Chapter 445: The Show-Off Governor

In December, Capet's Twilight had been released for ten days and raked in more than hundred million dollars at the North American box office. Everyone knew that Twilight was another massive hit.

Given that the original author had already published four novels in the series, every movie executive and producer understood that Capet had another blockbuster franchise.

Capet Pictures was pleased with its 2008 performance. However, the economic downturn caused by the U.S. financial crisis following the subprime mortgage crisis and the bankruptcy of Lehman Brothers continued to wreak havoc on the nation.

Adding to the woes, the largest financial fraud in history, the Madoff Ponzi scheme, had just erupted. Wall Street was in despair, U.S. manufacturing was shrinking, and the unemployment rate was skyrocketing.

California's already high deficit made matters worse, and in early December, Governor Arnold Schwarzenegger reluctantly declared a fiscal emergency in the state:

When Schwarzenegger took office at the end of 2003, after the recall of former Governor Gray Davis, he inherited a $12 billion deficit in California.

In 2004, Schwarzenegger issued over $15 billion in municipal bonds to get through difficult times, during which he enjoyed high approval ratings of over 65%, earning him global recognition as the "Governator."

By the end of 2006, Schwarzenegger was re-elected with 56% of the vote. However, by this year, California's deficit had ballooned to $24 billion!

"Looks like our environmentalist governor is in big trouble this time," Charles Capet and Arianna Huffington observed from the couch in Malibu's Zuma Point Estate as they watched Schwarzenegger's speech on economic improvements on TV.

"He's even seeking federal government aid, asking them to provide credit guarantees for California to attract investment?" Arianna Huffington shook her head.

"California's credit rating has plummeted to the worst in the nation," she continued. "Out of the three major rating agencies, Moody's and Fitch have downgraded California's ratings, and Standard & Poor's has placed the state on a watch list. This increase in bond issuing costs will only scare investors away!"

Charles nodded and said with a smile, "The current California tax increase bill didn't pass. Now he wants federal guarantees. Why would the federal government agree?"

In the U.S., the federal, state, and local governments follow a three-tier fiscal management system. Each establishes its own fiscal taxation system and specialized laws, assembles, approves, and executes its budget. Each level of government is responsible for its own matters within its jurisdiction.

Legally, federal, state, and local governments are fiscally independent and do not interfere with each other. California's deficit and cash flow crisis resulted from its own fiscal conditions, and the federal government has no obligation to provide support.

Arianna Huffington continued, "The federal government won't specifically support California, that would be unfair to other states!"

After all, California had long been the wealthiest state in the U.S. With a prime geographic location, the south had Hollywood, the entertainment hub, and the north had Silicon Valley, the tech center. The west had sunshine, beaches, and ports, and the east had majestic mountains and forests, even deserts. The Mediterranean climate in the middle provided fertile, sprawling lands.

In terms of entertainment, finance, technology, manufacturing, defense, and tourism, California was top-tier. Now, only its government was poor.

Charles didn't mind. Arnold Schwarzenegger's approval ratings continued to drop, with environmental policies being his only notable achievement.

He had aggressively promoted new energy, signing a series of environmental bills, including the Global Warming Solutions Act in September 2006.

Additionally, due to California's advocacy, 16 states in the U.S. established stricter vehicle emission standards.

"Selling some government assets won't solve the main problem," Charles said, supporting Schwarzenegger's decision to sell some government buildings. But selling famous properties like San Quentin State Prison or the Los Angeles Memorial Coliseum from the former Olympics would never gain approval from the state legislature.

Selling some government office buildings shouldn't be an issue. In a fiscal emergency, who would mind these things?

"We picked a show-off for a governor," Arianna Huffington concluded.

Charles just smiled. Wasn't he just a show-off governor?

Moreover, Arnold Schwarzenegger was originally a Hollywood actor, and a superstar at that!

Even his image as an environmental advocate was now being questioned by the media. The Los Angeles Times revealed that Schwarzenegger frequently used a private jet to commute between his Beverly Hills mansion in Los Angeles and the governor's office in Sacramento.

The nearly three-hour flight emitted as much exhaust per hour as a small car would in an entire year!

Didn't this undermine his righteous image of defending the environment and fighting climate change?

"Alright, Charles, I have to go now. I'm meeting with Barbara Boxer in Oakland tomorrow to discuss matters in the House of Representatives," Arianna Huffington said as she left.

"I already talked with Obama and several Democrats!" she continued while walking.

Charles escorted Arianna Huffington to the door and reminded her, "You could leverage California's fiscal situation. It's crucial for Barbara Boxer to secure the Speaker of the House position.

Also, Schwarzenegger will propose a high-speed rail between Los Angeles and San Francisco to strengthen connections between the economic centers of Northern and Southern California.

The state legislature will definitely seek federal financial support for this project. Although it's a public undertaking, it could be used as a bargaining chip. The president can't approve the funding bill before Barbara Boxer becomes the Speaker of the House!"

Arianna Huffington breathed out, smiled at Charles, nodded, and patted his shoulder, "If you ever get into politics, you'd surely have a bright future!"

Then, Arianna Huffington left Charles's estate by car.

"Me, in politics?" Charles shook his head. "There's nothing as interesting as what's behind the scenes!"

Manipulating from behind the scenes was way more fun. No wonder some wealthy American families retained their influence for one or two centuries.

Returning to the living room, Charles sat back on the couch and switched to another news channel. The economic downturn had led to increased layoffs, high unemployment rates, and accelerated social disorder.

Suicides, robberies, shootings - this year, America was indeed having a tough time!

*****

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