Meltdown?

Back on March 17 on this blog, I expressed concerns that the worldwide financial system "now appears in danger of collapse." On a day when the Dow Industrial Average closed at 11,972, I wrote: "The Dow dropping below 9,000 before President Bush leaves office is no longer an implausible prospect."

Today, of course, the Dow continued its march toward that grim milestone. Last week's historic $700 billion "bail-out" failed to halt the global slide in confidence in the financial markets. The impacts are radiating out and affecting the lives of every American.

No one knows what comes next, except that things are going to get worse before they get better. The meltdown on Wall Street has put in jeopardy $10 million of Ventura's conservatively-managed investment portfolio. Our AAA-rated bonds issued by Lehman Brothers and Washington Mutual are now of uncertain value in the wake of the bankruptcy of both firms. How much will eventually be recovered is simply unknowable at this time, although the Federal "bail-out" bill does have some provisions that may assist public agencies across the nation that have encountered similar or worse problems.

It is important not to overreact. Since March, Ventura has taken decisive action to trim our budget, making $4 million in cuts and preparing for even deeper revenue reductions this year. We've also postponed or cancelled several million more in capital projects. But even in tough times, we must continue to adequately serve our community and invest in the future by maintaining our vital infrastructure, including our streets, water and sewer systems.

With the presidential election just a month away, one thing is certain: the next president will take office in January facing the most difficult economic challenge facing the nation since Franklin Roosevelt in 1932. With the nation running all-time record deficits and with California not certain it can even pay its bills without a loan from the federal government, we will continue to work responsibly at the local level to live within our means and do our best to cope with global forces beyond our control.