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Why Meg Whitman can save California Search

JUN 9, 2010 09:18 EDT
2010 ELECTION | MEG WHITMAN

As former Goldman Sachs CEO and ousted New Jersey Governor Jon Corzine can attest, a JAMES PETHOKOUKIS IS A REUTERS COLUMNIST. THE
OPINIONS EXPRESSED ARE HIS OWN.
business background hardly guarantees political success. Though California is no startup website,
former eBay boss Meg Whitman, now the GOP’s nominee for governor, might have the right skill- Author Profile
set to tackle the Golden State’s fiscal challenges.

Not that getting the top job will be a simple click of a mouse. Although Whitman handily beat
primary opponent Steve Poizner 64 percent to 27 percent, it took $80 million to do it. And
California is a heavily Democratic state. Candidate Barack Obama won by 24 percentage points
over John McCain in 2008. And her opponent in November Jerry Brown, is a former governor and
canny pol. But Whitman’s billion-dollar fortune and voter unhappiness with Democrats nationwide
might be enough to seal the deal.

Then the fun would really start. The state’s $1.8 trillion economy is afflicted by a 12.6 percent
unemployment rate — the nation’s third highest — and a budget gap of $19 billion. And California James Pethokoukis is the Money &
Politics columnist for Reuters
has at least another $60 billion in underfunded public employee pension liabilities (perhaps as
Breakingviews. Previously, he was the
much as $500 billion when adjusted for realistic market returns and volatility), helping it earn the business editor and economics columnist
lowest credit rating among the nation’s fifty states. for U.S. News & World Report.
Pethokoukis has written for many
The dire situation would seem to require a chain-saw-wielding turnaround artist capable of publications including the New York
slashing spending and smashing unions. But a governor is not an all-powerful CEO, as many Times, USA Today, and Investor's
execs-turned-politicos have discovered. Instead of making unilateral decisions, governors must Business Daily. Pethokoukis is also an
persuade legislatures and interest groups, as well as rally public opinion.
official CNBC contributor. In addition, he
has appeared numerous times on
It’s a challenge that would not be entirely unfamiliar to Whitman. True, ebay was a growth MSNBC, Fox News Channel, Fox
business for most of her tenure. But growing the online auction firm into an Internet giant required
Business Network, CNN, and Nightly
Business Report on PBS. A graduate of
massaging and nurturing a large and disparate community of buyers and sellers. She had to
Northwestern University and the Medill
discern the messages of the marketplace and react astutely. As governor, she would need similar School of Journalism, Pethokoukis is a
capabilities in balancing the needs of differing constituencies, be they voters, teachers unions or 2002 Jeopardy! champion.
municipal bond investors. james.pethokoukis@thomsonreuters.com
» View Profile
Whitman also understands how government can accidentally create an environment hostile to
business. The Tax Foundation ranks California as having the third-worst tax climate in the nation, Follow James
including high sales and capital gains taxes. The candidate says if she was starting eBay today,
she might choose Texas over California. If California voters see things the same way as the
Pethokoukis
Whitman campaign come November, they just might “buy it now.” Subscribe to all posts via RSS (What is
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