Clarity Blog

Our sympathies go to the North Koreans we’ve seen on YouTube bawling inconsolably at the passing of Kim Jong Il, their “Dear Leader.”  We truly hope some day they will have a chance to understand how duped they were by the man who drank $700,000 worth of cognac a year while they slaved and starved.

That said, we found out we do owe a debt to ol’ K Jong – he bequeathed the world with ten management secrets, detailed very humorously by Constantine Von Hoffman in Inc.  We were particularly amused by the dictator’s second secret:

Communication is overrated. He only made one broadcast to his nation. In 1992, during a military parade in Pyongyang, he said into a microphone at the grandstand: “Glory to the heroic soldiers of the Korean People’s Army!” Even so, North Koreans wept on the streets like Elvis fans when they heard of his death.

As with all things K Jong, this management principle is just a tad extreme.  We recommend it only for leaders who own all the media outlets in their entire country and have legions of creative publicists inundating the entire populace with propaganda, like the claim he played a 36-under-par round the first and only time he played golf.

Most of us face a different reality, so it’s not likely our communications will have quite the effect Dear Leader’s had.  But still, there is something to be said about holding back the chief, so when he speaks he’s listened to.

We learned the power of this approach while ushering a very controversial project in Moreno Valley through seven Planning Commission and six City Council hearings .  The project manager, Steve Eimer, sat throughout nearly all of the 13 hearings without saying a word, always deferring to his consultants – until the last minutes of the last hearing.

Just before voting, the City Council added a new very expensive and utterly unreasonable condition to the project.   Eimer stood up, walked up the podium, waited to be recognized, and quietly said, “If you require that, we will not build the project.”

He returned to his seat without saying another word, and the City Council members started thinking about their re-election prospects if all the jobs and money the project would bring the city disappeared.  Then they quickly withdrew the provision and voted to approve the project.

So, yes, a few carefully chosen words delivered at just the right time can be very powerful communication tools.  K Jong got one thing right. But only one thing.

What were the three biggest California water stories of the past seven days?  Well, the news-heads and policy wonks here at Laer Pearce & Associates have compiled them for you here.  You’ll find the Big Three here every week, or you can follow LPAWater on Twitter for up-to-the-minute news and analysis. You can also sign up to receive the Weekly 3 via email here.  This week:

Mixed Signals from Brown

Gov. Brown paid a visit to the Fresno Bee editorial board this week. As the nation’s #1 ag county, water matters in Fresno, and Brown said all the right things in support of conveyance as part of a needed Sacramento Delta fix. Excuse how muted our “yay” is, because this week also saw Brown dumping the only GOP members of the pivotal California Water Commission – who happened to be the President of ACWA and the author of the water bond.  What’s it going to be, Guv, politics or bipartisan hard work?

Here’s the editorial the Fresno Bee wrote after Brown’s visit.

Read the Sacramento Bee on Brown’s ax job

“Press on!” says MWD’s Jeff Kightlinger

Curious about the top ag counties? Here they are.

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Airwaves over the weekend were choked with name-calling, blame and recrimination regarding Standard & Poor’s downgrading of US debt, and the clatter is only going to get louder as stock markets around the word suffer big losses today.

There is no clarity when fingers are stabbing, tongues are wagging and ears are closed.  At times like this, our experience as one of Orange County’s leading public affairs firms tells us to go to the source, and get a sense from there about where the truth may lie. Is the Tea Party’s intransigence to blame? The President’s inexperience? The Congress’ polarization?  Let’s look and see what we find. Here is the statement Standard and Poor’s issued Friday evening:

We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.

We have also removed both the short- and long-term ratings from CreditWatch negative.

The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.

The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

The statement obviously has been carefully worded to make general points, not specific ones, so all the pundits have been free to use it for their own ends – which has done little to nothing to put us on a path towards winning back our coveted triple-A.

