Economics

Calvin Trillin, Deadline Poet

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Yet Another Chapter in Trickle Down Economics

“C.E.O.’s in finance, technology, energy and beyond are pulling down multimillion-dollar paychecks. What many of these executives aren’t doing, however, is hiring.”

                                                                                                                                                                                                 -the New York Times

If you await a downward trickle,

You’ve just received a wooded nickel.

 

 

5 Things: April 22, 2011

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>>BLACK WHEELS Three reasons why African-Americans should ride bicycles, brought to you courtesy of community two-wheeler group Red Bike and Green. One, health: the exercise can counter obesity and chronic disease. Two, economics: why drop all your cash into a car pit when you can put it to brightening your present and future? Three, environment: environmental racism — including pollution in low-income communities — has gone on too long, and you can do you part to change it. Now that we have that out of the way, check out Red Bike and Green’s first “black Critical Mass” of the year in Oakland on Sat/23. Bikes: too many good reasons to ride them.

>>LOCAL BOY DONE GOOD Reynaldo Cayentano Jr. grew up on Sixth Street, and he’s not going anywhere. The City College student and photographer recently opened up gallery space with cohort Chris Beale in the old District Attorney’s office, but the two will be throwing their Sat/23 “Native Taste” party at the House Kombucha factory, where they’ll showcase the work of 13 local artists and the hip-hop stylings of Patience. Speaking of local boys, have you heard the new SF anthem by Equipto and Mike Marshall?

Equipto ft. Mike Marshall, “Heart and Soul”:

http://www.youtube.com/watch?v=F3Fh0dXpuco&feature=player_embedded

>>GOOD & PLENTY CHEAP There’s nothing we like better than good, cheap stuff. Not the cheap, cheap stuff of a Walmart or Kmart, or the good, pricey stuff of a Neiman Marcus or Bloomingdale’s. Good. Cheap. Stuff. And in pursuit of said stuff, we know that many of our fellow city dwellers have checked out a City Car Share car for the express purpose of driving to Serramonte Shopping Center in Daly City and hitting the Daiso store. Put away that gas tank: now we have our own Daiso store, newly opened in Japantown. Since most of the items cost $1.50, a $20 bill will get you a Santa Claus-size bagful of beautiful origami paper, clever lunch boxes, kitchenware, or whatever strikes your fancy from Daiso’s — no jive — selection of 70,000 good, cheap goods.

>>THEY WALK AMONG US It isn’t often that we indulge in a little unabashed fandom when a celebrity comes to our city/ashram. After all, we have our standards (smart, funny, left-leaning, maybe a pot bust or two), which rules out your Biebers, your Gagas, your Cruises ‘n’ Holmeses. We also believe that a man with a three-day stubble muttering to himself as he walks down the street has a right to his private musings. But when that man is Alec Baldwin, well, we have to stop, give him a deep Zen bow, tell him he’s welcome here, and report back. We have no idea why Baldwin is here – a Giants game? No, they’re on the road. SFIFF? No, we would have heard. Filming an episode of 30 Rock, Alcatraz Edition? Possibly –- and truthfully, we don’t care. We will take this no further. No tweets, no nothing. Because we want him to come back -– with Tina Fey.

>>THE GOOD BOOKS
A few minutes spent reading a good, cheap book can add some insight and perspective to anyone’s day, and this weekend presents a reason to look for said books. The San Francisco Public Library’s 50th Anniversary Book Sale is going on at the Fort Mason Center Festival Pavilion until Sun/24, with everything on sale for three dollars or less. Books, DVDs, CDs, tapes, and other media are available, and on the sale’s final day, nothing will cost more than a dollar.

The failed experiment

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news@sfbg.com

For three decades we have conducted a massive economic experiment, testing a theory known as supply-side economics. The theory goes like this: Lower tax rates will encourage more investment, which in turn will mean more jobs and greater prosperity — so much so that tax revenues will go up, despite lower rates.

The late Milton Friedman, the libertarian economist who wanted to shut down public parks because he considered them socialism, promoted this strategy. Ronald Reagan embraced Friedman’s ideas and made them into policy when he was elected president in 1980.

For the past decade, we have doubled down on this theory of supply-side economics with the tax cuts sponsored by President George W. Bush in 2001 and 2003, which President Barack Obama has agreed to continue for two years.

You would think that whether this grand experiment worked would be settled after three decades. You would think the practitioners of the dismal science of economics would look at their demand curves and the data on incomes and taxes and pronounce a verdict, the way Galileo and Copernicus did when they showed that geocentrism was a fantasy because the Earth revolves around the sun (known as heliocentrism). But economics is not like that. It is not like physics with its laws and arithmetic with its absolute values.

Tax policy is something the framers of the Constitution left to politics. And in politics, the facts often matter less then who has the biggest bullhorn.

The Mad Men who once ran campaigns featuring doctors extolling the health benefits of smoking are now busy marketing the dogma that tax cuts mean broad prosperity, no matter what the facts show.

As millions of Americans prepare to file their annual taxes, they do so in an environment of media-perpetuated tax myths. Here are a few points about taxes and the economy that you may not know, to consider as you prepare to file your taxes. (All figures are inflation adjusted.)

1. Poor Americans do pay taxes.

Gretchen Carlson, the Fox News host, said last year “47 percent of Americans don’t pay any taxes.” John McCain and Sarah Palin both said similar things during the 2008 campaign about the bottom half of Americans.

Ari Fleischer, the former Bush White House spokesman, once said “50 percent of the country gets benefits without paying for them.”

Actually, they pay lots of taxes — just not lots of federal income taxes.

Data from the Tax Foundation shows that in 2008, the average income for the bottom half of taxpayers was $15,300.

This year the first $9,350 of income is exempt from taxes for singles and $18,700 for married couples, just slightly more than in 2008. That means millions of the poor do not make enough to owe income taxes.

But they still pay plenty of other taxes, including federal payroll taxes. Between gas taxes, sales taxes, utility taxes and other taxes, no one lives tax free in America.

When it comes to state and local taxes, the poor bear a heavier burden than the rich in every state except Vermont, the Institute on Taxation and Economic Policy calculated from official data. In Alabama, for example, the burden on the poor is more than twice that of the top 1 percent. The one-fifth of Alabama families making less than $13,000 pay almost 11 percent of their income in state and local taxes, compared with less than 4 percent for those who make $229,000 or more.

2. The wealthiest Americans don’t carry the burden.

This is one of those oft-used canards. Senator Rand Paul, the tea party favorite from Kentucky, told David Letterman recently that “the wealthy do pay most of the taxes in this country.”

The Internet is awash with statements that the top 1 percent pays, depending on the year, 38 percent or more than 40 percent of taxes.

It’s true that the top 1 percent of wage earners paid 38 percent of the federal income taxes in 2008 (the most recent year for which data is available). But people forget that the income tax is less than half of federal taxes and only one-fifth of taxes at all levels of government.

Social Security, Medicare, and unemployment insurance taxes (known as payroll taxes) are paid mostly by the bottom 90 percent of wage earners. That’s because, once you reach $106,800 of income, you pay no more for Social Security, though the much smaller Medicare tax applies to all wages. Warren Buffett pays the exact same amount of Social Security taxes as someone who earns $106,800.

3. In fact, the wealthy are paying less taxes.

The Internal Revenue Service issues an annual report on the 400 highest income-tax payers. In 1961, there were 398 taxpayers who made $1 million or more, so I compared their income tax burdens from that year to 2007.

Despite skyrocketing incomes, the federal tax burden on the richest 400 has been slashed, thanks for a variety of loopholes, allowable deductions and other tools. The actual share of their income paid in taxes, according to the IRS, is 16.6 percent. Adding payroll taxes barely nudges that number.

Compare that to the vast majority of Americans, whose share of their income going to federal taxes increased from 13.1 percent in 1961 to 22.5 percent in 2007.

(By the way, during seven of the eight Bush years, the IRS report on the top 400 taxpayers was labeled a state secret, a policy that the Obama overturned almost instantly after his inauguration.)

4. Many of the very richest pay no current income taxes at all.

John Paulson, the most successful hedge fund manager of all, bet against the mortgage market one year and then bet with Glenn Beck in the gold market the next. Paulson made himself $9 billion in fees in just two years. His current tax bill on that $9 billion? Zero.

Congress lets hedge fund managers earn all they can now and pay their taxes years from now.

In 2007, Congress debated whether hedge fund managers should pay the top tax rate that applies to wages, bonuses and other compensation for their labors, which is 35 percent. That tax rate starts at about $300,000 of taxable income; not even pocket change to Paulson, but almost 12 years of gross pay to the median-wage worker.

The Republicans and a key Democrat, Sen. Charles Schumer of New York, fought to keep the tax rate on hedge fund managers at 15 percent, arguing that the profits from hedge funds should be considered capital gains, not ordinary income, which got a lot of attention in the news.

What the news media missed is that hedge fund managers don’t even pay 15 percent. At least, not currently. So long as they leave their money, known as “carried interest,” in the hedge fund, their taxes are deferred. They only pay taxes when they cash out, which could be decades from now for younger managers. How do these hedge fund managers get money in the meantime? By borrowing against the carried interest, often at absurdly low rates — currently about 2 percent.

Lots of other people live tax-free, too. I have Donald Trump’s tax records for four years early in his career. He paid no taxes for two of those years. Big real-estate investors enjoy tax-free living under a 1993 law President Clinton signed. It lets “professional” real-estate investors use paper losses like depreciation on their buildings against any cash income, even if they end up with negative incomes like Trump.

Frank and Jamie McCourt, who own the Los Angeles Dodgers, have not paid any income taxes since at least 2004, their divorce case revealed. Yet they spent $45 million one year alone. How? They just borrowed against Dodger ticket revenue and other assets. To the IRS, they look like paupers.

In Wisconsin, Terrence Wall, who unsuccessfully sought the Republican nomination for U.S. Senate in 2010, paid no income taxes on as much as $14 million of recent income, his disclosure forms showed. Asked about his living tax-free while working people pay taxes, he had a simple response: everyone should pay less.

