Gov. Arnold Schwarzenegger and Republicans in the Legislature are playing hardball with their Democratic counterparts: No new taxes, balance the budget with cuts and -- as Schwarzenegger ordered earlier today -- force state employees to take a third monthly furlough day, further reducing their pay. According to The Times' article, thousands of public employees plan to show up in Sacramento today to protest the additional pay cut.

The third imposed furlough day opens a deeper divide in one of the more drawn-out battles of this year's budgeting process: the one pitting public-employee unions and their Democratic allies in the Legislature against Schwarzenegger and state Republicans, who seemed to have rekindled their relationship after the May 19 special election. It's a topic being debated in this week's Dust-Up exchange between Jon Coupal of the Howard Jarvis Taxpayers Assn. and John Tanner, executive director of SEIU Local 721, which represents tens of thousands of government employees in Los Angeles County (their third and final exchange, in which they mull ideas to preserve state services in this budget crisis without reducing pay or laying off workers, will be posted later today). In the comments board for Monday's Dust-Up installment, several readers have come down on the side of Schwarzenegger and the GOP, posting comments similar the one left by "Pete":

Photo: Service Employees International Union protest Schwarzenegger's proposed furloughs and state employee pay cuts Tuesday, June 30 (Rich Pedroncelli/AP) 

Today's editorial about the new SAG contract tried to summarize more than two years of Hollywood labor talks in a single sentence, a high-risk move that, ahem, was not completely successful. Here's the sentence:

By "residuals intact," we meant that the new contracts didn't change the residuals already established for TV and other traditional outlets. "Albeit less generous" was a reference to newly created residuals for online programming that were minuscule in comparison to the ones paid for TV reruns. But our words didn't necessarily get these points across, and AFTRA National Executive Director Kim Roberts Hedgpeth sent me an e-mail registering her protest:

She's right on all accounts. I would add, though, that many writers and actors don't view the new residuals for programs streamed on Hulu and other online sites as being "more generous" than what they've relied on for years in television. Nor are there any residuals to be paid when a program made for the Internet is resold to other new-media outlets.

The ad-supported streaming provisions of the contracts are the real flash-points, because many union members see Hulu and its ilk taking the place of reruns on TV. In their minds, they are trading hefty TV residuals for parsimonious Internet ones. There's no question that the networks are airing far fewer reruns, and that more people are catching those repeats online than before. But it's also true that, at least so far, the shows that air on Hulu et al aren't generating nearly as much revenue for the networks as their reruns used to.

So, that's what we meant by "less generous." Now if only the newspaper offered as much space as the Opinion L.A. blog....

A federal appeals court in New York today rejected a bid by public pension funds in Indiana to halt the government-backed sale of Chrysler to Fiat, leaving only the Supreme Court potentially standing in the way of the deal. This move will no doubt disappoint the free-marketeers who bemoaned the Obama administration's role as Puppet Master in the automakers' reorganization. They argued that the administration gave less favorable treatment to some of Chrysler's and GM's debt holders so that it could advance the interests of certain unsecured creditors -- i.e., unionized workers.

Despite the unmistakable whiff of conspiracy theory, opponents of the deal have a point. Failing companies in desperate need of restructuring, as GM and Chrysler have been, usually try to reach a deal with their major creditors for a "prepackaged" bankruptcy filing. The threat of a messy, customer-alienating Chapter 11 (or worse, a liquidation that reduces assets to their fire-sale value) is often enough to wring concessions out of all concerned. But last year, sensing a political opportunity, the automakers played the too-big-to-fail card. The Bush administration responded, providing billions of dollars in short-term loans. The Obama administration then intensified the feds' involvement in the process, ostensibly to force the companies and their creditors to agree to a more profound restructuring that had a better chance of succeeding in the long term.

But there are a couple of things to bear in mind about this whole affair. First, the government's involvement came at the behest of GM, Chrysler and Ford, all of whom sought a federal bailout. (To its credit, Ford did not ask for immediate help from Washington, at least not directly.) GM and Chrysler did so because they were running out of cash and couldn't find private lenders. The money that GM and Chrysler needed to stay alive, both before and during their sojourns in bankruptcy court, needed to come from Washington, and the amount was so large that the administration couldn't reasonably take the role of a passive creditor. In other words, the clear choice here was between liquidation and deep government involvement, and the automakers chose the latter.

