No emergency measures needed

The other day, Arnold Schwarzenegger held a press conference wherein he declared California bankrupt. I had to laugh at the irony of living simultaneously in two economies, both of which are technically bankrupt. But the California bankruptcy is actually of a different stripe than the Icelandic one. It was, to put it simply, purposely caused by Governor Schwarzenegger, and is not any sort of shocking surprise. Rather, it is a necessary corrective to a longstanding problem in the governance of California. Proposition 13, which was passed in the late 70s, artificially and severely limited the ability of the California legislature to raise taxes. Over time, this has destabilized California's entire infrastructure, including roads, schools, social programs, state parks, everything. "The Terminator" is forcing a showdown with the California legislature, particularly with his own fellow Republicans, in order to finally be able to raise taxes. This will be a great benefit for the California economy (the 8th biggest in the world by most accounts), especially for small and midsize companies.

Arnold's recent behavior has yet further increased my respect for him. Of course, I, like many others, was surprised someone with such a seeming obsession with his looks could turn out to be interested in taking on the heady responsibility of governance. But his choice of wife got me thinking he may be a more intelligent, open-minded person than I originally thought, since Maria Shriver is a staunch Democrat. (And us Californian's definitely like having a bit of the Kennedy aura here on the West Coast). Plus, since being elected, he's made several environmentally friendly moves, including supporting the tax credit for solar panel legislation that should have been on the books years and years ago. But this bankruptcy is really the coolest. It has come about by his systematic application of his core principles; he refuses to beg the Federal Government for money and is absolutely unwilling to compromise, and now raising taxes is the only option. The discipline he acquired through body building may finally prove to be the way to get California out of a mess created 30 years ago by some well-meaning but over-zealous petition writers. And it has made me believe that self-confidence and a willingness to take total control of a situation are the main qualities a leader needs to get the job done.

I'm not sure Icelanders are as comforted by why and how their bankruptcy took place, and how it is being handled now. Geir is not quite the Terminator.