Orange County, California is often referred to as the “Most Conservative County in America”. But County Supervisors have made a mockery of that title by increasing spending by $145.8 million, in a year of lower property tax collection. Now that the County has started running out of cash, they simply diverted $73.5 million from the school’s share of property taxes to stop lay-offs of 490 County unionized employees. Conservatives support small government, low taxes, and prudent spending. The County protecting their union buddies at the expense firing 865 school teachers doesn’t sound very conservative to me.

I published a report last week: “California has Drawn Down 85% of its Credit Lines”; where we first reported the State of California has a $13 billion budget short-fall and has already pulled 85% of their available credit lines. I warned the state might start short-checking schools and local government in an attempt to avoid laying-off politically active state unionized employees. But I had no inkling that a big County with an upside-down budget would be the first to rip-off schools to shield powerful union friends.

Orange County has a dicey history when it comes to playing games with other-peoples-money. In 1993, I discovered that the County was trying to cover a $180 million budget short-fall by leveraging the County and the local school’s payroll accounts by 500% and speculating in the wild and woolly world of derivatives. When I confronted the County they claimed what they were doing was “perfectly legal”. I tried to get the FBI, the Controller of the Currency, and the State Attorney General to stop this egregious activity. I was told that: “Government makes laws to regulate the people, not to regulate themselves.” A year later Orange County filed the largest bankruptcy in U.S. history. Of the $2 billion in losses, local schools portion was $93 million.

In 2006, I ran and was elected as Orange County Treasurer to succeed Republican John Moorlach; now a Supervisor. When I came in office I discovered the $8 billion County pension plan was leveraged with $22 billion of derivatives. It turns out that the County had granted their unions the highest public pension benefits in the nation by spiking their pensions. To avoid having to actually pay for the higher costs of the benefits spike; the pension plan was secretly taking conspicuously bad investment risks. It took me a year of battling with County officials to get the pension to drastically reduce risk in 2007. Had the County not sold the derivatives, they would have suffered $2 billion in losses in 2008 Credit Crisis.

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The recent police-related deaths of 43-year-old Allen Kephart in Lake Arrowhead, California and 37-year-old Kelly Thomas in Fullerton, California have sent shockwaves through the their respective communities. Indeed, both are being investigated by the Federal Bureau of Investigation.

The death of Thomas, a homeless schizophrenic beaten into a coma by Fullerton police, is also being investigated by the Orange County District Attorney’s Office. His case is not the first time Orange County law enforcement has been accused of applying excessive force to a mentally ill homeless man.

In October 2007, 28-year-old Michael Patrick Lass was living on the streets of Santa Ana when police stopped him for having an open container of alcohol. At the time of his arrest he was alcohol-dependent, schizophrenic, bipolar, and had a history of seizures.

The altercation that led to Lass’s death took place at the Orange County Central Jail, where Lass was sentenced to serve five days after pleading guilty to public intoxication. The day Lass would have been able to leave he felt ill and asked for medical attention. Lass was ordered to leave his cell and after repeatedly looking over his shoulder while being directed by a deputy, he was tackled to the ground and a melee ensued.

“He wasn’t fighting or anything and he was already in a contained area, locked in a contained area,” Lass’s father Frederick, says of the incident. “Immediately there was a second deputy there, a third deputy, a fourth, a fifth, and on and on it went. There was so many deputies that you couldn’t count how many deputies were there.”

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Let’s say you have a knack for cutting hair.  If you live in Florida, guess how many hours of government-mandated instruction you’d be forced to sit through before you can become a barber?

1,200.

That’s right, well over a thousand hours.  Plus, you’d have to pay thousands of dollars to cover the cost of your classes and pass a written exam.  Only then will the government give you a license—that is, permission to cut hair.

Now what happens if you’re already a successful barber but didn’t have a chance to stop working and jump through all the hoops needed to get that license?

Armed government agents could raid your business and handcuff you in front of your clients. Indeed, this is already happening.  Institute for Justice economic-liberty expert Paul Sherman explains:

According to the Orlando Sentinel:

As many as 14 armed Orange County deputies, including narcotics agents, stormed Strictly Skillz barbershop during business hours on a Saturday in August, handcuffing barbers in front of customers during a busy back-to-school weekend.

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Many observers believe that the turning point in Scott Brown’s inspiring Senate win in January was when he was able to shake-loose the Democratic narrative that somehow he was trying to take away “Ted Kennedy’s Seat” from the Democrats.  His brilliant response, “It’s the PEOPLE’S seat” became a campaign slogan and, eventually, the theme of his victory speech.

Are we now witnessing another such moment in Orange County California?

Democratic Rep. Loretta Sanchez appeared on Spanish-language Univision to appeal to her most important voting base:  Latino voters.  Perhaps with a false assumption that only Latinos from the left were listening, she let slip an offensive and patronizing charge:  The Vietnamese are trying to take the seat from Latinos.

