Arnold Schwarzenegger - Total Recall - My Unbelievably True Life Story

We kept open communications with the commanders and always asked what more they needed, and we used their information to give regular public updates.

We heard that the winds had shifted and that the residents of a nursing home in the fire’s path were being evacuated to a makeshift shelter at the Del Mar racetrack. Del Mar was set up as a shelter for horses, not people. It was already evening, but my instincts told me to see it for myself; that it could be a particularly dangerous situation for the elderly residents.

It was sunset by the time we arrived. Close to three hundred patients had been evacuated. I hated what we found there: old folks parked in wheelchairs with IV bags, propped up against walls, lying on mats on cold cement. A few people were crying, but most were silent and still. I felt like I was walking through a morgue. I put a blanket on one old fellow and folded up a jacket to use as a pillow under a lady’s head. None of these people had their medication; some needed kidney dialysis. A nurse-practitioner and Navy Reserve commander named Paul Russo had bravely taken charge of the scene and, with the help of fellow volunteers, was struggling to find hospital beds. It was clear we had to get help or some of the elderly people weren’t going to make it. Immediately, Daniel Zingale and I and a couple of others got on the phone and started calling ambulance companies and hospitals to move the sickest people right away. We stayed a few hours until we were sure progress was being made, and that night we came back twice to check on Paul and his volunteers and the patients who remained. By the next day, we were able to get the National Guard to set up a military field hospital nearby.

Fortunately, failures like the one at Del Mar were rare. The wildfires in San Diego burned for another three weeks, but those first few days set the tone for our disaster response. We evacuated more than a half million people, the largest evacuation in the history of the state. Nine people died and eighty-five, mostly firefighters, were injured. A half million acres burned, and the property damage was widespread, including more than 1,500 homes and hundreds of businesses, at an estimated cost of $2.5 billion. The statistics in the wake of a disaster are always tragic. But we avoided another Katrina, and I was satisfied that our emphasis on preparedness had paid off.

There was a much larger disaster brewing that would disrupt many more households and change many more lives than the wildfires. America was on the brink of the worst economic collapse since the Great Depression. In Sacramento, our first whiff of trouble came even before the fires, as we started developing a budget for 2008–09. In the spring, we saw effects of a serious slowdown in the state housing market, despite more optimistic economic forecasts nationwide and internationally.

The economists who consulted for the state were saying, “We’re facing some headwinds in housing, but the economy will pick up again in the next couple of years. The fundamentals are strong, and you can expect continuing healthy growth in 2009–10.” Yet only two months later, our monthly revenues from taxes began falling alarmingly short: $300 million below expectations in August, $400 million in November, $600 million in December. The prediction was that we would have a $6 billion shortfall in our budget by the time the next fiscal year began in July 2008. I thought, “ What is that about? ”

While the beginning of the Great Recession is often dated to the financial market meltdown in September 2008, the crisis came earlier and harder to California than to the rest of the country. This was because of the scale of our housing market and the impact of the mortgage meltdown. California’s already legendary property values skyrocketed during the 1980s and 1990s, and homeowners started using the ever-increasing equity in their homes to fund retirement plans, finance college costs, or buy vacation homes. But now people were falling behind on mortgages and losing their homes at double the national rate. By some estimates, more than $630 billion in value was gone, lost, disappeared, and with it went tens of billions of dollars in tax revenue.

Part of the blame belonged to the federal government, which allowed fast and loose subprime mortgage deals. In the past, a 25 percent down payment had been required. What’s more, quasi-government entities Fannie Mae and Freddie Mac were encouraged to increase loans to low-income borrowers in order to stimulate the economy and expand the culture of home ownership. This helped fuel the housing bubble. Just as I’d learned from Milton Friedman, when the federal government meddles in markets, the states pay the price. Californians suffered in part because of a federal fuckup, and as governor, I was caught short.

I didn’t have much money to work with, but I used every bit of cash I could get my hands on to respond. We desperately tried to accelerate infrastructure bond spending to build highways and rail lines, build new roads, and repair old bridges. We found money for job programs to retrain construction workers losing their jobs. We persuaded big lenders to freeze interest rates for more than one hundred thousand home owners most at risk. We hired more than one thousand people to staff state call centers to advise mortgage holders in trouble and help people with unemployment benefits.

Just before Christmas, US treasury secretary Hank Paulson visited to discuss the subprime mortgage crisis. He and I held a “town hall” meeting in Stockton, and I listened to him talk about “minimizing the spillage” of the housing downturn into the overall economy. At that point, I was still willing to describe the problem as a “hiccup” in my comments to the audience. But I had a bad feeling about it. I flew to Washington not long afterward for a governors’ conference where Alphonso Jackson, President Bush’s housing secretary, gave a speech about how the American Dream of owning a home was alive and well. I knew Alphonso slightly and cornered him during the break to ask what was really going on. “It doesn’t look good,” is all he would say. The expression on his face alarmed me. He showed more concern than he’d shown onstage.

I decided that we should throw out the economic forecasts for fiscal year 2008 and budget for zero revenue growth. In our boom-addicted state, zero growth in the Sacramento budget would be much more painful than it sounds. We were facing $10 billion worth of automatic increases in pensions, education, health care, and other programs that were protected by law or federal funding mandates. So if state revenues stayed flat, the only place to come up with the funding was cuts in other programs that weren’t so protected. The choices were really tough. If we reduced spending on prisons, we had to let prisoners out and maybe make neighborhoods less safe. If we cut education, what did that say about our concern for our children, the most vulnerable of our citizens? If we cut health, were we saying we really didn’t care about old people, or the disabled, or the blind?

In the end I decided to cut all programs 10 percent across the board. It’s painful to have just endorsed things that you now have no money for. For example, I had supported a bill to strengthen foster care so kids would not wind up on the street. I believed such bills would ultimately reduce state expenses in health care and law enforcement because some foster care children get in trouble once they’re out on their own. But after passionately advocating this plan, I had to withdraw it when the financial crisis hit. I felt terrible, and I looked like a schmuck, backing out on a commitment we wanted to make but could no longer afford.

The final working days of December 2007 were devoted to a procession of interest-group advocates and community leaders whom I’d invited to the cabinet room near my office. I felt I had to look in their eyes and tell them myself what we were up against financially. The consequences of cuts are not just dollars, but people. Talking about fiscal responsibility sounds so cold when you have a representative for AIDS patients or poor children or the elderly sitting across from you. “Democrats are getting screwed, Republicans are getting screwed, we’re all getting screwed,” I told them. When I asked for their input, to my surprise, they thanked me for leveling with them. Many offered helpful advice.