Big banks saying no to California IOUs

posted at 1:22 pm on July 7, 2009 by Ed Morrissey

The financial sector has just delivered a message to California, roughly translated as, “Quit working on cow tails and apologies to long-dead people.”  A group of the largest banks in the US has announced that it will stop accepting California IOUs by Friday.  The state will run out of cash by the end of the month if it cannot issue IOUs, as long as its $24 billion budget gap remains unresolved:

A group of the biggest U.S. banks said they would stop accepting California’s IOUs on Friday, adding pressure on the state to close its $26.3 billion annual budget gap. …

The group of banks included Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and J.P. Morgan Chase & Co., among others. The banks had previously committed to accepting state IOUs as payment. California plans to issue more than $3 billion of IOUs in July.

Ms. Mills of the CBA said some banks were concerned that there aren’t processes in place to accept IOUs, and also worried about fraud issues.

One of the reasons we use a common currency, provided by the federal government, is to avoid fraud issues.  Several people have wondered at the legality of issuing IOUs as cash devices.  They accuse California of creating currency, which is unconstitutional, although the state has done it on previous occasions.

Also, Californians may not understand this, but these IOUs are essentially state bonds.  The people who buy them are demanding 3.75% interest APR on the devices, which means that the state is actually spending more money than they normally would now.  The longer they use IOUs instead of cash, the more expensive it gets for Californians later when the IOUs get cashed.

Interestingly, all of the above banks have accepted TARP funding, or perhaps more accurately, had TARP funding thrust on them.  Would the Treasury have to have approved this decision?  Did the Treasury insist on this decision?  If so, it could either signal a hardline approach from the White House on California’s budget crisis, or give them an excuse to intervene.

A bailout would only delay the day of reckoning.  California’s budget woes are entirely of their own making, and a bailout would not solve the underlying political problems in California.  They tax too much and they spend too much, and their political class hasn’t got the guts to actually solve either of those problems, let alone both.  A bailout would put California right back in the same place next year, and the year after that.  If ever there was a moment for tough love from Uncle Sam, this is it.


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Comment pages: 1 2

No honor among thieves.

the_nile on July 7, 2009 at 1:23 PM

Sh!t…meet Fan.

PappaMac on July 7, 2009 at 1:23 PM

Liberalism, heal thyself.

LimeyGeek on July 7, 2009 at 1:24 PM

JOEL KOTKIN: Who Killed California’s Economy?

It took some amazing incompetence to toss this best-endowed of places down into the dustbin of history. Yet conventional wisdom views the crisis largely as a legacy of Proposition 13, which in effect capped only taxes.

This lets too many malefactors off the hook. I covered the Proposition 13 campaign for the Washington Post and examined its aftermath up close. It passed because California was running huge surpluses at the time, even as soaring property taxes were driving people from their homes.

Admittedly it was a crude instrument, but by limiting those property taxes Proposition 13 managed to save people’s houses. To the surprise of many prognosticators, the state government did not go out of business. It has continued to expand faster than either its income or population. . . . The media and political pundits refuse to see this gap between the state’s budget and its ability to pay as an essential issue. It is. (This is not to say structural reform is not needed. I would support, for example, reforming some of the unintended ill-effects of Proposition 13 that weakened local government and left control of the budget to Sacramento.)

But the fundamental problem remains. California’s economy–once wondrously diverse with aerospace, high-tech, agriculture and international trade–has run aground. Burdened by taxes and ever-growing regulation, the state is routinely rated by executives as having among the worst business climates in the nation. No surprise, then, that California’s jobs engine has sputtered, and it may be heading toward 15% unemployment.

Keemo on July 7, 2009 at 1:25 PM

Time to let the seals die and the artists starve.

aero on July 7, 2009 at 1:26 PM

Obama and Biden have been out of the country and there hasn’t been a peep out of Tim, so perhaps the TARP banks have gone rogue.

myrenovations on July 7, 2009 at 1:26 PM

This isn’t about “IOU’s.” It’s about bankrupt entities, which call themselves “governments,” which continue to spend billions or trillions of dollars, all of which will become more dead weight on the backs of the People. This is about business as usual, until the People are broken.

Beltway, does this ring a bell?

OhEssYouCowboys on July 7, 2009 at 1:27 PM

As Thatcher said “the problem with socialism is that you eventually run out of other peoples’ money”

California is the perfect petri-dish to provide us all with an object lesson in why contemporary liberalism is a fraud.

