Tag Archives: Prop 13

Orange County Republicans Shed Crocodile Tears Over the Effects of Prop 13

croctearsRepublican crocodile tears flowed this weekend in Orange County as a group of city officials called F.I.S.T. – “Fight Insane State Theft” – comprised of 14 Orange County mayors and 42 city council members, nearly all of them Republicans – protested Republican Governor Schwarzenegger’s plan to take away billions in state property tax revenue from their cities.

According to the Orange County Register, the group held a rally this past weekend in Placentia, joined by an array of Republican front organizations posing as anti-tax crusaders, including Citizens for a Better Placentia, Fullerton Association of Concerned Taxpayers, and Yorba Linda Residents for Responsible Representation.

The Register notes that the protesters are “particularly concerned about losing funds for roads and other transportation projects.”

But it is the Republicans themselves – and their corporate funded anti-tax allies – who are themselves directly responsible for giving the state the power to take away property tax revenue from California cities.

Prior to 1978, local governments in California (as elsewhere in the nation) could set their own property tax rates and spend the money that they raised on local needs.

But the Republicans did not trust local governments or local voters with the power to tax local property or to spend that revenue as they thought appropriate.

So they decided to give the state the sole power to set property taxes and to give the state legislature the sole power to decide how that money would be spent.

Prop 13 took away the cities’ power to set property tax rates or levy property taxes, and gave all such power to the state — where it would be subject to Prop 13’s strict limits and the 2/3 rule – in other words, subject to the statewide anti-tax minority’s veto, regardless of the wishes or needs of local officials or voters.

Now our local Republican elected officials and Republican anti-tax front groups are outraged about “losing funds for roads and other transportation projects”  — which, by the way, tend to benefit large landowners and developers more than local citizens — because the state wants to spend that money elsewhere.

This latest instance of Orange County Republican hypocrisy reminds me of an exchange from Samuel Beckett’s play Waiting for Godot:

Estragon: We’ve no rights any more?
Laugh of Vladimir, stifled as before, less the smile.
Vladimir: You’d make me laugh if it wasn’t prohibited.
Estragon: We’ve lost our rights?
Vladimir: (distinctly). We got rid of them.

So I ask our Orange County Republicans: Having given up our rights, are you now ready to amend Prop 13 to return the property tax power to local governments and local voters?

Democrats Should Be Joining the Tea Parties

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Democrats are responding to the growing nationwide phenomena of anti-tax “tea parties” protests by mocking them and by pointing out that they are prompted and run by right-wing organizations.

Neither response is a winning political strategy.

It is pure political stupidity — and bad economic policy — for Democrats to treat the tax protests with derision or contempt.

Rather than mocking the aims of the tea parties, Democrats should follow the lead of presidential candidate Barack Obama, who promised to “provide a tax cut for working families” and “restore fairness to the tax code and provide 95 percent of working Americans the tax relief they need.”

Obama also promised to provide tax relief for small businesses and startups by  eliminating “all capital gains taxes on startup and small businesses to encourage innovation and job creation.”

What Obama recognized – and Democrats already seem to have forgotten – is that working families are in fact being over-taxed while the super rich have gotten a free ride – and that voters will cast their ballots for the party and the candidates who they believe will create a fairer tax code and reduce their tax burden.

And while it is certainly legitimate to point out that the anti-tax tea parties are being manipulated and guided by right-wing groups and talk-show hosts whose agendas are not the same as working and middle class voters, this point is devoid of political impact unless it is accompanied by a commitment to do a better job than these groups of protecting working class and middle class economic interests.

For too long, Democrats – especially in California – have allowed Republicans to dominate and set the terms of the tax debate.

As a result, Democrats have allowed Republicans to paint them as the party of higher taxes – and have allowed the super rich to pretend to defend the economic interests of working families and the middle class while in fact shifting the costs of government to those who are least able to afford it.

Instead of responding to the tax protests with mockery and contempt, Democrats need to insist on talking about the kinds of taxes that the government imposes and who pays them.

We should insist that all taxes be progressive and focused on overturning the Republican’s outrageous favoritism of the super rich.

Especially in the midst of the current recession, we should oppose any increases whatsoever in regressive taxes – such as the sales tax, the automobile tax, and the gasoline tax – that disproportionately hit working and middle class families, unless and until the state and federal tax code is revised to require that the super rich pay their fair share.