5. And (surprise!) since Reagan , only the wealthy have gained significant income.

The Heritage Foundation, the Cato Institute, and similar conservative marketing organizations tell us relentlessly that lower tax rates will make us all better off.

“When tax rates are reduced, the economy’s growth rate improves and living standards increase,” according to Daniel J. Mitchell, an economist at Heritage until he joined Cato. He says that supply-side economics is “the simple notion that lower tax rates will boost work, saving, investment, and entrepreneurship.”

When Reagan was elected president, the marginal tax rate for income was 70 percent. He cut it to 50 percent and then 28 percent starting in 1987. It was raised by George H.W. Bush and Clinton and then cut by George W. Bush. The top rate is now 35 percent.

Since 1980, when President Reagan won election promising prosperity through tax cuts, the average income of the vast majority — the bottom 90 percent of Americans — has increased a meager $303, or 1 percent. Put another way, for each dollar people in the vast majority made in 1980, in 2008 their income was up to $1.01.

Those at the top did better. The top 1 percent’s average income more than doubled to $1.1 million, according to an analysis of tax data by economists Thomas Piketty and Emmanuel Saez. The really rich, the top 10th of 1 percent, each enjoyed almost $4 in 2008 for each dollar in 1980.

The top 300,000 Americans now enjoy almost as much income as the bottom 150 million, the data show.

6. When it comes to corporations, the story is much the same — less taxes.

Corporate profits in 2008, the latest year for which data is available, were $1.8 billion, up almost 12 percent from $1.6 billion in 2000. Yet even though corporate tax rates have not been cut, corporate income-tax revenues fell to $230 billion from $249 billion — an 8 percent decline, thanks to a number of loopholes. The official 2010 profit numbers are not added up and released by the government, but the amount paid in corporate taxes is: in 2010 they fell further, to $191 billion — a decline of more than 23 percent compared with 2000.

7. Some corporate tax breaks destroy jobs.

Despite all the noise that America has the world’s second highest corporate tax rate, the actual taxes paid by corporations are falling because of the growing number of loopholes and companies shifting profits to tax havens like the Cayman Islands.

And right now America’s corporations are sitting on close to $2 trillion in cash that is not being used to build factories, create jobs or anything else, but act as an insurance policy for managers unwilling to take the risk of actually building the businesses they are paid so well to run. That cash hoard, by the way, works out to nearly $13,000 per taxpaying household.

A corporate tax rate that is too low actually destroys jobs. That’s because a higher tax rate encourages businesses (who don’t want to pay taxes) to keep the profits in the business and reinvest, rather than pull them out as profits and have to pay high taxes.

The 2004 American Jobs Creation Act, which passed with bipartisan support, allowed more than 800 companies to bring profits that were untaxed but overseas back to the United States. Instead of paying the usual 35 percent tax, the companies paid just 5.25 percent.

The companies said bringing the money home — “repatriating” it, they called it — would mean lots of jobs. Sen. John Ensign, the Nevada Republican, put the figure at 660,000 new jobs.

Pfizer, the drug company, was the biggest beneficiary. It brought home $37 billion, saving $11 billion in taxes. Almost immediately it started firing people. Since the law took effect, it has let 40,000 workers go. In all, it appears that at least 100,000 jobs were destroyed.

Now Congressional Republicans and some Democrats are gearing up again to pass another tax holiday, promoting a new Jobs Creation Act. It would affect 10 times as much money as the 2004 law.

8. Republicans like taxes too.

President Reagan signed into law 11 tax increases, targeted at people down the income ladder. His administration and the Washington press corps called the increases “revenue enhancers.” Among other things, Reagan hiked Social Security taxes so high that by the end of 2008, the government had collected more than $2 trillion in surplus tax.

George W. Bush signed a tax increase, too, in 2006, despite his written ironclad pledge to never raise taxes on anyone. It raised taxes on teenagers by requiring kids up to age 17, who earned money, to pay taxes at their parents’ tax rate, which would almost always be higher than the rate they would otherwise pay. It was a story that ran buried inside The New York Times one Sunday, but nowhere else.

In fact, thanks to Republicans, one in three Americans will pay higher taxes this year than they did last year.

First, some history. In 2009, President Obama pushed his own tax cut—for the working class. He persuaded Congress to enact the Making Work Pay Tax Credit. Over the two years 2009 and 2010, it saved single workers up to $800 and married heterosexual couples up to $1,600, even if only one spouse worked. The top 5 percent or so of taxpayers were denied this tax break.

The Obama administration called it “the biggest middle-class tax cut” ever. Yet last December the Republicans, poised to regain control of the House of Representatives, killed Obama’s Making Work Pay Credit while extending the Bush tax cuts for two more years — a policy Obama agreed to.

By doing so, Congressional Republican leaders increased taxes on a third of Americans, virtually all of them the working poor, this year.

As a result, of the 155 million households in the tax system, 51 million will pay an average of $129 more this year. That is $6.6 billion in higher taxes for the working poor, the nonpartisan Tax Policy Center estimated.

In addition, the Republicans changed the rate of workers’ FICA contributions, which finances half of Social Security. The result:

If you are single and make less than $20,000, or married and less than $40,000, you lose under this plan.

But the top 5 percent, people who make more than $106,800, will save $2,136 ($4,272 for two-career couples).

9. Other countries do it better.

We measure our economic progress, and our elected leaders debate tax policy, in terms of a crude measure known as gross domestic product. The way the official statistics are put together, each dollar spent buying solar energy equipment counts the same as each dollar spent investigating murders.

We do not give any measure of value to time spent rearing children or growing our own vegetables or to time off for leisure and community service.

And we do not measure the economic damage done by shocks, such as losing a job, which means not only loss of income and depletion of savings, but loss of health insurance, which a Harvard Medical School study found results in 45,000 unnecessary deaths each year

Compare this to Germany, one of many countries with a smarter tax system and smarter spending policies.

Germans work less, make more per hour and get much better parental leave than Americans, many of whom get no fringe benefits such as health care, pensions or even a retirement savings plan. By many measures the vast majority live better in Germany than in America.

To achieve this, single German workers on average pay 52 percent of their income in taxes. Americans average 30 percent, according to the Organizations for Economic Cooperation and Development.

At first blush, the German tax burden seems horrendous. But in Germany (as well as Britain, France, Scandinavia, Canada, Australia, and Japan), tax-supported institutions provide many of the things Americans pay for with after-tax dollars. Buying wholesale rather than retail saves money.

A proper comparison would take the 30 percent average tax on American workers and add their out-of-pocket spending on health care, college tuition, and fees for services and compare that with taxes that the average German pays. Add it all up and the combination of tax and personal spending is roughly equal in both countries, but with a large risk of catastrophic loss in America, and a tiny risk in Germany.

Americans take on $85 billion of debt each year for higher education, while college is financed by taxes in Germany and tuition is cheap to free in other modern countries. While soaring medical costs are a key reason that since 1980 bankruptcy in America has increased 15 times faster than population growth, no one in Germany or the rest of the modern world goes broke because of accident or illness. And child poverty in America is the highest among modern countries — almost twice the rate in Germany, which is close to the average of modern countries.

On the corporate tax side, the Germans encourage reinvestment at home and the outsourcing of low-value work, like auto assembly, and German rules tightly control accounting so that profits earned at home cannot be made to appear as profits earned in tax havens.

Adopting the German system is not the answer for America. But crafting a tax system that benefits the vast majority, reduces risks, provides universal health care and focuses on diplomacy rather than militarism abroad (and at home) would be a lot smarter than what we have now.

Here is a question to ask yourself: We started down this road with Reagan’s election in 1980 and upped the ante in this century with George W. Bush.

How long does it take to conclude that a policy has failed to fulfill its promises? And as you think of that, keep in mind George Washington. When he fell ill his doctors followed the common wisdom of the era. They cut him and bled him to remove bad blood. As Washington’s condition grew worse, they bled him more. And like the mantra of tax cuts for the rich, they kept applying the same treatment until they killed him.

Luckily we don’t bleed the sick anymore, but we are bleeding our government to death.

 

ABOUT THE AUTHOR:

David Cay Johnston is a columnist for tax.com and teaches the tax, property, and regulatory law of the ancient world at Syracuse University College of Law and Whitman School of Management. He has also been called the “de facto chief tax enforcement officer of the United States” because his reporting in The New York Times shut down many tax dodges and schemes, just two of them valued by Congress at $260 billion.

Johnston received a 2001 Pulitzer Prize for exposing tax loopholes and inequities. He wrote two bestsellers on taxes, Perfectly Legal and Free Lunch. Later this year David Cay Johnston will be out with a new book, The Fine Print, revealing how big business, with help from politicians, abuses plain English to rob you blind.

 

The online-learning challenge

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culture@sfbg.com

CAREERS AND ED Mixing, mashing, chatting, tweeting: This is how the University of California envisions the future of learning for what it calls a new breed of students. Also on the syllabus? Podcasting, vodcasting, blogging, and Skype.

Last week, UC was awarded a $750,000 Next Generation Learning Challenges grant, moving it one step closer to a curriculum composed of words that barely existed a decade ago. But some fear — with good reason — that online education will become a low-cost, high-return alternative to traditional instruction. And the students will be the losers.

UC’s Online Instruction Pilot Program grew out of recommendations to explore online learning discussed by the UC Commission on the Future over the past two years. This spring, a subcommittee of faculty and administrators selected 29 courses to be developed over the next two years.

The pilot program is a long-term initiative to evaluate and ultimately increase the role of online education as a regular part of the UC curriculum — a chance to respond, according to the program’s website, to a “transformation” in the way students learn.

The commission promotes online learning as a boon without trade-offs, a way of answering questions of accessibility, efficiency, and, ultimately, costs — and is not shy about outlining the relationship between the three. Chartered to help wiggle UC out of a “vise of rising costs and drastically reduced resources,” the commission is proposing sweeping changes to California’s public university system.

