LET THE GAMES BEGIN

I thought I would begin by just a few brief comments regarding the change at the top of the three stars leading the hit parade: New York, California and Illinois. All have new governors...well, that's not really true. Quinn is the old governor in Il., Brown is the REALLY OLD governor in California both in age and from the standpoint that it is his second time around and Cuomo is the re-birth of his old man who ran New York seemingly forever. The opening line for all three was, "Folks, we have a problem." So far so good.

I don't think it is too far a stretch to say that if, within their first year, they are unable to put their respective states on a path that at least could be seen to lead to fiscal recovery, the future may indeed be bleak. For one, increased base rates due to inflationary fears coupled with lender-demanded higher spreads will exacerbate and may well remove any benefit received from the ability to access credit markets in the near term. What will be interesting to watch is the comparison with federal attempts to attain fiscal stability which will certainly, I think, be the first task undertaken by the new congress. Will all these efforts impede one another? One would hope not.

It seems almost too incomprehensible to consider but what would be the result of failure of the effort in any of these state, and yet there is nothing in the background of these governors to suggest that they are prepared to move against their "base" (which of course must be done) or to deal head-on with the problems they face without the long held belief that the bail-out from Uncle will, in the end, be available. Witness Stimulus 1. And yet, I think that absent a clear statemennt from them that, "we are on our own," this is precisely what is being considered to be the solution and that, in some respects, we are about to witness the biggest game of "chicken" we have ever seen. Given Illinois being the home state of The Leader let us look to the Illini first with the added confidence of knowing (at least I know) that that state's condition is a hell of a lot worse than popular belief. Make the outing of that fact New Year's prediction #5 1/2! Tomorrow marks the start of the new congress. Let us see if the Republican leadership has anything to say on this subject. Might not be a bad idea.