The unsurprising and yet depressingly real budget data from California today
should shock no-one and CNBC's Rick Santelli provides the most succinct and even
more saddening reality check on the situation this morning as he points out
the $15.7 billion shortfall and how cuts and compromise will fill that
gap. His sane response to the implicit rise in taxation that this
compromise realistically requires will mean - happy feet as Californians
leave the state. His rant is one of the best but a little later in the
day, the problem appears to be on its way to being fixed by none other than the
hoody-in-chief himself. According to Bloomberg, Facebook Inc.’s initial
public offering likely will account for 20 percent of California’s personal
income growth this calendar year, the state fiscal analyst said. The
state expects personal income to grow 4.9 percent in 2012. If the Facebook IPO
were excluded, that would total 4.0 percent, the agency said. Money paid to
company executives, investors and insiders would equal 1 percent of all personal
income in 2012, the agency said. So two things come to mind: 1) we sure hope
there are more mega-IPOs due next year to fund CALI's shortfall or we may have
to pull the 'transitory' or unsustainable card out of the drawer; and 2) how
will all those Facebook employees (and the corporation itself) feel when they
start facing higher taxes (as Saverin just pre-emptively did?).
Will they follow Santelli's happy feet out of the state? In the meantime, it
would appear that the Facebook IPO is just the snake-oil medication that
everyone needs - how could the IPO go wrong?
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