Cali...Next?
I can't help but to think of Greece and California being the same place. Feel free to rip that statement apart. Comparing the world's 8th largest economy and America's largest agricultural producer to what amounts to a portfolio of resort islands attached to a DMV level efficient state is a bit specious. I will admit that.
Then again, the methods by which the two entities operate are strikingly similar. The inefficiencies of their markets are strikingly similar. Most importantly, the ability of their fiscal problems to drag down the economic entities they belong to deeper into the mud...are strikingly similar.
Personally, I don't fear for California. But that has more to do with my irrationally exuberant mood of the day, than with any logical argument I can present.
Speaking of arguments on this subject, here is a year-and-a-half old one. Be honest, if you read it without any dates mentioned, could you be certain when it was written?
It goes to show that the real structural issues hampering the U.S. and the world at large still have not been touched. It has been three years and counting.
As MF Global counter parties take a collective inhale and prepare for the pillage, hundreds of millions of off the balance sheet assets are nowhere to be found.
As Greece's deportation from the EU finally becomes a reality, it all makes me think back to Cali.
Ridiculous shit like The Dream Act and a public welfare and pension system specifically designed to bankrupt the state are currently tops on my list. A sordid smorgasbord of municipal bonds is close, but currently occupies the copper pipe position.
That, however, is merely a function of this being a blog post and not a textbook or perhaps more descriptively...a very lengthy suicide letter.
That is sort of how I see California today if states could resemble people.
A rich, spoiled brat so bored of life only a slow death will suffice.
Like Sharon Stone's character in Casino, stealing from Bobby D. so she can fill the pockets of her Pimp (James Woods in a great turn, I just had to remind) and the junkies who will eventually give her a hot dose for a sack of rare coins.
I'm personally hoping Cali is broken off by an earthquake and drifts off.
But but what about mee? I am here. There are good people here, we are just outnumbered by the leeches.
I think the good people like you will be able to find your way out of the new island that will be formed and will be known as Commieforniastan.
Why does California have to be so dysfunctional? Its not like NY is great, but CA is embarrassing at this point. Jerry Brown is in Sacramento, the same guy who let public workers unionize in the first place.
I think the only reason CA isn't going into a debt spiral is because the US government is seen as more likely to bail it out than the ECB is Greece.
They really are freakishly similar.
Massive and unsustainable deficits. Reliance on its citizens to vote against their own pensions to achieve fiscal control. No way to boost revenues without driving out the few remaining businesses. A broken political system. No independent monetary policy. Cheap debt from the implicit guarantee of a larger entity.
At this point, I almost hope we see CA default or come close to it...just enough to scare it into rethinking its politics. Then it can once again prosper.
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