But let’s take a closer look at what S&P wrote.  Not surprisingly, the words “Tea Party,” “President,” “Democrat” and “Republican” do not appear. Nor do the words “tax increase.”   However, the words “less reduction in spending” do appear, and they appear in the form of a threat: S&P may lower the US credit rating to “AA” if the agreed-to level of spending cuts agreed to fails to materialize (and/or if interest rates go up or fiscal pressures result in U.S. debt increasing). Anyone talking about spending like the U.S. used to hasn’t heard S&P clearly.

The key word in this statement isn’t “spending,” though.  It’s “debt,” so that’s where we should look for clarity. The credit rating agency is concerned that the U.S. is borrowing somewhere around 50 cents of every dollar it spends and wants the U.S. to begin to change that unsustainable debt trajectory.  Revenues from increased taxes could be used to pay off debt, so someone is not out of their mind if they’re talking about raising taxes.  However, recent history tells us whenever DC politicians have raised taxes, they’ve used the revenue to spend more (bad in S&P’s eyes), not to pay down debt (good in S&P’s eyes).

We all know know from our personal finances that cutting spending is the best way to slow the accumulation of debt.  If we haven’t always known it, the last few years of recession has taught it to us, and most of us have tightened our belts. Will the “S&P Shock” help Congress and the President to learn it?

Jerry Brown after his solo flight

They should drop Bob Hope’s name from Burbank’s airport terminal and put up Jack Benny’s.  Benny, as younger readers may not recall, made a career out of humor based on his obsessive frugality – well, cheapness, to be more exact.  I was reminded of him this week when Gov. Jerry Brown emerged from the terminal solo on Thursday morning, after flying without entourage or security on Southwest flight 896, even refusing to pay the $18 seat upgrade.

A sputnik moment it wasn’t – but a Plymouth moment it most certainly was.

Brown is a master of political symbolism and nothing could have rekindled the image of the beat-up Plymouth he drove the last time he was governor than his choice of transportation last Thursday.  Never mind that members of the State Senate and Assembly fly solo to and from Sacramento just about every week – after Schwarzenegger’s over-sized Hollywood presence, the gesture was a perfect one for communicating the governor’s stated commitment to a new era of frugality in Sacramento.

Brown’s symbolism isn’t remotely like President Obama’s. There are no cool logos or spiffed up soundbites.  Heck, he even calls what he’s seeking “a path to fiscal rectitude.” No pollsters or political messaging consultants got their hands on that phrase.  Still, there’s a lot of finesse behind Brown’s symbolism. Check out the photo.  How did all those reporters and photographers know to be outside the airport terminal if they weren’t given a heads-up by Brown’s hard-working communications staff?

Certainly, there are security risks if he keeps up this form of transportation, but t here are also political ones. What happens the first time he travels with staff and security? Will the press call it the end of his path to fiscal rectitude?  What if his seat-mate is hostile, instead of a complacent state employee, as happened this time? And more importantly, how will he cope with the inevitable realization that California’s problems are too big to be solved by mere symbolism, no matter how spot on it may be?

Thirty years in public affairs has taught me there are no magic words and no magic symbols.  Fixing things takes hard work and is most often done incrementally, with several “Plan B’s” employed along the way. But given the choice between flying solo or talking austerity from a limo, Brown gets an “A” for symbolism, even if it ultimately accomplishes little.

In case you missed it last week, Gov. Brown has released his “insider” appointments – the policy, press and legal folks that work “inside the horseshoe,” making the decisions and statements that will define the Brown Administration.

Our water and development clients should read Nancy McFadden’s bio very carefully, as the former PG&E policy Senior VP will probably be their primary senior interface with the governor’s office.  Public affairs and policy wonks are required to memorize the entire list.  Quiz Friday.  Here’s the full list, arranged alphabetically:

Elizabeth Ashford, 35, of Sacramento, has been appointed Deputy Press Secretary in the Office of the Governor. She worked at the Brunswick Group in London, England from 2009 to 2010. Prior to that, Ashford worked in the Office of the Chairman of the Conservative Party in the United Kingdom. From 2006 to 2008, she served as Chief Deputy Communications Director and then Chief Deputy Cabinet Secretary in Governor Schwarzenegger’s Administration. This position does not require Senate confirmation, and the compensation is $130,000. Ashford is a Democrat.

