This week, the Los Angeles Business Journal explains how the trickle down economics of the country's financial crisis may hurt LA...as well as some of its wealthiest citizens. Billionaire Eli Broad, who's a major shareholder of American International Group, the insurance company that the federal government wants to stabilize through its reported $700 billion bail out plan, has been particularly susceptible to the crunch, according to the newspaper.
Broad is also a major philanthropist in LA, and the Business Journal asks if diving AIG stocks will affect his generous giving. His charities and causes certainly hope not. The billionaire has invested hundreds of millions of dollars in reforming public school systems throughout the country, and during these tight fiscal times, education spending often gets cut by local and state governments. Superintendents and principals, teachers and students will need wealthy people like Broad to help ease the pain.
The financial crisis may also mess with political giving. Already, opponents of Proposition 8, the anti-gay marriage ballot measure, are concerned about the flow of money to their campaign. Karen Ocamb, news editor for In and Frontiers magazines, writes about the particulars in her column for the Bilerico Project.
Southern California is also something of an ATM for both political parties--not just contributions to the presidential race, but congressional races for the House of Representatives and the Senate. With donation limits placed on individual campaigns, wealthy folks often write big checks to the Democratic National Committee or the Republican National Committee, which then pay for their own TV ads to support or attack a candidate. That cash flow, at the very least, may be put on hold...just when politicians desperately need money for the homestretch to Election Day--TV and radio ads don't come cheap, especially in California.
As President George Bush said last night on national television, "These are not normal circumstances."
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