Monday, July 20, 2009

A Bear Market

A few months ago, California Governor Arnold Schwarzenegger stumbled across a grizzly bear while visiting Montana. Luckily for him, it was hollow and made of bronze. But still, it was life-sized, and reminded him of the great grizzlies that once roamed his beloved Golden State, so he bought it and brought it home to Sacramento.

The governor installed his new bear smack dab in the middle of the Capitol hallway, right in front of his office. This was good news for the Highway Patrol officers who guard Schwarzenegger's lair, since the bronze grizzly replaced them as the focus of visiting tourists' snapshots. It also made a nice bollard, adding another level of security outside the governor's office. And it gave the reporters who cover the governor somewhere to rest their microphones during his occasional hallway news conferences on the state budget crisis.

Today (and we use that term loosely since this very long day has about ten minutes left in it) was the last day of California's latest budget stalemate. As we staked out what would prove to be the final Big Five meeting of the crisis, the governor's staffers brought out a press pool, something we refer to as a "mult box," because it has multiple microphone outputs for the media to plug into, thus sparing the bear the indignity of all those microphones duct-taped to its bronze back.

It occurred to me that the bear could be put to better use as California struggles to balance its books. Why not carve a slot along its spine, and turn it into a Piggy Bear? (Or would that be a Beary Bank?) Certainly all those tourists who line up in the hall hoping for a glimpse of the Governator would gladly drop a quarter or two into the bear's belly for the privilege of posing with it. We could charge the out-of-staters a buck, or maybe even five; after all, they're freeloaders anyway, getting a free tour of our Capitol and occupying valuable hall space without paying any rent, all on the California taxpayers' dime.

Once the great beast proved his worth, the state Treasurer could securitize the bear, as California likes to do with all its longterm assets. Why, we could sell Bear-er Bonds. Perhaps Bear Stearns could handle that for us. After all, they pioneered those securitized asset deals, didn't they?

Oh wait. That got them in trouble. They went belly up - as extinct as the California grizzly.

Governor Schwarzenegger and his pals in the legislature found some other ways to balance the books, ending my five-hour reverie about the bear (who is still unnamed, by the way) by coming out of their meeting to announce a Deal At Long Last to erase the state's $26 billion deficit. It isn't pretty; they plan to slash $6 billion from K-12 education, $3 billion more from higher ed, more than a billion from the prisons, more than a billion from medical care for the poor, etc. etc. The governor gets to close some state parks (but thankfully, just a few), resume oil drilling from a single rig off Santa Barbara, tighten up on fraud and abuse in welfare programs, and raid the treasuries of California's counties to the tune of $4.3 billion. All of this assumes the approval of two-thirds of each house of the state legislature, some of whom have been known to hold this sort of budget deal hostage until the appropriate legislative ransom is paid.

If the deal does go through, it should allow the state to resume selling bonds, which would mean an end to the IOUs that have brought California international embarrassment for the last three weeks. It doesn't really mean an end to the state's financial crisis, since tax revenues are still declining, and the budget is likely to fall further out of balance before the year is out (think about this: already this calendar year, the state has had to cut, borrow or manipulate more than 60 billion dollars out of its spending plan - which is more than half the state budget).

Which means we're likely to be back in that hallway at some point this fall, sprawled across the marble floor, charging our iPhones and laptops on the taxpayers' electric bill, resuming our vigil as our fearless leaders grapple with yet another shortfall, and squabble over how to close it.

At which point I say, let's open up the bear market. Name that grizzly, saw out a slot in his back and put the California Golden Bear to work.

Otherwise, we could be bearish on California for a long, long time.

Sunday, July 5, 2009

The Curious Case of Sarah Palin

At least no one can accuse the Republicans of being boring anymore.

In a span of just two weeks, the Grand Old Party has shot off more political fireworks than a pyromaniac on Independence Day.

One after another, the rising stars of a leaderless party have gone supernova. Two of them have probably disappeared forever into political black holes. The third will continue to ping pong around some parallel universe, hoping her unpredictable trajectory finds its target at some point.

First, Nevada Senator John Ensign, the silver-haired son of the Silver State, a classic Central Casting presidential hopeful, revealed he had an affair with a married staffer, and got his mistress' husband a couple of jobs on the public payroll, too. Oops. Nevada is supposed to be a swing state...not just a swinger's state. So long, Senator.

Then, an even bigger bombshell - South Carolina Governor Mark Sanford's disappearing act, followed by his bizarre, rambling confession of an Argentinean love affair. Abdicating his gubernatorial responsibilities for five days was bad enough, but admitting to multiple affairs and not loving his wife anymore has doomed this Great Republican Hope (Rush Limbaugh kept muttering "He could have been our JFK!" What, did Rush already know about Sanford's philandering?).

