From the Los Angeles Times:
Smashing the record for the most money ever donated by a candidate in a political election, Republican Meg Whitman has written her gubernatorial campaign a $15-million check that brings her personal stake in the race to $119 million.
The new infusion pushed the billionaire candidate past the previous record holder: New York City Mayor Michael Bloomberg, who spent $109 million on his 2009 reelection bid.
“It takes a lot of money to be competitive in California,” said Whitman, speaking to reporters after a campaign event at the San Francisco headquarters of Yelp, which provides online customer reviews.
Whitman noted that she had a competitive primary and has been campaigning for two years, and that unions have spent millions supporting Democratic nominee Jerry Brown.
Brown derided the donation late Wednesday, as he spoke to reporters at a celebration in downtown Los Angeles that commemorated the 200th anniversary of the start of the Mexican War of Independence.
The most visible effect of Whitman’s deep pockets has been her ability to blanket the airwaves, notably in recent days with a controversial ad featuring 1992 footage of then-presidential candidate Bill Clinton flaying Brown’s record on taxes during a Democratic primary debate.
The report upon which Clinton relied — a CNN story on Brown’s governorship — has since been proved inaccurate, leading the Brown campaign to repeatedly call on Whitman to take down the ad. Clinton called the ad “misleading” as he endorsed Brown, despite their past enmity.
Whitman came under stern questioning on the ad from an audience member at her San Francisco event. The confrontation — and later questioning of the candidate’s positions and strategies —- was rare for Whitman campaign events, which are usually held in front of wholly friendly audiences.
“Why are you refusing to remove an ad that has proven to be false and therefore misleading despite claims from both Bill Clinton and the CNN reporter who initially provided the fallacy? Why would you both knowingly and purposefully run a campaign that is based on lies?” asked Susan McKay, a 24-year-old account executive and registered Democrat.
The state Department of Finance has confirmed that the tax rate per each $100 of income declined under Brown’s tenure, from 1975 to 1983.
Brown released a budget plan Tuesday that calls for fiscal austerity, pension reform and reducing environmental regulations. Specific proposals include setting up a rainy day fund, simplifying the state’s tax structure, penalizing state leaders if they fail to pass a budget on time, vetoing legislation that lacks a means to pay for associated costs and proposing a constitutional amendment that would require future ballot initiatives to identify funding sources.
From The Los Angeles Times:
When Meg Whitman says California is bleeding jobs, the Republican gubernatorial nominee often cites the exit of Northrop Grumman.
After 70 years in Southern California, Northrop, the nation’s second-largest defense contractor, announced in January that it was moving its corporate headquarters to the Washington, D.C., area. On the campaign trail, Whitman uses the company’s decision to highlight the need for aggressive action as the state grapples with what she describes as a corporate exodus.
“We have got to have an economic development team that stands up and competes for California jobs,” she said at a recent appearance in Folsom, near Sacramento.
But Gov. Arnold Schwarzenegger created such a team in April — and it would have had little leverage with Northrop Grumman. The company said it left the state not because of high taxes or cumbersome regulations but to be closer to its key customer: the U.S. government.
Whitman, the former head of EBay, promises to help turn California’s economy around by cutting government spending as much as $15 billion, including the elimination of 40,000 state jobs. She would become marketer-in-chief, using the bully pulpit of the governor’s office and the power of political appointments to draw business here.
She suggests that if the government also cut taxes, eased regulations and focused more on recruiting new companies and retaining those already here, California would not be suffering record unemployment.
But many policy experts say such plans will do little in the short term to create the 2 million new jobs Whitman promises: The state’s bleak economy is primarily the result of its deep investment in the real estate boom.
Most large corporations and small businesses are basing key decisions on factors over which a governor’s economic team would have little influence, the experts say. Credit markets are still tight and consumer confidence remains low.
Brown released a jobs plan last month aimed at expanding the renewable-energy industry and supports “strike teams” to help businesses cut bureaucratic red tape, in addition to advocating tax credits for manufacturers and less regulation. But on the stump he focuses on his past experience as governor and his ability to bring people together to solve the state’s problems.
Whitman’s ideas have been endorsed by the California Chamber of Commerce and the state chapter of the National Federation of Independent Business.
Economists agree that the state does not attract many new businesses from elsewhere. But according to the Public Policy Institute of California, the jobs it loses as a result of relocations total about 11,000 a year — less than one-tenth of 1% of California’s 18 million jobs. Moreover, in a downturn, marketing and outreach play a relatively small role in California’s economy, which, like the national economy, expanded and collapsed with the housing bubble.
The experts say California’s job growth has been closely tied to the national economy for the last 30 years — regardless of policies in Sacramento — after outperforming the country during the Cold War era, when the state was home to several large contractors and dozens of military bases.
The state’s jobless rate is higher than the national rate of 9.5%; so are those in neighboring Nevada, Oregon and Arizona. But experts say California’s unemployment is consistently higher because its population growth tends to outpace job creation
Whitman says she would eliminate taxes on manufacturing equipment and capital gains, increase the research and development tax credit for businesses and cut red tape. Schwarzenegger has tackled these areas, with mixed success.
But the problem is cyclical, not structural, economists said.
Whitman “talks as if the California economy is shriveling up and blowing away in the wind. That’s not true,” said Christopher Thornberg, a founder of Beacon Economics in Los Angeles.
He and other experts point to the same positive indicator: More than half of the venture capital invested in U.S. companies in the second quarter of this year poured into California, the most since the third quarter of 2008, when the national economy collapsed.
Although Whitman acknowledges that fact on the stump, she cites the state’s poor rankings in national surveys of business climates to convey the message that California is losing its competitive edge. This year, Chief Executive magazine named California the worst state in the country for business, saying it was on its way to becoming the “Venezuela of North America.”
Some economists say the rankings she cites, by focusing on taxes and regulation, take a narrow view of the business climate.
Economists said investments in education and infrastructure will help boost the state’s economy, particularly as the UC and California State University systems struggle with overcrowded classes, admission waiting lists and soaring tuition. Likewise, investment in roads, highways and public transit has languished in recent years.