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The Biz Roundup January 9

What happens when California goes out of business?

California faces a budget deficit of more than $41 billion over the next 18 months. . . . The list of cuts and shortfalls is almost apocalyptic. According to the UCLA Anderson Forecast, thousands of lost jobs in the public and private sectors will cause California’s unemployment rate to leap to 8.5% by the end of 2009 (it was 6.5% in October). If the state runs out of cash by mid-February, as has been predicted, hundreds of state vendors, such as electrical-supply wholesalers, food-service companies and building- and grounds-maintenance firms, will be sent IOUs from the state government. Dependents may drop in worth from $309 to $103 on Californians’ 2009 income tax forms. And, by the way, don’t count on a tax refund showing up soon after you file in April — one of those IOUs may find its way to your mailbox instead, explaining that the refund may be delayed.

(“The Great California Fiscal Earthquake,” Time, January 08) Meanwhile, our elected officials fight among themselves over how much nothing they should do about the crisis. Here’s the problem: our entire democratic system of government has been designed to be slow, laborious, and inefficient. Why? Because “fast, easy, and efficient” is what tyrannies and dictatorships do. The Romans had the same problem with their republican government split between an aristocratic senate and a tribunate. But slow and deliberate is a losing hand when Hannibal or some rogue general is about to knock the walls down, so the Roman constitution had a provision for appointing a dictator for a limited time during emergencies. Well, here in California, someone needs to take the wheel and it isn’t going to be girly men like Governor Arnold.

A thousand bucks for a house.

There are 18 listings in Flint, Mich., for under $3,000, according to There are 22 in Indianapolis, 46 in Cleveland and a whopping 709 in Detroit. All of these communities have been hit hard by foreclosures, and most of these homes are being sold by the lenders that repossessed them.

(“Radical cheap: $1,000 homes,” CNN Money, January 08) I bet you pay the closing costs. Of course, these houses are in totally run-down and in neighborhoods you’d never want to live (or die) in, but houses for sale as low as $500 shows you that the slide in home prices has barely begun.

Because they did such a great job with the first $350 billion.

Senior Bush administration officials are preparing to ask lawmakers for the second half of the $700 billion financial rescue package despite intense opposition in Congress and then have President Bush use his veto if the request is voted down . . . Government sources say a majority of lawmakers on Capitol Hill now do not support handing over more rescue funds to either administration.

(“Bush to Ask for Second Tranche of Financial Bailout Funds,” Washington Post, January 9) Okay, in 13 more days Bush will ignominiously and for all time leave a position of responsibility in the federal government, as will Doctor Manhattan (Paulson) and Lex Luthor (Kashkari). Tell me, how much of that $350 billion can they spend in a week? Is this like some kind of game show.

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