Wednesday, May 20, 2020

Is California the New Greece?

Gavin Newsom portrait by Sabo
The power freak governor of California, Gavin Newsom, led the nation in issuing a statewide stay-at-home order to "battle" COVID-19.

This, despite top medical scientists at Stanford University and the University of Pittsburgh, amongst others, warning that the lockdown was a mistake from a medical perspective.

But beyond the questionable health benefits of the lockdown, the governor's move is now creating a gigantic fiscal problem for the state.

The lockdown is projected to lead to a state budget shortfall this year of  $54 billion.  In the end, it will probably be more.

Newsom has created this financial mess for the state, and just like Greece during their financial crisis, he has no central bank money printing machines to bail him out.

He is now in begging mode just like Greece was, but, whereas a lot of Greece's financial trouble was about paying off old debt, California's problem is about running the current state government (and also local governments).

I had no problem calling for Greece to walkway from its debt and I don't have a problem with the government of California shrinking. Indeed, I would cheer it on.

But the governor sees things differently.

"We are going to do everything in our power to protect the most vulnerable, and do our best to protect public health, the public safety, and significantly do our best to address public education. But we can't do that alone without the federal government's support, not as charity but as social responsibility to help meet the needs of millions and millions of Americans," Newsom told  NPR's All Things Considered.

Of course, the federal government doesn't have any money either---but, via the Federal Reserve, they can print it.

Newsom just sent a letter to Senate Majority Leader Mitch McConnell, Senate Democratic Leader Chuck Schumer, Speaker of the House Nancy Pelosi and House Republican Leader Kevin McCarthy begging for federal money.

On Sunday, he also told CNN's Jake Tapper, "I hope they'll consider this, the next time they want to salute and celebrate our heroes and first responders, our police officers and firefighters, consider the fact that they are the first ones that will be laid off by cities and counties. The folks that are out there, the true heroes of this pandemic, our healthcare workers and nurses, those county health systems have been ravaged, their budgets have been devastated and depleted. They're the first ones to be laid off."

"I'm not looking to score cheap political points, but I do want to make this point," he continued, "We have an obligation, a moral and ethical obligation to American citizens all across this country to help support cities, states and counties."

"I'm not here by any stretch of the imagination to suggest or even to allow the implication that somehow we're pitting one group against another," Newsom said. "The magnitude of these budgets nominally is personnel at the county and city levels."

This is going to be fun to watch.

The Germans, who were the primary objectors to a Greek bailout, had more incentive for that bailout  (the banksters wanted it) than President Trump and McConnell have to bail out Newsom.

Squirm Gavin, squirm.



  1. He's quite comical. You can take every statement he makes, reverse the negative and derive the actual truth. Amazing.

  2. I want to see all these states and municipalities and their employees, especially those expecting the huge benefits that some agencies promised, get what they deserve good and hard as Robert Higgs put it. Problem is it will be us in the private sector that these sociopaths will put as much of the burden on as they think we will take.