Hope for California

California real is in a fiscal mess. it has a huge deficit and soaring unemployment. People are leaving the state in droves. Is there hope for the state?
There might be: Meg Whitman.


If you are not from California, you may be in shock at what you are hearing of its financial travails. However, that is nothing compared to what Californians are thinking about their situation.

Remember that Arnold was elected to replace the recalled Gray Davis to resolve the financial mess. Six years later conditions have deteriorated even further; despite double-digit revenue increases for multiple years. The tax base is still too tied to a relatively small group of individuals together with the once-booming housing market and one-time revenue streams. Additionally, nothing has been done to remedy the stranglehold public employee unions have on the legislature and thus the state’s budget. The public employees are paid better than their private sector “employers,” not including the estimated and not-yet-funded liability of $200 billion for pensions.

So if the Terminator wasn’t able to cure the disease that has infected Sacramento, the question is who is going to disinfect the place? More importantly, why would anyone try? Enter Meg Whitman of eBay fame. Ms. Whitman started as the head of eBay when there were 30 employees and $4 million of revenue. When she left, there were 15,000 employees, $8 billion in revenue and universal recognition. Ms. Whitman whetted her appetite for politics during the 2008 campaign, returning to her home base of California to deal with the crushing debacle existing there.

So why would Meg want to tackle such a daunting task? She says in a very believable manner that she cannot stand by and let her adopted home state fail. Having spent twenty years of her career in California, she has seen the decline of the business environment from the best-rated state to the bottom of the list. She has seen leading businesses she knows well, such as Intel, decide to spend billions of dollars to move operations to the neighboring states of Nevada, Arizona and New Mexico. Ms. Whitman feels she offers the right skill set to confront the challenges that others may not be able to do.