I thoroughly expect the vast majority of ‘Americans’ to be far too stupid to learn the lesson.

LimeyGeek on July 7, 2009 at 1:28 PM

I hope Obama is arrogant enough to bail out California, the collapse of his economic agenda and his presidency, when the other 49 states come up to the till, will be an entertaining sight to behold.

elduende on July 7, 2009 at 1:28 PM

The group of banks included Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and J.P. Morgan Chase & Co., among others.

I’m glad they finally woke up.

Vashta.Nerada on July 7, 2009 at 1:28 PM

Maybe some of the illegal aliens that have moved back to Mexico could send money to CA…

d1carter on July 7, 2009 at 1:29 PM

As a longtime Californian, I say, in my best Montgomery Burns voice, “exxxxxcellent.”

Patrick S on July 7, 2009 at 1:30 PM

I thoroughly expect the vast majority of ‘Americans’ to be far too stupid to learn the lesson.

LimeyGeek on July 7, 2009 at 1:28 PM

Which is precisely why the Socialists took over the public schools. The seeds of Socialism are illiteracy and ignorance. Socialism needs a people who need to be led. A people who can’t think for themselves. A stupid people.

OhEssYouCowboys on July 7, 2009 at 1:30 PM

and their political class hasn’t got the guts

You misspelled nuts!

MD11Fr8Dog on July 7, 2009 at 1:30 PM

Cowtails?

kahall on July 7, 2009 at 1:30 PM

Interestingly, all of the above banks have accepted TARP funding, or perhaps more accurately, had TARP funding thrust on them. Would the Treasury have to have approved this decision? Did the Treasury insist on this decision? If so, it could either signal a hardline approach from the White House on California’s budget crisis, or give them an excuse to intervene.

I’ll go with the latter – don’t forget who is in the WH.

Vashta.Nerada on July 7, 2009 at 1:30 PM

I do contract work for the state of CA. Thank heaven that’s only a part of my revenues. I’ve told them we won’t accept IOU’s. I will have to lay off 6 employees. Two of them are Asians, so at least they have the consolation of an apology from the legislature for past discrimination.

guntotinglibertarian on July 7, 2009 at 1:31 PM

Wasn’t Obama telling us last week, that the rest of the country should be following the CA model?

PappaMac on July 7, 2009 at 1:31 PM

A couple of years ago Wall Street would have created IOU-backed securities and found them so profitable that even low-income people’s IOUs would be sold in tranches.

pedestrian on July 7, 2009 at 1:31 PM

PappaMac on July 7, 2009 at 1:23 PM

Thanks for the laugh!

oldleprechaun on July 7, 2009 at 1:31 PM

Obama and Biden have been out of the country and there hasn’t been a peep out of Tim, so perhaps the TARP banks have gone rogue.

myrenovations on July 7, 2009 at 1:26 PM

Just because you don’t see the puppeteer doesn’t mean he doesn’t have is hand up the puppet’s a$$. These banks can’t buy a Coke in a machine without approval right now.

Phil-351 on July 7, 2009 at 1:32 PM

Patrick S on July 7, 2009 at 1:30 PM

Patrick, I’m curious. Does this mess open the door for Meg Whitman? Is she getting some good press out there? I like her but want to know what Californians think of her?

sherry on July 7, 2009 at 1:32 PM

Let them sink like a rock.

easyone on July 7, 2009 at 1:33 PM

its time for another war on global warming.

rob verdi on July 7, 2009 at 1:33 PM

I do contract work for the state of CA. Thank heaven that’s only a part of my revenues. I’ve told them we won’t accept IOU’s. I will have to lay off 6 employees. Two of them are Asians, so at least they have the consolation of an apology from the legislature for past discrimination.

guntotinglibertarian on July 7, 2009 at 1:31 PM

Sad, but in liberal world that is compensation.

Vashta.Nerada on July 7, 2009 at 1:34 PM

Can Obama nationalize California? Say, make it a District of Columbia West or something?

BuckeyeSam on July 7, 2009 at 1:34 PM

easyone on July 7, 2009 at 1:33 PM

totally agree….tough love is sorely needed here, maybe they will finally wake up

cmsinaz on July 7, 2009 at 1:34 PM

sherry on July 7, 2009 at 1:32 PM

Quite frankly, sherry, there is no good press out here. I doubt 99.9% of people out here know of her.