 

ALL BUT THE KEG PARTY

UC envisions a greater number of students served and increased diversity, “from Kentucky to Kuala Lampur,” according to Law School Dean Chris Edley, cochair of the commission’s Education and Curriculum Working Group.

Edley, one of the most enthusiastic proponents of digital learning, initially referred to online education as an 11th UC campus, promising it would offer an equivalent college experience — minus only the “keg party.”

Critics were quick to condemn the plan as overblown excitement. Concerned undergraduates and skeptical faculty raised questions about the quality of online learning. Angry graduate student instructors (understandably) balked at Edley’s grandiose vision of a cybercampus where “squadrons of GSIs” will serve on the “frontline of online contact” with undergraduates.

Political science professor Wendy Brown is one of the leading critics. “Personal engagement with students is crucial,” she told us in a phone interview. “Real teachers don’t just teach subject matter. You have to know students and where their experience and level of engagement is. I don’t want them just to come out with content — I want them to come out as thinkers … have a new way to analyze the world.”

Brown said she believes that acclimating to the intellectual culture of a university — especially important in the first year — can’t be achieved online. Yet first-year courses are exactly where administrators are looking to channel online efforts.

Administrators hope to relieve pressure on overcrowded gateway math and science courses, as well as freshman reading and composition. As many as 40 percent of first-year students test out of their first semester of reading and composition, indicating that the students remaining are those most in need of attention. Even so, a generous smattering of general chemistry, intro calculus, and reading and composition classes like Humanities 1A are among the pilot courses moving forward.

Craig Evans, professor of mathematics and chair of the course committee for calculus, echoes Brown’s concerns. “I don’t think it’s impossible to make this work, but I think it would be very, very difficult,” he said. “Part of what we do as teachers is applied psychology, things like checking in with students and keeping up morale, in addition to teaching classical mathematics. It’s hard to see how to convey that in an online course.”

Robert Anderson, faculty representative to the Board of Regents and professor of economics and mathematics, agreed that there is “something important about being on campus for four years, rubbing shoulders with students and faculty.”

And when short-term goals — taking pressure off overcrowded introductory courses — are met, what comes next?

The academic senate approved the pilot program on the condition that the necessary funding — as much as $7 million — come from outside sources. With the exception of the $750,000 NGLF grant, that money hasn’t materialized. The university has borrowed money from internal sources; half of that will be directed toward infrastructure development, according to Anderson.

With money-saving rhetoric underlining every stage of the program’s development and millions to be invested in online infrastructure, how will UC officials avoid the temptation to simply use online learning as a revenue source — regardless of what academic benefits pilot program researchers find?

 

CASH COWS

The answer is: they won’t.

In a post on the Berkeley Blog last summer, Edley attempted to allay fears that an online program would eliminate campus learning by assuring that future online pupils would be “new, tuition-paying, UC-eligible students we otherwise wouldn’t have the room or resources to serve. And any net revenue would be plowed back into supporting the on-campus program.” In this model, off-campus students would be cash cows milked for the additional revenue they could produce.

Though the committee has delayed visions of an entirely online degree since then, crucial questions regarding a long-term trajectory remain: Would online students pay the same price? Would they be accepted exclusively for online matriculation? Would their degrees be identical?

Nobody knows, but already the pilot program is relying on projected revenue from off-campus students to help recoup some of the borrowed $7 million, according to Anderson.

Keith Williams, Edley’s cochair on the commission’s education and curriculum working group, confirmed that UC is planning to offer newly developed classes on a per-credit basis to students enrolled at UC and others.

According to Williams, these new courses will offer full course credit — and the full price tag. Pricing was made consistent with brick-and-mortar courses, Williams explained, to avoid causing UC students to make a tough decision: either pay full price for an on campus course or save money by taking a less desirable online course.

And yes, conveniently, offering the courses at full price does generate revenue to be reinvested. (Williams balked at the phrase “skimmed off the top.”)

Now that the pilot program is underway, administrators are treading more lightly around its money-making intentions. But for a reminder of the project’s origins, one need only look at the commission’s recommendation to up enrollment quotas for nonresident students — a recommendation slated to be met next year.

The commission’s final report explicitly calculates the amount of money ($12,000) that can be generated for each Californian replaced with a nonresident student, stating “each 1 percent increase in nonresident students would generate almost $1 million” — a dubious maneuver at a time when the university claims it must expand online education to meet the shortages of space for its own residents.

The culture betrayed by this vision of UC education is clear — one in which educational models are constructed according to business practices.

Despite the pilot program’s rhetoric of innovation and breakthrough, it’s not the first to fuse Internet with education. Brown is quick to note that despite her criticism of the pilot program “[she] is not a Luddite.” She described to us how the faculty is increasingly making use of online educational aids.

Many professors choose to broadcast their lectures online, allowing students — and anyone else for that matter — to virtually peek in on a lecture, either live or with a delay of hours or days.

Currently, more than 40 UC Berkeley lecture halls are fitted for video and/or audio recording. Thousands of transmissions, from biology to history, have been uploaded to iTunes and YouTube (see sidebar).

Although webcasts are highly popular with students — and students are undoubtedly the main priority for the program — people are tuning in from all continents, according to Benjamin Hubbard, who runs the webcast program.

For Hubbard, webcasts “[broaden] the window of access to all the scholarly activity on campus. We are fortunate in that we are public university, so first and foremost we have a mission of community service and making this content freely and publicly available matches this mission.”

 

THE PUBLIC OPTION

Recognizing the enormous challenges of decreased accessibility and increasing cost, a growing consortium of educators and researchers are building momentum and developing a vision for a truly public online educational program.

Lisa Petrides, president and founder of the Institute for the Study of Knowledge Management in Education, calls herself a “public education fanatic.” She told us that the instead of using online teaching as a money-maker, schools can adopt a principled, egalitarian approach.

Petrides is a signatory of the Capetown Declaration, a manifesto for the open education movement. The declaration calls for collaboration that cuts across institutional lines; for the use and promotion of free educational resources; and for policy support for open education.

“You start to have this pedagogical collaborative community that can use resources in this way, changing how we teach and how we learn,” she said. To take analogy for computer software, Petrides says her movement is akin to the open source movement.

Now there’s an innovative approach to online education — with its eyes on the future, not its pocket.

 

Party Radar: Happy birthday, sexy Lexy

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Gosh and begorrah, I know you’re hungovah — from all that St. Paddy’s Day grog or whatever. Don’t worry, you’ll feel better by Saturday, just in time to celebrate the Lexington Club‘s 14th anniversary, huzzah! Unfamiliar with this rowdy party dyke landmark? Hot chicks, get hip real quick at this blowout, featuring DJs Jenna Riot and Miss Pop, sexy-sexy dancers, no cover, and of course stiff drinks.

After the jump, a Super Ego clubs column from 2007 devoted to the Lex’s 10th anniversary (which was the perfect antidote to the L Word phenomenon of the time), giving you a wee bit o’ lesbian history.

LEXINGTON CLUB 14TH ANNIVERSARY Sat/19, 9 p.m., free. Lexington Club, 3464 19th St., SF. www.lexingtonclub.com

(originally published 4/10/07):

HOT LEX

10 years of hot dykes and cold beer at the Lexington Club

SUPER EGO Lesbians: is there nothing they can’t do? They can run a contemporary art gallery in thigh-baring Versace, tossing back their Paul Labrecqued locks as they leap from their roofless 330Ci. They can go from homeless crack addict to nude Hugo Boss model without gaining a single ounce. They can be a smokin’-hot Latina named Papi, a sassy, brassy canoodler who just happens — surprise! — to be a whiz at hoops. Astonishing lesbians!

Oh, wait. That’s The L Word — about as far from the real world of gloriously rambunctious, wild San Francisco dykes as you can get without scarfing down a gift sack of MAC Pervette lip frost, doing Pilates to Ashlee Simpson (“I am me!”), and microwaving Cheeto, your stump-tailed calico cat. Yes, yes, I know the writhing isle of televised lesbos that L makes LA out to be is one big, fat, easy, anorexic target. Don’t get your Mary Green panties in a bunch, Caitlyn. Just lie back, relax, and think of Joan Jett and Carmen Electra. It’s OK. But just as Chuck D. once bemoaned the fact that most of his heroes don’t appear on no stamps, so my homo heroes don’t appear on no Showtime.

Case in point: Lila Thirkield, the superhumanly vivacious owner of SF sapphic outpost the Lexington Club. When I first moved here in the early ’90s, I almost turned straight or something. The San Francisco my naive dreams envisioned was full of hot, scruffy, tattooed boys into hip-hop and punk, all of them on goofy, gleaming bicycles, occasionally in drag. What I got were mostly overgymed proto–circuit queens in pink spandex thongs and cracked-out twinks you could practically see through. Great if I needed to floss, but … And while all the cute ex–ACT UPers were somewhere adrift — busy shearing sleeves off flannels, maybe — it was the rough-and-tumble sistas who really dotted the t’s on my fanboy résumé. Dykes ruled it.

That was back when wallet chains were radical and FTMs were the new It girls. I’m dating myself, but who wouldn’t, hello? Alas, despite all those Sister Sledge–soundtracked strides up the rainbow of equal signs, women could still get kicked out of bars for making out. Wha? It was a gay man, man, man’s world, and the few lesbian watering holes hewed strictly to the old-school standards: alternadykes, calm down.

Thirkield, a spiky-souled kid at the time, stepped up and opened the Lexington in 1997 to give dykes of a different stripe a dive of their own. Like all bars clever enough to fill a cultural gap, the Lex galvanized its community and reinforced the new, boisterous lesbo aesthetic that combined street activism, machismo appropriation, punk rock attitude, and a winking yen for girly pop culture. And hot sex, of course.

“It seemed so important to have a space where we could be creative, where artists, street kids, and young people could hook up and express themselves,” Thirkield says. “It was my first time running a bar, but it was like the whole community was running it with me.”

Over the past decade the Lex has persevered in the same spirit. “The economics of the city have really changed,” Thirkield says. “Our crowd has a really hard time living here now — that’s why we never charge a cover and we always support other things going on. But really, we’re doing better than ever.”

