CALIFORNIA’S BUDGET CRISIS : An IOU on Self-Esteem : California’s Plight May be a Harbinger or Just Reason for Others to Gloat


So this is what the world’s seventh-largest economy has come to:

California’s credit rating is hovering somewhere around Bart Simpson’s school GPA. Even Noah wasn’t at sea for as long as the state government has been adrift on the budget. And all that comes on top of the state’s chain of disasters, man-made and natural, which would make Egypt’s seven plagues seem like a day at the beach--except you know what the beach is like these days.

Is it any wonder that golden, glamorous California, rich and self-indulgent California--"the glory, jest and riddle of the world” California--is now getting talked about around the country and even the world like some poor, feeble relation, a state going from model to muddle?

Comedian Jay Leno on “The Tonight Show” this week: “Here in California fires continue to rage throughout the state. Boy, fires everywhere . . . you have the feeling maybe Gov. Pete Wilson is trying to burn the state down for the insurance money. . . . Pay off those IOUs.”


L’Express, a weekly French newsmagazine, in a cover story three weeks before: Two women jog down Malibu beach in T-shirts with the acronym IOU. “A new trend? No, a protest . . . a bankrupt U.S. state is not a rare thing. But California! The (state) that, since the gold miners of 1849, seemed to live an endless success story, the model . . . for the civilization of the 21st Century, finds itself suspending its payments like a common little republic of the old Soviet Union.”

Newspapers from Chicago to Texas to London have been throwing down glum words like a bad hand of cards: “blighted . . . nadir . . . extraordinary series of blows . . . fiscal fiasco.”

Where’s the California Task Force to Promote Self-Esteem when you need it?

Author and Angeleno Ray Bradbury was in France a few weeks ago, and brushes off all the carping, here and abroad:


“They’re jealous of us. We’ve got a wonderful state here.” Actor Charles Laughton once advised him: “If you have three successes in a row, they’re going to hate you. Every third time, fail. Then people will feel sorry for you, and you can go back to being excellent again. That’s California. We’re too successful. The center of the world. Have been for 30 years.”

In its troubles, as in its triumphs, California engenders complex responses:

The “viewed with alarm” reaction. California is a bellwether in matters serious as well as frivolous, and its difficulties could become the nation’s difficulties. In the Washington Post, political writer and longtime California watcher Lou Cannon wrote: “This budget crisis could be a harbinger of worse to come. California is on the cutting edge, and what has happened here this year is a warning for the entire nation.”

The Schadenfreude reaction--a German word meaning malicious delight in the misfortunes of others, as when you see someone in a brand-new sports car you could never afford getting ticketed by the CHP. In this case, that private, tickled feeling among those from other parts of the country that even high and mighty California has feet of clay and is getting its comeuppance. Few confess publicly to this, but it’s there.

The “more in sorrow than in anger” reaction. Don Pride is a spokesman for Florida Gov. Lawton Chiles, and Florida is a state whose problems and advantages often parallel California’s. For Floridians, all this confirms that California has become a model of what not to be--"not only as far as fiscal management but also what happened in the way of growth out there,” says Pride. “We just see California as something we want to avoid--a good example for us not to follow.”

The plain old head-shaking disbelief. L. Stanley Chauvin is a Louisville, Ky., lawyer and longtime Democratic activist. California’s straits get talked up over lunch even there. “It’s something we didn’t think would ever happen in California. Some other state, maybe yes. Camden, N. J., or East St. Louis, because everybody moved out. But hell, everybody lives in California! I just never thought California would have money problems.”

Recession, aerospace cuts, fires, droughts, insects. “It’s bad enough under normal circumstances, and unbearable under these circumstances with the budget,” says Chauvin. “Pete Wilson’s in the position of the guy standing in front of a liquor store two minutes after his twin brother robbed it--he can’t win.”

Indeed, Wilson does take on the proportions of the biblical figure Job, the man for whom nothing went right. Even the California delegation tuned out when Wilson, once touted as 1996 presidential timber, addressed the Republican convention by satellite from Sacramento. (It had to be by satellite, Leno joked, because “none of the major airlines would accept his IOUs.”)


The long view. Where Californians tend to judge themselves only by their shallow history, Europeans in particular take a longer view, and ultimately perhaps a more optimistic one.

John Micklethwait is the correspondent here for the Economist. “What California really doesn’t seem to realize is, it isn’t really about comparing California with what it used to be like. It’s more about comparing California to other areas” of the world, and their economies.

He wrote recently that “by any reasonable standard . . . the government of the most advanced state of the most powerful country in the world is failing.” His criticism is of California’s governance, not its economy, which he believes to be sound and resilient yet.

“It’s very difficult to go to New York, parts of the East Coast, and try to persuade yourself that California is in a worse state. . . . To put it blankly, it would be impossible for me, working for an international newspaper, to go to my editor and try to explain to him that California is somehow badly equipped to face the next century compared to the rest of America.”

His colleague Phil Reeves, West Coast correspondent for the Independent in London, is less cheered, however. The Los Angeles riots shocked the world’s outdated image of California as white people “whose main pursuit is happiness and luxury and roller-skating along the beach.” Then the quakes hit, “finally the budget crisis and the slump in the defense industry. All those stories received quite a lot of attention in Britain, and all seem to add up to a fairly disastrous picture.”

He believes California can recover, but “nonetheless people are actually beginning to wonder: ‘Hey, will they ever climb out of this one?’ ”

Yet the Golden State still has its fans.

Writer Sue Halpern, whose book of essays, “Migrations to Solitude,” came out this year, still longs for California from Upstate New York:


“In this household we really love California and often think we’ll use our frequent flier tickets to make our way there.”

And for goodness’ sake--New York City has flirted with bankruptcy for years.

“When people talk about homeless people who live in the country, they say, ‘Well, you know, they’re homeless, but they live in a beautiful place.’ Maybe when people look at California and see it’s on the verge of bankruptcy, people losing jobs, they say, ‘Well, all that’s true, but they get to live in a beautiful place.’ ”