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So the fallout of Wall Street is hitting Capitol Avenue and the budgetary hole is growing by the week. Just before the recent election the deficit was estimated to be between 15 and 21 billion dollars. My big question is will Obama let California fail? Will California become the first state taken over by the federal government? Will California become Washington DCW (west)?
Today California's deficit has grown to 24 billion. The heat is on the legislature to make cuts to the budget before the government runs out of cash entirely.
Doesn't this all smack of GM? Charley Rose had some GM insiders on last night. They described that the company should have had serious intervention back in 2005 when it posted over a 10 billion dollar loss in a good economy. These experts described how the UAW has lost its power and its constituency and has become a union of the retired. It should have been forced to make concessions four years ago and maybe GM wouldn't be bankrupt today they said.
Now California is close to insolvency too. And why? Too many programs, too many paid commissions, too many benefits for employees and too much in salaries. Just like the UAW in the auto industry, the state employee unions here in California has called the shots for long enough to bring the state to its knees. Year after year in good and now in bad economies the state has been unable to live within its means because the unions ever expanding demands have created budget requirements that leave no rainy day fund.
It's like an alcoholic who reaches rock bottom. The California Legislature has been drunk with partisanship, drunk with power, drunk with rich coffers during the boom, drunk without a spine and blinded by slick PR campaigns on the part of every union with a marketing agency.
Every state union puts out these propaganda pieces branding themselves as heroes and sacrificial lambs of pure heart in the public service. Bullshit. All the marketing is about money, about leveraging sentiment to leverage public dollars for higher salaries, better benefits, better retirement, bigger program budgets.
Now they've done it at long last. They've killed the golden goose and we're all suffering for it. But does the legislature have the guts to cut salaries and benefits or will they take the easier road to cut out programs? Based on their history of spineless, partisan, union-cow-towing budget-making, they will take the road that inflicts the most pain on the public in order to avoid making the unions mad and to create cover for increases to taxes and delayed revenue tactics.
The world rushed in back in 1849 to find the gold that has defined California. I suspect that without an fast, thoughtful, courageous and effective government response, the world will begin rushing right out again. The gold rush is over and all that's left is red ink.
How much red ink? Well, I think we ought to apply the old contractor rule for remodeling a home. Take the estimate and add a minimum of 25% and that's what you'll really pay for it. Using that method for estimation, the real hole could be 30 billion.
If California had been so poorly governed back in 1936, Judy Garland might have sung these lyrics instead of the original:
San Francisco
Written by: Lyric by Gus Kahn, melody by Bronislaw Kaper and Water Jurman ( New lyrics & additional melody for Judy Garland by Roger Edens.)
Cranky Version Lyrics by Cranky - 2009
San Francisco, put fees on your golden gate
Let no one come in we're too poor
San Francisco, here is your squanderin' gov'
Saying I'll squander no more.
Other places just speak of you in jest
Tell me you're the one in all the golden west
San Francisco, I'm leavin' home again
Never a mortgage back here...
San Francisco, right when I embark
Budgets are really stark...
And you will laugh to see me,
Perpendicular, hanging on a railroad car
San Francisco, let me beat my feet
Far away from Market Street
Electric bills are comin' due, can't watch it go dark
From the top of the mark
There's Brooklyn Bridge, London Bridge,
And the Bridge of San Louis Rey
But the only bridge, that's a real gone bridge,
Is the bridge across the bay
San Francisco, I am insolvent now,
No job, no savings wow,
San Francisco, I don't mean Frisco
San Francisco, here I go!
Just a simple curmudgeon observing life in the USA. Cranky posts to his blog regularly at http://crankyblog.com.
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