San Francisco: Reaganomics is Back!

San Francisco might have seemed one of the least likely cities to rip a page from the economic play book of Wisconsin Governor Scott Walker.  Yet in approving a tax holiday for Twitter, Inc., the giant of micro blogging, the city’s Board of Supervisors has done just that.  Walker has become infamous for gutting his state’s collective bargaining law.  Less well known, though, is the package of tax cuts he had previously signed into law – including a two year income tax moratorium for companies moving into Wisconsin – that increased the very budget deficit he argued justified his drive against his state’s public employees.  San Francisco officials presumably won’t take up the cudgel against public employees or government services the way Walker did, but proposing new tax breaks while the city is running a serious deficit certainly smooths the path for those who will.

There’s nothing really new about this approach.  Call it “supply side economics,”“trickle-down economics” or “Reaganomics,” the idea’s the same: Cut business taxes, America thrives, and the tax cuts pay for themselves in increased revenue.  When the theory proved to be poppycock as those revenues failed to materialize, fiscal conservatives like Ronald Reagan found themselves born-again as deficit spenders.

Walker’s cuts were only a drop in the bucket compared to Wisconsin’s anticipated two-year shortfall of nearly $3 billion, amounting to $117 million over two years, with just a million or two for the relocating companies.  But his backers hope they’re just the start – eight of the cuts Walker campaigned on (there were more) would cost an estimated $3.8 billion over the two year budget cycle.

Likewise, the estimated $22-57 million payroll tax exemption that Twitter has apparently successfully demanded as its price for staying in San Francisco for the next six years falls far short the city’s projected $380 million deficit.  And since the deal only applies to new hires, Twitter won’t actually pay less than it does today.  But here too, that won’t be the end of it.

Online game creator Zynga has already announced it wants the same deal; others, likely including online review company Yelp, will certainly follow.  And since it’s not allowed to fashion a tax break for the benefit of a single company, this one is crafted for an entire “community revitalization” zone.  Business owners in other parts of the city will obviously ask their Supervisors why they can’t get them one too.

And there is a darker side to this.  Ronald Reagan was accused of being many things, but original thinker was not one of them.  He may actually have believed in what his future running mate, George H. Bush, once called his “voodoo economics,” but not everyone is so naive.  Grover Norquist, President of Americans for Tax Reform, proclaims his desire to shrink government “down to the size where we can drown it in the bathtub.”  And a major tax break for a wealthy corporation in an industry that’s currently thriving is just how you start the shrinkage.

It’s not that there are no legitimate policy issues here.  The city is currently one of the few with a payroll tax and some would prefer to switch to taxing a company’s gross receipts.  (The city had a hybrid system in which a company was taxed either on its profits or gross receipts until the latter was eliminated in 2001 by a lawsuit filed by the city’s businesses, an outcome that cost the city $25 million annually.)  And Supervisor Ross Mirkarimi, who voted against the Twitter deal proposed a two-year moratorium on taxing stock options.  Instead, for the moment the city has opted to stick with the current system and give Twitter what it wants.

And let’s be clear here – this tax break is not focused on an industry or individuals struggling to make ends meet.  The New York Times recently pegged the hi tech industry’s average salary for computer science majors just out of college at $80,000, (with Google going as high as $90,000 to $105,000.)  Twitter itself is currently valued at $7 billion and hi tech employment in San Francisco is almost at its peak level.

The bill needs to go through one more reading, but with the Supervisors having voted 8-3 in its favor and Mayor Ed Lee leading the cheers, it seems certain to become law next week.  The question of whether the Board still had a “progressive” majority had been a open one until it firmly embraced a corporate tax agenda with this vote.  Still, as the city elects a mayor later this year and Lee has pledged to serve only the remainder of now-Lieutenant Governor Gavin Newsom’s term, the Twitter vote may emerge as a litmus issue in that race.

Those behind the Twitter deal no doubt think it will be cool to keep such a hip company in the city.  Perhaps they’re too young to remember Reaganomics; perhaps they’ve forgotten.  And no doubt, they’ll continue to denounce politicians in Sacramento and Washington, D.C. for cutting taxes on the rich and services for the rest of us.  But when it comes time to balance the budget in San Francisco, hip and cool won’t pay the bills.  Let’s not the rest of us forget that.  And for now, the city’s Board of Supervisors has been tried and found wanting.

San Francisco Gets an Antiwar Congresswoman

The recent 226-202 House of Representatives approval of the supplemental budget was a particular disappointment to antiwar activists.  At one point they’d thought it might be possible to block the bill and its $79.9 billion Department of Defense appropriation earmarked largely for the Iraq and Afghanistan wars, – at least temporarily.   Nonetheless, San Francisco antiwar voters might take some consolation in one thing anyhow – it appears that the city now has an antiwar Congresswoman.  And no, it’s not House Speaker Nancy Pelosi, but Jackie Speier, elected just last year to represent the less liberal western part of the city and several towns on the Peninsula to the south.

Not only was Speier one of but sixty votes (fifty-one of them Democrat) against the budget in its first trip through the House, but she also made a second, tougher vote against it.  When House Republicans took umbrage at the addition of a $5 billion International Monetary Fund loan guarantee, they announced they would switch sides and vote against the bill upon its return from the Senate, raising the possibility of its defeat should the antiwar Democrat votes hold firm.

