Big Orange: at the End of the Day

Today it will become official. Today the politicians who for the past 18 months have pretended to run Orange County will gather in celebration on courthouse steps with the bankruptcy lawyers and business executives who, in fact, have been calling the shots. There will be a toast to solvency. The Big Orange will be declared free at last from bankruptcy, free at last from shame. After the speeches, cold turkey sandwiches will be served.

The grand moment was preceded by the successful peddling on Wall Street last week of nearly $900 million worth of Orange County bonds--money needed to start making partial repayments to cities, school districts and other investors in Orange County’s leaky pool. In that dark December of 1994, when the county bolted for Bankruptcy Court, it was said that Wall Street would never again buy another Orange County bond. This proved not to be the case.

The market, as the saying goes, has no memory. The market apparently did not linger long on human interest tales of laid-off welfare workers. Rather, it focused on Orange County’s still-gilded economic base, its vibrant work force and Gold Coast opulence--in other words, on what might be called the real Orange County, as opposed to the governmental entity of the same name. The price was right, and the market moved. Wall Street taketh, Wall Street restoreth.

Not that Orange County seems exactly grateful. It filed a battery of lawsuits Tuesday against an array of Wall Street entities. The general thrust is that these outsiders should have supervised the Orange County treasurer--even if the county’s own “supervisors” did not. Some folks down here maintain Orange County never was financially bankrupt. Rather, it was morally bankrupt, refusing to clean up its own mess. The lawsuits provide eloquent support for this position.

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Throughout the crisis, the bankruptcy lawyers invoked a cliche--”at the end of the day”--to the point of self-parody: At the end of the day, they’d say, pool participants who played ball would come out just fine; at the end of the day, the Big Orange would rise again, if everyone would give the lawyers and business leaders room to maneuver. . . .

Well, this now is the end of the day, and so then: What did it all mean, this much-noted fall from fiscal grace by one of the nation’s wealthiest counties? The short answer: Not much.

At the end of the day, Orange County remains a haven of wealth, a place of promise, a good bet on Wall Street. At the end of the day, its freeways still teem with Mercedes and BMWs, its malls with shoppers. The schools are mostly good, the new suburbs attractive. Disneyland is still standing. So is Fashion Island. The beaches are wonderful, the weather fine.

Yes, some 500 county workers did get laid off. Most of these worked in the social services, tending to unwed mothers, mental patients, discarded children and the like. There are those who see this as unfair, a rich county forcing the downtrodden to absorb the pain. There are others who see it as political triumph. This is, after all, Orange County, where many a political career begins by taking aim at government in general, and government “giveaways” in particular.

At the end of the day, some elected officials did get run from office, and a few face the possibility of Lompoc time. Rest assured, new ones already have stepped forward to replace the fallen, promising to crack down on welfare giveaways to unwed mothers, mental patients. . . .

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At the end of the day, more than a few people have begun to ask: Was the bankruptcy filing even necessary? A Nobel-winning economist--albeit one hired by Merrill Lynch, one of Orange County’s many legal targets--has determined that, had the county not panicked and instead stuck with its investment plan, it would have turned a profit by now.

A lawyer engaged on the edges of the action figures the county wanted a big club to bully pool investors into submission. By ducking into bankruptcy, it forced them to confront a some-or-nothing proposition. And so the pool participants forfeited any right to sue the county--a right to victimhood, if you will--in exchange for a percentage of their own money, and the hope that more might be recovered later through the county’s legal assault on Wall Street.

And yet all of this, the lawyer argues, could have been accomplished through political give-and-take. “At the end of the day,” he asked angrily, “what did the bankruptcy accomplish? Nothing.” Nothing, except. . . .

It made Orange County a national laughingstock. It scared a lot of people, more than it actually hurt. It temporarily depressed the real estate market. And, yes, it made a lot of wonderful rain for the bankruptcy bar--at present, the fees owed to lawyers are somewhere near $50 million, and the end of their day is nowhere in sight.