Financial engineering or financial foolishness: mimicking below-zero federal interest rates?

Schwarzenegger: I can be bought!

I am rich and powerful ...

For a man who said he was t0o rich and independent to be bought or be required to cater to the special interests, it's ironic that Governor Schwarzenegger has exceeded the fundraising prowess of his predecessor Gray Davis and caved in to liberal democrats and their special interest  spending whenever possible.

According to the Sacramento Bee ...

"Gov. Arnold Schwarzenegger says he has a price."

"If he is going to give up the no-new-taxes stance on which he staked his 2006 re-election campaign, he says, Democrats must agree to shove aside environmental rules for 11 highway projects and let private investors and builders play a larger role in state construction."

The triple whammy ...

Like a RINO (Republican In Name Only), Schwarzenegger is abandoning his so-called "conservative" principles and talking about raising taxes in a time of universally acknowledged recession.

Like a committed environmentalist and the  spearhead of California's efforts to fight global warming, Schwarzenegger seems all to ready to abandon environmental rules -- especially as they may apply to concrete production.

And as one who is too rich to pander to the special interests, he is openly advocating to let private investors play a larger role in state construction.

But what do you expect from a man who declares himself to be no longer the candidate the people elected, but a post-partisan politician who is above party politics. A convenient cover for a political turncoat who is willing to turn his back on the party who elected him and do deals with the profligate spenders he was elected to rein in.

It's a role to be played and it's only an writer's words ...

"Schwarzenegger has long believed that higher taxes damage the economy; he said in 2006 it would be the 'worst thing' to do."

Notice how he is looking ahead to 2010 -- to clear his record before facing a Senate run?

"Now, facing a $40 billion budget deficit over the next 18 months, he says he is willing to bend if the state can offset the impact of raising taxes by making regulations friendlier to businesses."

Switch hitter?

Only months ago, the budget deficit was said to be somewhere between $12 BILLION and $24 BILLION -- with $14 BILLION mentioned as a likely number.

So how did we suddenly get to $40 BILLION or his Schwarzenegger trying to clear the whole deficit before his Senate run? Or his he trying to pull a Pete Ueberroth? Ueberroth, as you may well remember was the head of the Los Angeles Olympic effort and overstated all costs in order to have a major surplus at the end of his watch.

Switching subjects: it is no longer about taxes or spending, it's about jobs and infrastructure...

Parroting the Obama line, Schwarzenegger has apparently turned into a liberal democrat.

" 'Really, the whole idea was that we help the people as much as possible in these very terrible times,' Schwarzenegger said last month as he rejected a Democratic plan to reduce the deficit by $18 billion because he said it didn't do enough to promote job growth."

" 'This proposal that they have sent down … does really only one thing, and this is punish the people of California,' he said."

Truth be told, Schwarzenegger is complicit in "punishing the people" as he signed off on every budget since he was elected. There is no "they!" It Schwarzenegger and the legislature who have spent the last five years spending California into an abyss -- and with little or nothing to show for all of that massive spending except nice new freeway sound walls which are graffiti magnets.

It's not his lifestyle that he is gambling with ...

"Schwarzenegger's action was risky; continued stalemate means the state will run out of cash in February, unable to pay tax refunds or state vendors."

He can move out of state to another one of his homes at a moment's notice. Not that he was even in the state when the new budget proposal was revealed during the New Year break. He was enjoying life in Sun Valley, Idaho -- at one of his other homes.

Diversionary tactic: look over there ...

"Democrats say the Republican governor is holding up the budget over a stimulus package they consider largely irrelevant to closing the state's massive deficit."

" 'Economic stimulus is extremely important, and we need to get Californians back to work,' Assembly Speaker Karen Bass, D-Los Angeles, said Wednesday. 'However, economic stimulus proposals will not address the (cash) situation that the state controller has indicated we will be facing in February. So it is our belief the governor should sign the proposal we put forward to address the immediate cash crisis.'"