Of course these tax protest “tea parties” are a Republican sham — the Republican anti-tax activists not interested in reducing the tax burden on the middle class and working families, but in keeping the Bush tax breaks for the rich — but that does not mean that the underlying middle class protest — even rage — at their tax burden should be ridiculed. On the contrary, it means that the Democrats should insist on seizing the debate and turning it against the Republicans — as Obama did.

Democrats can win the tax debate – if they take the tax protest “tea parties” seriously.

Related posts:

Why I Love Conservative Talk Radio’s John and Ken Show

The Charge of the Democrat Light Brigade: California Democrats Caught in Republican Tax Trap

Why the Republican Anti-Tax Movement Doesn’t Care About the Taxes that YOU Pay

Why the Republican Anti-Tax Movement Doesn’t Care About the Taxes that YOU Pay

I listened recently to Jon Coupal, president of the Howard Jarvis Taxpayers Association, on the Los Angeles NPR radio program “Air Talk with Larry Mantle.”

jarvisThe specific topic was the tax increase ballot measures, such as Proposition 1A, that were part of last month’s budget deal and are coming before California’s voters in a special election on May 19.

But Coupal wanted to talk about California’s taxes in general, and he made the claim that California’s taxes are the highest in the nation.

Wait a minute, I thought.

If Coupal is correct about Californians being so outrageously overtaxed — more than 30 years after the passage of Prop 13 – isn’t he admitting that both the Howard Jarvis Taxpayers Association and its primary accomplishment – Prop 13 – have been dismal failures?

In fact, neither Coupal nor the Howard Jarvis Taxpayers Association really care about the amount of taxes that most Californians pay.

What they care about is the kind of taxes and who pays them.

And that’s far from the same thing as caring about taxes in general, or the taxes paid by the average Californian.

The Howard Jarvis Taxpayers Association, and Prop 13, was initially a project of Los Angeles’ biggest apartment landlords.  Jarvis himself was a lobbyist for the Los Angeles Apartment Owners Association – initially concentrating his efforts in attempting to destroy rent control — and ran the campaign for Prop 13 from the Apartment Owners Association’s office.

The goal of Jarvis and his allies was not primarily to limit the taxes paid by California’s homeowners – at least not those who actually live in the houses that they own – or to limit the taxes paid by middle class Californians.

Instead, the goal of Jarvis, the anti-tax Republicans – and of Prop 13 – was to limit the taxes paid by the largest and richest commercial landowners and landlords.

By that measure – and only by that measure — his work and the work of his successors such Jon Coupal — has been a tremendous success.

Of course, as a direct result of Prop 13’s cap on business and commercial property taxes – and its equal treatment of all property taxes regardless of the kind of property owned – the rest of our taxes have increased.

In particular, Californians have been pummeled by increasing regressive taxes, such as the sales tax, the gasoline tax, and the vehicle registration tax.

But the Republican anti-tax movement doesn’t care – and has never cared — about those kinds of taxes.

And by talking about taxes as though all taxes were the same and applied equally to everyone, the Republican anti-tax movement continues to protect the giant landlords whose taxes they’ve keep down and to bamboozle the middle class voters whose taxes continue to rise.

The next time you hear one of the anti-tax Republicans – or an avid John and Ken Show listener — strike a phony populist pose as they complain about California’s high taxes, ask them this:

How have the Republican anti-tax crusaders  limited taxes on the middle class or the average Californian?

Why do they make no distinction between taxes on owner-occupied property and taxes on business, commercial and landlord property?

Why do they insist on making no distinction between progressive taxes – which require the richest Californians to pay more – and regressive taxes – which require us all to pay the same?

When you don’t get an answer to these questions, ask yourself this one:

How stupid do they think we are?

Based on their success in protecting the landlords and the rich by foisting California’s tax burden on the middle class, I’d say they have good reasons to think we’re pretty damn stupid.

The Charge of the Democrat Light Brigade: California Democrats Caught in Republican Tax Trap

charge-of-the-light-brigade-posters2Half a league, half a league,
Half a league onward,
All in the valley of Death
Rode the six hundred.
“Forward the Light Brigade!
Charge for the guns!” he said.
Into the valley of Death
Rode the six hundred.
– Alfred Tennyson, The Charge of the Light Brigade.