The young drinking dyke crowd has also expanded, finding homes over the years in such spaces as the Phone Booth and Pop’s, as well as legendary joints such as Sadie’s Flying Elephant and the Wild Side West. New bar Stray is catering to a mostly female clientele, and, although lesbian spaces Cherry and the old Transfer have succumbed, a slew of roving dyke dance parties have taken root.

“The dyke scene has changed in the past 10 years too,” Thirkield says. “It’s more diverse. Certain aspects of it are more visible in the media — some people expect different things. We get a lot more complaints from people coming in for the first time, saying things like ‘It’s such a dive!’ Well, yes, that’s exactly what it is. I mean, it’s great that lipstick types exist. I hope they find a place that makes them happy. But if you want to flick your lighter and sing along to old Journey songs with a roomful of babes from around the world — like during Pride last year — this is the place.”

And what about that pesky L Word? “We get a big crowd to watch it on Sunday nights — mostly because they can’t afford cable. Then they stay for an hour afterward, drinking and bitching about it. So it’s great for business!”

Crazy like a Mission homeboy

1

caitlin@sfbg.com

LIT Benjamin Bac Sierra, San Francisco City College English composition and literature professor and author of Barrio Bushido, an ode to Mission District vato locos, picks me up in his cherry red-and-black 1972 Chevy Monte Carlo low rider. As an academic who started selling weed in the Army Street projects when he was 10, Bac Sierra is well aware that he has an attention-getting car. As it turns out, it nicely represents his world view.

“I’m not supposed to be driving a Monte Carlo. I’m not supposed to be talking to you like this,” he tells me, his conversation inflected with casual swear words and a rhythm like that of an evangelist preacher, or maybe just a man who feels what comes out of his mouth. “A lot of people go into education and think they have to choose: am I going to be square or am I going to be how I used to be? But you can be intellectual and homeboy-homegirl at the same time.”

Barrio Bushido, Bac Sierra’s first novel, follows the story of three young men who ricochet from romance to brutal gang beatings, PCP leños, larceny, and neglect. Lobo, Santo, and Toro’s world has made them wild gangsters. Author Maxine Hong Kingston has compared Bac Sierra’s prose to that other chronicler of the underground man in uncertain times, Dostoyevsky. Although it hardly glorifies the protagonists, an honor and a beautiful-crazy logic to their deeds does emerge. Bac Sierra holds that the impulsiveness, that locura, needn’t be forgotten when someone leaves the street hustling lifestyle.

“I want to make a line between being a homeboy and the negativity. Craziness is a power — you can’t learn that in a book,” he reflects. We drive by his brother’s old house on Treat and 21st streets — Bac Sierra hears that a PayPal executive lives there now. After Bac Sierra’s father died, his brother, charismatic and clever, brought him up — until his brother wound up in jail and died young.

When Bac Sierra was 17, years after he had dropped out high school and begun dealing angel dust, he had a choice. He could continue his lifestyle, possibly ending up dead or in jail, or “retreat” into the Marines, which represented an honorable discharge, as it were, from the barrio.

Bac Sierra’s experience in the Marines followed the same lines as Toro’s, his headstrong and loyal Barrio Bushido character — to a point. Both of them cleaned up and were promoted to squad leader because of their sheer “craziness.” And both saw serious front line action during the Gulf War. Bac Sierra manned a machine gun as part of the first wave of Marines to land in Kuwait City in 1991. He also began writing in the military, letters home that he would revise “maybe 10 times — I wanted to be heard.” Although he doesn’t specifically recommend military service to young people, he recognizes the value of the discipline learned in the armed forces. “A lot of homeboys don’t do shit,” he says flatly.

After serving, he retained his strong ties to the Mission and his family there. Before his brother died, he was the one who motivated Bac Sierra to get his college degree, not to stop at his master’s in creative writing from UC Berkeley, but to continue on to law school. “Hood logic,” Bac Sierra calls it, the idea that a degree in a concrete field was far better than one writing. Although he hated every day of law school, he can now appreciate the experience and the knowledge it brought him.

He pulls the Monte Carlo over to speak with an older man on the corner across the street from his brother’s old house. “Yo escribí un libro, señor, en honor de mi hermano,” he calls out the window, inviting the man to his upcoming book release party at Mission Cultural Center. Many of his friends from the old neighborhood (he now lives in Richmond, where he is raising two of his four children, Margarita, nine, and Benny, six) are Barrio Bushido‘s biggest supporters. I ask him if it makes him sad, how much the neighborhood has changed since when he grew up. “This is the world. Economics knows no friends.”

I recognize the last line from Barrio Bushido. Its characters speak with an urgent poetry, moving through scenes influenced by Dostoyevsky and Miguel Ángel Asturias, with Gabriel Garcia Márquez-like magical realism. Bac Sierra wants the book to be taught in schools and has set a goal of having it adopted into 50 class sections by next semester.

Other things he hopes for: first, that readers be taken on a journey. “It doesn’t have to be stuffy. I want them to be amazed with the language.” Second, he wants the book to show that life is full of choices. “Start living here in this world,” as he puts it.

His last hope is for a “homeboy resurgence” in the Mission, the neighborhood that was once the center of Latino culture in Northern California. Thursday’s party at the Mission Cultural Center is a start. Bac Sierra is planning a low-rider show, Aztec dancers, a reading, and live music for the event — the positive parts of homeboy culture, like Bac Sierra himself. “I’m fucking straight homeboy,” he says. “I am very efficient. I am always inventing things.” 

BARRIO BUSHIDO BOOK PARTY

Thurs/17 7 p.m., free

Mission Cultural Center for Latino Arts

2868 Mission, SF

(415) 643-5001

www.missionculturalcenter.org

Rep Clock

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Schedules are for Wed/16–Tues/22 except where noted. Director and year are given when available. Double and triple features are marked with a •. All times are p.m. unless otherwise specified.

ARTISTS’ TELEVISION ACCESS 992 Valencia, SF; www.atasite.org. $5-10. “OpenScreening,” Thurs, 8. For participation info, contact ataopenscreening@atasite.org. An Island (Moon, 2010), Fri, 8.

BERKELEY FELLOWSHIP OF UNITARIAN UNIVERSALISTS 1924 Cedar, SF; www.bfuu.org. Donations requested. The Economics of Happiness, Thurs, 7.

CASTRO 429 Castro, SF; (415) 621-6120, www.castrotheatre.com. $7.50-12. •Fight Club (Fincher, 1999), Wed, 2, 7, and Insomnia (Nolan, 2002), Wed, 4:35, 9:35. •McCabe and Mrs. Miller (Altman, 1971), Thurs, 2:20, 7, and Pat Garrett and Billy the Kid (Peckinpah, 1973), Thurs, 4:35, 9:15. “Midnites for Maniacs: King of the Hood” •Beverly Hills Cop (Brest, 1984), Fri, 7:30; The Warriors (Hill, 1979), Fri, 9:45; The Last Dragon (Schultz, 1985), Fri, 11:59. The Leopard (Visconti, 1963), Sat-Mon, 2:30, 7.

CHRISTOPHER B. SMITH RAFAEL FILM CENTER 1118 Fourth St, San Rafael; (415) 454-1222, www.cafilm.org. $6.50-15. The Illusionist (Chomet, 2010), call for dates and times. Even the Rain (Bollaín, 2010), Feb 18-24, call for times.

GOETHE-INSTITUT SAN FRANCISCO 530 Bush, SF; (415) 263-8760. $7. “From the Wild West to Outer Space: East German Films:” Chingachgook: The Great Snake (Groschopp, 1967), Thurs, 7.

HUMANIST HALL 390 27th St, Oakl; www.humanisthall.org. $5. The Panama Deception (Trent, 1992), Wed, 7:30.

MECHANICS’ INSTITUTE 57 Post, SF; (415) 393-0100, rsvp@milibrary.org. $10. “CinemaLit Film Series: New Year’s Revolutions:” Adam’s Rib (Cukor, 1949), Fri, 6.

PACIFIC FILM ARCHIVE 2575 Bancroft, Berk; (510) 642-5249, www.bampfa.berkeley.edu. $5.50-9.50. “Film 50: History of Cinema: Fantasy Films and Realms of Enchantment:” Le Million (Clair, 1931), Wed, 3:10. “Radical Light: Alternative Film and Video in the San Francisco Bay Area:” “Abstraction in Film,” Wed, 7:30. “African Film Festival 2011:” “Contemporary African Short Films,” Thurs, 7. “Suspicion: The Films of Claude Chabrol and Alfred Hitchcock:” Betty (Chabrol, 1992), Fri, 7; La Cérémonie (Chabrol, 1995), Fri, 9; The Swindle (Chabrol, 1998), Sat, 8:50. “Cruel Cinema: New Directions in Tamil Film:” Naan Kadavul (Bala, 2009), Sat, 3. “Cinema Across Media: The 1920s:” The Complete Metropolis (Lang, 1926), Sat, 6. Shoah (Lanzmann, 1985), part one Sun, 11:30am; part two Sun, 5:15.

RED VIC 1727 Haight, SF; (415) 668-3994; www.redvicmoviehouse.com. $6-10. Four Lions (Morris, 2010), Wed-Thurs, 7:15, 9:20 (also Wed, 2). Harry Potter and the Deathly Hallows Part One (Yates, 2010), Fri-Sat, 5, 8 (also Sat, 2). Inside Job (Ferguson, 2010), Sun-Tues, 7, 9:30 (also Sun, 2, 4:30). White Material (Denis, 2009), Feb 22-23, 7:15, 9:20 (also Feb 23, 2).

ROXIE 3117 and 3125 16th St, SF; (415) 863-1087, www.roxie.com. $5-9.75. San Francisco Independent Film Festival, Wed-Thurs. See www.sfindie.com for more info. Modern Romance (Brooks, 1981), Fri, call for times; Lost in America (Brooks, 1985), Sat, call for times. Henri-Georges Clouzot’s Inferno (Bromberg and Medre, 2009), Sun-Tues, call for times.

