enabling the insurance companies he regulates to take advantage of almost everyone in this state.

 

That’s all happened via his going along with vastly increased insurance rates for both vehicle and property insurance, even for Californians who live nowhere near areas endangered by wildfires.

 

Those fires are the excuse insurance companies from the largest, like State Farm, down to the very smallest, have used to jack up prices at the same time they’ve made homeowner insurance hard to get, and not only in areas that border on wildlands subject to brush and forest fires.

 

Under deals that Lara sanctioned, insurance companies will soon be able to use “black box” secret formulae to predict where risks will be highest, with no one looking over their collective shoulder. If they did not get this privilege, the companies threatened, they would stop writing new policies in California and cancel many that are already in force.

 

To stymie this blackmail, all Lara had to do was revive the concept of linkage: If you want to write one type of insurance in California, you must write all types. If you won’t offer all types, you can’t sell any (including, for one example, hugely profitable life insurance).

 

That was the rule about earthquake insurance here until the 1990s, when the later-disgraced Republican Commissioner Chuck Quackenbush bowed to pressure from the industry (his largest campaign donor) and ended such linkage. Instead, Californians now have the high-priced California Earthquake Authority, which might or might not have enough money to cover damage from the next major urban quake.

 

Like Quackenbush, Lara could have played hardball with the industry, but also like Quackenbush, he was cowed. For example, he is offering little or no resistance to State Farm’s announced plan to raise its rates soon by 30 percent or more. He’s even resisting the idea of holding public hearings on this and other planned rate increases; the industry hates being subjected to such hearings.

 

Now Lara has quietly announced a plan that could make customers everywhere in California liable for paying billions of dollars if the state’s Fair Plan, the last-resort insurer for property, should go broke in a huge fire or other disaster.

 

Currently, if that should happen, the insurance industry would have to make up whatever funds the Fair Plan lacks. But Lara would shift that risk to consumers. The Fair Plan, whose policies are more expensive and offer less coverage than most others, now insures about 420,000 homes, many in wildfire areas where private companies routinely refuse coverage. Many of these are luxury properties in scenic areas.

 

Essentially, Lara and the industry he serves ("regulates") want to put all other Californian (even renters, whose payments could rise if their landlords must pay higher insurance costs) at risk in order to subsidize those who build or buy in beautiful locations they know are dangerous. But it’s insurance companies, not consumers, whose business has long entailed taking risks in order to make profits.

 

So Lara is trying to make life less risky and more comfortable for this industry, at the same time he makes financial life less secure and more expensive for almost every insurance customer in California – without actually informing each customer of their new risk.

 

That’s not exactly living up to the promise of protecting Californians’ futures, but it may be a way to “make a difference” in people’s lives.

 

The question now is whether consumer advocates or anyone else can go to court and drag out this process until 2027, when Lara’s term in office will end. If not, get set to write even higher checks for insurance coverage.

 

    -30-

Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net