Posted on 12/19/2002 9:46:13 PM PST by Robert357
Edited on 07/19/2004 2:10:46 PM PDT by Jim Robinson. [history]
CALIFORNIA'S BLACK-RUPTCY [IBD Editorial], posted May 11th, 2001.
Backhoe, can you "dig up" some more?
The state's power bill could rise to $100 million a day in the coming months, raising widespread concern about the state's financial health and setting the stage for a showdown: Should the treasury be committed to keep the lights on at all costs, or should the state at some point say enough is enough and allow rolling blackouts? In a growing financial crisis that has redefined what constitutes a lot of money, the state's daily power tab has sent shivers through consumer advocates, economists and some state financial authorities who say the spending soon will drain a burgeoning surplus that ...
"This partisan vote sentences California rate payers to 15 years of energy bondage," said Assembly Republican Minority Leader Bill Campbell."Republicans proposed $5 billion in rate cuts for utility rate payers and $1.5 billion in rate cuts for municipal utility rate payers. Democrats would rather spend the surplus than reduce power rates."
The California electricity crisis is becoming a California financial crisis. from 10/29/2001:
For more than a year, California has suffered through blackouts, brownouts and an economic form of mass hysteria. Watching the governor of California, Gray Davis, exhibit the symptoms of economic idiocy became a reliable amusement for the rest of the country. As he said so accurately when the problem materialized, Davis could have solved it in 20 minutes had he been willing to let electric rates rise.Instead, the governor tried to save consumers by insulating them from reality and assuring that free-floating wholesale prices of electricity exceeded fixed retail prices. Thus Davis turned a problem into a crisis, in which first the two major utilities bought power to sell at a loss, and then the state took over the sucker's role. In only a year, the utilities lost more than $15 billion and the state lost more than $12 billion.
I am the greatest. I am the greatest!
California is demonstrating a third lesson, too. If you can borrow on your own credit, you can do whatever you want no matter how stupid folks in Washington think you are.To buy electricity because generators won't sell to its utilities, California's state government plans to borrow $10 billion this year on Wall Street. That's roughly what the International Monetary Fund has lent Indonesia in the past three years, but Indonesia had to promise energy-price increases to get the money.
An employee stopped coming to work in order to travel out of state with his new girl. A replacement worker was hired. It was not the first desertion for the employee. He was terminated upon his return and is now receiving unemployment and has a pro-bono attorney to sue for a fraudulent worker's comp claim for 'upper body" repetitive motion problems. In the mean time, he can't make his car payments and so he flees the state.
This is a normal scenario in Missouri. Any one can get unemployment and workers comp settlements. It takes an act of god and hundreds of thousands of dollars in lost time and attorneys fees for a small business owner to protect his integrity and prevent fraud. The system is geared to support fraud.
Bureaucrats and attorneys have created permanent full time employment for themselves in the workers comp field.
That is, a rich upper class (which will include, due to purchase power, any middle class wage earner), and the multitudes of poor and destitute.
There's too much wealth, and too great of an educated business class to abandon CA altogether. But what we will get is a bifurcation in the division of wealth. And this begin to occur shortly as the state pulls out of financing local programs and leaves it to cities/districts.
Wealthy areas like the Penninsula, West LA, and coastal OC/SD will easily be able to finance local programs to keep classrooms size down and infrastructure maintenance up.
But in the bario that is LA, watch out. The gang warfare that is going on right now is unstoppable. And we will begin to see 50+ kids in classrooms where nothing is being taught.
But like I said, as long as you're behind the gate with the ocean in your back-yard, no one that can pull off staying is going anywhere...especially to someplace like Texas.
To get such loans the 3rd world countries need to agree to impose certain fiscal constraints on their spending. Wall Street rating agencies will be trying to impose those on California anyway. I can't see California legislators voluntarily giving in without some posturing and fighting. That means they might as well work it out and humor Wall Street for loans and Wall Street will treat them for the banana republic mentality that they show.
Lest you think I am being smug, Texas and other states are heading in the same direction. The parasites are killing off their hosts.
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