Second, although they've raised interesting legal questions about whether the Bush and Obama administrations had the authority to use TARP dollars to aid the automakers, the Indiana pension funds seem more interested in wringing more dollars out of the deal. It's hard to sympathize with the pension funds on this point. According to Business Week, the funds bought Chrysler's debt at a deep discount in June 2008, after the company's credit rating had been downgraded. They were essentially playing the role of vulture investors, paying 43 cents on the dollar. Now they're complaining about a bankruptcy plan that gives them 29 cents on the dollar, which supporters of the plan say is far more than the funds would get if Chrysler were liquidated.

But then, this is the kind of fight that arises when the government tries to steer a company through the treacherous waters of bankruptcy, rather than leaving it and its creditors to protect their entwined interests as best they can. The process becomes inescapably politicized, with critics assuming that the result favored the unions because of the Democrats' ties to labor. The best argument that the administration can make to the contrary is that every creditor would have been worse off had Washington withheld its cash and allowed the automakers to go straight to liquidation. But that doesn't address the question of whether bond holders took too great a haircut for the sake of sparing creditors whose interests should have been subordinate to theirs.

Updated Monday at 2:38 p.m.: The Supreme Court has put the sale of Chyrsler assets to Fiat on indefinite hold as it examines the issues raised by the Indiana pension funds. Stay tuned....

Updated Tuesday at 4:58 p.m.: The Supreme Court declined to hear the Indiana appeal, clearing the way for the Fiat purchase.

Photo: AP Photo / Don Ryan

Our skeptical editorial on the government-arranged marriage between Chrysler and Fiat (with a federal bankruptcy judge to deliver the vows) drew this rebuke from reader "JVW," who didn't much care for it (but didn't say why):

Replace the words "Chrysler" and "GM" with "LA Times" and "NY Times" and replace "cars" with "news." Then replace "smaller" with "honest" and "fuel-efficient" with "less ideological" and the editorial works just as well. But I am sure that irony is lost on your editorial boards and newsrooms as you race the automakers to bankruptcy.

If it's a race, JVW, we win!! Our parent company, Tribune, been in bankruptcy since December. But your comment has me confused. The editorial said the administration's enthusiasm for smaller and more fuel-efficient cars wasn't shared by the public, whose purchase decisions will be the ultimate arbiter of Chrysler's fate. Are you saying that the government wants honest and less ideological news, but the people don't? Or that the Times on both coasts need to hook up with Italian publishers to become more honest and less ideological?

More seriously, several other readers argued that Chrysler will be doomed by the deal because the UAW will control 55% of its stock. Yes and no. A union-run trust fund to finance retiree health-care benefits will receive a ton of Chrysler stock and an IOU in lieu of the $4.6 billion in cash the automaker was due to pay. I don't see how this trust (or VEBA, in industry parlance) could afford to hold onto the Chrysler shares. Wouldn't the cost of providing health benefits force the VEBA to cash out its holdings in fairly short order? And given the experience employees at WorldCom and Global Crossing had when their retirements were pegged to their company's stock, wouldn't Chrysler's retirees be the first to demand that the VEBA find a safer investment ASAP? Any thoughts, readers?

Credit: AP Photo / The Canadian Press, Geoff Robins

Today's Editorial Page weighs in on a Los Angeles billboard ordinance being considered today by a City Council committee, offering The Times' prescription for how the city could best fashion enforceable and effective sign restrictions. But we'd have more faith that the council could pull off such a feat if it hadn't failed so dismally in the past:

Before the city permits any new billboards or draws any new districts, it must demonstrate its ability and its will to enforce current law, cite and dismantle illegal signs and complete and publicly post its sign inventory. Absent that showing of good faith, over the course of a year or two, no Angeleno can be expected to see any new law as anything other than further concessions to the billboard industry.

We also discuss the Screen Actors Guild's tentative deal with the Hollywood studios, pointing out that SAG's efforts to negotiate a better deal in new media was undermined by the willingness of other unions to accept less. Next time around, the union might want to increase its leverage by negotiating jointly with the American Federation of Television and Radio Artists and the Writers Guild of America, whose contracts will expire at about the same time as SAG's.

Over on the Op-Ed page, columnist Jonah Goldberg says the Environmental Protection Agency's decision last week to regulate greenhouse gases should be disturbing to "people who believe in democratic, constitutional government." That's because the agency is taking on sweeping powers to regulate nearly every sphere of economic activity, powers that were never put before the voters.

