Wednesday, December 15, 2010

California: Worse than the depression

If anyone in California was under the impression that the worst of the recession could be over, Gov.-elect Jerry Brown's latest comments on the economy will make grim reading. Schwarzenegger's successor will announce his budget plan on Jan 10 - a plan that will have to deal with a $28b hole in the state's coffers.

The veteran Democrat, who last ran the state in the late 70s/early 80s, had some choice phrases to describe California's predicament.

Speaking at UCLA he said:

"Please sit down if you're reading the stories on the budget on Jan. 10. If you're driving, fasten your seat belt because it's going to be a rough ride."

He said gaps between the wealthy and the middle class were widening and the current era was "a very difficult period. We've never had it before. It may be worse than the Depression in terms of political pressures, the tearing of the social fabric."

"...what we are facing is not only a budget deficit. We're facing a societal crisis, and we will only resolve it as we understand it and we work not only to exercise a discipline, which has been sadly lacking, but also a fairness that enables everybody to feel they have an honest stake in the whole society. That's the larger picture here."

The detail is still to come on how Brown will make saving and implement his austerity measures - but it's going to an extremely rough ride for the less-than-golden state.