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Tuesday, May 19, 2009

CA Votes Tonight

Update: If you are in a depressed mood, CA fiscal policy is not the correct prescription. Instead, you need to read the funniest car review ever by Jeremy Clarkson at the Times Online. I picked it up (on the Honda Insight), over at Anthony Watt's. It's the first time I've ever seen someone describe a car's problems as "vast and cancerous", but it gets better:
So you’re sitting there with the engine screaming its head off, and your ears bleeding, and you’re doing only 23mph because that’s about the top speed, and you’re thinking things can’t get any worse, and then they do because you run over a small piece of grit.
If you do not read this auto review, you are really cheating yourself. I have never driven a Honda Insight, but I will probably do so in order to work this out of my soul before I collapse in helpless laughter the first time I encounter one on the open road. And yes, "hairy-shirted eco-ism at its very worst" is definitely on topic for this post.
End update.

I've been following some of the CA news over at Rob's. For example, see this recent post.

He did, after being begged, put up a brief summary of the resolutions and the expected outcomes.

I asked him some questions. Non-Californians have a stake in this. California has about 12% of the nation's population, and accounts for a higher proportion of GDP. As far as I can figure out, the state is busted.

Tonight's election seems likely to result in rejection of most of the proposals to at least narrow the gap. What happens next?

What happens to the muni bonds? The public unions have done very well in CA, but the retirements are beginning, the pension and medical funds were never adequate to cover their expenses (and have obviously taken significant losses), and barring massive reform efforts, it looks like a lot of folks won't be getting their CA tax refunds next year either.

For anyone who's living in a state east of the Mississippi, and feeling smug about this, don't bother. Rail data continues to show very significantly better YoY results for the west as compared to the east. The times are so bad we can't afford to laugh at the troubles of others.

Also, NJ is probably close to being in as much fiscal trouble as CA. The CA legislature does seem nearly unique in its semi-psychotic inability to begin addressing its fiscal woes. The idea of borrowing from the localities to offset the lack of lending available to the state government seems to warrant a forced hospitalization for a mental evaluation under the normal guidelines.

Well, at least I will get to see some of my questions answered in the real-time Laboratory of Democracy. California's debt isn't sovereign, so it's not identical to the Federal predicament, but it will be interesting to see how their funding priorities shake out.

My guess is that parks and schools go first. State employee pensions go last.
My Washington State isn't all that far behind California when it comes to budget problems.

Our whole economy is like the Insight it seems. A single grain of grit shows its lack of resiliency (much like that last straw on a camel's back). Too bad we're now following a Chinese sand truck down the slope of prosperity.

As a side note, VERY funny car review though!
Yes, Clarkson is funny on car reviews.

But read this - his account of how he lost his savings by jumping from UBS to AIG last Autumn.


Are you crying or laughing?
Shtove, I can't even read that. I can't stand any more horror stories. I spent all weekend reading bond default stats.
The ICE was invented so long ago that they don't realize there WAS a semblance of fuel infrastructure for it. Gasoline was a waste product of Kerosene production. Now of course kerosene is the waste product.

This is why diesel is a sensible solution. Nothing against hybrids, I like 'em, but it's foolish to think they're so great - working hybrids have been around since the 1920's - all diesel railroad engines are essentially hybrids. The recent innovation is the batteries, not the hybridness.
MoM,California's legislature is not "nearly" psychotic.The political process completely broke down some years ago with gerrymandering.Imagine a legislative district 200 miles long and 10 miles wide...as only one example.Spend some time with the estimable mr Cote' if you want someone to elucidate the details of how Cali malfunctions.It is not fixable short of a complete collapse.
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