VIZ CINEMA New People, 1746 Post, SF; www.vizcinema.com. $12. Breath (Kim, 2007), Sat, 5. Gantz (Sato, 2011), Sat, 7:15. YERBA BUENA CENTER FOR THE ARTS 701 Mission, SF; (415) 978-2787, www.ybca.org. $6-8. “Volume 14: Middle East,” nine videos focusing on the Middle East compiled by ASPECT: The Chronicle of New Media Art, Jan 13-March 27 (gallery hours Thurs-Sat, noon-8; Sun, noon-6). “Around the World in 33 Films: The Jeonju Digital Project,” Thurs, 7:30; Sat, 7 and 9; Sun, 2 and 4. 

Flush with tips

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culture@sfbg.com

CULTURE I floated drunkenly into the second-story bathroom at 1015 Folsom. It’s a tiny affair, and my head was just enough obscured to make navigating past the waiting bodies a sure difficulty. I did my business and realized that the man that I had squeezed by, near the sink, wasn’t another patron, but some sort of bathroom attendant. In my inebriated state, it appeared to be an elaborate joke.

He was Latino, wearing a nice suit, and stood in the narrow space between the sink and one of the three urinals, his back against the middle pissoir. He had a mountain of curiosities piled over the sink, and a towel for drying hands draped over one arm.

“Have you worked here long?” I asked.

He shook his head. No. Just a little while.

“Do you keep your tips?”

No. He shook his head again, indicating that there was some sort of split. Reluctantly using the towel, I thanked him and dropped a Washington into the tip jar.

Somewhere, after more French techno, I drifted off to sleep. When I awoke, I wondered, had that really happened? Had I dreamt it? Had I hallucinated?

I sent 1015 Folsom an e-mail inquiring about the attendant. Apparently it was true. Barnaby May, who describes himself as a seven-year veteran of the nightclub scene, took credit for the hookup. He felt that something was lacking from 1015, that it would be better to have a bathroom attendant than not. He put me in contact with Shaun Fausz, who runs a company called Refreshus, which trains and supplies bathroom attendants.

According to Fausz, the service is tailored to appeal to a lackluster economy: it costs the clubs nothing. “Clubs would rather have a free service than have to repaint every few months and replace a trashed sink,” Fausz says. Which makes good sense in a city where one of the dominant aesthetics of the nightlife is a sort of high-class posturing that can quickly be ruined by a Magic Marker. Other clubs have resorted to taunting taggers. Look how fucked up our bathroom is, the Rickshaw Stop seems to say, what else can you do? Put up another sticker? The Independent has painted its water closets black to nullify vandalism.

Bathroom attendants from Refreshus act as security, whether they’re at a nightclub, like 1015, or at a strip club, like the Century Club, where one of Refeshus’ longest standing employees, Gary Lawton, has worked for nine months. Lawton says it’s “a good public service,” although he never imagined performing it. Positioned in the bathroom, he’s able to monitor illicit behavior. “As you hear the snorting, you know what’s going on and you just let them know that they have to take it outside,” he says. “Or they’ll approach me and ask me if its cool, and I’ll just inform them that it’s zero tolerance, as well as alcohol, because there’s no drinking with full nudity.”

This was news to me. (My Catholic upbringing and feminist programming at university makes it impossible to attend a “gentleman’s club.”) If a club includes full nudity, and not just topless dancing, alcohol is verboten. “Our beloved senator is responsible for that, Dianne Feinstein.” says Lawton. “It doesn’t make any sense — I mean that’s what security is for. If you see someone being belligerent, you just tell them to go get some fresh air or something.”

Lawton, who looks like he could be a bouncer, doesn’t necessarily tell people he’s a bathroom attendant as much as “a member of security, who’s stationed in the bathroom.” But no embarrassment shows when he discusses the details. He loves his work, where he gets to act as liaison, recommending girls to patrons and occasionally getting a peek himself. He gets to meet people from all over, and show them a piece of the world that he never glimpsed before being at the Century. “It’s something I can’t explain,” he says. “You know you’re stuck in the bathroom, and then you see them doing something like ‘School Girl Night.’ It’s wild. Like nothing I’ve ever seen before. It’s just amazing every time I get out there. They have several girls who actually lift their legs up and climb all the way to the ceiling. It’s like being at the circus, but they’re stripping.”

It’s an experience that, to put it simply, Lawton is generally priced out of, a world where “private dances” can cost upwards of $100. In terms of straightforward class, Lawton has no shortage — he’s a polite man who chooses his words with the precision of someone who makes a living speaking to people — but if we’re talking economics, he’s low on the ladder. Once or twice before meeting me at the Barbary Coast coffee shop off Market Street, Lawton had to drop appointments at the last minute, his housing situation in tumult. Truth is he’s on General Assistance, in the shelter system, and shared tips from a few nights work a week aren’t enough to get over.

The income for a bathroom attendant, the flow of tips, breaks down across class lines as well as cultural ones. In Lawton’s experience, middle- to upper-class white men tip well. With African American or Indian men, he doesn’t count on tips. In some ways, bathroom attendants perform an obsolete service that only older generations know how to handle. (Think of the bathroom attendants at Bimbo’s, and that club’s retro style.)

Fausz has his own observations: “European people don’t tip. They don’t have tipping over in Europe. Women don’t tip as often — they like to let the guys pay for everything when they go out.” To my knowledge, Refreshus doesn’t have female attendants.

While Lawton can’t enforce any specific prices, he sometimes has to step in, politely explaining that the service isn’t complimentary. “Everyone under 32, they’re oblivious,” he says. “They come in and see the candy and go, ‘Oh, it’s free.’ And you have to remind them that, no, this is a service. But you don’t force any prices. Like I’ll have a jar with a $5 bill and I’ll just let them use their own discretion, just remind them that the colognes are usually this amount because it’s expensive and I have to pay for all that. You just make them feel comfortable and let them know that even though it’s complimentary, this is how I make a living. I’m responsible for all this. Because they think the club provides the service.”

A lot of this has to do with exposure. While a number of clubs — Vessel, Harlot, Trigger — reportedly have similar services, bathroom attendants aren’t common. Lawton had never encountered one before landing his job, just seen them on TV, and he describes the position as obsolete. “Each generation wants their own type of representation,” he says. “So naturally anything they think of as obsolete just doesn’t apply to them.” At the same time, Lawton acknowledges that a genuine amount of surprise plays in his favor, and patrons admire that the service is still on offer.

Whether bathroom attendant work at the nightclubs provides enough income is unclear. In a place where people pack singles, like the strip clubs, the tips are expected to flow more freely. That’s fine with Lawton, who doesn’t like the more amphetamine-infused nightclub culture as much, having had close family members ruin their life over addiction.

Fausz has seen turnover, most often when attendants steal or are headhunted by clubs. Some just aren’t a good fit ,or can’t work in the environment, or can’t hold the right amount of conversation. (The attendant I met at the beginning of this piece no longer works for Fausz.) But there are people willing to work for Refreshus wherever the opportunity arises. On a recent night I ran into Russ, a lean fellow in a sharp jacket stationed in the more luxurious main bathroom at 1015 Folsom. He described the job as “a good way to supplement my income,” adding “I’m a personal trainer.”

Fausz wants to fit bathroom attendants into more of the city’s nightclubs, even if an event tends to draw a crowd for whom a bathroom attendant is an obscure novelty. He puts it simply: “I’m kind of training the next generation of people to tip.”

SFBG Radio: The economics of pearl handled dildos

2

In today’s episode, we discuss the economics of pearl-handled dildoes — and how supply, demand and income inequality impact the unemployment rate. Just in time for the State of the Union speech. You can check it out after the jump.

sfbgradio1/24/2010 by endorsements2010

Editor’s Notes

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tredmond@sfbg.com

Social inequality is morally wrong, politically dumb, and economically unsustainable. It also makes you fat.

Seriously.

There’s a book by two British epidemiologists that argues the physical and mental health case for economic equality — and it’s full of great stuff. It’s a year old, but I read a nice analysis of it in Nicholas Kristof’s column in the Jan. 2 New York Times. Kristof notes that Richard Wilkinson and Kate Pickett, both British epidemiologists, cited vast and growing evidence that societies with greater equality are in general more healthy. And by that they mean not only that those societies have less crime and violence; the people who live with greater equality actually have less heart disease, mental illness, and obesity.

The book is called The Spirit Level: Why Greater Equality Makes Societies Stronger. A lot of it’s kind of touchy-feeley, but in the end, they come to a scientific conclusion: “The relationships between inequality and poor health and social problems are too strong to be attributable to chance.”

The two scientists also take on one of the great taboos of modern economics. They argue that growth isn’t necessarily good, that the standard goal of every official government policy in every major nation in the world — capitalist, socialist, or communist — over at least the past half-century, has been based on a flawed assumption.

There aren’t even that many progressives in this country who want to challenge the idea that the economy needs to grow to solve problems like unemployment and poverty. Sim Van Der Ryn, the visionary planner and architect, once told me that it makes no sense to have “a perpetually adolescent economy.” But in most polite company, that’s heresy.

But our new governor, who once employed Van Der Ryn as the director of the Office of Appropriate Technology, has a few heretical cells in his Jesuit-trained brain. And while I don’t expect him to turn the state’s growth frenzy on its head, he ought to be willing to think about this:

The solution to California’s problems may lie more with redistributing the pie than with making it larger.

I’m not arguing that we should abandon growth, particularly at a time of high unemployment. But keep in mind: corporate profits are already up, both here and nationwide — but the big companies are hoarding their cash and not hiring. Banks are making money again — but they’re not lending it out. We’re in a different sort of recovery here, one that may, for the moment, be structurally jobless. During the deep recession, businesses figured out how to survive with fewer employees, and they’re not about to start expanding the payroll.

And of course, the public sector has done nothing but shrink, and there’s little talk of anything but more shrinking.

So maybe the only way we’re going to get out of this is to inject more money into the economy, not by borrowing but by sending some of the idle wealth at the top back down to the level where it might become production. It might make us all a lot healthier. Because it turns out that you don’t have to eat the rich; just tax them.

