Britannia Radio

THE TIMES         17.2.09
Arnie Schwarzenegger joins the ranks of the girlie men
After years on the brink, California is finally going out of business
Chris Ayres

Lucky you," said my accountant the other day. "You've underpaid your 
taxes this year. That means you owe the state of California money."
"I don't get it," I said, wincing. "Why is that lucky?"
"You didn't hear?"
"Hear what?"

"If you were due a refund for 2008, California wouldn't send you a 
cheque. It would send you an IOU. And before you ask: no, this will 
not work in reverse."

So this is what things have come to here in America's most 
financially powerful state - a state whose $1.8 trillion economy is 
theoretically the eighth-largest economy in the world (just behind 
the United Kingdom, France, and Italy). If you thought that the 
collapse of Iceland made things tricky, confidence-wise, just wait 
until this sucker goes down. Which it is expected to do this week or 
next, as it technically becomes insolvent, unable to pay tax refunds, 
repair roads and bridges, keep schools open, or indeed provide a wage 
for anyone unfortunate enough to find themselves on its payroll.

After years on the brink, it has finally come to this: California is 
going out of business.

How did this happen? Sure, the economy is bad. But this is a state 
whose money comes from the most bankable economic assets on Earth - 
the Long Beach ports, the Central Valley agricultural region, the 
defence contractors out in the Mojave desert, Silicon Valley, Napa 
Valley... Hollywood. How do you tax all this and end up amassing 
debts at the present rate of $1.7 million per hour?

Perhaps it has something to do with the man running the place. And I 
am ashamed to say that, yes, when the actor most famous for playing a 
killer robot in a so-so B-movie ran for governor, I was behind him. I 
defended his fiscally conservative, socially moderate agenda and 
loveable tendency to work movie tag lines into important policy 
debates. I believed in Governor Arnold Schwarzenegger, the 
"governator". And like the five million Californians who voted for 
him, I'm feeling a bit silly now.

It was all talk in the end. For all Mr Schwarzenegger's swagger, he 
didn't have the faintest idea how to run a state that is at the mercy 
of laws put on the books at every election by the voters themselves, 
through a system of utter madness known as "direct 
democracy" (imagine, if you will, an army in which the troops can 
overrule the general, mid-battle, with a show of hands).

Still, nothing justifies the fact that Mr Schwarzenegger - who once 
railed against "economic girlie men" - has allowed California's 
budget to grow by 40 per cent to a morbidly obese $144 billion since 
2004, setting the stage for a calamity of asteroid-hitting-the-
Pacific proportions the moment tax revenues began to fall.

So what now?

The governor wants to raise taxes - exactly the same thing that his 
predecessor tried to do before being terminated by a certain 
Hollywood action star - while his fellow Republicans are objecting, 
without suggesting anything cleverer. Until a solution is found, 
California is done, dead, kaput. It is, as John Cleese might have put 
it, an ex-state. In the meantime, I suggest we put Mr Schwarzenegger 
on an aircraft, fly him back to Austria and ask politely for a refund.

A scoundrel's argument
Will Barack Obama turn out to be a similar disappointment? I hate to 
say it, but I have a bad feeling. Particularly worrying are those 
endlessly fawning Obama supporters who argue that Republicans who 
oppose the underpants-on-the-head insanity of the $787 billion 
"stimulus package" are unpatriotic and care more about their 
political careers than they do about saving the country from certain 
destruction.

This kind of talk sounds awfully familiar to me. We heard it in 2002, 
when the endlessly gung-ho supporters of one George W. Bush were 
telling Democrats that, unless they signed up to the underpants-on-
the-head insanity of the Iraq invasion, they were unpatriotic and 
cared more about their political careers than they did about saving 
the country from certain destruction.

The trouble is, when someone puts a gun to your head, there's only 
one way to find out if it's loaded. And it involves them pulling the 
trigger.