The Lessons of California and Jim Doyle

Wonder why Jim Doyle quit?

From a speech by Tom McClintock, a California (R) politician:

"I know that everybody likes to poke fun at California - but I can tell you right now that despite all of its problems, California remains one of the best places in the world to build a successful small business. All you have to do is start with a successful large business."

And that's the only humorous part. There's one graf which is almost scary for Wisconsin residents, though:

You can trace the collapse of California's economy to several critical events: the rise of environmental Ludditism beginning in 1974; the abandonment of constitutional checks and balances that once constrained spending and borrowing; and the rise of rule by public employee unions. There are other factors as well: litigation, taxation, illegal immigration - but for the sake of time let me concentrate on the big three.

The Doyle Budgets correspond to #2 above; there's little doubt that WEAC and AFSCME are the 'shadow government' in the Capitol and many other cities in Wisconsin (#3); and Doyle's Luddite EnviroWacky program will be the Fall Session's main course (#1).

Agreed, California politicians have been creating its problems for longer than Wisconsin's.

But here's the upshot:

Today, California is like the shopkeeper, who leased out too much space, ordered too much inventory, hired too many people and paid them too much. Every month the shopkeeper covers his shortfalls with borrowing and bookkeeping tricks. Ultimately, he will reach a tipping point where anything he does makes his situation worse. Borrowing costs are eating him alive and he's running out of credit. Raising prices causes his sales to decline. And there's only so much discretionary spending he can cut. That's the state's predicament in a nutshell. California 's borrowing costs now exceed the budget of the entire University of California and it is increasingly likely that it will fail to find lenders when it must borrow billions to pay its bills at the end of this month.

You don't really have to speculate on "why Jim Doyle quit." The answer is found by looking west to California.

HT: The Hatted One