Analysis: Governor sends loud, clear message with vetoes

After a tumultuous year, lawmakers and Gov. Arnold Schwarzenegger finally get a break from one another – and, boy, do they need it.

Democrats grew angry this week after Schwarzenegger finished vetoing 35 percent of the bills on his desk, a modern record. They're particularly incensed that the Republican governor issued a standard message for 136 of his 415 vetoes in which he blamed the state's 85-day budget delay.

Schwarzenegger's unusual veto approach capped a divisive two months in which he turned combative with lawmakers as budget talks broke down.

The governor drew their ire in late July after signing an executive order that laid off 10,000 temporary and part-time state workers and sought to reduce 200,000 others to the federal minimum wage until the budget was signed. He vowed in August to veto every bill until lawmakers passed the state budget. And he threatened to impose a historic budget veto when lawmakers delivered their first compromise spending plan in mid-September.

The governor has talked about docking legislators' pay if they miss budget deadlines in the future. And he will spend the next month running them down as he campaigns for Proposition 11 to remove lawmakers' power to draw their own districts.

"I think it's a pretty good indication of his frustration with the Legislature," said Tim Hodson, director of the Center for California Studies at California State University, Sacramento. "He vetoed 10 percent more bills than the last record. It was such a dramatic increase that it clearly indicates a newattitude."

...Even if Schwarzenegger wasn't revenge-minded, he seemed intent on sending a message.... there were "a lot of terrible bills"

..."There are so many lousy bills where you say to yourself, 'Why would the Legislature deal with those bills during the budget negotiations when we didn't have a budget

8 reasons the banking system bailout won’t work

1. There are more than $1 trillion worth of subprime collateralized mortgage-backed securities out there - and that’s just one type of problematic derivative security. The bottom line: $700 billion isn’t enough. Period.
2. The purchase plan is not limited to just residential mortgage-backed securities. Surprise! What else will Treasury buy?
3. Who’s going to fight off the lobbying groups out to influence the managers that the Treasury Department hires to direct money to their masters? Did we mention that $700 billion wasn’t enough?
4. The government plan is even more under-funded than people realize, for it doesn’t authorize the full $700 billion: Indeed, it starts with only $350 billion, leaving an even greater shortfall. Did we mention that $700 billion wasn’t enough?
5. Treasury is going to hire banking-industry managers to manage the process. Those managers are going to serve themselves - just as they served themselves to get us into the crisis.
6. There is no defined mechanism to determine what price the Treasury Department will pay for what it buys. For argument’s sake, even if Treasury were to only buy the problem securities its leadership speaks of in public - residential mortgage-backed securities - there are problems if it prices them too low: If that happens, some holders won’t sell them, taking the chance that if they hold them long enough they will be worth more than Treasury is willing to pay. How will those financial institutions regain liquidity if they won’t sell the securities needed to make this happen?
7. Since Treasury can’t buy all the problem securities, if it prices what it’s going to buy too low, all remaining holders will have to mark down their holdings and take more write-downs and losses. How will that create confidence and facilitate “liquidity”?
8. However, if the Treasury Department prices the securities too high, several problems quickly emerge: Hedge funds will rush to sell their current holdings, and may very well speculate by buying up more securities to sell them at a higher price (profit) to Treasury, meaning that the Treasury Department plan won’t necessarily be helping banks directly. What’s more, if those securities are priced too high, and the market for them continues to fall, taxpayers will eat the losses - a reality that likely will lead to an end to further program funding.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.