Rep. Sanchez district has seen an enormous influx of Vietnamese immigrants over the past two decades.  There have often been tensions between the Latino population and the new arrivals from Asia.  Because the vast majority of Vietnamese immigrants arrived here seeking refuge from a communist, totalitarian regime, they tend to lean more to the right than their Mexican counterparts.

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From the Orlando Sentinel:

If U.S. Rep. Alan Grayson were a rock star, his latest PR blitz — a DVD sent to tens of thousands of Central Florida residents — would be called Grayson’s Greatest Hits.

The 90-minute disc features video highlights from his first term in office, including one of him grilling Fed Chairman Ben Bernanke and another in which the Orlando Democrat preaches on the need to teach schoolchildren about the U.S. Constitution.

The DVD comes wrapped inside a mailer covered with promotional slogans: “Congressman Alan Grayson, Hard at Work for You,” “He works hard. He pays attention. He gets things done,” and “Video DVD Inside: Watch Congressman Grayson in Action!”

In many ways, it’s the perfect campaign video — with one key difference.

Thanks to perks given to all members of Congress, it’s not Grayson’s campaign but taxpayers who footed the nearly $73,000 bill to produce and mail the DVD to 100,000 homes in Grayson’s district of Lake, Marion, Orange and Osceola counties.

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Before Tuesday’s elections, I wrote about a nasty union battle in the heart of conservative Orange County, Calif.

The good news: The unions might have a nearly endless source of cash in the form of employee dues, but they don’t win every battle. On Tuesday, in an election that holds nationwide lessons, a pension-reforming candidate for OC supervisor withstood a million-dollar-plus union onslaught and lived to tell about it. A county Republican Party chairman, put to the test over his “manifesto” to fellow GOP officials, is now taking his lessons to other counties.

In January, Chairman Scott Baugh berated Republicans who side with union benefit-enhancement deals and declared that no GOP candidate for office would receive party support if the candidate did not eschew union support. OC GOP support is a big deal in that still-overwhelmingly Republican county.

The showdown came this week in a contest to replace a supervisor, Chris Norby, who went on to the state Assembly. Fullerton Councilman Shawn Nelson took party chairman Scott Baugh’s pledge to refuse union funds seriously as he sought election to the powerful county board. Nelson was named the county GOP Elected Official of the Year after he blew the whistle on a retroactive pension deal in his city. He displayed the courage Baugh said he is seeking in Republican elected officials.

Nelson’s top opponent, Anaheim Councilman Harry Sidhu comes from the go-along, get-along wing of the party. He signed the “no union support” deal, but then he sat back and said nothing as the county’s major public employee unions dropped upwards of a million dollars on his behalf – including for vile smear ads against Nelson, depicting him as a friend of child molesters because his law firm does criminal defense work. Sidhu also promised that, as supervisor, he would drop a county lawsuit challenging the retroactive portion of a past pension increase.  It was almost unbelievable the number of mailers and TV and radio ads the unions paid for – something bordering on overkill for this type of county race.

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“Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction,” said German psychologist Erich Fromm. Whatever greed does to one’s psyche, it does even worse things to public budgets. California, sinking amidst a structural $19 billion deficit and facing as much as one-half-trillion-dollars in pension debt, is paying the price for years of legislators giving away the store to public employee unions.

Yet even as unlikely sources (former Assembly Speaker Willie Brown, Treasurer Bill Lockyer and California Public Employees’ Retirement System chief actuary Ron Seeling) recognize the grave threat outrageous pension deals pose to the state’s long-term fiscal health, the state’s unions and Democratic leaders continue to operate as if there is no problem. The public seems increasingly agitated by the injustice of a situation that requires private sector workers to work late into life to pay the higher taxes needed so that public sector workers can retire in their early 50s with six-figure, cost-of-living-adjusted deals. But to the politicians, the unions still rule.

In my old haunts of Orange County, Calif., a particularly nasty race for the Board of Supervisors has been unfolding in the past month. On June 8, voters in that heavily Republican and generally anti-union county will fill the slot of a supervisor who has since been elected to the state Assembly.

Back in January, party leader Scott Baugh threw down the gauntlet after watching one Republican after another sell out to the state’s unions. In what has been referred to as the Baugh Manifesto, Baugh slammed Republicans for their role in expanding debt. He promised to use the party to hold Republicans accountable. He called for the party to do more than just endorse those with an “R” after their name. He made two specific demarcations: No Republican will get party support without backing a now-dead Paycheck Protection Initiative, which limits the ability of unions to use dues for political purposes. And no Republican will get party support “who receives contributions from public employee unions.”

It was tough stuff and the party has stuck to these demands.

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Alan Grayson.  How did this clown get elected?  Even Democrats are asking themselves that.

The man who delighted in claiming Republicans want the sick to die to save the taxpayers money, was so proud of his obnoxiousness that he started a website to celebrate himself, www.congressmanwithguts.com.

No sooner did his self promotion tour get off the ground before his mouth got some more attention, calling one of Fed Chairman Ben Bernanke’s aids a “K Street whore.”  After 24 hours of defending the outrageously out-of-bounds slur, and after pretty candid criticism from his fellow Democrats, Mr. Manners finally apologized.

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