Perhaps the luckiest part of my career was to start graduate school at a department, UCSD's political science, that was just starting its ascent. The value of my degree has, more or less, steadily increased as UCSD's reputation rocketed to the top 10. But that may have been temporary as the entire UC system is headed for a steep crash. California's budget process, notably constrained by a series of propositions, has meant that even before this year, the Universities were being asked to do far more with less. Their budgets grew by 2% over the past decade, despite a 30% increase in the number of students. That UCSD and the other UCs were able to hold onto their star professors and continue to hire was quite amazing. I am always impressed when I meet the newest graduate students produced by UCSD. Will this continue with furloughs and hiring freezes?
I think the answer might actually be yes, but only because nearly every other college and university in the US (and in Canada) is facing similar budget woes. I am guessing that this year's job market will be the worst in memory (and my memory goes back to the early 90's recession).
Where will these faculty flee? France? Hardly. There will be some bleeding, but I think most folks are going to stay put, especially if they have negative equity in their houses.
The good news is that some places do have a spare $100k to hire part-time faculty, but only for those who are truly incompetent.