Nathan Habib keeps it kosher

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“I’m a really practical person. That limits me from driving out to a club the city and coming back in the morning to take a test.” Nathan Habib’s not living the rock star stand-up comedian life just yet. But that’s not to say that Habib (who will be performing at Kung Pao Kosher Comedy‘s holiday run Thurs/23-Sun/26) isn’t dedicated to making people laugh. He’s been performing for seven years – and he’s 21 years old.

Habib’s standard promotional copy calls him “confidently awkward,” and this is actually how he comes across when I meet with him at Farley’s coffee shop on Potrero Hill. I’m late, of course, and he’s begun to read from the rack of magazines besides him, but he quickly shelves the material to say a very polite hello as I approach.

Habib is from a strong Israeli-Latvian-Italian family with a big social network in Palo Alto. His mom is the lovingly pushy type of mother that approached Kung Pao founder Lisa Geduldig after her son fell in love with New York comedian Greg Rogell’s act that night. “Traditional Jewish mom, telling her I’m a comedian like I’ve been doing it forever or something,” Habib laughs.

Whether Geduldig took the endorsement with a grain or salt or not is questionable, but the fact remains that she listened to mom’s assertion that her 14 year old son was serious about stand up. She put Habib into the lineup of one of her shows before (this week’s run will be Habib’s second with the series), and provided support for the kid as he traversed the world of high school open mics and comedy clubs around the peninsula. “Lisa has been really good to me,” Habib says. Throughout high school, he says, he was known as the “stand up guy,” and didn’t know any one else his own age with the same motivation to grip mics and wax observational on stage. 

The reasonable tenor of conversation with Habib is kind of weird because I tend to think of stand-up comedians as messed-up individuals (in the best sense of the term). But here we have a young man who puts his double major in film and economics at UC Santa Cruz firmly at the top of his list of priorities. He’s got a girlfriend with whom “things are flowing well,” and who doesn’t mind that she makes regular appearances in Habib’s schtick, generally as part of stories highlighting his inability to set romantic scenes for her. He also gets a laugh out of his brothers, who find Habib’s venting about frustrating situations hilarious, and his dear old momma, who drove him all around town in the early days to get him to gigs. “My mom loves it when I make fun of her. I don’t know why – well, I think she likes the attention,” he smiles.

Wholesome as a glass of milk. Although, coming from Gunn High School, a competitive prep incubator in Palo Alto, the choice of stand up comedian as a career is a bit off the beaten path. “All my friends want to be doctors and lawyers, go to grad school or whatever.” But Habib can’t shake the pull of comedy “It’s my identity. Plus, I feel like I’m giving something to society.”

His general feel-good sunniness is appropriate, perhaps, for a Christmas gathering for people that don’t celebrate (or need a break from) Christmas. Kung Pao takes the old cliché of Jews eating at a Chinese restaurant over the holidays and puts a little sass on it: a lineup that this year includes creepy-cute Wendy Liebman, Vietnamese-Jewish Joe Nguyen, Habib, and Geduldig herself. A real nice place to take the fam if you’re ready for a break from “closed for the holidays” and canned expectations of world peace and fraternal love.

For Habib’s part, he’ll be following in the grand standup tradition of playing off the idiosyncrasies of his lovingly wacky life, which for him isn’t as easy as it sounds, really. “These things come so naturally to me that I don’t always see the funniness in it.” Kung Pao gives him a chance to play up the Jewish side of his routine, not something he usually focuses on. “I will say,” he says. “That it’s going to feel good to come back to my people.”

Kung Pao Kosher Comedy

Thurs/23 and Sun/26 dinner 5-6 p.m., comedy 6-7:30 p.m.

Fri/24-Sat/25 dinner 6-7 p.m., comedy 7-8:30 p.m.

All shows $42-62

New Asia Restaurant

772 Pacific, SF

(925) 275-9005

www.koshercomedy.com

Local hiring — and purchasing

1

EDITORIAL The local hire ordinance that the Board of Supervisors approved last week once again puts the city on the cutting edge of progressive policy. San Francisco’s law, sponsored by Sup. John Avalos, is the strongest in the country, and ultimately will mandate that 50 percent of all the people hired on public works projects live in the city.

The politics of the bill were tricky; the local building trades unions opposed it on the grounds that many of their members live out of town and that hiring decisions should be based on seniority, not on residence. But eight supervisors recognized that a local hire law not only benefits the large numbers of unemployed San Franciscans; it’s also good economic policy for the city.

Numerous studies have shown that money paid out to local residents gets spent in town, and circulates in town, and creates more economic activity. That translates into fewer social and economic costs for the city and increased tax revenue.

There are costs to the law. Someone has to monitor compliance, and that requires additional city spending. Training local workers for union jobs may raise the price of some projects. But in the end, the studies all show that keeping money in the community is worth the price.

Avalos deserves tremendous credit for negotiating with labor and other interested parties, accepting compromises that don’t damage the impact of the measure and lining up eight votes to pass it, so even if Mayor Gavin Newsom vetoes it, the board can override the veto.

Now the board ought to apply the same principle to a local purchase law.

One of the major complaints small businesses have in San Francisco is their inability to get city contracts. The qualifying process is complicated and expensive — and when big out of town corporations with plenty of resources to put together bids can also offer lower prices, locals get left out.

The city spends vast sums of money, hundreds of millions of dollars a year, buying goods and services. Every dollar that leaves town translates into far more than a dollar lost to the local economy.

In fact, a 2007 study by Civic Economics showed that 38 percent of the money spent on locally based retailers in Phoenix, Ariz., remained in town and recirculated in the local economy; only 11 percent of the money spent at chain stores stayed in town.

That’s a huge difference, and would translate into many millions of dollars for the San Francisco economy. (Over time, the impact of local hire and local purchasing laws would be much greater than the one-time burst of income expected from the America’s Cup race.)

There are complications with any local purchase law. Not everything the city needs can be bought locally. Nobody in San Francisco, for example, makes train cars or fire engines. But on everything from office supplies and cars to uniforms and consulting contracts, there are (or could be) local companies handling the city’s business.

As with the Avalos law, there would be costs. Some small local suppliers would be unable to match the price that big chains offer. But the overall economic benefits to the city would greatly exceed those price differentials.

San Francisco currently gives a modest preference in bidding to local firms. But if the supervisors applied the Avalos principle and mandated that, within five years, a certain percentage of everything the city buys would have to go to local firms, city officials would be forced to do what they ought to do anyway: look local first.

Every year during the holiday season, the mayor and business leaders urge residents to shop locally. When the new Board of Supervisors takes over in January, the members should start looking beyond rhetoric and start working on legislation that would keep the city’s money in the city.

EDITORIAL: Local hiring, and purchasing

1

Tomorrow’s Guardian editorial:

The local hire ordinance that the Board of Supervisors approved last week once again puts the city on the cutting edge of progressive policy. San Francisco’s law, sponsored by Sup. John Avalos, is the strongest in the country, and ultimately will mandate that 50 percent of all the people hired on public works projects live in the city.

The politics of the bill were tricky; the local building trades unions opposed it on the grounds that many of their members live out of town and that hiring decisions should be based on seniority, not on residence. But eight supervisors recognized that a local hire law not only benefits the large numbers of unemployed San Franciscans; it’s also good economic policy for the city.

Numerous studies have shown that money paid out to local residents gets spent in town, and circulates in town, and creates more economic activity. That translates into fewer social and economic costs for the city and increased tax revenue.

There are costs to the law. Someone has to monitor compliance, and that requires additional city spending. Training local workers for union jobs may raise the price of some projects. But in the end, the studies all show that keeping money in the community is worth the price.

Avalos deserves tremendous credit for negotiating with labor and other interested parties, accepting compromises that don’t damage the impact of the measure and lining up eight votes to pass it, so even if Mayor Gavin Newsom vetoes it, the board can override the veto.

Now the board ought to apply the same principle to a local purchase law.

One of the major complaints small businesses have in San Francisco is their inability to get city contracts. The qualifying process is complicated and expensive — and when big out of town corporations with plenty of resources to put together bids can also offer lower prices, locals get left out.

The city spends vast sums of money, hundreds of millions of dollars a year, buying goods and services. Every dollar that leaves town translates into far more than a dollar lost to the local economy.

In fact, a 2007 study by Civic Economics showed that 38 percent of the money spent on locally based retailers in Phoenix, Ariz., remained in town and recirculated in the local economy; only 11 percent of the money spent at chain stores stayed in town.

That’s a huge difference, and would translate into many millions of dollars for the San Francisco economy. (Over time, the impact of local hire and local purchasing laws would be much greater than the one-time burst of income expected from the America’s Cup race.)

There are complications with any local purchase law. Not everything the city needs can be bought locally. Nobody in San Francisco, for example, makes train cars or fire engines. But on everything from office supplies and cars to uniforms and consulting contracts, there are (or could be) local companies handling the city’s business.

As with the Avalos law, there would be costs. Some small local suppliers would be unable to match the price that big chains offer. But the overall economic benefits to the city would greatly exceed those price differentials.

San Francisco currently gives a modest preference in bidding to local firms. But if the supervisors applied the Avalos principle and mandated that, within five years, a certain percentage of everything the city buys would have to go to local firms, city officials would be forced to do what they ought to do anyway: look local first.

Every year during the holiday season, the mayor and business leaders urge residents to shop locally. When the new Board of Supervisors takes over in January, the members should start looking beyond rhetoric and start working on legislation that would keep the city’s money in the city.

Editor’s notes

2

Tredmond@sfbg.com

The New York Times, the old established voice of the liberal media elite, ran a piece on Sunday looking for answers to the nation’s persistent economic crisis. Reporter David Segal interviewed prominent economists on the left and right — the likes of John H. Cochrane at the University of Chicago, James K. Galbraith at the University of Texas, even Gar Alperowitz at the University of Maryland, who’s kind of (God help us) a socialist.

