The Chamber broke a tradition of non-partisanship dating back more than 100 years when it endorsed Schwarzenegger in the 2003 recall election. For this, they were rewarded handsomely by the Schwarzenegger administration and were given unprecedented access and influence over our State government, to the detriment of almost everyone else – especially small business. The “job killer” label they put on any legislation they didn’t like, for example, for many years virtually guaranteed a Schwarzenegger veto.

According to several news reports, complaints have now been filed with the California Fair Political Practices Commission that say the Chamber didn’t even fund this ad through its own political action committee- since that would have been subject to disclosure regulations, and instead paid for it through their membership dues, to the tune of more than one million dollars! They also noted that Republican candidate Meg Whitman’s campaign manager, former Gov. Pete Wilson, is on the chamber’s board.

The man responsible for turning the California Chamber of Commerce into this overtly partisan political organization is apparently their President and CEO: Allan Zaremberg, He was the Master of Ceremonies at the Republican Primary Gubernatorial Debate in Orange County last month, touting his take on “the importance of a business-friendly governor to California”.

He is also the head of the “California State Protocol Foundation” – a shadowy “non profit organization” has paid for millions of dollars’ worth of Schwarzenegger’s overseas travel and other bills racked up by his office, including the use of private jets. This group claims these payments allow the Governor to meet with foreign dignitaries, “thereby supporting business opportunities between California and their countries” but what they have really done is turn what should have been public interest trade missions into luxury junkets with blatant cronyism. More than anything, this organization has corrupted and perverted California’s international trade and economic development programs, and it is almost unbelievable that they have gotten away with it.

The ad now being run by the California Chamber is stunning in its dishonesty. For example, they attack Brown for having been against Proposition 13, the property tax initiative, not mentioning that they were also opposed to it at the time. The theme of the ad is “enough is enough” and that may very well be the way many in California feel about the California Chamber of Commerce.

Let’s hope the next Governor- who ever he or she is, from whatever party, will stop this bullying and political manipulation by the California Chamber of Commerce. The rest of us – especially small business, deserve a seat at the table on California business issues for a change. It seems to me that members of the California Chamber of Commerce should not only resign from this organization, they should also demand a full refund of their membership fees for as many years as they have been members. Regardless of their political party, I’m sure they didn’t sign on for this garbage.

It seems incredibly strange that the Chinese government should be able to pull one of our most successful products just because it is successful, without any repercussions at all from our government.  Should the U.S. now stop the sale of some manufactured goods from China, as soon as they become successful?

As reported in the New York Times, a spokesman for Alibaba, said executives at the company were “angry” because Yahoo appeared to follow Google in suggesting the Chinese government was behind the cyberattacks.  They issued a statement saying that Yahoo was “reckless” in supporting Google because they believed there was a lack of evidence that the attacks were supported by the Chinese government. 

Yahoo is one of the companies that was targeted in the attacks but the company declined to confirm that it was a victim. “The people with knowledge of the situation said that Google contacted Yahoo about the attacks before it publicized them. Google executives were dismayed that other companies were unwilling to publicly acknowledge the attacks, and they were particularly frustrated by Yahoo’s silence” the Times reported. 

Yahoo paid Alibaba $1 billion in 2005 and gave Alibaba control of Yahoo China in exchange for a 40 percent stake in the Chinese company. Yahoo’s investment in Alibaba has paid off in a big way for that company. Alibaba.com, a unit of Alibaba, went public in 2007 with a huge stock offering in Hong Kong and is now valued at $12.5 billion.  Jack Ma, the founder of Alibaba is a celebrity in China because of his success in forcing California’s Ebay to leave the Chinese market, and for taking over Yahoo’s China operations, as part of their billion dollar investment in his company. 

This was a huge amount of capital from a California company that was used to make Alibaba fantastically successful. Now that company is turning on very the people who helped it become what it is.  Is this a simple case of “sucking up” to the Chinese authorities?  Jack Ma is said to be famous for that, and some people even believe he is now milking the resources out of Yahoo so it eventually fails in that country. 

In any event, a consensus seems to be forming that this is a free trade issue.  If the Chinese government blocks Google or other American Internet firms – or forces them to leave that country, the the American Goverment should take the same action with Chinese Internet firms – and it seems like a good place to start would be Alibaba.

“Any decision made by Google will not affect Sino-U.S. trade and economic relations, as the two sides have many ways to communicate and negotiate with each other,” Chinese government spokesman Yao Jian told a news briefing in Beijing.