And now, the Curious Case of Sarah Palin. She was born wacky and grows wackier right before our eyes - and all without benefit of digital effects. No one's ever accused her of being a conventional politician. Why should she start now?

Palin's startling decision to quit being governor two-and-a-half years into her term makes no political sense. To many Alaskans, her "explanation" that she doesn't want to be just another lame duck governor, "milking it," as she said, is a selfish affront. Many, many governors serve only one term - in some states, like Virginia, they do so by statute. Mark Warner and Tim Kaine were lame ducks from their first day in office; the Virginia Constitution forbids running for re-election. Should they have just resigned, then, rather than "milk" their lame duck status for four years? Arnold Schwarzenegger has a year and a half left in his second term as Governor of California, making him as lame a duck as Palin in Alaska. Can you imagine the uproar if he quit tomorrow, abandoning ship in the middle of a budget crisis? It's not likely he'd be applauded for his leadership and integrity, or for answering a "higher calling." Most voters expect their leaders to honor their oaths of office.

I don't buy the blogosphere's theories of some sinister secret that Palin's hoping to keep hidden by leaving office. Sure, she's under investigation for all sorts of alleged ethics violations, but Palin is nothing if not a fighter. She has shown that from the moment John McCain foolishly thrust her into the national spotlight. If that was all this was about, Palin would stand firm and punch back. No, I actually believe her when she says she's tired of the nasty focus on her family. It's also very much about money; Palin probably hopes that leaving office now will lower the volume on those ethics charges and slow the mounting cost of her defense. And I think she really does want to step back and marshal her resources for some sort of national campaign, perhaps as a highly-paid inspirational speaker for now, and then as a presidential candidate in 2012.

But Palin is kidding herself if she thinks her critics will simply go away once she's no longer governor. The spotlight's red glare just gets hotter when you run for president, and her irrational decision gives her enemies even more ammunition. If she can't even complete a single term governing the nation's least populous state, how in the world will she ask America to entrust her with the presidency? Didn't she owe it to Alaska to finish the job to which she was elected? Will she ever again be able to accuse an opponent of wanting to "cut and run" - from Iraq, or anywhere else?

It's one thing to decline a second term to pursue a national campaign; it's worked for many former governors, including Jimmy Carter. It's quite another to quit halfway through that first term. In fact, it's almost without precedent. A review of the National Governors Association's historical database shows that 205 U.S. governors have resigned their seats. Almost all did so because they were elected or appointed to higher office, such as California's Earl Warren becoming Chief Justice in 1953 or Arizona's Janet Napolitano quitting to become President Obama's Homeland Security secretary. About a dozen have resigned because they were indicted or under criminal investigation. Remarkably, New Jersey's gay Gov, Jim McGreevey, was the first to quit because of an extramarital affair; all the previous governors caught in (heterosexual) dalliances rode out the storm (a ray of hope for Mark Sanford).

But in that long, rich legacy of prematurely departing governors, not even the wonderfully named Alpheus Felch of Michigan or Archibald Yell of Arkansas slunk from office in as ignominious a fashion as Sarah Palin. One must go all the way back to California's very first governor, Peter Burnett, to find a chief executive who simply quit because he couldn't take it anymore. Burnett served barely more than a year in office before resigning in 1851 under intense criticism from the state legislature. Among other things, the governor wanted all black people expelled from California, passed a stiff tax on immigrants, and advocated the extermination of California's Indian tribes. While in the Oregon legislature, he had led the successful fight for that state's exclusion law, barring blacks from Oregon and mandating the flogging every six months of any who refused to leave. California lawmakers reacted to their new governor's State of the State address with howls of fury. Burnett was ridiculed in newspapers up and down the state. So he simply packed up and quit. This is the exclusive company in which Sarah Palin finds herself 158 years later.

(Burnett still got a street named after him: Burnett Avenue in San Francisco. Somehow I doubt there will be a Palin Place in Anchorage, or even Wasilla, anytime soon).

So while soon-to-be-former Governor Palin ponders her future and plots how to build a national campaign around defensiveness and victimization, the Republican Party is reeling, casting about for a leader, and staring at an awfully thin bench. Last year's also-rans, Mitt Romney and Mike Huckabee, look awfully good right now. Newt Gingrich? Come on down and play savior. The governors McCain passed over to pick Palin - Tim Pawlenty, Mitch Daniels - vault to the head of the pack. Even jolly old Haley Barbour of Mississippi, as unlikely an Obama opponent as you could ever envision, looks more and more viable for 2012.

Until the next bombshell goes off, that is...