More smoke and mirrors: seeking a position of plausible deniability?

Is the governor's goal to set the stage, so to speak, so that he can claim he fought hard against the democrat's dastardly budgetary plans?

"Despite issuing a separate budget proposal last week, the governor continues to negotiate with Democrats over their $18 billion package with the possibility he could sign it before February."

I can be bought; and I don't mind selling out my own party in the process ...

"The governor said last month that if Democrats give him what he wants, he'd sign the package even though it skirts the state's two-thirds vote requirement for taxes, making opposition by lawmakers of his own party irrelevant in a way they say is illegal."

What environmental impact?

Schwarzenegger is primarily asking to waive environmental restrictions so that $1.2 billion in road projects can begin as soon as this year, which he estimates would establish 21,600 jobs, including those created in other sectors by worker spending.

Can you say "special interests?"

"The governor is also asking to change construction guidelines to make it easier for private firms to build state projects, which he suggests would allow California to take advantage of even more federal and private capital."

Hollywood Lesson One: Looking Good ...

"Schwarzenegger's demands, if met, would allow the governor to say he scored some wins for business interests, even as he capitulated on taxes. It's a strategy likely to reappear during summer budget talks, when the governor is expected to ask Democrats to loosen rules over meal and rest breaks in exchange for further tax increases."

Looking tough by threatening the union or would the meal and rest breaks only apply to non-classified workers?

It doesn't matter if the results are mostly symbolic and can be exploited in the media for maximum advantage ...

"In the meantime, the governor's list of $1.2 billion in road projects likely won't have a game-changing effect in a $1.7 trillion statewide economy, though the administration believes it would help the recovery."

"The nonpartisan Legislative Analyst's Office said the proposal has some merit in a down economy, such as taking advantage of lower prices for materials and highly competitive bids as more firms are desperate for work. But it faces numerous challenges, principally the need for federal waivers."

"The analyst also noted that the plan would only accelerate construction by a few months, since several projects are already on track to begin in early 2010, not creating as immediate an impact as advertised. And the analyst report noted that stimulus would be confined to those areas where highway projects are located."

Special interests?

"But with the state desperate for new jobs, the governor likely believes there is no greater political opportunity than now to press the Democratic-controlled Legislature to make concessions that enable more long-term private involvement in state construction."

"Democrats oppose the governor's plan because they want the 11 specified road projects to undergo environmental review, whereas Schwarzenegger wants to eliminate that hurdle. Democrats also want more oversight over a procedure that incorporates the design and construction sequences into one, a change that Schwarzenegger wants because it is more favorable to private builders."

Only "acting" like a Republican?

"The governor's proposals would require Democrats to give up protections that environmentalists and state employee labor unions hold dear. Steinberg said there is room for agreement but that the governor shouldn't expect to get everything he wants."

The political way?

Do or say anything to pursue your own agenda has always been the way of politics, regardless of political party -- no matter whether or not you style yourself as a  post partisan politician.

"In 2006, Schwarzenegger focused heavily on two messages – his opposition to taxes and his environmental credentials. Faced with far different economic circumstances in 2009, Schwarzenegger's message has shifted to creating jobs.

"While he once promoted his ability to balance environmental concerns with economic ones, he says the economic ones win out for now."

" 'What we want to do is strip away some of the rules and regulations that are holding us back now to do infrastructure in the first place," Schwarzenegger said last month. 'So we need jobs right now. For me the people are the most important thing, then we can worry about all the other regulations.'"

Bottom line ...

Schwarzenegger has abandoned the conservative principles of the Republican party and has joined the ranks of those politicians who will do or say anything to pursue their own personal agenda: in this case moving  Schwarzenegger beyond Hollywood into a well-respected statesman.

-- steve

Reference Links:

Analysis: Schwarzenegger shifts budget focus from opposing taxes to creating jobs - Sacramento Politics - California Politics | Sacramento Bee

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