Well of course the two sides have many ways to communicate with each other – that is not the point. If one party to a trade agreement censors and blocks the content of the other party, then of course it should it should be a trade issue.  In the tit for tat world of diplomacy, if they block the content from one of our companies, then shouldn’t we block one of theirs?

California buys a huge amount of Chinese imports, but they don’t by nearly as many of our exports. One of our strongest industries in the movie industry – but only 20 foreign films are even allowed to be shown in that country each year. The rest of the movies we produce here are simply pirated (i.e. stolen) there, Can you imagine if we said to China, “we will only allow the products from 20 of your manufacturers in our country each year”. Now they are blocking, and possibly even attacking, one of California’s other great industries – Internet services.

It is not at all disrespectful to China to expect our government to respond to blocking and censorship with reciprocal actions that affect Chinese companies. That is how a mature trade relationship works. Mr. Yao Jian has it wrong. This is exactly the kind of thing that should affect trade and economic relations – this is a trade issue.

UPDATE: Evidence that the Obama Administration may be looking at these blocking and censorship issues from a more sensible “fair trade” perspective, might be found in a speech Secretary of State Clinton plans to give on the issue on Thursday. From a column by Andrew Ross in today’s San Francisco Chronicle:

“The Internet is integral to the international trading system,” said Ed Black, CEO of the Computer & Communications Industry Association, who is scheduled to meet with Clinton on the matter this week. “China cannot limit the free flow of information and still comply with its international trade obligations.” “You can’t lecture the Chinese on human rights,” said another industry executive. “You won’t get anywhere with that. So, it’s best to treat it as a trade issue.”

Should the administration go that route, it will enlarge the can of U.S.-China worms already growing around the latter’s increasingly protectionist economic policies. “Greater control of the Internet is part of a wholesale tightening up of the Chinese economy,” said an executive with a high-tech trade organization that is also due to meet with Clinton. “It’s about protecting domestic industries and pushing indigenous innovation. But they’re doing it in blatantly discriminatory, brazenly unfair ways.”

To achieve $1.4 billion in General Fund savings, Governor Schwarzenegger proposed 15 percent reduction in state personnel costs achieved by modifying employee compensation and reducing our workforce budget … as follows:
   *   Employees will be required to contribute an additional five percent towards their retirement costs;
    * An across the board five percent reduction in all salaries;
    * A five percent reduction in the cost of the state workforce payroll implemented by executive order S-01-10 requiring all department directors to reduce their payrolls by five percent.

This sounds a little too incremental for me.  Certainly most State employees can take a five percent hit – they have pretty good jobs, but this isn’t getting to the root of the problem.   What about eliminating Civil Service postions all together?   Put government workers under employment contracts instead – even generous ones.  Then they could stop paying pensions as well, something none of the rest of us get. 

The Cupertino computer and popular electronics business is just one of several businesses, including Nike Inc. and PG&E Corp., that have criticized the chamber’s stance. Nike resigned from the chamber’s board of directors but stayed as a member of the group. The U.S. Chamber of Commerce criticized proposed “cap-and-trade” legislation passed by the House of Representatives and due to come before the Senate. Apple’s vice president of worldwide government affairs, Catherine Novelli, sent a letter to Thomas Donohue, president and CEO of the chamber, in which she said, “We would prefer that the Chamber take a more progressive stance on this critical issue.”

ON MAY 19th Californians will go to the polls to vote on six ballot measures that are as important as they are confusing. If these measures fail, America’s biggest state will enter a full-blown financial crisis… A good outcome is no longer possible. California now has the worst bond rating among the 50 states. Income-tax receipts are coming in far below expectations. On May 11th Arnold Schwarzenegger, the governor, sent a letter to the legislature warning it that, by his latest estimates, the state will face a budget gap of $15.4 billion if the ballot measures pass, $21.3 billion if they fail. Prisoners will have to be released, firefighters fired, and other services cut or eliminated. One way or the other, on May 20th Californians will have to begin discussing how to fix their broken state.

Only a minority of Californians bother to vote, and those voters tend to be older, whiter and richer than the state’s younger, browner and poorer population… Those voters, moreover, have over time “self-sorted” themselves into highly partisan districts: loony left in Berkeley or Santa Monica, for instance; rabid right in Orange County or parts of the Central Valley. Politicians have done the rest by gerrymandering bizarre boundaries around their supporters. The result is that elections are won during the Republican or Democratic primaries, rather than in run-offs between the two parties.
Representative democracy is only one half of California’s peculiar governance system. The other half, direct democracy, fails just as badly. California is one of 24 states that allow referendums, recalls and voter initiatives. But it is the only state that does not allow its legislature to override successful initiatives (called “propositions”) and has no sunset clauses that let them expire. It also uses initiatives far more, and more irresponsibly, than any other state.