Neal Bascomb, author of a recent book on the hunt for Nazi war criminal Adolf Eichmann, points out that the fledgling nation of Israel's pursuit and prosecution of the notorious operational manager of the "Final Solution" exposed his crimes to the world and served justice against a man who might otherwise have gone free. That's worth noting as the world works on systems, like the International Criminal Court, for trying others who have committed crimes against humanity.

And Dean Florez, chairman of the state Senate Committee on Food and Agriculture, points out the folly of some California pistachio growers, who thought the nuts' thick shells and the methods used to process them would protect them from bacteria. That mistake was exposed when about 3 million pounds of pistachios from a Terra Bella plant had to be recalled because of salmonella contamination. Florez has introduced a bill that he says will reduce the risks.

All that, and Letters, too.

*Photo of Adolf Eichman by Associated Press

"Tea Party" protests are all the rage, so to speak, in Friday's letters.

So far, we've received around 100 letters about the tax day demonstrations, many from readers sympathetic to the small-government cause, like Studio City's Gary Aminoff, who expressed disgust with this Op-Ed written by Marc Cooper, director of Annenberg Digital News at the Annenberg School for Communication at USC. 

Writes Aminoff:

People like Marc Cooper can't seem to get their arms around what the Tea Parties were about. He says the Colonists rebelled against injustice, but he can't understand why people rebel today. I guess he assumes that bailing out failed private companies and incurring a multitrillion-dollar bill that we will pay off for generations is not an injustice. It is definitely an injustice to my grandchildren, who will likely have a lower standard of living because of it.

The American people are fed up with our government assuming that it is its right to spend the taxpayer's money in any way it deems important. That is what the Tea Parties are about.

Cooper also thinks the Tea Parties are a Republican activity. He is wrong. Of the seven organizers of the Van Nuys Tea Party, of which I was one, only three were Republicans.

 Of course, some readers saw the protests differently, including Stephanie Winnard, of West Hills:

I do not understand what the "Teabaggers" were protesting.

My understanding is that the Boston Tea Party was protesting taxation without representation. The last time I checked, we all have the right to vote in this country. I don't think that idea really makes sense.

Or maybe they were protesting higher taxes -- but Obama has given a tax break to 95% of all Americans, so it can't be that.

This "movement" makes me laugh. Who can take it seriously when their analogy does not even make sense?

(For more on Tea Parties, check out this blog post from my colleague Jon Healey, who analyzes the online response -- more than 1,500 comments! -- the Times received in response to Cooper's piece.)

Mayor Antonio Villaraigosa and pay cuts for city workers and Obama's new Cuba policy, too.

Photo: A Tea Party protest in Las Cruces, N.M.  Credit: AP Photo/Las Cruces Sun-News, Norm Dettlaff.

The Times editorial page sums up President Obama's tour of Europe and Turkey as an impressive show that won the president accolades, but very little else; Obama's hopes for more stimulus spending by the G-20, more troops for Afghanistan and more condemnation of North Korea's nuclear ambitions went largely unrealized. We also find much to like in Defense Secretary Robert M. Gates' military budget proposal, which aims to shift the emphasis from fighting big conventional wars to taking on insurgencies like the ones in Iraq and Afghanistan.

Gates and Obama hardly aim to disarm America, but there's no question that they intend to buy less ammo. Given that the United States spends nearly as much on defense as every other country on Earth combined, that's not a bad plan.

Finally, The Times praises Mayor Antonio Villaraigosa's efforts to wrest sacrifices from city employees, who must accept pay cuts in this tough economy if they want to avoid widescale layoffs that would only worsen local unemployment.

Over on the Op-Ed page, American Prospect associate editor Ezra Klein compares "nationalized" healthcare systems in Britain and Canada to the private health system in the U.S., and finds that both systems find ways to ration care. The choice comes down to occasional waiting times for elective surgery, or excluding many people from getting care at all:

So although Britain and Canada have decided that no one will go without, even if some must occasionally wait, the U.S. has decided that most of those who can't afford care simply won't get it.

Columnist Jonah Goldberg assails the Obama administration for opening its arms to the discredited United Nations Human Rights Council, a pack of nations that ignores rampant human rights abuses in places like Sudan and Cuba while taking every opportunity to condemn Israel. Rather than trying to change this reprehensible group from the inside, Obama should cut all ties and delegitimize it by ignoring it. And novelist Susan Straight finds that her husband's simple advice to the girls' basketball team he coaches applies as much to everyday life as it does to the court.

