Monday, November 7, 2011

Dan Rodrik wrong on California

He tries to make the argument that California cannot go bust and cause a catastrophe.
He uses the Exogenous theory, that there is a political book somewhere that guarantees the union will come to the rescue of California. Unfortunately Dan, we do not need to look at the Book of the Exogenous, there are now just 12 members in the dictatorship. If California went belly up with this committee, you can forget about a bailout.

Do we really believe that Ben will bail out California without democratic approval of Congress?

I think Dan is just inventing happy talk. California will likely go bankrupt, I think the pension debacle has gone to far to reform.

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