Like the Russians did to the British at Balaclava in Tennyson’s famous poem, California’s Republicans have set a deadly trap for Democrats that they won’t be able to escape.

When the state’s more than $40 billion shortfall and budget stalemate was resolved last month, it was on condition that several tax increase propositions — most notably Prop 1A — be placed before the voters.  Governor Schwarzenegger has set May 19, 2009, as the date that the voters will decide the fate of these propositions in a special election.

Schwarzenegger and the state Democratic leadership support these tax increase propositions.

The Republicans – who acquiesced in both the budget and its tax increases by permitting the minimum number of their party members to vote for the deal that ended the stalemate – are now likely to oppose them.

Joining the Republicans in urging that voters reject the tax increase propositions will be the state’s powerful and well-funded anti-tax organizations, including the Howard Jarvis Taxpayers Association and Grover Norquist’s Americans for Tax Reform.

As a result, the voters will see an intense, expensive, and high publicity campaign leading up to the May 19 special election that pits Democrats (and their union allies) arguing for higher taxes against Republicans (and their anti-tax allies) calling for no increase in taxes.

Once again, the Republicans will be the party saying no to taxes and the Democrats will be forced to be the party of tax increases.

To most voters, it will not matter that the budget deal was explicitly premised on the state getting the increased revenue from these taxes.

Nor will it matter to the Republicans that they tacitly agreed to these tax increases when they signed off on the state’s budget.

Instead, the Republicans will seize the opportunity of the special election to make amends to the state’s anti-tax forces – which are mad as hell at them for agreeing to the state budget – and to paint the Democrats – once again — as profligate spenders who want to tax Californians to death.

To make matters worse for the Democrats, the propositions that are going before the voters on May 19 are mostly hikes in regressive taxes and state fees – including increases in the state’s income tax, sales tax, gasoline tax and vehicle fees – that hit middle class pocketbooks hardest.

Again, it will not matter to voters that it was the Republicans who insisted that if the state’s revenue is increased, it be increased by the most regressive kinds of tax measures.

Nor is it likely to matter to voters that for decades the Republicans and the state’s anti-tax forces have forced the middle class to bear the brunt of the state’s revenue needs because of Prop 13’s constitutional command not to tax commercial or business property differently than owner-occupied homes, and the Republicans’ steadfast commitment to protecting the rich by opposing any form of progressive taxation.

The reason that these facts are unlikely to matter to voters is that the Democrats have done a terrible job of making these arguments in the past, and specifically failed to make these arguments during the heat of the most recent budget battle.

California’s Democrats should have taken their cue from the Obama campaign and insisted that the state’s already battered middle class be protected from any tax increase.

And like Obama, California’s Democrats should instead have called for balancing the state budget through higher taxes for the very rich who have benefited so disproportionately from both the Bush tax cuts and the financial deregulation that has led to our national economic crisis.

But it’s probably too late to do that now.

The tax trap is set.

And California’s Democrats are riding right into it.

Why I Love Conservative Talk Radio’s John and Ken Show

If you’re happy that Rush Limbaugh has been giving headaches to Republican leaders trying to find a popular political stance for their shrinking party, you’ll be thrilled to hear about the migraines that a conservative-libertarian talk radio duo named John and Ken are giving to the leadership of the Republican Party in California.

robespierre-headWhile Limbaugh helps the Democrats by shoving the Republican Party backwards toward an increasingly unpopular combination of militarism and social conservatism, at least his primary targets are Democrats.

Limbaugh wants Obama to fail, not the Republican Party.

In contrast, John and Ken almost never mention Democrats. Their primary target is the leadership and elected officials of the California Republican Party.

And while Limbaugh’s followers are the people whose marginal political power was proven in the last election to be insufficient to prevent the collapse of the Republican Party, the followers of John and Ken are people whose votes and enormous political clout are absolutely essential to California Republicans – the true believers of the California tax revolt.

But before we talk about John and Ken, we need a short history lesson:

Movements of highly motivated true believers are difficult to contain and control, and can become a mortal danger even to their putative leaders and one-time heroes.

During the French Revolution, Maximilien Robespierre was executed by the same mob that he had once incited and led in the Reign of Terror against his enemies.