Anne Gust Brown, 52, of Oakland (Brown’s wife), has been appointed Special Counsel in the Office of the Governor. This position does not require Senate confirmation and Gust Brown will serve with no compensation. Gust Brown is a Democrat.

Gil Duran, 34, of Tulare, has been appointed Press Secretary in the Office of the Governor. Duran served as Communications Director for U.S. Senator Dianne Feinstein from 2008 to 2010. Previously, he served as Press Secretary to Mayor Antonio R. Villaraigosa from 2007 to 2008. Duran also served as an aide and Press Secretary to Governor Brown as Mayor of Oakland from 2004 to 2007. This position does not require Senate confirmation, and the compensation is $147,900. Duran is a Democrat.

Joshua Groban, 37, of Los Angeles, has been appointed Senior Advisor for Policy and Appointments in the Office of the Governor. Groban served as Legal Counsel for Governor Brown’s 2010 campaign and previously practiced law at Munger, Tolles & Olson LLP in Los Angeles. This position does not require Senate confirmation, and the compensation is $147,900. Groban is a Democrat.

Julie Henderson, 48, of San Francisco, has been appointed Senior Advisor for Policy in the Office of the Governor. Henderson was a Special Assistant Attorney General while Brown was Attorney General and previously was a Vice President and Associate General Counsel at Gap Inc. This position does not require Senate confirmation, and the compensation is $147,900. Henderson is a Democrat.

Jim Humes, 51, of San Francisco, has been appointed Executive Secretary for Administration, Legal Affairs, and Policy in the Office of the Governor. Humes was Brown’s Chief Deputy while Brown was Attorney General, and before that Humes was the Chief of the Civil Division under then-Attorney General Bill Lockyer. This position does not require Senate confirmation, and the compensation is $175,000. Humes is a Democrat.

Nancy McFadden, 51, of Sacramento, has been appointed Executive Secretary for Legislation, Appointments, and Policy in the Office of the Governor. She was senior vice president at PG&E from 2005 to 2010. Previously, McFadden served as senior advisor to Governor Gray Davis from 2001 to 2003, deputy chief of staff for the Office of the Vice President from 2000 to 2001, and general counsel for the U.S. Department of Transportation from 1996 to 2000. This position does not require Senate confirmation, and the compensation is $175,000. McFadden is a Democrat.

Jonathan Renner, 40, of Sacramento, has been appointed Legal Affairs Secretary in the Office of the Governor. Renner was Senior Assistant Attorney General for Government Law while Brown was Attorney General. Prior to that, Renner practiced law at Kronick, Moskovitz, Tiedemann & Girard, in Sacramento. This position does not require Senate confirmation, and the compensation is $147,900. Renner is a Democrat.

Nick Velasquez, 30, of Los Angeles, has been appointed Director of External Affairs in the Office of the Governor. Velasquez served as Deputy Campaign Manager for Governor Brown’s 2010 campaign. Previously, he headed the California Accountability Project at the Democratic Governor’s Association. From 2006 to 2009 he served as a senior communications and policy aide to Los Angeles City Attorneys Rockard Delgadillo and Carmen Trutanich. This position does not require Senate confirmation, and the compensation is $80,000. Velasquez is a Democrat.

Evan Westrup, 28, of Sacramento, has been appointed Deputy Press Secretary in the Office of the Governor. He was Deputy Press Secretary on Governor Brown’s 2010 campaign after serving as Deputy Press Secretary in the Office of Attorney General Brown between 2009 and 2010. Prior to that, Westrup was Deputy Youth Vote Director on President Obama’s Campaign in New Mexico in 2008. He was Associate Communications Director in Governor Schwarzenegger’s Administration from 2007 to 2008. This position does not require Senate confirmation, and the compensation is $71,000. Westrup is a Democrat.

In the world of political tea leaf reading, no brew is stronger than the appointments a recently inaugurated politician makes, so California’s political pundits – myself included – have been watching Jerry Brown very carefully.  And today there’s an extremely clear message in the bottom of my teacup.

