There's an interesting article about California's current political and fiscal crisis in this week's The Economist, California in Crisis: Is the Golden State governable?
Both the recall and the budget can be partly explained away as special problems. The budget crisis is a delayed reaction to the dotcom bust (and the collapse in tax revenues)…and the recall is essentially a political ruse by the Republicans to take advantage of that…[y]et both the recall and the budget are also symptoms of a more profound malaise in the state…
The real flaw in California is not a mechanical one to do with how smoothly the machinery of government is working (though it plainly isn't doing very well). The real problem is that politicians have become divorced from the changing nature of their state.
Guh, I'm glad I moved. Not that New York doesn't have its own problems, and lots of them.