Paging Bill Simon
I am terrified that Obama will feel the need to bail out California. I can't possibly think of a worse use of my money, nor a worse precedent for the future. Does anyone think that, in retrospect, Bill Simon's refusing to bail out New York City was the wrong decision. NYC is not what I could call financially responsible, but they are paragons of virtue compared to what they were in the 1970's, and would have been had they not been forced to take ownership of their budget problems.
Postscript: My prediciton if Obama intervenes: bondholders will get 10 cents on the dollar, and the SEIU will be given 55% ownership of California.