Patrick S on July 7, 2009 at 1:34 PM

With such luminaries as Karen Bass, Nancy Pelosi, Harry Reid and Pete Stark, to name but four, how could it be otherwise for California?

But still Democratic automatons will not equate the failure of their State with the failure of its politicians (and their role in electing them).

Has no-one on the Left the ability to critically self-analyze?

One Against Many on July 7, 2009 at 1:36 PM

How dare you bother us with this when we’re trying to mourn the passing of Michael Jackson (with a taxpayer subsidized free concert). Get your priorities in order.

Infidoll on July 7, 2009 at 1:36 PM

I’m eagerly anticipating a statement from Karen Bass on a proposed fix.

a capella on July 7, 2009 at 1:36 PM

Which is precisely why the Socialists took over the public schools. The seeds of Socialism are illiteracy and ignorance. Socialism needs a people who need to be led. A people who can’t think for themselves. A stupid people.

OhEssYouCowboys on July 7, 2009 at 1:30 PM

If there is anything positive to be said for the cancerous socialist, collectivist vermin, it is that they are masters of the ‘long game’.

The damage they have done to America will take at least 2 generations to undo. They really do all deserve to be hunted down and shot.

LimeyGeek on July 7, 2009 at 1:37 PM

I thoroughly expect the vast majority of ‘Americans’ to be far too stupid to learn the lesson.

LimeyGeek on July 7, 2009 at 1:28 PM

They’re not supposed to, and they’re not dumber than other people. Those that were supposed to ensure a decent civil society have failed the average man terribly. The corrupted institutions of America aren’t peopled by average Americans, they’re run by the elites. They opened the barn door. They let the wolves have free rein, and reign. Why blame the sheep? Maybe if things get worse, the army will save us.

JiangxiDad on July 7, 2009 at 1:37 PM

Since liberalism is a progressive mental disorder, California will be a shining example on how degenerating the illness can be. If there is no way to cure it, it could spread to Michigan, New York, New Jersey and other blue states that are afflicted with the same disease.

volsense on July 7, 2009 at 1:37 PM

Has no-one on the Left the ability to critically self-analyze?

One Against Many on July 7, 2009 at 1:36 PM

I think they mothballed that alongside their ability for independent thought.

LimeyGeek on July 7, 2009 at 1:38 PM

They really do all deserve to be hunted down and shot.

LimeyGeek on July 7, 2009 at 1:37 PM

Now ur talking!

Sic semper tyrannus!

JiangxiDad on July 7, 2009 at 1:38 PM

While not quite as bad off as Cali, Illinois wouldn’t be far behind if Obama turns on the state bailout tap.

Hoping Californians can wise up, but …

I wonder how the rectums (erm, reporters) in the main sewer media will try to mask this failure….

Mew

acat on July 7, 2009 at 1:39 PM

One Against Many on July 7, 2009 at 1:36 PM.
no they are all brain dead,

easyone on July 7, 2009 at 1:39 PM

Considering how California typically spends its citizens’ money, the banks should be happy they aren’t being paid in embryonic stem cells.

Mr. D on July 7, 2009 at 1:39 PM

Patrick S on July 7, 2009 at 1:34 PM

I understand the press thing, I’m in Chicago. If ever there was a need for a tried and true achiever in the business world, it’s now for California. What an absolute shame.

sherry on July 7, 2009 at 1:39 PM

JiangxiDad on July 7, 2009 at 1:37 PM

I hope that was rife with sarcasm.

LimeyGeek on July 7, 2009 at 1:39 PM

How come Ed never mentions that California is a donor nation — paying more in feredal taxes than it received in federal expenditures and that California would have billions in surpluses if the federal government did its job, secured the boarder and deported all the illegal aliens leaching off the Golden State to the tune of about ten billion per year?

It is always yada yada yada, spend too much, out of control, yada yada yada, need to learn lesson… When in reality California would be doing just fine if the fed would just do its job and give California its fair share of tax revenues.

tommylotto on July 7, 2009 at 1:39 PM

DejaVu.

Banks (being told they must) loan money to a client that has no way of repaying said loan. I’m sure i’ve seen this movie somewhere before.

