Please Bail Out California before the IMF
By John Amato Friday Jun 12, 2009 12:00pmEzra Klein writes from his new gig at the Washington Post: Should California Get a Bailout?
That said, a lot of companies that proved too big to fail weren't too big to change. Wall Street was given compensation caps. GM had to renegotiate its labor contracts. If Washington is going to bail out the Golden State, it should make the money contingent on structural reforms that leave the state better able to balance budgets in the future.
This should be like an IMF intervention (maybe Simon Johnson has some thoughts?). California's legislature is in a strange position: It needs a two-thirds vote to raise taxes but also has to fund ballot propositions that require a simple majority of an uninterested public. The majority party in the legislature, in other words, can neither control how much money it raises nor how much money it spends. That's not a sustainable state of affairs
I think President Obama should direct his staff to think about bailing out California instead, and let the Europeans borrow the billions of dollars they need directly from the Chinese and leave us out of it. We have-- largely because of corrupt hacks like Rahm NAFTA Emanuel-- enough problems right here at home.
The Campaign Silo writes:
Funding the IMF: White House Should Honor Left’s Critique, Allow for Conditionality Review
"This bail-out for European banks by the American taxpayer is such a bad idea that they had to attach it to a "support the troops" emergency supplemental in order to get it passed.
Dear President Obama, please help California. We have a major league moron for a Governor and the 2/3 vote needed to make any substantial changes in the legislature is killing us. Stan Van Gundy's horrendous coaching of last night's Laker-Magic game is nothing compared with what we have to deal with.
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just go back to the Enron Tapes.
Enron CEO Ken Lay mocked the efforts by the California State government to thwart the practices of the energy wholesalers, saying, "In the final analysis, it doesn't matter what you crazy people in California do, because I got smart guys who can always figure out how to make money."
Enron eventually went bankrupt, and signed a US$1.52 billion settlement with a group of California agencies and private utilities on July 16, 2005. However, due to its other bankruptcy obligations, only US$202 million of this was expected to be paid.
Yesssss!!!! Get'em John!!!
Called my rep and couldn't get an answer how he would vote on the war funding bill that has the IMF money attached to it. Kucinich is leading the fight!
WTF you mention a fucking NBA coach in the post but not Kucinich?
before we start sending it overseas, with all the money the financial assholes have secretly stashed there.
And before AHNULD, what was California's ranking among WORLD ECONOMIES? Larger than a lot of sovereign nations, IIRC. Just like 3-4 years ago it was.
To blame the Laker's superb gamesmanship on Stan Van Gundy's idiotic coaching is ridiculous.
you got right to the heart of the post! good job!
Um.. that was idiotic coaching, dude.. i was at the game and wanted to go down there and strangle the guy.
another one!!
Allen Iverson pwns Stephon Marbury!!
[bang bang! Eaaaugh! I stab you with my kniiiiife!]
Ok, old joke.
and another!!
I'm interested in giving SVG the benefit of the doubt because the guy always gives great press conferences. How do you know he didn't tell Jameer Nelson to foul (or at least guard) Derek Fisher? I don't think he would call out his point guard in front of the national media (throw him under the bus, as the kids say). How is Van Gundy's coaching supposed to shoot free throws? The players play, and if you listen to Van Gundy's statements, he never said it was his fault (whereas he has in the past,) he just said we didn't play defense and we didn't execute.
Jameer Nelson rushed back from injury, and he was never the player he thought he was anyway. If anything, blame Van Gundy for not playing Rafer Alston.
Oh well, it really was a bad performance by Van Gundy.
PS Go WINGS!!!
it's a threepeat!!
What's your problem, Leadership. Does your mommy not pay enough attention to you?
I am ridiculing you child. The White House is shitting on progressive Democrats who want to hold up BILLIONS that will got to the IMF.
And you talk about basketball.
My mother taught me games are for children and that men put those games aside and take on the real challenges of this world.
I agree with the part about not bailing out the IMF but how is giving money to CA going to help them fix the legislative constipation and taxation stagnation that's causing many of their problems? As Ahnuld would say, "No pain, no gain!"
