No Golden Parachute For The Golden Bear
Well, I guess we now know where the line is drawn.
Since just before election day, we’ve been hearing about bailouts. It’s no secret that the tanking economy sent John McCain’s presidential campaign into the tank. It was showing glimmers of life until he made the grand pronouncement he was “suspending’” the campaign to work on the economy. From there, it was pretty much a downward spiral. Still, the banks and mortgage companies and AIG were bailed out by President Bush and a Democratically controlled congress, the election happened, and Barack Obama was elected President. Since coming into office, General Motors and Chrysler both accepted a big pile of cash, asked for more, and were rebuffed into bankruptcy.
Next, Governor Schwarzenegger came calling. California needed a federal bailout. The California economy is the WORLD'S 8th largest. Not the country’s, the world’s. They needed a federal bailout, they said. There’s no way the country’s economy can recover if California’s economy doesn’t recover. It’s for the nation, not just us.
President Obama said “no”. The Washington Post Monday reported:
“After a series of meetings, Treasury Secretary Timothy F. Geithner, top White House economists Lawrence Summers and Christina Romer, and other senior officials have decided that California could hold on a little longer and should get its budget in order rather than rely on a federal bailout.”
So there it is. If you were wondering where the bailouts stopped, they apparently stop at bailing out states. Maybe the government learned its lesson throwing good money after bad at the automakers, and decided not to start pumping it into the states beyond the infrastructure dollars that are already earmarked to go out to ‘shovel ready’ projects channeled through state legislatures.
Of course, if California had gotten bailout money because they are “too big to fail”, who would come calling next? Florida is in pretty dire financial straits. Would Charlie Crist have kicked off his Senate campaign by asking the federal government for a handout? There are plenty of states where there just isn’t enough money to go around. Which state is not “too big to fail”? How could the federal government have possibly made that kind of judgment?
So a Democratic government has made a pronouncement that you’d more normally expect from a Republican government. Clean up your house, get your budget in order, don’t call us, we’ll call you.
I’ve always heard one of the definitions of insanity is doing the same thing over and over again expecting different results. Every state had to be watching the California decision, and probably preparing it’s plea for federal money. Many probably could have made a good case. But the line appears to have been drawn at the state line.
I suppose we should just hope in the case of California… that line isn’t the San Andreas Fault.