NY Times :: 11-Week Countdown to California Recall Begins
Article

> In a sign of the real-world impact of California's
> upheaval, the bond-rating house Standard & Poor's today
> downgraded California debt three notches, to BBB, the
> lowest of any state and just two grades above junk-bond
> status. The company said that "with political focus on the
> recall, the prospects for meaningful structural budget
> reform resulting from any enacted budget are diminished."
>
> The office of Phil Angelides, the state treasurer,
> estimated tonight that the downgrade could cost the state
> an additional $1 billion in borrowing costs over the next
> 30 years.

In all the frenzy over the recall effort, I've still yet to hear a clear explanation of what exactly Gov. Davis did wrong, apart from winning the last election. As far as I can tell, he handled the energy crisis about as well as anyone could. He administered triage back at its peak by signing costly but stabilizing long-term contracts when the spot markets were spiraling out of control. He then agitated for the investigation of energy company business practices and has doggedly pursued retribution from these scofflaws after details of their criminal conduct came to light.

His gravest mistake appears to have been succumbing to the pressure of those who forever insist on reducing government excises below a level sufficient to meet costs on the services and entitlements which people expect and upon which many have come to depend (foremost, the middle class and their college-swarming offspring.) But the most reckless advocates for these ill-advised refunds, rebates, and rollbacks are typically the same people leading his ouster. Meanwhile, their extracurricular pursuit of power has only worsened the financial crisis.
posted by Tomohiro Idokoro @ 8:54 AM

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