California needs a new state constitution. Eliminate the proposition system and the gerrymandered districting.
Just like with the private company bailouts, it should not be without cost. Throwing money at the problem is what Bush did to Pakistan, and it was a total waste. We need something better for the 'pariah' state on the left coast.
Didn't the citizens of Cali vote to make it impossible to raise taxes? Didn't they vote against ballot measures to help avert this crisis? Why should the taxes of the citizens of the rest of the country pay?
Because California voters are bafoons. (See Prop 8) The Howard Jarvis group out here effs everything up. TAXES=TYRANNY! So, everyone votes scared and against the best interest of the state.
Everyone else has to pay because they're buffoons? I hope we get some kind of concessions. No money til they fix the state constitution regarding their stupid financial rules.
Honestly, what's another $25 billion? It's like bailing out GM except this money would actually help people.
I think in the long run we'd have been better off to let everything fail and rebuild with a sound infrastructure.
Usually we bail out to help the people who're usually the innocent bystanders of some corp/political corruption/malfeasance. The Cali thing just sticks in my craw cause in this particular case its the people themselves that screwed the people.
is only the fault of the people to the extent that obama or bush are the 'fault' of the people, who voted for what was a available.
the california constitution got into the condition it is in through the very carefully designed, meticulously executed, lavishly funded political public relations propaganda campaigns.
Harry, then maybe the Federal Government can just call it giving California some of its own money back - and not giving it to Wyoming.
we're all in this together.
If the altruistic motive dongetcha, nobody in the united states lives far enough away not to get sucked into the black hole that will be created if and when California "fails."
election were a matter of robbing Peter to pay Paul. Paul in this instance included children, those with psychiatric disabilities, etc., the state's most vulnerable. The voters rejected that.
But Ahnold didn't listen to the voters, he's stealing from the vulnerable anyway, so now my treatment for my psychiatric disability is in limbo.
That Ezra Klien piece was written a month ago. But anyway, California is effed. I work for the state govenment and it sucks because they keep spreading rumors of an additional 5% paycut on an already 9% pay reduction (furloughs) which will only save $500 million even though we have a $24 billion problem. They also keep threatening to shut down all state parks even though they are revenue generators. There is zero logic in the Governor's office. Cuts just for the sake of cutting. I think Arnold wants to save face with conservatives or something and "drown the beast" once and for all in California. Even though California, per capita, has one of the smallest state governments in the nation.
Wait til fly-over country starts getting 'even' for all the slights, affronts and insults, the fact that they are mostly imagined notwithstanding. Wait til West Bumphuque Iowa, and Leaping Jesus, Texas, get word the "feelthy" Obamanistas want to bail out that nest of vipers, that blighted, sinful place, Californicationland!
Considering how much those middle states actually suck up federal dollars while crying and moaning how they're the 'real america' and the coast are all full of hell bound degenerates, I kinda like the idea of their heads exploding over this.
This is an issue so ripe for demagoguery as to defy imagining, truly.
If its not this issue, or another issue, the demagogues are perfectly willing to go with something made up. (They're coming to take our guns, for example)
And David Letterman said something he should not have. Talk about false outrage.
Not everyone on the coast is exactly with it.
I live in NH and have lived in Maine and come from the Midwest.
I've come to call the my old country region "The Socialist States of the Midwest" which really ain't too awful bad.
Like everywhere else, the Jeebus Freaks always holler the loudest but they don't make the final decisions. Look at the gay marriage voting lately for example. (NH had to inject some ridiculous language to get the winguts to shut up which only a moron would believe meant anything anyway).
Divide California into two states - northern and southern. Fund the split and NoCal in general by making SoCal a "prison state". SoCal will accept GitMo detainees as well as prisoners from all other states - for a reasonable fee, of course.
Snake Plissken can be retained in the unlikely event that anything ever goes wrong. Can anyone foresee any problems with this solution?
Legalize pot and gay marriage. They'll be solvent quick.
Your idea is more practical but not nearly as fun - unless you're a gay stoner.
teh gays generally have good jobs and throw kick-ass parties. The last gay wedding my husband and I attended was classy. Four, count them, four hours of premium OPEN bar. So much fun!!
