The leftish consensus around here is that the county to the south of L.A. went broke because (1) prop. 13 and other propositions reduced the county's ability to raise taxes, as did the the strong anti-tax movement among Orange County's middle-class and rich classes; (2) developers and corporations such as Disney pushed the county for more services, as did normal population growth. These pushed the county to break the normal approach of county treasurers (borrowing to invest in infrastructure) and instead engage in financial investment, often with borrowed money, in ways that would have a high return. The structural budget short-fall was covered by earnings from these investments. (Local governments jumped on the bandwagon because of the high return, though some were induced to do so by law.) Citron _and_ the county supervisors _and_ the voters saw that Citron's strategy was paying off and wanted to pursue it further. The opposition candidate in last year's election (a Republican, by the way) pointed out that with high returns come high risk, but was handily defeated. In this, the role of Merrill Lynch et al. was as a drug pusher approaching the junkie. A symbiotic relationship. Both sides of the deal pushed for deregulation that allowed county treasurers to do what Citron did. It's a mistake to focus on just Citron _or_ on just Merrill Lynch. in pen-l solidarity, Jim Devine [EMAIL PROTECTED] or [EMAIL PROTECTED] Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA 310/338-2948 (daytime, during workweek); FAX: 310/338-1950 "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- K. Marx, paraphrasing Dante.