PappaMac on July 7, 2009 at 1:40 PM

I just can’t help myself from singing this little tune.
The roof the roof the roof is on fire
The roof the roof the roof is on fire
The roof the roof the roof is on fire
We don’t need no water let the……..

Bulldogger on July 7, 2009 at 1:40 PM

What’s killing California is liberalism. “Government, give me more of everything but taxes.”

ROCnPhilly on July 7, 2009 at 1:41 PM

U.S. Constitution – Article 1 Section 10 -

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit [ bill of credit is some sort of paper medium by which value is exchanged between the government and individuals]; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

MB4 on July 7, 2009 at 1:41 PM

Too bad Steinbeck is dead he could write an updated “The Grapes of Wrath” where to poor Californians have to move to Oklahoma.

LincolntheHun on July 7, 2009 at 1:41 PM

The media and political pundits refuse to see this gap between the state’s budget and its ability to pay as an essential issue. It is.

You know, when my credit cards are maxed out, and I’m still spending 120% of what I’m earning, the problem is not that the banks won’t loan me more money. This is not rocket science, and the pols in Sacramento know exactly what the solution is, they’re just not willing to either take the blame for getting us here, or pay the political price for the necessary cuts. I don’t know what’s going to happen, but maybe I should stock up on pitchforks and torches, I suspect they’re going to be in demand soon.

Socratease on July 7, 2009 at 1:41 PM

Keemo on July 7, 2009 at 1:25 PM

Very close… but they left out how the Green energy agenda has made it impossible to compete there… energy prices are just way too high.

Thats what really killed the California economy.

Romeo13 on July 7, 2009 at 1:41 PM

Bulldogger on July 7, 2009 at 1:40 PM

+1

Excellent…. :-)

cmsinaz on July 7, 2009 at 1:41 PM

Wasn’t Obama telling us last week, that the rest of the country should be following the CA model?

PappaMac on July 7, 2009 at 1:31 PM

See , he’s right.

the_nile on July 7, 2009 at 1:42 PM

When in reality California would be doing just fine if the fed would just do its job and give California its fair share of tax revenues.

tommylotto on July 7, 2009 at 1:39 PM

You need to take that act on the road….I’m still drying my eyes from the laughter.

LimeyGeek on July 7, 2009 at 1:43 PM

MB4 on July 7, 2009 at 1:41 PM

Of hell you’re gonna quote that old thing?

Rules? Dem’s don’t need rules.

LincolntheHun on July 7, 2009 at 1:43 PM

When government payroll checks bounce, and government employees start demanding to be paid in gold or silver. . . .

Nah…it’ll never happen. Government employees aren’t that smart.

Skandia Recluse on July 7, 2009 at 1:43 PM

A group of the largest banks in the US has announced that it will stop accepting California IOUs by Friday.

Damn! I was counting on those big banking guys being girlie men!
- Arnold

MB4 on July 7, 2009 at 1:44 PM

It is always yada yada yada, spend too much, out of control, yada yada yada, need to learn lesson… When in reality California would be doing just fine if the fed would just do its job and give California its fair share of tax revenues.

tommylotto on July 7, 2009 at 1:39 PM

Perhaps you should look into the rulings of the California Supreme Court on the question of funding illegal aliens.

Vashta.Nerada on July 7, 2009 at 1:44 PM

http://query.nytimes.com/gst/fullpage.html?res=9404E1DC1539F933A1575AC0A9629C8B63&sec=&spon=&pagewanted=al

Californians to Vote on Spending $3 Billion on Stem Cell Research

Remember this

HumblyRight on July 7, 2009 at 1:45 PM

sherry on July 7, 2009 at 1:32 PM

Personally, I’m enthusiastic. And, since the choices are slim out here (think Gavin Newsome), I think she’s going to do pretty well.

Infidoll on July 7, 2009 at 1:45 PM

I hope that was rife with sarcasm.

LimeyGeek on July 7, 2009 at 1:39 PM

I was serious. Everyone I know is a brain-dead moron. They do what they’re told, according to the media and what they’re taught in school. What else are they supposed to do?

JiangxiDad on July 7, 2009 at 1:46 PM

When in reality California would be doing just fine if the fed would just do its job and give California its fair share of tax revenues.

tommylotto on July 7, 2009 at 1:39 PM

Really?

easyone on July 7, 2009 at 1:47 PM

I just can’t help myself from singing this little tune.
The roof the roof the roof is on fire
The roof the roof the roof is on fire
The roof the roof the roof is on fire
We don’t need no water let the……..