Also, that Just Say NO bullshit worked really well, didn't it?
Apparently the state lost billion or so in revenue from the economy being boosted from all the planned gay weddings that got canceled. Really shot themselves in the foot.
...all my life and I am starting to think that the sun and flavor-of-the-month workout out here has baked the brains of most Californians. Liberal state, my lily white ass.
So can we still try and make life imitate art?
NoCal - Extremely liberal strong-hold
SoCal - Rightwing prison state
Putting all the reichwingnuts and prisoners together just feels right.
we keep all the coastline and give them the interior?
They might settle for Death Valley but I think you'll have to give it a new name. Rushistan? Oreillyville?
:)
...the demographic probably already breaks down something like that.
you arm the wingnuts with sticks and let the Mexicans know that Southern Cali is ready to cede back to Mexico.
I think that works best.
That should like the #1 thing of the list titled "Never going to happen." They've talked about it for YEARS. NEVER. GOING. TO. HAPPEN.
I just hope that everyone remembers this bullshit when some asshole starts floating the idea of changing the Constitution so that Arnold (that horrible actor and even worse politician)can run for president.
Please bail out California!!!
My job depends on it.
but a bail out is not the answer
that with all the warnings and shouting about what would happen with a second Bush Administration it basically went in one ear and out the other.
Here we are. Ruined.
As a Progressive Californian, a big NO on this one John.
We have a lifetime opportunity here. As painful as it will be to have teachers and cops laid off, and basic services stopped, it's the only way that we will have the general public pause from watching American Idol, take to the streets, and build enough support to repeal the 2/3 rule once and for all. This is what all progressives should be focused on:
http://www.couragecampaign.org/page/s/Declara...
OTOH the money we are giving to the IMF has a huge bang-for-the-buck. It's tiny compared to how much we've spent on stimulus and bailouts domestically, and it will a) keep many governments around the world from chaos and unrest and b) ultimately help our own economy as they turn around and use half of that money to buy our products.
No bailout. Californians need to either change the way they do state business or learn to live with what they have. Cut services, cut education funding, cut fire departments and police departments. Then live with the results or change your system. Bailing you our will not change your constitution or turn the wingnuts blue.
it is controlled by wackjob pols who are in it for themselves
which is why those in the know are still making money, while the rest of us are one paycheck from living on the streets
and you are right...dont bail out the state
we need to reform prop 13
we need to rebuild our infrastructure
and (im gonna get flamed for this) we need to kick out all the illegals
not because i dont like them, but because those with money make sure to hire illegals so that they dont have to pay prevailing wages
i have a friend who is building a new home....its his second home...not one worker on the project is legal
he makes his money from real estate and rents...not one worker that he hires is legal
its time for this to change
i could say toss his ass in jail...and maybe thats an option
I won't flame you but not all illegals are unneeded. The answer is guest worker. Now I will probably get flamed. Haha
I will also say that your "friend" is ripping off construction workers unless of course he could not find anybody else to do the job. I don't think that is the case though.
Have to also say no John. Californians went to the polls and voted in Arnold twice. If he was managing so awfully, you should pull his ass out along with other state legislators that aren't doing their job. Californians got Davis out, so this isn't an impossibility. Going to the Feds for more money is circumventing the problem without correcting it. It would be the same as the bank bailouts.
years to come for the cutting off of food stamps (for some the only food they get), for the education they need, for the programs that would look after their teeth, eyesight, and hearing, or the programs that would prevent them from being abused.
And let me speak from the perspective of a Californian with a psychiatric disability. I am sure we will be thanking you for the cutting off of our lifesaving meds, and other treatments which help us to function. I'm sure PWPD will be thanking you as they're cast out of mental hospitals onto the streets.
All so you can prove a point.
I hope that you never have to be poor, elderly, a child, or seriously ill in a state with severe financial problems. You will not appreciate people going Social Darwinism on you either.
Anna, I am truly sorry about how this will impact you. But it is not as you say about just proving a point.
It's about fixing the problem once and for all, instead of suffering the same dysfunction, deficits and insanity year after year for the next 100 years.
