Posted by
Always To The Right on Thursday, November 13, 2008 5:30:44 PM
None of them should get a bailout, especially California. Both the
American auto industry and California share one common trait:
exceptionally poor management. The shareholders of the automakers
should have acted to oust management and challenged the bloated labor
contracts that have bankrupted American manufacturers. California
voters should have voted out the Democrats in 2006 and 2008 after they
proved incapable of cutting spending.
The problem in California isn’t a revenue shortfall, it’s a wildly
irresponsible spending spree. The Governator is no exception. While
Arnold talked about fiscal responsibility and state deficits, he
proposed boondoggles like the $3 billion for stem-cell research in 2005. Instead of making tough choices, they simply kept spending and waited for someone to bail them out.
Update: The deficit numbers are off, according to
the governor’s office, who contacted me a short while ago. The initial
deficit was $16.5 billion for a single year, while the $28 billion is
an estimate for two years. They also say the main problem is
the credit crisis, and the deficit projection from the California
Treasurer’s office was only $3 billion prior to October. The press
office says that a disproportionate portion of the revenue stream comes
from capital-gains taxes, so when everyone took a bath, so did
California. They have a special session of the legislature at the
moment, in part to restructure the tax stream.
They also want to point out that the budgets have been flat — no increase — for the past three years at $103 billion.
The governor’s press office didn’t note this, but I also corrected
the last paragraph to remove the insinuation that Schwarzenegger
supported Bass’ call for a federal bailout.