Bulldogger on July 7, 2009 at 1:40 PM

Some like it hot and some sweat
When the heat is on
Some feel the heat and decide that
They can´t go on
Some like it hot, but you can´t tell how hot
Til you try
Some like it hot, so let´s turn up the heat
Til the politicians and unions in Kalifornia fry

- Big Banker Guys

MB4 on July 7, 2009 at 1:49 PM

How come Ed never mentions that California is a donor nation — paying more in feredal taxes than it received in federal expenditures and that California would have billions in surpluses if the federal government did its job, secured the boarder and deported all the illegal aliens leaching off the Golden State to the tune of about ten billion per year?

Before you start throwing stones, realize you’re in a glass house.

California’s got a number of problems with immigration enforcement on its own in, in part because cities like San Francisco and Los Angeles are declared “sanctuary cities”

If these two cities dumped their “sanctuary city” policies and turned over information to the Feds to allow deportation of illegals, THEN they could talk about Federal responsibility for the state’s immigration woes.

teke184 on July 7, 2009 at 1:50 PM

Liberalism, heal thyself.

LimeyGeek on July 7, 2009 at 1:24 PM

+ infinity

SouthernGent on July 7, 2009 at 1:50 PM

This is the stupidity of Americans. I caught a “reporter on CNN,” who was “reporting” on “health care” in Canada, with the hope, of course, that it would be the same, here.

She said, thus:

“Taxes are high in Canada, but the health care is free.”

That’s like me saying, “My brother will drive me anywhere I want, for free.” “I just had to buy the car, the insurance and the gas.” “But, it’s all free, after that.”

OhEssYouCowboys on July 7, 2009 at 1:51 PM

Vashta.Nerada on July 7, 2009 at 1:44 PM

I prefer to remember when 58.93% of great people of the State of California passed Proposition 187 — which was declared unconstitutional by a federal court BTW.

The federal government owes California — Big Time!

tommylotto on July 7, 2009 at 1:52 PM

OhEssYouCowboys on July 7, 2009 at 1:51 PM

They really do all deserve to be hunted down and shot.

LimeyGeek on July 7, 2009 at 1:37 PM

JiangxiDad on July 7, 2009 at 1:53 PM

I prefer to remember when 58.93% of great people of the State of California passed Proposition 187 — which was declared unconstitutional by a federal court BTW.

The federal government owes California — Big Time!

tommylotto on July 7, 2009 at 1:52 PM

That’s a very good point, and one not to be overlooked lightly. I’d add though that CA routinely sends liberals to state and federal offices. The people who did that to you may be the same ones you voted for.

JiangxiDad on July 7, 2009 at 1:54 PM

When in reality California would be doing just fine if the fed would just do its job and give California its fair share of tax revenues.

tommylotto on July 7, 2009 at 1:39 PM

Why? Rich people don’t get back their fair share of revnues they pay in.

Socialism isn’t fair.

lorien1973 on July 7, 2009 at 1:55 PM

This country is about to implode. When Obama bails out California and his Hollywood cronies then he’s obligated to bail out the rest of the socialistic states i.e. New York, Pennsylvania, etc.etc. When that happens the economy will tumble into the depths of hell and the country will disintegrate. Grab hold of something sturdy because this isn’t going to be pretty.

rplat on July 7, 2009 at 1:56 PM

tommylotto on July 7, 2009 at 1:39 PM

Also CA routinely elects people who continue this practice of taking more money out of CA than it gets. Reap what you sow and all that.

lorien1973 on July 7, 2009 at 1:57 PM

That’s a very good point, and one not to be overlooked lightly. I’d add though that CA routinely sends liberals to state and federal offices. The people who did that to you may be the same ones you voted for.

JiangxiDad on July 7, 2009 at 1:54 PM

Good point, especially since I heard that the state’s case was tanked because the AG who argued it didn’t like the policy. (This is why people figured that current AG Jerry Brown would tank the Prop 8 case when he argued it before the state Supreme Court.)

teke184 on July 7, 2009 at 1:57 PM

I was serious. Everyone I know is a brain-dead moron. They do what they’re told, according to the media and what they’re taught in school. What else are they supposed to do?