Like many of the Californians he represents, Gov. Arnold Schwarzenegger now spends more than three hours commuting because he lives so far from the office. But his ride is a private jet. After flirting briefly with buying a Sacramento abode for his family, then living alone for a while in a 2,000-square-foot hotel penthouse across from the Capitol, the governor has decided to stay nearly every night at his Brentwood mansion.

The commute costs hundreds of thousands of dollars a year, which aides say the governor pays for himself. Some environmentalists say the trips expand his carbon footprint enough to undermine his image as a crusader against global warming, despite the pollution credits he buys to offset the damage.

Abandoning more glamorous parts to settle in Sacramento has long been a trade-off governors made for the privilege of running the state. But Casa de los Gobernadores, the 12,000-square-foot suburban ranch home that Ronald Reagan and his family had built when they ruled the town, did not lure Schwarzenegger and kin, despite five visits to the home by California first lady Maria Shriver and a Realtor.

“I just don’t have a home in Sacramento,” Schwarzenegger said in a recent interview at a Starbucks in Washington, D.C., where he had flown — by private jet — to attend the winter meeting of the National Governors Assn. “The question is how can I be with my family, because that is extremely important, to be with my kids. They are all growing up. They are in their teens. They need their father around,” …

Schwarzenegger has used his vast financial resources to create a kind of roving governorship, with almost constant travel in and out of California. He spent more than $591,000 in campaign funds, donated mostly by special interests, for travel in 2007 — a year in which he was not running a major campaign.

The governor rarely sleeps now in the $62,000-a-year hotel penthouse paid for by a tax-exempt charitable foundation. But in the early years of his administration, Schwarzenegger spent most weeknights there, working late, receiving visitors and playing chess, former aides said.

“When I worked for him, he was there almost every night,” said Donna Lucas, a public relations consultant who was a senior advisor to the governor and first lady during Schwarzenegger’s first term. “We were working so hard, I can’t even tell you. I know it was important for him to have an opportunity to be up here in Sacramento.”

When he went out, his security detail would knock loudly on the door of the hotel garage where his caravan of SUVs was parked, wave to the workers and bring the governor down from his suite, as garage and hotel employees took pictures. Now he is rarely sighted. “I didn’t see him in a very long time,” a cashier said from inside a booth at the garage, speaking on condition of anonymity out of fear of losing the job.

U.S. Agriculture Secretary Ed Schafer said Friday the nation’s largest beef recall has set back negotiations to ship U.S. beef to Japan and South Korea. Those markets closed to the U.S. cattle industry in 2003 after a scare over mad cow disease. Schafer said at a convention of meat packers and processors that he is hopeful trade talks will continue, but that the Westland/Hallmark Meat Co. recall has diplomats asking why the U.S. can’t ship safe meat. The USDA recalled 143 million pounds of beef from the Chino-based slaughterhouse after the U.S. Humane Society released undercover video that showed slaughterhouse workers there kicking and shoving sick and crippled cows and forcing them to stand with electric prods, forklifts and water hoses. Downer cows, or those too sickly to stand, are banned from the food supply because they carry a higher risk of mad cow disease and other illnesses.

Today, calling a bill a “job killer” is the kiss of death for legislation the chamber deems unfriendly. Gov. Arnold Schwarzenegger has vetoed all but three of the chamber’s 41 job-killer bills on his watch. The chamber’s job-killer list, a compendium of a dozen or so Democratic bills that would rein in businesses, has become the unofficial score card that industry and trade groups use to measure their success in beating back unfriendly legislation. The chamber issues laudatory press releases – “From day one in office, Gov. Schwarzenegger has demonstrated his commitment to protecting California’s economy and encouraging job creation,” reads one dated Oct. 12 – and the governor takes a bow. “Since I took office, California’s business climate has dramatically improved,” the Republican governor said after vetoing all 12 of this year’s job-killer bills.

But critics charge the chamber simplistically tags as job killers all legislation that would improve environmental protections and consumer protection, including tort reform, insurance reform and landlord/tenant law. “I think it’s part of the whole movement by the free marketeers, extreme right-wing of the (Republican) party that has identified this as an effective phrase,” said former Democratic Assemblywoman Hannah-Beth Jackson. “Unfortunately, it resonates with people in way that takes the focus off the real legislation.”