Conan meets his match: California

Remember when rising energy costs pissed off enough Californians to push Gray Davis out of Sacramento? Well, those were the good 'ol days:

Yesterday, the Economist's Free Exchange blog argued that, indeed, California is too big to fail. And though we're deeply uncomfortable with the concept, under the general notion of that idea, we'd say they're probably right:

California is the world's eighth largest economy, and it contributes roughly an eighth of total American output (and drives much of the output in surrounding states). It's very difficult to imagine the European Union standing by and allowing a budget crisis to ravage the German economy, or the IMF doing nothing at all to assist a Russia or a Brazil as they melted down.

Were California forced to make significant cuts to its spending, the ramifications could be quite serious. School systems and universities would be endangered (which would threaten the state's long-term economic prospects). Increases in crime, homelessness, and serious poverty would encourage residents to leave. Service cuts could threaten key industries. In short, the recession could grow far more serious in the state than it already is. That would threaten recovery across the nation.

It will be fascinating to see what a federal bailout for a state the size of California might look like. Fascinating in the way an autopsy determines a death sort of way, I mean.

And not that I'm blaming Gov. Schwarzenegger for Cali's economic crisis but, really, what would it take to get a recall petition going for him? How could anyone do worse? Would California actually have to split off from the continent?