Gov. Schwarzenegger, left, and Speaker Bass

Things are bad here in California. Yes, we have the world’s fifth largest economy — we’d be a member of the G-8, if we were a sovereign nation. But the sky is falling for real this time. The state is $26 billion in the hole.

Reporting from Sacramento suggests that in his negotiations with the Dem-controlled Legislature, GOP Gov. Arnold Schwarzenegger is stuck in his usual, Bush-esque “my way or the highway” mode.

After all, he has little skin in this game — he sits on a personal fortune worth tens of millions (and can easily replenish the ol’ coffers playing superannuated robots when he leaves office), so he’ll be fine even if the economy collapses. And his political legacy is shot. No matter what happens over the next 16 months, nothing can prevent Arnold Schwarzenegger from going down as one of the worst — if not the worst — governor in California’s 159-year history.

As the stalemate continues, the hole gets deeper — the deficit was “only” $24 billion a couple of weeks ago. Another $2 billion accrued while Sacramento dithered.

And this brief but vivid moment, which was reported last Wednesday, does not bode well:

Assembly Speaker Karen Bass, D-Baldwin Vista (Los Angeles County), was visibly upset coming out of the governor’s office Wednesday afternoon.

“He broke it. He should fix it,” she said, apparently referring to Schwarzenegger.

The Los Angeles Times described the speaker as “sputtering” and “struggling to contain her exasperation.” Bass, who was sworn in as speaker in May 2008, is considered to be a serious and skillful politician — a work horse, not a show horse — which makes her the perfect foil for the gubernator.

That was Wednesday. On Sunday, perhaps in response to the speaker’s outburst, Schwarzenegger floated a totally Hollywood solution to get the deal-making moving. Film it:

Would state budget negotiations be more fruitful as a reality television show?

In a Capitol notorious for secret deals hashed out by powerful leaders, Gov. Arnold Schwarzenegger says he would enjoy televising or webcasting some of the talks on the state’s fiscal crisis. His counterparts in the Legislature say they are willing to give it a try…

Schwarzenegger has been touting a need for transparency in the face of evidence that Californians don’t trust their government. He even says he would like his office to be a “glass house” so visitors can see inside.

“Everyone will be performing more, but I think eventually they will get used to it that there is cameras around,” he said in a recent interview.

As budget-fixing proposals go, filming negotiations is more off the wall than out of the box, especially compared with other ideas that have been floated recently but that appear to be going nowhere.

A bill to legalize and tax marijuana that would produce $1 billion in revenue, according to proponents, has been lost in the shuffle. And — counter-intuitive as it sounds — another $1 billion could be saved by commuting the sentences of the state’s 682 death-row inmates to life in prison, according to a recent front-page article in the Times.

These ideas have been batted down as too radical — so truly game-changing ideas like generated tax revenue by creating zones for legalized casino gambling (for example, in Hollywood) and prostitution (in sections of San Francisco, for example) don’t stand a chance.

Still, if filming the budget talks would jumpstart the negotiations, the pols in Sacramento should go for it.

It would also be the first reality drama on C-SPAN — an idea that ought to prompt C-SPAN junkies everywhere to contact network boss Brian Lamb and urge him to get on the phone with Schwarzenegger, Bass and the rest, if he hasn’t already.