JiangxiDad on July 7, 2009 at 1:46 PM

I don’t dispute that, rather your underlying assumption that there exists some group of people that are duty-bound to provide anybody with anything (eg. ‘provide’ a civil society).

We should be building these things for ourselves. Any other belief immediately casts us into the role of sheep. Americans are supposed to be strong-minded, independent individuals, not sheep….hence my assertion that most ‘Americans’ are nothing of the kind.

Even if we are to lament the pitiful state of the general public’s mind, it didn’t happen with the flick of a switch…it took apathy on the part of the people to allow themselves to slide into the intellectual sewer. More specifically, it took a nation-wide failure spanning 60+ years.

LimeyGeek on July 7, 2009 at 1:58 PM

I hate to over simply this, but as someone on the outside of CantAffordYa looking in, how hard would it really be to cut unnecessary programs?

If politicians are so heavily entrenched in lobbyists’ pockets, wouldn’t it make sense to cut the funding from projects whose contributors have donated the least amount of money to the slimeballs in office?

I know the liberal way is to support the one-eyed, three-toed, purple spotted unicorn fish and its future generations over human beings, but something has to give.

VibrioCocci on July 7, 2009 at 1:58 PM

It will be interesting to see if, for a start to ending this mess, California taxpayers actually force their legislature to quit funding illegals and start funding California. The waste of taxpayer’s money in this area, for one, is horrendous and on-going. And NONE of these feeders at the trough can even VOTE. Jeez. How stupid can you be? California stupid, apparently.

bradley11 on July 7, 2009 at 2:00 PM

Also CA routinely elects people who continue this practice of taking more money out of CA than it gets. Reap what you sow and all that.

lorien1973 on July 7, 2009 at 1:57 PM

But none of the Californians sent to Congress are all that powerful… oh wait.

myrenovations on July 7, 2009 at 2:00 PM

THAT’S the idea: Give every illegal in California IOUs instead of money. I’m sure the banks will cash them eventually. sarc/off

bradley11 on July 7, 2009 at 2:01 PM

teke184 on July 7, 2009 at 1:50 PM

What have you been smoking? This is a problem that has been brewing for over a decade. The federal government has been forcing CA to accept and care for the illegals against CA’s popular will. Now after years of being forced by the federal government to accept this major shift in its population, the illegals are now a political constituency that have significant political power particularly in the major urban areas where they have taken over and forced the passing of the sanctuary laws you are complaining about. You have the chicken and the egg wrong. California tried to save its state in ’94, but was stopped by the federal government which has failed to accept its share of caring for these illegals. A decade of 10.5 billion per year of unnecessary expense is a lot of billions. CA could even afford stem cell research if the feds would just pay for the illegals that are here because of their failure to protect our border!

tommylotto on July 7, 2009 at 2:01 PM

I think California needs to tax the hollywood elite entertainment industy at a 200% rate of income forever.
Wonder how fast they would leave.

easyone on July 7, 2009 at 2:02 PM

It will be interesting to see if, for a start to ending this mess, California taxpayers actually force their legislature to quit funding illegals and start funding California. The waste of taxpayer’s money in this area, for one, is horrendous and on-going. And NONE of these feeders at the trough can even VOTE. Jeez. How stupid can you be? California stupid, apparently.

bradley11 on July 7, 2009 at 2:00 PM

Who says they don’t vote?

Vashta.Nerada on July 7, 2009 at 2:02 PM

MB4 at 1:41 — The text from the Constitution seems clear. Has the practice of state IOUs ever been challenged in court, and with what result?

jwolf on July 7, 2009 at 2:03 PM

I hope Obama is arrogant enough to bail out California, the collapse of his economic agenda and his presidency, when the other 49 states come up to the till, will be an entertaining sight to behold.
elduende on July 7, 2009 at 1:28 PM

The group of banks included Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and J.P. Morgan Chase & Co., among others.
I’m glad they finally woke up.
Vashta.Nerada on July 7, 2009 at 1:28 PM

He will not have to bail out California directly. Look at the banks involved. O’s control of these banks + the impact on the unions if they don’t pay = TARP-a-palooza

Jed_Eckert on July 7, 2009 at 2:04 PM

We all know that the Bank of Hopenchange will bail out California eventually

mizflame98 on July 7, 2009 at 2:04 PM

How hard is it to understand that people who moved into their homes 30-50 years ago can not afford to pay today’s property taxes on their houses? The democrats what to kick old people out of their homes.