In Communist China, Mao gave his official blessing to the radical Red Guard movement during the Cultural Revolution for the purpose of consolidating his control over the country’s universities and intellectuals. Within a short time, the Red Guards  had created chaos throughout China and threatened to destabilize Mao’s own regime.

In Iran, Abolhassan Banisadr incited and mobilized Islamic opposition to the Shah. Within a year after the Shah was overthrown, Bamisadr was himself deposed and threatened with death by these same Islamic militants.

Now California’s Republican Party leadership faces a similar fate at the hands of the anti-tax extremists who have long served as their own revolutionary guard and army of true believers.

When the tax revolt began in California in the 1970s, the state’s Republican Party leadership was opposed to a constitutional amendment that would limit the government’s ability to raise taxes.  They believed — correctly — that such an amendment would lead to enormous budget deficits.

But when Prop 13 was approved in 1978 by an overwhelming 65 percent of the voters, California’s Republican Party leaders – Governor Ronald Reagan above all — quickly hopped on the very top of the anti-tax bandwagon.  Ever since, hostility to taxes — in any form and under any and all conditions — has been an article of faith for California’s Republican Party.

The enduring political success of the California tax revolt has given enormous power to anti-tax extremists such as Grover Norquist and his organization, Americans for Tax Reform, as well as the organization of the late tax revolt hero, Howard Jarvis, The Howard Jarvis Taxpayers Association.  Norquist and Jarvis became, in effect, the ideological leaders of the California Republican Party, and their organizations now serve as the party’s real battlefield force.  When Norquist insisted that Republican candidates swear to oppose any tax increase under any and all circumstances, every Republican member of the California legislature signed the Pledge.

It has been an alliance that has served the party well, particularly because these anti-tax organizations are so effectively run and because the identification of the California Republican Party with the tax revolt has motivated hundreds of thousands of grass roots anti-tax extremists to work tirelessly — walking precincts, making phone calls, addressing envelopes, and mobilizing home owners and community groups — on behalf of the Republican Party and to get out the vote for Republicans candidates.

Now all that is threatened by two guys named John Kobylt and Ken Chiampou with very loud microphones who are appalled at the tax increases included in the budget deal between Governor Schwarzenegger and the state legislature.

Their radio program — The John and Ken Show on Los Angeles’ conservative KFI AM-640 – is the most listened to local talk radio program in the United States.

And it has declared total war on the leadership of the California Republican Party, which it blames for the budget’s increases in taxes.

headonastickhq4Since the budget deal, for four prime-time hours every day, John and Ken have relentlessly blasted California’s Republican leadership as traitors to the anti-tax movement and the people of California.

They’ve put pictures on their website of Schwarzenegger and the leaders of the California Republican Party with their heads on pikes, swords, and toilet plungers.

They’ve called for the recall of Schwarzenegger.

They’ve called for the recall of Republican legislators.

They’ve announced “Revolt, Recall and Repeal” rallies.

And they’ve taken away the leadership of California’s tax revolt from Republican Party allies Grover Norquist, Americans for Tax Reform, and The Howard Jarvis Taxpayers Association.

They are about to destroy the California Republican Party.

Democrats should be thrilled.

UPDATE: See related posts:

Democrats Should Be Joining the Tea Parties

Why the Republican Anti-Tax Movement Doesn’t Care About the Taxes that YOU Pay

The Charge of the Democrat Light Brigade: California Democrats Caught in Republican Tax Trap

End California’s Hostage Crisis

drain9On this morning’s radio talk shows, following the early morning passage of California’s budget, Democratic legislators have finally taken up the political fight against the Republicans and are urging revision of the state’s dysfunctional budget process.

In addition, Secretary of State Debra Bowen announced today that signatures may begin to be collected for petitions calling for two measures designed to lower the legislative vote requirement necessary to pass the state budget and spending bills related to the budget from sixty-seven percent (two-thirds) to fifty-five percent.

The proposed measures would retain the two-thirds vote requirement for property tax increases.

drain10In order to be placed on the ballot, the measures need the petition signatures of 694,354 registered voters – the number equal to 8 percent of the total votes cast for governor in the 2006 election. These petition signatures must be collected within 150 days (by July 20).

There is also a Facebook group dedicated to the passage of these measures called “Stop the Insanity: Majority Rule for California!