Only the day that everyone in your situation starts demonstrating loudly and visibly, day in and day out in the streets of Newport Beach, Dana Point and outside every gated community in Orange County will the tyranny of the minority (the 2/3 rule) will be repealed.
I was on welfare in 1994 when the whole country went nuts on single mothers on the dole; suddenly we were crack whores with children not worthy of a crumb of bread or a roof over their head. I was going to school specifically to be able to earn the funds to support my kids alone -- as the state and feds would not spend the money to chase my non-paying ex husband. He still has never paid a dime or landed a day a jail and a law specifically allows the feds to take any future child support in return for the pittance I received for the two years I was on the dole.
Tell me about frustration.
And yes Moon, I organized, organized women during a time when no one, not even the most progressive organizations would bother to care about what happened to the poorest or even wonder why they should care.
The poor cannot organize themselves, not now, not ever, survival takes every minute and every ounce of one's energy -- and I'm just speaking of people in average health, not the disabled. The French Revolution didn't happen until the petit Bourgeois got in on the act.
And what's worse, is when education and services to the poorest are slowly cut, that population becomes more susceptible to propaganda and less willing to participate democratically (look at Fox News' demographic).
Action needs to be focused on cutting off the lifeline to the privileged and wealthy, all classes besides the uppers can get in on that, if only they are willing to work together for once.
I have been poor and in need of severe medical attention. Oh, it was an awful situation to be in. I'm not saying no to prove a point. I'm saying no because I don't think bailing out a state that hasn't done a single thing to turn itself around is a bad idea.
Michigan is having to use its federal stimulus money to pay down its budget. California better do the same thing. And what I do support for both California and Michigan is for each state to cut back on its donor status. Have to take care of your own home first. When that happens, I bet a whole bunch of the Southern states will start to get in line as they get a glimpse of the big picture.
poor, elderly, disabled, and children out to dry? From my vantage point, I believe nothing will accomplished, except that Arnold and others of his ilk will get the message that it is OK to do this to us, that it is OK to continue taking from people who have nothing and maybe never had anything to begin with. I don't think you'll get your change to the constitution, but those of us in the lower classes will get screwed.
One of the reasons I comment here is because I believe the lower classes don't have enough of a voice on the internet or the blogs. And the people who think that CA's lower classes should be left to the wolves until the constitution is reformed clearly will not have to suffer the consquences of that. Evidently not even a heavy conscience either!
Today I got a crapload of mail from the CA Health Department and Social Security. From the Health Department a pamphlet reminding me of my "hearing rights" which at this time is something you would dread to recieve because for me it worries me that my Medicaid is next on the chopping block. Then I got a letter I should have recieved days ago informing me that Arnold took the ax to my disability benefits yet again and hacked another chunk off. And it arrived so late I cannot even appeal the decision. But then I also got another letter from the SSA informing me my benefits have been cut altogether. It's possible that I am actually getting a larger benefits check now from another source in SSA, but they didn't bother to make that clear, so now I get to spend the entire weekend wrestling with fear and anxiety.
Storming the Bastile for one's rights is not so damn easy if your next meal or in my case, ability to function without severe depression and psychosis is suddenly thrown into question.
I don't write any of this as to throw a pity party, but I do write about it because (and please forgive the harshness of my tone) I believe some of you have no freaking clue how this will impact people who were already towards the bottom of CA society. So any words to the contrary ring almost as hollow as Arnold's platitudes of sympathy do.
If you all don't see as much of me this weekend it's because I am having a rough one and have to channel my energies into not panicking and sinking into depression.
And again, please forgive me if my tone sounds harsh.
Schwarzenegger and his conservative agenda is killing California just like it destroyed our global economy.
First of all the evil Schwarzenegger got to be Governor by the criminal recall instigated by the villain Rove and the corrupt Bushies. (see the Enron scandal)
Second a tax increase during these difficult times is a fair and workable way to keep the money and economy afloat till we get out of this mess.
Which would you prefer, losing your job, getting your pay cut by 10% or paying 2% (around 10%) more state tax which goes toward education, fire and police, city services, etc.
When you do the math a temporary tax hike helps fix the problem best. Because it ADDS money to the economy, not takes it away.