Editorial cartoon by Lisa Benson / Washington Post Writers Group

Great, isn't it, about housing sales being up, and the demand for big-ticket stuff too?  I'm starting to allow myself to think Churchillian thoughts, as the Great Winston did in 1942, after a victory in North Africa: `"Now, this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

But I think there's wisdom in not falling back into all the old ways -- not on Wall Street, absolutely. But also not going back to making consumer spending, buying new stuff, the alpha and omega of the economy. Amid the home-building and home-buying and manufacturing, we also need to cultivate another, older value, one that was both necessity and virtue during the Depression and the Second World War.

We need to learn how to fix stuff again. Repairing and rebuilding, making do and mending, are as high value as building and making. They're skilled jobs for people with skills. We've added to planned obsolescence the appeal of impenetrable complexity and low, low prices.

When it's almost always cheaper to throw away and replace than it is to repair and reuse, we miss regenerating not only an ethic of thrift but an economic niche of skilled craftsmen and artisans who earn a good wage by letting us hang on to our things longer. Shoes, refrigerators, clothes, computers, cameras, kitchen sinks. What's that phrase used about some flawed government programs? Mend it, don't end it.

Some of the time, I'd rather pay one of my fellow Americans, maybe even a neigbhbor, to repair or make over something I already own than buy something made five thousand miles away.

Technology keeps adding new iterations to all of our gizmos to make them more desirable, but does that necessarily make them better for us? We're finally, wisely beginning to ask ourselves whether we need this or that, the latest and the hottest, if what we already have does the job.

Rather than this sharklike eat-or-die imperative, what about remaking part of our economy to rework what we already have? Don't keep chewing up all the precious, empty landscape just building new homes; rehabilitate the old ones. There are genius artisans and craftsmen out there in this country, just itching to get their talented hands on things that need fixing and remaking and bettering. For the first time in many years, let's think about what we can keep and improve, rather than just what we can discard and replace.

Photo: former Washington Governor Booth Gardner, shown in 2003, knows how to fix stuff.  Credit: Mike Urban/Seattle Post-Intelligencer.

The Times' Op-Ed page introduces a new opinion writer with an impressive resume today: President Barack Obama, who lays out his vision for next week's G-20 summit in London. Obama aims to convince other countries to launch government-sponsored bailouts of their own financial systems in line with those in the United States; he also calls for boosting the International Monetary Fund, resisting protectionism and cracking down on offshore tax havens.

Columnist Jonah Goldberg, meanwhile, takes aim at the union-backed "card check" proposal being considered by congressional Democrats -- if it passes, he says, it would enable unions to shanghai workers much like British press gangs seized sailors in the 19th century. And economists Simon Johnson and James Kwak weigh in on Treasury Secretary Timothy Geithner's proposal to manage $1 trillion in troubled bank assets.

The Times editorial board, too, has Geithner's proposal at top of mind (and the top of the page), welcoming the effort to have the prices for troubled assets set by the market, not the government. We also examine reports that the Environmental Protection Agency is on the verge of an official finding that global warming endangers public health and welfare, a significant ruling that could eventually lead to widescale national regulation of greenhouse gases -- though not as wide nor as quickly implemented as alarmist critics claim. And we urge California's congressional delegation to restore a pilot program allowing Mexican trucks to travel north of the border, which was killed last month. Mexican retaliation for the protectionist measure would be economically devastating to the Golden State.

All that, and Letters too.

The Times' editorial board notes the latest bit of change President Obama is bringing to Washington: He's blowing off this weekend's annual Gridiron Club dinner for the capital's media mavens -- the first president to do so since the 19th century -- but appearing this evening on "The Tonight Show with Jay Leno" -- the first sitting president to do so, period. The more important message of the president's swing through California, however, is that green growth is a win-win:

While conservatives grumble about the high cost of weaning the nation off fossil fuels, California demonstrates that doing so can pay off. The fact that the state led the nation in energy-efficiency regulation, for example, means that Californians pay lower residential power bills, on average, than residents of most states, even though power here is more expensive. A 2008 UC Berkeley study estimated that this efficiency has created more than 1 million jobs since 1972. Meanwhile, the state's green technology business is booming.

The board also notes a few hopeful signs for increased political stability in Pakistan. And it says state officials made the right decision in letting erstwhile domestic terrorist Sarah Jane Olson return home to Minnesota while on parole....