That Giant Sucking Sound in California

testosteronepit's picture

Wolf Richter   www.testosteronepit.com

There never was that “giant sucking sound” that Ross Perot had warned about during his quixotic presidential campaign in 1992—the sound that manufacturing jobs would make as they headed south to Mexico if NAFTA were ratified. Turns out, he was wrong. The jobs went south silently, and not in one fell swoop either, but gradually. However, yesterday in San Francisco, there was a giant sucking sound. It wasn’t from jobs going south, but from money going east. Lots of it. And in one fell swoop. President Obama was in town, fundraising.

His first stop in San Francisco—after a breakfast fundraiser in Southern California—was the Mark Hopkins Intercontinental on Nob Hill. $38,500 a person. With 70 people attending, the take was $2.7 million. Then they drove to a fundraiser at a private home in the Pacific Heights neighborhood, the most spectacularly expensive area in San Francisco, and perhaps in the world, where the Pelosis live. No reporters allowed. Also $38,500 a person, 70 people, $2.7 million. A cool $5.4 million between the two. It’s all very democratic. The elite got to buy access to the President and got to bend his ear. Anyone can do it. It just takes some money and knowing the right people.

Then in the evening, finally, there was a fundraiser for the hoi polloi at the Nob Hill Masonic Center. 2,500 people paid $100 or more for their tickets. And they got what they expected: after hobnobbing all day with some of the richest people in California, Obama remembered ... the middle class. During his 30-minute speech, he promised to do what he could to improve their lot—having suddenly become a populist.

"And I don't want this nation to be known just for buying and consuming stuff," but for manufacturing, he said. Indeed. Since 2000, real wages have declined, and the White House touts this horrid statistic in a recent paper that outlines how to make America competitive with low-wage countries like China. And one of the principal strategies is lowering wages. Read.... When the White House Touts Falling Wages.

But unlike the intimate groups of the prior two fund raisers, these attendees got no access. Their hundred bucks just gave them an opportunity to see him on stage in the distance, and later, some of them got to shake his hand. That’s all the hoi polloi got. Nevertheless, they gave him rousing applause. But when a couple of people did speak up against him and made their way down the aisle, they were promptly removed—not arrested and not shot, just thrown out. No dissent allowed.

Outside, streets were blocked, and traffic was a snarl. Protesters of all stripes stood around and yelled, wanting to be heard and seen, from Tea Party activists to frustrated leftists and deceived medical marijuana devotees, who'd massively voted for Obama in 2008 only to get their hide skinned by the subsequent federal crackdowns on dispensaries, growers, and other elements of California’s most vibrant industry—elements that are largely legal under California law and illegal under federal law. But who are these people going to vote for? Rick Santorum? So the crackdowns will continue.

Obama doesn't come to California to campaign. Doesn't need to. He has California in his pocket. He comes to raise money. But even here, his job approval rating has plummeted from 65% in March 2009, when green shoots were still everywhere. Well, we couldn’t see them, but they had to be somewhere, invisible ones maybe, because California was going bankrupt and losing jobs faster than anyone could count—and it continued to lose jobs until August 2011 (yep, no typo, for that ongoing debacle, read.... The Shriveling Middle Class in California). So the bloom has come off the rose, and in a December field poll, his job approval rating in California was down to 48% (though that's still light years ahead of.... The Most Disparaged Profession).

But California is unique. Take high-speed rail. The most profitable route in the world is the Tokyo-Osaka Shinkansen with 150 million passengers per year. Even Amtrak, the perennial money loser, has a very profitable route: the Acela Express between New York City and Washington DC. In theory, California’s high-speed rail project could fall into that category. “In theory,” because in reality, it has turned into a hair-raising and very expensive scandal. Read.... Bait And Switch: High-Cost Rail to Nowhere.