The group is dedicated to “ending the rule that forces the California Legislature to have a 2/3rds vote to pass a budget. This rule has allowed a minority party–in this case, the Republicans–to hijack the process and hold the state hostage until they get their way.”

The group’s website points out that “California is one of only 3 states that requires a supermajority to pass a budget, and the consequences have been severe. It’s time for a return to the democratic principles of majority rule for budgets in California.”

I urge you to join this group and invite your friends to join.

As blogger Dave Dayen noted this morning in a scathing article on the budget agreement, “this is a budget the GOP can be proud of, because it’s a profoundly conservative budget. Because they hold a conservative veto over it. And they get the best of both worlds – they don’t have to vote for the budget en masse so they don’t have to own it. In short, the hijacking worked.”

This is the most important issue facing California – and it’s time for a change.

Let California Fail

I’ve received several emails today asking me to call Republican legislators and beg them to vote for the currently proposed California budget.

eartrhquake1

But since the proposed budget is bad (too many cuts in the wrong places, plus regressive tax increases), why should I or other Democrats support it?

Why isn’t the state Democratic Party telling the voters that this disaster has been caused by the Republicans?

Why are the Democrats not seizing the ideological moment by calling this budget disaster a Republican disaster?

We Democrats have done a terrible job of fashioning the debate on the budget crisis.

Now we’re fighting for a budget that cuts jobs, cuts services to the poor and the vulnerable, undermines unions, trashes environmental safeguards, relies on increases in the most regressive kind of taxes (sales, gasoline and income), and gives billions in tax cuts to the wealthy.

If we win on this budget, we lose, both ideologically and in regard to the future of California. As it is, the current proposed budget rewards Republicans, the wealthy, and the tax-cut lobby for their intransigence.

They have played us as fools, and we’ve allowed them to get away with it.

When I suggested that we shouldn’t fight for this terrible budget, a friend said, “It’s so easy for us to sit here and say ‘let California fail’ because it won’t really affect us that much. We have jobs that aren’t dependent of State government. We don’t collect disability, we’re not on welfare, we don’t depend on vouchers to get us another night in an SRO. But there are millions of Californians who do, and I’m not willing to insist on anything at the moment except to get this flawed budget passed. Then [we will] fix what is wrong with this system so that we do get budgets that are fair.”

I am sympathetic to her concerns, but I am not convinced.

My friend’s plea for support for this budget reminds me of the phrase “beggars can’t be choosers.”

But we’re not beggars. We are the majority of California’s citizens and voters.

We ought to insist now on a budget that is fair — and if that fails, we ought to go to the voters and tell them that the Republicans have caused their state government to fail.

Only then will we have the chance to get real change in California.

Why Obama Should Say No to Aid for California

The inaugural festivities are over and the new Obama administration is in place, but California’s Republican Governor Arnold Schwarzenegger and the state’s Democratic legislative leadership are sticking around Washington to lobby for federal aid for the financially starved and politically stalemated Golden State.

bill-clinton-pointing-finger

Last week, Schwarzenegger pitched for billions in federal financial aid in a letter to Barack Obama, in which he urged the new president to support a New Deal style “substantial federal stimulus program” for California.  According to Schwarzenegger, California is ready to undertake nearly $44 billion in infrastructure projects that are capable of creating nearly 800,000 jobs.

Specifically, Schwarzenegger told Obama that California is prepared to launch $11.8 billion in energy and energy efficiency projects; $11 billion in investment in road, transit and rail construction;  $4 billion in health care investment, including $1.4 billion in health care information technology; $8.5 billion in water and sewer projects; $1.1 billion in school construction, including broad band access and career technical education projects; and more than $5 billion in airport, park, public safety and other public works.

In addition, Schwarzenegger asked Obama for financial help to cover rising public health caseloads, tax credits for renewable energy projects, and federal funds to pay for the $1.6 billion estimated cost of retrofitting trucks in California so that they comply with state legislation to cut greenhouse gas emissions.

I doubt that Schwarzenegger reminded the president — who has economic worries of his own — that he had just vetoed the plan passed by the California legislature to raise revenue from the state itself to deal with California’s budget crisis.

Along with Schwarzenegger, California’s Democratic legislative leaders are also looking to President Obama and the federal government for financial aid.