The right-wingers talked about the need to cut government, the left-wingers talked about community co-ops and green technology, and all sides agreed that the situation was dire and would probably get worse. But nobody even mentioned wealth inequality.

It’s kind of mind-boggling. It’s as if the entire subject is off the table, taboo, something that doesn’t get discussed in the company of polite economists. And that’s just crazy.

Look: the 400 richest Americans today have combined assets of about $1.5 trillion. Raise that number to 5,000 and you can about double the total wealth. This is a very rich country; our prospects aren’t bleak at all. With a bit of enlightened public policy, we could profoundly improve the economic situation in just a few months.

I have no PhD. I barely escaped Wesleyan University with an economics degree in 1980, squeaking out a D in my last class by promising the (very conservative) professor that if he failed me, I’d be back next year. But it doesn’t take econometric wizardry to add up the figures. They go like this: A one-time 20 percent wealth tax on the 5,000 richest Americans — including many people who have pledged to give away half their wealth anyway — would generate about $600 billion. Nobody would miss any meals; no families would lose their homes, or even their second or third homes, or their personal jets. Expand the pool a little and you could easily reach $1 trillion.

With that money, you could immediately create 7 million jobs (at an average of $50,000 a year) and fund them for three years. That would cut the unemployment rate in half. What would those people do? Plenty. They could rebuild the country’s roads and highways and bridges, and build high-speed rail systems, and work in health care clinics, and teach art and music and writing, and clean up environmental messes … there’s loads of work in this country. And even with a modest estimate of the economic multiplier, those 7 million public sector jobs would create another 3 million private sector jobs, and all of a sudden, the country’s booming again. And a lot of those people who were hired by the government could now transition to private business. (And those very rich people would do well in the boom, as they always do, and might even make most of their money back.)

Raise taxes on the top 5 percent of the nation’s wage earners and corporations and you would generate enough money to keep the program going until the private economy could pick up the slack. Then eliminate the Social Security tax on the first $25,000 of income and expand it to cover all income up to $250,000 and suddenly — a huge incentive for small businesses to hire new workers and a stable retirement system for the next two generations.

It’s not that hard. It’s not a socialist revolution. Nobody really gets hurt, and a lot of people benefit. I mean, it seems to me that it ought to be part of the discussion. Maybe that’s why I was such a lousy economics student.

 

The biggest fish

6

rebeccab@sfbg.com

Shortly after Larry Ellison, the billionaire CEO of Oracle Corp. and owner of the BMW Oracle Racing Team, won the 33rd America’s Cup off the coast of Valencia, Spain, in February 2010, a reception was held in his honor in the rotunda at San Francisco City Hall.

The event drew members of Ellison’s sailing crew, business and political heavyweights such as former Secretary of State George Schultz, and other VIPs. Attendees posed for photographs with the tall, glittering silver trophy at the base of the grand staircase.

As part of the celebration, Ellison helped Mayor Gavin Newsom into an official BMW Oracle Racing Team jacket, and Newsom granted Ellison a key to the city, a symbolic honor usually reserved for heads of state and the San Francisco Giants after they won the World Series. Shortly after, the mayor and the guest of honor, whom Forbes magazine ranked as the sixth-richest person in the world, sat down for a face-to-face.

That meeting marked the beginning of the city’s bid to host the 34th America’s Cup in San Francisco in 2013. Since securing the Cup, Ellison has made no secret of his desire to stage the 159-year-old sailing match against the iconic backdrop of the San Francisco Bay, a natural amphitheater that could be ringed with spectators gathered ashore while media images of the stunningly expensive yachts are broadcast internationally.

Newsom and other elected officials have feverishly championed the idea, touting it as an opportunity for a boost to the region’s anemic economy. The city’s Budget & Legislative Analyst projects roughly $1.2 billion in economic activity associated with the event — the real prize, as far as business interests are concerned. It would also create the equivalent of 8,840 jobs, mostly in the form of overtime for city workers and short-term gigs for the private sector.

While the idea has won preliminary support from most members of the Board of Supervisors, serious questions are beginning to arise as the finer details of the agreement emerge and the date for a final decision draws near.

Ellison and the race organizers would be granted control of 35 acres of prime waterfront property in exchange for selecting San Francisco as the venue for the Cup and investing $150 million into Port of San Francisco infrastructure. But the event would result in a negative net impact to city coffers.

Hosting the event and meeting Ellison’s demands for property would cost the city about $128 million, according the Budget & Legislative Analyst, just as city leaders grapple with closing a projected $712 million deficit in the budget cycle spanning 2011 and 2012.

Part of the impact is an estimated $86 million in lost revenue associated with rent-free leases the city would enter into with Ellison’s LLC, the America’s Cup Event Authority (ACEA). In exchange for selecting San Francisco as a venue and investing in port infrastructure, ACEA would win long-term control of Piers 30-32, Pier 50, and Seawall Lot 330 — waterfront real estate owned by the Port of San Francisco, with development rights included. Seawall Lot 330, a 2.5-acre triangular parcel bordered by the Embarcadero at the base of Bryant Street, would either be leased long-term or transferred outright to ACEA.

The most vociferous opponent of the America’s Cup plan is Sup. Chris Daly, who has voiced scathing criticism of the notion that the city would subsidize a billionaire’s yacht race at a time of fiscal instability. “The question is whether or not the package that San Francisco’s putting together is good or bad for the city,” Daly told the Guardian, “and whether or not it’s the best deal the city can get.”

 

THE CREW

According to a Forbes calculation from September 2010, Ellison’s net worth is $27 billion, making him several times wealthier than the City and County of San Francisco, which has a total annual budget of about $6 billion. Ellison reportedly spent $100 million and a decade pursuing the Cup.

As soon as Ellison expressed interest in bringing the Cup to San Francisco, Newsom began charting a course. Park Merced architect and Newsom campaign contributor Craig Hartman of the firm Skidmore, Owings & Merrill was tapped to reimagine the piers south of the Bay Bridge as the central hub for the event, and soon Hartman’s vision for a viewing area beneath a whimsical sail-like canopy was forwarded to the media.

The mayor also issued letters of invitation to form the America’s Cup Organizing Committee (ACOC), a group that would be tasked with soliciting corporate funding for the event. ACOC was convened as a nonprofit corporation, and it’s a powerhouse of wealthy, politically connected, and influential members.

Hollywood mogul Steve Bing, who’s donated millions to the Democratic Party and funded former President Bill Clinton’s 2009 trip to North Korea to rescue two imprisoned American journalists, is on the committee. So is Tom Perkins, a Silicon Valley venture capitalist, billionaire, and former mega-yacht owner who was once dubbed “the Captain of Capitalism” by 60 Minutes. George Schultz and his wife, Charlotte, are members. Thomas J. Coates, a powerful San Francisco real estate investor who dumped $1 million into a 2008 California ballot initiative to eliminate rent control, also has a seat. Coates resurfaced in the November 2010 election when he poured $200,000 into local anti-progressive ballot measures and the campaigns of economically conservative supervisorial candidates.

Billionaire Warren Hellman, San Francisco socialite Dede Wilsey, and former Newsom press secretary Peter Ragone are also on ACOC. There are representatives from Wells Fargo, AT&T, and United Airlines. One ACOC member directs a real estate firm that generated $2.5 billion in revenue in 2009. Another is Martin Koffel, CEO of URS Corp., an energy industry heavyweight that made $9.2 billion in revenue in 2009. There’s Richard Kramlich, a cofounder of a Menlo Park venture capital firm that controls $11 billion in “committed capital.” And then there’s Mike Latham, CEO of iShares, which traffics in pooled investment funds worth about $509 billion, according to a BusinessWeek article.

There’s also an honorary branch of ACOC composed of elected officials including House Minority Leader Nancy Pelosi, Gov. Arnold Schwarzenegger, Sen. Dianne Feinstein, and others. Their role is to help the Cup interface with various governmental agencies to control air space, secure areas of the bay exclusively for the event, set up international broadcasts, and bring foreign crew members and fancy sailboats into the United States without a hassle from immigration authorities.

ACOC is expected to raise $270 million in corporate sponsorships for the America’s Cup. That money will be funneled into the budget for ACEA. It’s unclear whether the $150 million ACEA is required to invest in city piers will be derived from ACOC’s fund drive.

The city also anticipates that ACOC would raise $32 million to help defray municipal costs. “However,” the Budget & Legislative Analyst report cautions, “there is no guarantee that any of the anticipated $32 million in private contributions will be raised.”

A seven-member board, chaired by sports management executive Richard Worth, will direct the ACEA, according to Newsom’s economic advisors, but the other six seats have yet to be filled. ACEA’s newly minted CEO is Craig Thompson, a native Californian who previously worked with a governing body for the Olympics and has helped coordinate major sporting events internationally. In an interview with sports blog Valencia Sailing, Thompson provided some insight on why major corporations might be inspired to donate to the cause. Basically, the Cup is the holy grail of networking events.

“It’s a very difficult economic situation we are going through, and it’s not the best time to be looking for sponsors for a major event,” Thompson acknowledged. “On the other hand, the America’s Cup is one of the very few activities … that offer access to really top-level individuals in terms of education or economic situation. The America’s Cup is a unique platform for a lot of companies that want access to those individuals that are very difficult to reach under normal circumstances. I can tell you for example that Oracle is very pleased with the marketing opportunity the America’s Cup has presented to them. They invite their best customers and are very successful in turning the America’s Cup into a platform for generating business. The same thing can be true for a lot of different companies that need access to wealthy individuals.”

But should San Francisco taxpayers really be subsidizing a networking event for the some of the business world’s richest and most powerful players?

 

TRANSFORMING THE WATERFRONT

Over the past four months, Newsom’s Office of Economic and Workforce Development (OEWD) has been negotiating with race organizers to hash out a Host City Agreement outlining the terms of bringing the America’s Cup to San Francisco.

The proposal will go before the Board of Supervisor’s Budget & Finance Committee on Dec. 8, and to the full board Dec. 14. A final decision on whether San Francisco will host the race is expected by Dec. 31. ACEA and ACOC will each sign onto the agreement with the City and County of San Francisco.