Predictably, they did not.  This time even Pelosi herself – who did not vote the first time as is common practice for a Speaker – was recorded in favor, presumably to demonstrate how much the House leadership really wanted the votes.  And yet, despite a San Francisco Chronicle report that “the White House has threatened to pull support from Democratic freshmen who vote no,” Speier did just that, one of only six freshmen – among thirty-two total Democrats – to do so.  Arguably, Speier was doing nothing but what San Francisco voters had directed her to do last November when 59 percent of them supported Proposition U which stated that the city’s Congressional representatives “should vote against any further funding for the deployment of United States Armed Forces in Iraq.”

But realistically speaking, although the ballot question’s only exception concerned “funds specifically earmarked to provide for their [American troops in Iraq] safe and orderly withdrawal” and did not exempt funding requests from Democratic Presidents, the fact that George Bush had negotiated a troop withdrawal agreement before leaving office seems to have made most House Democrats feel they have a pass to fund that war right through 2011. And certainly Pelosi has never given any indication of paying the proposition any heed despite the fact that 61 percent of her district backed it.

On the contrary, she’s made it clear that she views it as a Democratic Speaker’s duty to ensure the funding of what a Democratic President has now taken on as his wars.  Her spokesman, Brendan Daly, told the Chronicle that Pelosi was telling members “we need to do this, this is President Obama’s plan for both Iraq and Afghanistan. He’s got a plan to end the war in Iraq.  He’s got a plan to refocus our efforts in Afghanistan, and we need to support the president in that, and this is the right way to go.”

And yet when Representative Jim McGovern (D-MA) proposed adding language calling for the Secretary of Defense to “submit to Congress a report outlining the United States exit strategy for United States military forces in Afghanistan” by December 31, 2009, it was no dice.  Pelosi’s view is apparently that the President shall give us his plan in his own good time. (McGovern has since filed his amendment as a free-standing bill with 84 co-sponsors.)

Her San Francisco colleague Speier, on the other hand, said she had “serious problems with the current wars” and didn’t believe that “escalating the conflicts make America or the world safer.”  Speier’s viewpoint is particularly welcome in that it differs so markedly from that of her predecessor, the late Tom Lantos, who voted for the first House resolution for the Iraq War (which Pelosi did not.)

Moreover, in her ascent to her new position, Speier had betrayed no particular maverick tendencies.  She gained it not through any kind of insurgent antiwar campaign but more of a vetting process of the area’s political establishment.  A former state legislator forced to leave office due to term limits, she had failed in a prior bid for the Democratic nomination for Lieutenant Governor. But when she announced her interest in the Lantos seat, it soon became clear that she would have the endorsements deemed to matter – and presumably the attendant campaign financing.  At this point, other potential candidates backed off and the insider consensus choice was presented to the voters for their ratification.  Speier then won 90 percent of the Democratic vote in a special primary after a campaign that seemed to involve less of telling people what she stood for than reminding them that they already knew her – and that her ultimate victory was inevitable.

So, at a point when the country’s antiwar movements are largely stalled, Bay Area antiwar voters can at least cheer the pleasant surprise of having a new Congresswoman willing to buck both the White House and the House leadership.

Sex and the City: Prop K

Memo: Prop K did not pass on Election Day.  For those hoping and praying for victory, San Franciscans, as liberal as they are, voted against decriminalized prostitution.  Prop K, heavily supported by the San Francisco Democratic Party, the National Lawyers Guild, the Harvey Milk Democratic Club, along with many other prominent progressive organizations, would forbid law enforcement agencies to investigate, arrest, or prosecute anyone selling sex, although it would not technically legalize it.  To the keen visitor, San Francisco seems like a city full of prestige, ingenuity, and rich in culture. However, when you venture into the heart of the city, visitors will find that it is teeming with dirty vices.  Brothels posing as massage parlors and nail salons, narcotics being sold on the corner in broad daylight, and strip clubs innocently waiting for the tired traveler.    If you haven’t been to San Francisco for a while, there is much here to suit your pleasure: It is a perfect city for the undiscriminating John.

San Francisco, the flash-forward city of the Pacific Rim, has, for better or worse, become an extremely liberal city.  It has become a home to the Folsom Street Parade that celebrates sadism and masochism, Lovefest–a street festival where neo-hippies gather to share “love,” and a Hollywood mayor who regards his town as a “sanctuary” for illegal immigrants, a haven for those practicing civil disobedience.  Prostitutes, coincidentally, have had a long, famed history in San Francisco, setting up shop on Maiden Lane (a.k.a. Morton Lane) near Union Square during the Gold Rush, then accommodating miners with women of all colors.  Today, Maiden Lane only exists as an alley for delivery vehicles and upscale boutiques. However, the elusive “call girls” have migrated to the online world.  Through this transition, escorts now have access to a more seemingly infinite database than they could ever encounter on the streets and some who they would never imagine soliciting business from.  John’s or “tricks,” one who uses an escort’s service, can now safely view and pick their fantasy in the privacy of their home without the authorities breathing down their neck.  The internet has also given escorts anonymity and has provided them with forums to share their positive experiences, fears, and business information.  Prostitution in the 21st century has become a billion dollar business.

Prostitution is the world’s oldest profession.  And there is nothing anyone can do from preventing a women from selling her body.  Unfortunately, in the modern age, many other despicable trades are associated with it such as pimping, pandering, human trafficking, and child prostitution which have slandered the honest working girl.  To which I am happy that Prop. K did not pass.  Though Prop K’s intent was to protect women and to report abuse without fear of prosecution, it allows pimps to operate legally, opening the floodgates to legal organized crime, threatening the humanity of women.  Whether one thinks prostitution should be legalized or not, one cannot deny the fact that prostitution breads a slew of detrimental activities that ultimately harm society.