ECONOMY
Untitled Page
UC Irvine Economic Outlook: Grim
OC METRO Publisher Steve Churm filed this report from the Pacific Club, where UCI's Dean Andy Policano and State Controller John Chiang addressed 175 of the county's leaders on Thursday.
Steve ChurmPublished: July 24, 2009 09:17 AM
Mr. IOU, California’s cash manager, State Controller John Chiang stood stoically as he listened to his introduction in front of an invitation-only business crowd at Irvine’s Pacific Club. The coat-and-tie gathering had come to hear from the man in the middle of the Golden State’s fiscal fiasco. Four hundred miles north, in the capitol, the governor and legislature were just hours from taking a vote to amend California’s budget and slash $15 billion in spending to close a staggering $26 billion shortfall.
In February, left with no other options to keep the state from defaulting, Chiang took the unprecedented step to mail $3 billion in refund IOUs to taxpayers to keep California solvent. Stuck smack in the middle of the governor and state lawmakers, Chiang has been scrambling for months to maintain a $2.5 billion cushion that Wall Street requires to maintain the state’s shaky credit rating and remain fiscally viable as a government. He’s managed the precarious high-wire act so far. But the future is far, far from certain as Chiang soberly shared with the lunch crowd that quickly lost its appetite for dessert once he took the microphone. Scotch, straight up, not coffee, would have been more appropriate at that moment.
The plain-speaking Chiang, the son of Taiwanese immigrants, warned that next year could be “dramatically worse” without clear solutions and real courage from Sacramento to make tougher and more painful decisions. Even then, the road to recovery, and the prospect of California operating again in the black, is bleak in the near term. Erasing any doubts of a swift rebound, Dean Andrew Policano from UC Irvine preceded Chiang and told the assembled that it would be 2013 (yes, 2013 … not next year or 2011) before California would see full employment again and a sustained recovery. And when the economy does bounce back, Policano, dean of the Paul Merage School of Business, predicted that Californians could look forward to higher taxes, interest rates and inflation.
NEXT PAGE >>
Related headlines
'OC METRO Minute,' July 24: UCI Paul Merage School of Business lunch
O.C. Fair attendance decreases
More tough times ahead for Orange County
|
||||
|
In February, left with no other options to keep the state from defaulting, Chiang took the unprecedented step to mail $3 billion in refund IOUs to taxpayers to keep California solvent. Stuck smack in the middle of the governor and state lawmakers, Chiang has been scrambling for months to maintain a $2.5 billion cushion that Wall Street requires to maintain the state’s shaky credit rating and remain fiscally viable as a government. He’s managed the precarious high-wire act so far. But the future is far, far from certain as Chiang soberly shared with the lunch crowd that quickly lost its appetite for dessert once he took the microphone. Scotch, straight up, not coffee, would have been more appropriate at that moment. The plain-speaking Chiang, the son of Taiwanese immigrants, warned that next year could be “dramatically worse” without clear solutions and real courage from Sacramento to make tougher and more painful decisions. Even then, the road to recovery, and the prospect of California operating again in the black, is bleak in the near term. Erasing any doubts of a swift rebound, Dean Andrew Policano from UC Irvine preceded Chiang and told the assembled that it would be 2013 (yes, 2013 … not next year or 2011) before California would see full employment again and a sustained recovery. And when the economy does bounce back, Policano, dean of the Paul Merage School of Business, predicted that Californians could look forward to higher taxes, interest rates and inflation. NEXT PAGE >> Related headlines 'OC METRO Minute,' July 24: UCI Paul Merage School of Business lunch O.C. Fair attendance decreases More tough times ahead for Orange County |
||||
