Wednesday was an anniversary of sorts, albeit one that few recalled and even fewer wanted to remember.

For the record, the Nasdaq stock index hit its all-time high on March 10, 2000, reflecting nearly six years of sizzling growth in the high-technology sector of the economy, driven by huge amounts of speculative investment, before a steep plunge that extinguished tens of billions of dollars in paper wealth.

Stock speculators - including ordinary Americans who were trying to fatten their retirement accounts - weren't the only ones whose hubris was hammered by the plunge. Politicians who should have known better saw government revenues soar from income taxes on the stock options and capital gains and spent the windfalls as if the boom would last forever. Politicians and pension fund managers saw portfolios swell with paper gains and sanctioned immense increases in pension benefits for their pals in public worker unions.

California, ground zero for the high-tech explosion, enjoyed a disproportionate share of its positive impacts, and suffered a disproportionate share of the subsequent implosion's negative effects. California's budget crisis is so much worse than that of other states because Sacramento received a huge, one-year spike in state revenues - 12 billion extra dollars - and then-Gov. Gray Davis and the Legislature foolishly committed most of it to permanent spending and tax cuts. When revenues returned to normal growth levels, we were stuck with a huge structural deficit. California's growing public pension crisis has similar roots.

Four years after the Nasdaq began to slide, where are we?

Nationally, a mild recession bottomed out in 2001 and the economy has been in recovery ever since, marked by sharp rises in corporate profits and the stock market. California's decline was somewhat steeper due to the prominence of its high-tech industry, but was still mild by historic standards, and recovery has been a little slower than it has been nationally.

The most troubling aspect of the situation - and one that is looming as a presidential campaign issue - is that the recovery has not resulted in a strong surge of employment. "Jobless recovery" has entered the national political lexicon, accompanied by much speculation as to its cause.

Democrats and their allies in organized labor are beating the drums about "outsourcing" of jobs to other countries, such as India, but its real impact is unclear. There is, moreover, an increasing body of economic opinion that new jobs are not being reflected in the official statistics because of a fundamental change in the structure of post-industrial companies.

"There really are more people working, but they are the self-employed, contract workers, and native and immigrant workers working off the books," Andrew Sum, director of the Center for Labor Market Studies at Northeastern University in Boston, said in one published interview.

Sum and others point to the household employment survey, an alternative to the more traditional survey of employers, as evidence. The former consistently shows much-higher levels of employment than the latter, which is the basis for the official employment and unemployment numbers.

California may be leading the nation in that phenomenon as well. Official job growth has been mediocre in the last two years - "essentially flat" in the words of the new state budget - but other indices of economic activity, such as personal income, taxable sales and housing prices, have been markedly stronger. With its plethora of startup companies, California is a hotbed of domestic outsourcing, and with its millions of illegal immigrants, it has a powerful underground economy. Anecdotally, too, the state's very expensive workers' compensation system encourages companies to use contract workers, rather than place them on payrolls, and a new health care mandate on employers, if it survives a test at the polls in November, may also depress payroll hiring.

We need a better handle on what's happening economically in this state because so many of our budgetary decisions are based on forecasts of what will happen. The budget crisis is a warning of how those decisions can backfire when assumptions are wrong.