Story originally in the Wall Street Journal, May 1, 2003:

If the government of California were a company, it'd be American Airlines. It's nearly broke, and everyone is mad at the CEO. American decided to let its chief go, and soon California voters may be able to do the political equivalent and recall Governor Gray Davis.

The state budget deficit is at an estimated $35 billion and growing by $21 million a day. Yet a paralyzed California legislature has so delayed solutions that the state will have to borrow at least $10 billion this summer just to pay off short-term debts and meet cash flow. ''There's a potential for a dramatic downgrading of state bonds,'' admits Democratic Assemblyman Gene Millin of San Francisco. The state comptroller may soon have to issue IOUs to vendors.

The problem isn't that taxes are too low. The Tax Foundation ranks California's overall tax burden as the seventh highest among the 50 states. Sacramento took in $69 billion in revenue this year, 18% more than four years ago. But state spending increased at almost twice that rate as the politicians soaked up and spent a one-time revenue boom from the Internet bubble. Raising taxes now will only cause more jobs to flee to nearby states and delay any economic recovery--which is exactly what happened after the 1991 recession.

Some political leadership would seem to be called for, yet a recent Field Poll found that only 9% of voters have much confidence in Mr. Davis's abilities to fix things. Nine percent. Saddam Hussein would have done better than that in a Basra secret ballot. And this for a governor they re-elected only last year, albeit narrowly against an outspent and inexperienced Republican.

The governor's budget abdication is now producing a rare and remarkable recall effort, which under the state's constitution doesn't require that the incumbent be guilty of any malfeasance. The recall must be put to a vote if 897,000 valid signatures are turned in by early September. A ragtag group of citizen volunteers with little money must convince 10,000 people a day to sign the petition to make the ballot.

Yet it still could happen. Last week GOP Representative Darrell Issa promised to raise money for the recall, and a state budget meltdown this summer could help. The Field Poll found that a special recall election could be close. Mr. Davis's approval rating is 24%, the lowest of any California Governor in a half century. Voters approved of recalling him by 46% to 43%.

This is despite the fact that many Republicans actually oppose recalling the Democrat because of the unpredictable way his potential successor would be chosen on the same ballot: Anyone could file and anyone on a long ballot could win because whoever had a plurality, no matter how small, would be the new Governor.

Recall or no, California's dysfunctional government needs major reform. The Democratic legislature passed a gerrymander that almost guarantees continued control by liberals in thrall to unions, trial lawyers and environmental activists. But there are signs voters are waking up to the trouble the state is in.

Polls show that President Bush would carry California today, after being trounced by 12 percentage points in 2000. And former GOP Governor Pete Wilson is virtually tied in the polls with Democratic Senator Barbara Boxer, who is up for re-election in 2004. Rather than recall Mr. Davis, voters might get politicians to pay more attention if they tossed out Ms. Boxer, or if they used the state's initiative process to lower California's job-killing health care and workers compensation costs. Best of all would be if the state adopted the constitutional cap on state spending of the kind that is now saving Colorado from fiscal disaster.

No one disputes that California's politics has moved left since Ronald Reagan dominated it a generation ago, especially on cultural issues. Above all the state's voters are notoriously apolitical, a fact they claimed as a virtue back in boom times. But now they've learned that political leadership, or the lack of it, has consequences. The silver lining about California's budget crisis is that it may awaken voters to the fact that political change is essential for the state to regain its vitality and optimism.