Nowadays, a bailout by the IMF includes a 'Structural Adjustment Programme', in which all the state's assets would be sold to Haliburton Corporation for cents on the dollar - privatisation. Ask Chile, Russia, Argentina, Zambia, Zimbabwe, and today Peru.
That would be a step in the right direction.
Hey, they can have write offs too. charity and such.
This is your own fault. You keep voting yourself new fancier benefits and public works AND lower taxes. You can't have both, and its time you decided what you get - high benefit state with high taxes, or medium benefit state with medium taxes, you can't have a high benefit state with medium taxes!
We're the highest taxed state in the union.
For every dollar that goes out to the feds, we get back 70 cents.
It's time other states carried their own weight.
Now, this is a catch 22 now. I've always said, no one can run California. All you can do is hang on.
Jerry Brown was the last great Governor we've had.
At least he balanced the budget here.
This may be our own fault. For not electing Dems.
How a minority in this state(politically) can yield so much power, is beyond me. But then again, we're talkin GOPers. They would never do anything illegal.
"How a minority in this state(politically) can yield so much power, is beyond me."
2/3 rule mudshark. Very simple really. 33% of the state can block anything the other 66% wants to do, via the budget.
So 50.1% of the population can take away rights from a minority (gay marriage), but you need a 66% supermajority to institute a simple fee (and there is no fee Republicans ever support).
This is just a recipe for complete disaster, which is exactly where we are.
http://www.couragecampaign.org/page/s/repealt...
http://ca.restoremajorityrule.com/
There are quite a few states taxed more than Cali.
For example, NJ, NV, CT, NH, MN, IL, and DE all get back less per dollar than cali does.
For state and local tax burden Cali only ranks 6th, and mostly that is due to residents of Cali paying taxes to other states in which they work.
My state, CT, we pay on average $2,000 more per capita in state and local taxes than Cali does. ($7K vs $5K). But thanks for trying.
Thanks for correcting me.
Either way, it's a no win situation for the public at large.
Sweeping changes are definitely needed. But I'm not holding my breath. In short, we're all screwed.
“Dear President Obama, please help California. ”
As I sat around in my state, waiting for my income tax return, which wasn't being paid because the state was out of money, a pleading for California, whose citizens have decided to perpetually have their government spend more money than it takes in? Nope, I don't think so.
If California doesn't want to bring their spending and revenues in line, then there are bankruptcy courts that will do the job for them. I don't think the rest of the nation should absorb California being profligate.
That said, when the regulated electricity was being rerouted by Enron, and then sent back into California as unregulated electricity should have been prosecuted as criminal fraud. A fitting punishment in this particular matter would have been death in the electric chair. ;-)
Instead, it brought California the terminator, who, despite his powers, can't manufacture money for California to spend. Only the Federal government can do that, and it's only a matter of time before that borrowing bubble bursts. That will be evidenced by treasuries going to market, and commanding a spike in the interest rate (through a significant discount), notwithstanding the Fed's stated interest rate.
California's Enron electricity fraud was the canary in the coal mine. I didn't hear of a lengthy sentence in that case. Where is the prosecution, or the attempted prosecution for rating the mortgage backed securities as "AAA" even though the underlying mortgages, if sampled would have shown the securities to be junk grade? Kinda like a don't ask, don't tell on white collar fraud.
California is a victim of white collar crime, endorsed by the government aggravated by California's own stupidity. Trouble is, the rest of us are victims of government endorsed white collar crime as well. We're not all going to be bailed out.
Please, President Obama, think about giving California one dime in aid five minutes after the top tax rate for over $250,000 goes to 95 per cent. Until then give the poor a free bus ticket to a saner state.
Amato says the Governor is a moron and the 2/3 legislative vote requirement are the problems. Why can't California voters make these necessary changes themselves? The President can't fix either of those things. Money won't fix either of those things.
I would propose California fixing its constitution, and leadership problems first, and then some form of bailout plan. California resident do pay more into the federal system than it gets back, so it's fair for the federal government to support California in a time of need, but not without strings attached. California needs to fix some of its bigger systemic problems before it gets a dime.
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