We already have the highest state taxes and highest sales tax. They also have the state divided up in districts, I don’t know what they call them that can raise taxes for expenditures and attached them to your property tax. The tax goes mostly to pay for lefty looney envirowhacko crap and not even remotely near your neighborhood.

Blake on July 7, 2009 at 2:04 PM

I understand the press thing, I’m in Chicago. If ever there was a need for a tried and true achiever in the business world, it’s now for California. What an absolute shame.

sherry on July 7, 2009 at 1:39 PM

Simon lost to Davis.

Count to 10 on July 7, 2009 at 2:04 PM

And NONE of these feeders at the trough can even VOTE

Oh, they vote, trust me. They have their own – taxpayer funded – versions of ACORN.

guntotinglibertarian on July 7, 2009 at 2:05 PM

How come Ed never mentions that California is a donor nation — paying more in feredal taxes than it received in federal expenditures
tommylotto on July 7, 2009 at 1:39 PM

When’s the last time California voted for a conservative for President? When’s the last time California had a conservative Senator? And where’s Nancy Botox from anyhow?

Don’t bitch around here dude, you guys are getting exactly what you’re voting for.

PackerBronco on July 7, 2009 at 2:05 PM

Can Obama nationalize California? Say, make it a District of Columbia West or something?

As long as we can make sure California has the same representational status as DC: observers only.

nerdbert on July 7, 2009 at 2:05 PM

Now the feds are saying they are thinking about taking over those two parks, and several more

Well, at least I’ll be able to carry a firearm in the parks.

guntotinglibertarian on July 7, 2009 at 2:06 PM

But the fundamental problem remains. California’s economy–once wondrously diverse with aerospace, high-tech, agriculture and international trade–has run aground.

Yet, they still don’t stop spending. They know the tax revenue has dropped but they still spend what they know they won’t collect because they think they can just raise taxes again and again. They’re all wh*res!

Blake on July 7, 2009 at 2:07 PM

They’re all wh*res!

Blake on July 7, 2009 at 2:07 PM

Correction: They’re all Liberal whores…

California is a very good example of what the entire country will look like if we allow Liberalism to rule the day beyond 2010… Bad enough already!

Keemo on July 7, 2009 at 2:08 PM

I can confirm that it’s not just the largest banks, several small CA only chains have stated internally to their employees that they will not be accepting CA IOU’s either. Things are about to get really interesting in our ‘Golden‘ tarnished state.

monotonousboy on July 7, 2009 at 2:09 PM

Also CA routinely elects people who continue this practice of taking more money out of CA than it gets. Reap what you sow and all that.

lorien1973 on July 7, 2009 at 1:57 PM

Give us a break! The state is gerrymandered to protect political seats. My district looks like someone through a piece of pasta on the wall. My street is one district, the next street another, and the one after that, a third — in a residential neighborhood! There is no rhyme or reason but to give the donks a seat. When we tried to change it a few years ago, we got kneecapped by the GOP including but not limited to the infamous foul mouthed Ace of Spades, who spewed misinformation about it and had no dog in the hunt. So, contrary to what bloggers like to think, there are many subjects that they don’t know sh*t from sh*nola.

Blake on July 7, 2009 at 2:11 PM

It’s odd how so many times in the past, California is held up as the model for this or that. They’re so…good. Look at how they do this. Look at how they do that.

All the while, the rot just kept on creeping. Now it’s showing through and makeup won’t hide it any more.

Thunderstorm129 on July 7, 2009 at 2:13 PM

The Chief Wh*re of LA is asking for donations to cover the cost of this stupid funeral. Hey! Why not make the millionaire family pay for it? They constantly waive fees for the rich and famous in this city. What an insult!

Blake on July 7, 2009 at 2:14 PM

Not even if Jesus Christ himself asked me to move to that state would I!!!
There are nothing but freaks out there. CA made its bed now lay down and shut up!!!!

mmcnamer1 on July 7, 2009 at 2:15 PM

A number of credit unions will accept the warrants. And why not? They are guaranteed and there is interest and it is for long time customers.

Blake on July 7, 2009 at 2:16 PM

There’s a reason the Legislature would love to disarm every citizen tomorrow…

Harry Schell on July 7, 2009 at 2:17 PM

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