In a letter sent to Senators Barbara Boxer and Dianne Feinstein and Speaker of the House Nancy Pelosi, California Senate President Pro Tem Darrell Steinberg (D-Sacramento) wrote “During this challenging time, the states — especially California — need the federal government’s help.”  Among the projects and programs that Steinberg wants federal help to fund are school construction and repair, job training, state park and wetland maintenance, new energy and green technology projects, highway and rail improvements, and affordable housing construction.

Steinberg and Assembly Speaker Karen Bass (D-Los Angeles) also held a conference call today with reporters to talk about how California can increase its share of the billions of dollars that President Obama wants to invest in public works projects as part of his economic stimulus package.

As a progressive Californian, I support these programs and projects, and I applaud the Democratic leadership for their advocacy of them in the face of rigid Republican opposition.

But I am not sure that the federal government should pay the tab – even for needed and necessary government services — that California refuses to pay for itself.

Senate President Pro Tem Steinberg has said that this is “no time for finger-pointing.”

I strongly disagree.

The confluence of the nation’s economic meltdown, California’s crushing financial crisis and $41 billion budget deficit, and the state’s political gridlock is precisely the time to point the finger – and squarely place the blame for the mess we’re in on Prop 13  and the state’s Republican Party.

Because of Prop 13 (which is now Article 13A of the California Constitution), California’s property tax is both regressive (that is, the same tax rate applies regardless of the value of the property or the income of the property owner) and severely limited (the property tax cannot exceed 1 percent of the property’s appraised value).

In addition, the property tax is unclassified — that is, the same tax rate applies to residential and commercial property, and to owner-occupied (homestead) and investor property.  This means that the state legislature cannot apportion the burden of taxation among classes of property based on their function in the economy or among property owners based on their ability to pay.

It also creates a political alliance, based on supposedly shared economic interests, among property owners of whatever size — uniting the perceived interests of middle class homeowners, such as someone who owns and lives in a $500,000 house in Fullerton or Modesto, with the state’s largest corporate, commercial and investment property owners.

Prop 13 also severely restricts – and in practice all but eliminates – the state’s ability to increase revenue and pay its own way.

Under Prop 13 (Art. 13A, section 3), the California legislature cannot increase the state’s revenue except by a two-third super-majority vote.  This means that a minority in the legislature – such as the current onstructionist Republicans – can prevent the state from obtaining the funds it needs to pay its bills.

In practice, it now means a $41 billion state budget deficit, as well as the disintegration of the state’s highways and infrastructure, and the elimination or drastic reduction of necessary government functions such as aid to schools, the poor, and the elderly.

Since it’s passage in 1978, Prop 13 has become the “third rail” (as in touch it and die) of California politics.

It has also become a rallying point for the state’s Republicans and their ideological opposition to government social programs of any kind.

It has allowed the Republican Party to pose as the protector and defender of middle class economic interests.

And it has pushed California to the brink – and now perhaps past the brink – of complete political dysfunction and economic collapse.

So while I applaud California’s Democratic leadership for looking for a way out of our political and economic crisis and in funding the state’s essential government projects and programs, it also seems to me that we must finally confront the $41 billion elephant in the room – Prop 13.

Until we do so, and until the governor and the legislature elected by the people of California can raise the revenue necessary for California to function, we should not expect the taxes raised by the federal government – paid for by the people of other states – to bail us out.

Perhaps, then, the best thing that President Obama and the Democratic Congress could do for California is to say no and insist that we first take care of Prop 13 and its crippling effect on our state’s ability to govern and pay for itself.

UPDATE

Yahoo has an article that calls California’s budget crisis a “golden opportunity” to eliminate Prop 13.

The article points out that “at the heart of California’s problems, economists say, is the government’s heavy reliance on personal income taxes, which produces wild swings in revenue as its coffers overflow in good years and dry up in leaner times.”

“A big reason for the state’s reliance on income taxes is Proposition 13, a voter-approved change to the state Constitution that limits property tax increases and requires any plan to boost taxes to receive the approval of at least two-thirds of the legislature.” “

“The 1978 measure was credited with sparking anti-tax sentiment in other states and assisting Ronald Reagan’s election as U.S. president two years later.”

“Legislators have responded by burdening state residents with some of the highest income and sales taxes in the country.”

“Economists say the state has long needed to fix that revenue roller-coaster ride and are hopeful that this crisis will force leaders to face the music.”

Amen.