SACRAMENTO — On a day of more gyrations in the nation's investment markets, California Treasurer Kathleen Brown accused President Bush on Wednesday of economic indifference to the most severe recession in California since the post-World War II years.
Brown, in a strongly worded speech to the Sacramento Press Club, also criticized Republican Gov. Pete Wilson for playing politics with state budget problems. Aides said Brown, a Democrat often mentioned as a potential candidate for governor, has been growing concerned about state and national economic developments.
Brown blamed Bush and his economic advisers for a litany of problems.
"The U.S. economy has the lowest growth rate today of any of the industrial nations in the world. This is the great U.S.A. Our industrial production is flat, housing starts are anemic, and consumer confidence is plunging," she said.
"In my judgment, this Administration is guilty at best of economic indifference. At worst it is an Administration that is guilty of economic incompetence. . . . They have adopted a hands-off policy with respect to economic issues," Brown added.
Later she told a reporter: "Part of the problem is that there is no leadership. The President is the leader of our nation. This is like a war at home. We've got to marshal our resources to address it and deal with it."
As for Wilson, the treasurer said the governor was playing politics by placing much of the blame for the state's budget problems on the rise in the number of consumers of government services, such as schoolchildren and welfare recipients, at a time when businesses and jobs are leaving the state.
"The problems that the state is facing today have a wide range of villains that we could attack," she said. "This is really a political judgment that the governor is making in focusing in on one segment of the state's population."
Brown argued that California's budget problems are caused largely by the recession. She noted Administration figures which show that the recession claimed 380,000 jobs in California between mid-1990 and mid-1991.
That, she said, "translates into 380,000 families that aren't going to be spending money and putting money into the economy, and not paying taxes to the state of California."
Brown also said the state's top AAA bond rating is in serious jeopardy because of a recession-related budget shortfall of $3 billion so far this fiscal year. The budget problems were brought on because of a slump in projected tax collections and unexpectedly high costs of providing additional services to needy Californians.
The treasurer said the Legislature, now in recess, should convene a special session soon to deal with the problem.
The treasurer noted that she had been in office only 314 days but had seen interest earnings on state investments drop from 8.1% to 5.52%. She said that will reduce interest earnings used to finance general government services by $75 million. But she said the loss may be more than offset by savings on interest rates the state pays on its own debt, which she called "the lowest in decades."