From the beginning, the event was envisioned as “the twin transformation,” according to OEWD — the America’s Cup would be transformed by attracting greater crowds and heightened commercial interest while San Francisco’s crumbling piers would be revitalized through ACEA’s $150 million investment in port infrastructure.

The plan paints downtown San Francisco as the “America’s Cup Village” during the sailing events, and a study produced by Beacon Economics estimates that the financial boost would come primarily from hordes of visitors flocking to the event — more than 500,000 are expected to attend. The city expects a minimum of 45 race days, including one pre regatta in 2011 and one in 2012 (or two in 2012 if the one in 2011 doesn’t happen), a challenger series in 2013, and a final match in 2013.

The transformation of the city’s waterfront would be dramatic. In addition to the rent-free leases for Piers 30-32, 50, and Seawall Lot 330, ACEA would be granted exclusive use of much of the central waterfront, water, and piers around Mission Bay, and water and land near Islais Creek during the course of the event. Under the Host City Agreement, race organizers would have use of water space spanning Piers 14 to 22 ½; Piers 28, 38, 40, 48, and 54, a portion of Seawall Lot 337, and Pier 80, where a temporary heliport would be sited.

Seawall Lot 330, a 2.5-acre parcel valued by the Port at $33 million, lies at the base of Bryant Street along the Embarcadero and has a nice unimpeded view of the bay. Piers 30-32 span 12.5 acres, and Pier 50 is 20 acres.

The Budget & Legislative Analyst’s study predicts that the ACEA could opt to build a 250-unit condo high-rise on Seawall Lot 330, deemed the most lucrative use. Under the Host City Agreement, the city would be obligated to remove Tidelands Trust provisions from Seawall Lot 330, which guarantee under state law that waterfront property is used for maritime functions or public benefit. Tweaking the law for a single deal would require approval from the State Lands Commission, but Newsom, in his new capacity as lieutenant governor, would cast one of the three votes on that body.

The combination of construction, demolition, lost rent revenue, police and transit, environmental analysis, and other event costs would hit the city with a bill totaling around $64 million, according to the Budget & Legislative Analyst study. Since city government would recoup around $22 million in revenue from hosting the Cup, the net impact would be around $42 million. That doesn’t include the potential $32 million assistance from ACOC.

At the same time, the city would stand to lose another $86.2 million by granting long-term development rights to 35 acres of Port property for 66 to 75 years without charging rent, bringing the total cost to $128 million. OEWD representatives played down that loss in potential revenue, saying past attempts to redevelop piers hadn’t been successful because none could handle the upfront investment to revitalize the crumbling piers.

The Host City Agreement has raised skepticism among Port staff and the Budget Analyst that tempered initial enthusiasm for the event. “The terms of the Host City Agreement will require significant city capital investment and will result in substantial lost revenue to the Port,” a Port study determined. Faith in that plan seems to be eroding and it may be scrapped for an alternative plan that’s cheaper for the city.

The Northern Waterfront alternative substitutes Piers 19-29 as the primary location for the event and eliminates the Mission Bay piers from the equation. Under this scenario, ACEA would invest an estimated $55 million, instead of $150 million. In exchange, it would receive long-term development rights to Piers 30-32 and Seawall 330 on “commercially reasonable terms,” according to a Port staff report.

Board of Supervisors President David Chiu requested that the Port explore that second option more fully, and the Port report notes that it would reduce the strain on Port revenue. The Northern Waterfront plan would cost the Port a total of $15.8 million, instead of $43 million, the report notes. Port staff recommended in its report that both the original agreement and the alternative be forwarded to the full board for consideration.

 

PHANTOM BIDS?

Under the competition’s official protocol, Ellison, as defender of the Cup, has unilateral power to decide where the next regatta will be held. Race organizers have said it’s a toss-up between San Francisco and an unnamed port in Italy — though it’s anyone’s guess how seriously a European site is being considered by a team headquartered at the Golden Gate Yacht Club, a stone’s throw from the Golden Gate Bridge.

According to a San Francisco Chronicle article published in early September, Newsom issued a memo stating that San Francisco was competing against Spain and Italy to become the chosen venue. Valencia was said to be offering a “generous financial bid,” and a group in Rome was rumored to have offered some $645 million to bring the Cup to Italian shores, the memo noted. It was a call for the city to present Ellison with the most attractive deal possible to compel him to pick San Francisco.

Speaking at an Oct. 4 Land Use Committee hearing, OEWD director Jennifer Matz told supervisors: “San Francisco was designated the only city under consideration back in July. Now we are competing against the prime minister of Italy and the king of Spain.”

However, the veracity of those claims came into question in mid-November. Daly, incensed that the Mayor’s Office never communicated with him about the Cup despite wanting to hold it in his sixth supervisorial district, launched his own personal investigation. He fired off an e-mail to Team Alinghi, a prior America’s Cup winner, and began communicating with other European contacts until he got in touch with someone in Valencia’s municipal government.

“I got a call back from a representative who basically said I should know something,” Daly recounted. Valencia, his source said, never submitted a bid to host the Cup. At a Nov. 13 press conference, Valencia’s mayor Rita Barbera confirmed this claim, according to a Spanish press report, expressing disappointment that the city had been eliminated from consideration as a host venue. “There was no formal bidding process,” she charged. She also denied reports that any money had been offered.

Meanwhile, the Budget Analyst was unable to find any concrete evidence that other host city bids had been submitted. “We have nothing to confirm that other offers have been made,” Fred Brousseau of the Budget Analyst’s office told the Guardian.

In response to Guardian queries about whether the Mayor’s Office had evidence that Italy had indeed submitted a bid, Project Manager Kyri McClellan of the OEWD forwarded a one-page resolution from the Italian prime minister assuring race organizers that there would be tax breaks, accelerated approvals, and other perks guaranteed if the Cup came to Italy. However, an Italian journalist who looked over the resolution told the Guardian that the document didn’t appear to be a formal bid, merely a response to a query from race organizers.

Daly has his doubts that either Valencia or the Italian port were ever seriously considered. “I think they were phantom bids,” he said, “created by either Larry Ellison or the Newsom administration … to place pressure on the Board of Supervisors.”

A representative from OEWD told the Guardian that officials have no reason to doubt that the European bids, and accompanying offers of money, were real. However, the city wasn’t privy to race organizer’s discussions about possible European venues. A final decision is expected before the end of the year.

Daly hasn’t held back in voicing opposition to the America’s Cup and blasted it at an Oct. 5 Board meeting. “This tacking around Sup. Daly will not get you in calmer waters,” Daly said. “I told myself I was not going to make a yachting reference. But I will bring a white squall onto this race and onto this Cup, and I will do everything in my power starting on Jan. 8 to make sure these boats never see that water.”

 

WIND IN WHOSE SAILS?

The America’s Cup would undoubtedly bring economic benefit to the area and create work at a time when jobs are scarce. Police officers would get overtime. Restaurant servers would be scrambling to keep up with demand. Construction workers seeking temporary employment would get gigs. Hotels would rake it in. Pier 39 would be booming. However, the Budget Analyst report cautioned: “It is unlikely that any labor benefits would remain in the years after the America’s Cup event is completed.”

Certain small businesses would catch a windfall. John Caine, owner the Hi Dive bar at Pier 28, didn’t hesitate when asked about his opinion on the city hosting the Cup. “Please come fix our piers. It’s a shout-out to Larry Ellison,” he said. Caine said he supports the America’s Cup bid 100 percent, and is excited about the boost it could give his business. The Hi Dive would not be required to relocate under the proposal, he added.

At the same time, other small business would be negatively affected, particularly those among the 87 Port tenants who would be forced to relocate to make way for the America’s Cup. The Budget Analyst’s report also notes that retail businesses in the area whose services had no appeal to race-goers might suffer from reduced access to their stores, since crowding and street closures would shut out their customers.

The sailing community has rallied in support of the Cup, and Newsom has received hundreds of e-mails from yachting enthusiasts from as far away as Hawaii and Florida promising to travel to San Francisco with all their sailing friends to watch the world-famous vessels compete.

Ariane Paul, commodore of a classic wooden boat club called the Master Mariners Benevolent Association, told the Guardian that she was excited about the opportunity for the America’s Cup to showcase sailing on the bay. “In the long term, it’s a win-win,” Paul said. “It would be great to have that boost.” As for the financial terms of the deal, she remained confident, saying, “I don’t think that the city is going to let Larry Ellison walk all over them.”

Sup. Ross Mirkarimi is often politically aligned with Daly, but not when it comes to the issue of the America’s Cup. As a kid growing up on the island of Jamestown, a tiny blue-collar community located off the coast of Rhode Island, Mirkarimi learned to sail and occasionally spent summers working as a deckhand. Every few years, the America’s Cup would come to nearby Newport, transforming the area into a bustling hub and bringing the locals into contact with famous sailors. It left an everlasting impression. When the BMW Oracle Racing Team secured the 33rd Cup off the coast of Valencia, Mirkarimi did a double-take when he saw a photograph of the winning team — his childhood friend from Rhode Island was on the crew.

Mirkarimi told the Guardian he supports bringing the Cup to San Francisco because of the economic boost the area will receive — if the Cup continues to return to San Francisco as it did for 53 years in Newport, he said, the city could look forward to a free gift in improved revenue associated with the event, and that could help quiet the tired annual debates over painful budget cuts.

At the same time, he acknowledged that the Budget Analyst report had prompted what he called healthy skepticism. “I think the onus is on the city and Cup organizers to make sure the benefits far, far outweigh the investment,” Mirkarimi said. “This effort is not just about making one of the wealthiest men in the United States that much more wealthy … That can’t be the case,” he said. “It has to be about what will the Cup do in order to be a win-win for the people of San Francisco.” Mirkarimi said he expected scrutiny of the details of the agreement at the Dec. 8 Budget and Finance Committee hearing: “Naturally, in this time of economic downturn … people want to know, what’s the outlay of cost, and what are we going to get in return?”