One of the biggest questions asked of Brown is whether he’ll have the stomach for a fight with the public employee labor unions that paid for his campaign.  (Brown is independently quite wealthy, but unlike Meg Whitman, he didn’t spend a dime of his own money on his gubernatorial run.)  His appointment to the top job at the Department of Personnel Administration would be clear signal of whether there will be continued kowtowing to the powerful unions, or whether Brown would bite the hand that fed him and take the steps necessary to rein in out-of-control spending on public employee salaries, benefits and retirement programs.

Today, Brown as much as told us he sees continued groveling in his future as he appointed a big-time pro-labor lawyer, Ronald Yank, to the position.  Yank practiced law at the Carroll, Burdick & McDonough  law firm that has represented California’s prison and Highway Patrol officers and several powerful public employee unions.

Messages can be words or they can be actions – and we all know actions speak louder than words.  While Brown has talked about tough times and tough decisions ahead, his appointment of Yank tells us that he’s not planning on being too tough on the unions.  And that’s too bad for California.

What were the three biggest California water stories of the past seven days?  Well, the news-heads and policy wonks here at Laer Pearce & Associates have compiled them for you here.  You’ll find the Big Three here every Thursday, or you can follow LPAWater on Twitter for up-to-the-minute news and analysis. You can also sign up to receive the Weekly 3 via email here.  This week:

A Veteran Returns to Big Problems

Jerry Brown isn’t that kind of veteran – and a big Veterans Day THANK YOU to those of you who are! – but he is a veteran of the governor’s office … which makes us wonder why he’d ever want to go back.  Brown is committed to rebuilding California’s water infrastructure and fixing the Sacramento Delta’s environmental problems, but that stuff is pretty far down his list of priorities.  And now, with the budget deficit pegged at $25.4 billion we’re also wondering:  Will water ever get its due?

Read Capitol Weekly’s story listing Brown’s priorities and problems

Why wasn’t the deficit news published before the election?

(more…)

What were the three biggest California water stories of the past seven days?  Well, the news-heads and policy wonks here at Laer Pearce & Associates have compiled them for you here.  You’ll find the Big Three here every Thursday, or you can follow LPALand on Twitter for up-to-the-minute news and analysis. You can also sign up to receive the Weekly 3 via email here.  This week:

Friendlier Feds, Snippier State Regulators?

According to political insiders – and pretty much anybody who’s ever dealt with an appointed regulatory body – having more Republicans in office generally is good news for permit-seekers in the housing industry.  So the outcome of last week’s election should bring some hopey, changey prospects in the short-term nationwide, as the GOP takes over key committee posts in the House and a slew of new Republican governors take office.  Here in California, it’s a whole different story.  Tuesday meant at least four more years of Jerry Brown, whose agenda will be topped, said CalWatchdog’s Steven Greenhut at a recent luncheon, by environmental issues and slowing (or stopping!) new development.  That’s not exactly change we can believe in.

Read the Real Estate Channel’s take on the GOP win

Read MSNBC’s take

(more…)

The San Diego Union Tribune identified 17 key local land-use matters before California voters on Tuesday.  After all the votes were cast, nine resulted in positive news for the building industry, while eight weren’t so great.  See the rundown below.

Merced County Measure C: Voter Confirmation of Zoning Changes - Failed

Considered a slow growth initiative and known originally as the “Save Farmland Initiative,” Measure C would amend the county’s general plan to require voter approval whenever ten or more acres would be converted from agricultural or open space to residential use.

Yes 43.84%

No 56.16%

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Yesterday was more than election day … it was also Christine Iger’s Election Day Lunch, a longstanding OC tradition Laer has been involved with since its inception (or almost since its inception … it’s hard to remember back that far!).

This year one of the tasks that fell to LP&A was to design the trophies for the first ever “Best Election Day Costume” and “Best Political Pin Collection” contests.  Laer and Lauren worked it and came up with the idea of a can of soup … but not just any soup:

Front

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What do you think? Should we make it into a T-shirt?