Dan Walters writes at Capitol Alert:
California has the worst credit rating of any state now and the nation's worst credit rating record over the past 11 years, according to a new nationwide compilation by the Pew Center on the States.
The compilation is based on Standard and Poor's credit ratings and covers every year since 2001. Thirteen states sit atop the Pew chart with AAA credit ratings while California is alone at the bottom at A-minus and is the only state to dip to the worst possible rating, BBB, during the 11-year period.
That happened in 2003, during a state budget crisis so severe that then-Gov. Gray Davis was recalled. The highest rating California achieved during the period, A-plus, came in 2006.
Don't be surprised if more California cities go belly up.
Certainly a number of experts around the state won't be. The pressures that pounded San Bernardino, Stockton and Mammoth Lakes into bankruptcy mode aren't much different from those threatening other cities around the state: stagnating tax revenue, spiraling pension obligations and decreased financial support from the state, among others.
"It seems inevitable that there will be more bankruptcies," said economist Ed Leamer, director of the UCLA Anderson Forecast, which studies the regional and national economies.
"Our leaders have made budget commitments premised on optimistic and unrealistic expectations about future revenue growth and future gains in the stock market that aren't materializing and are not likely to materialize."
David Crane writes at Bloomberg:
Congress ordered JPMorgan Chase & Co. (JPM)’s chief executive officer, Jamie Dimon, to testify about $2 billion that his bank lost on an investment bet.
Worrisome as that gamble was -- after all, the banking crisis was largely due to bad bets by banks -- it is unfortunate that Congress has never called hearings on a far bigger bet, one that has had more catastrophic consequences for millions of taxpayers.
The one I’m referring to was made by California legislators on Sept. 10, 1999. They decided that investment gains would cover 100 percent of the cost of retroactive pension increases they granted that day to hundreds of thousands of state workers.
The politicians made the wrong bet -- and the result has been a penalty to California’s budget that has averaged $2 billion a year ever since and that will cost the state billions more for decades to come.And at The Wall Street Journal, Allysia Finley talks about the state's latest adventure: