Thursday, February 16, 2017

People Want To Be Free...As Do California Businesses

We have often tried to make the case that it is a basic human instinct to be free. And freedom can be defined in so many different ways. It could mean being able to walk freely in one’s neighborhood without being mugged. It could mean voting to pick candidates that you feel are best for representing your needs and not their own, selfish needs. It could mean not having a government bureaucracy that spies on your communications and family or an over reaching government bureaucracy that tells you how to live your life through mostly useless regulations. 

But another form of freedom is being able to keep as much of your hard earned wages and salary as possible, that you cannot have true freedom without financial freedom from over taxation. If you were able to keep more of your hard earned wealth you could have the freedom to send your kids to better schools, the freedom to start your own business, the freedom to travel more, the freedom to do anything you wanted with your own wealth. 

And we have shown this to be true so many times in the past in this blog. We have showed how states with the lower tax burdens on individuals have the higher economic growth rates, the higher population growth rates, the better economies, and the lower unemployment rates in general. People want to be free….and keep as much of their money as possible.

And the same is true of companies, they want to be profitable and productive and good employers to their employees and good companies to their customers. And the best way to do that is to let these companies keep as much freedom and wealth as possible and not over regulate them, which usually means less freedom and certainly less retained wealth. 

And this concept of freedom, and the inability of California politicians to grasp this concept, was vividly illustrated by a recent investigative report by NBC TV affiliate KCRA 3:
  • According to KCRA reporter, Mike Leury, on February 13, 2017, at least two dozen California companies are committed to moving at least part of their operation out of the state of California because of over taxation and over regulation: “Two dozen California companies have said they are tired of the business-bashing in Sacramento, along with the high taxes -- and they are now threatening to leave the state.”
  • And many of these existing companies are being wooed by the state next door, Arizona, which has lower taxes and lower regulation burdens.
  • Apparently, the day after California voters passed Proposition 30, which raised state taxes by $6 billion annually, Arizona was ready and launched its recruiting campaign to lure some of these disgruntled companies to Arizona.
  • The KCRA report said that 24 chief executives of California have flown to Phoenix to discuss relocation to Arizona.
  • “We can deliver the mayors, we can deliver the CEOs, we can deliver the legislative support,” said Barry Broome, president of the Greater Phoenix Economic Council.
  • Mr. Broome claimed that 24 California companies have already committed to moving out of California: “You start sending the wrong message to those folks and they start voting with their feet,” Broome said.
  • Dave Albertson relocated his marketing and technology company, Wholesalefund, out of California to Arizona, where he now does business in a Scottsdale: “Certainly when we were weighing the pros and cons, the operating costs and certainly some of the benefits of Arizona, (it) looked favorable.” 
  • This poaching of disgruntled California companies helped the greater Phoenix population to grow by a whopping 50,000 jobs in just the past year while unemployment in California continues to run above the national level.
  • And while some California companies are not moving everything out of the state, some are pruning their California operations like Chevron, which is moving 800 California jobs to Texas, and Waste Connections which is moving than 100 jobs to Texas. 
  • Relocation expert Joe Vranich of Spectrum Location Services is quote in the article as claiming: “I tracked for 2011, that 254 companies of all sizes and shapes and kinds left the state for primarily other states.” 
  • Mr. Vranich claims that companies leave California for three primary reasons: “High taxes, excessive regulations and the threat of really ridiculous lawsuits.” The ability to freely do business and reap the rewards is harder and harder to do in California.
  • Arizona is the exact opposite, with lower taxes and streamlined business regulations that make it much easier for businesses to do business, citing the reality that the state’s fast track permitting “allows certified architects and engineers in Phoenix to get building permits in a single day.”
  • Contrast this type of regulatory environment in California where Waste Management wanted to build a major recycling plant in LA on an old useless landfill site, creating economic value out of a low value piece of real estate and create some higher quality jobs in the process, but the permitting process took over ten years and was still not resolved.
  • As a result, the company moved the recycling plant to Arizona where it was up and running in a mere two years.
  • According to Duane Woods, the Waste Management executive involved in this permitting fiasco: “If you took a white board and said, how can we make it difficult, how many agencies can we layer on, California is just as complex as it can be. It’s not an employer-friendly state. And to that end, it’s more difficult -- definitely more costly to operate in.”
  • According to analysis by the Small Business and Entrepreneurship Council, California ranks dead last for being business friendly when measured via factors such as utility power costs, worker compensation costs, high taxes, etc.
  • And while California is about to add another paid holiday for state workers, i.e. taking care of their own and reducing state employee productivity by another day, Arizona has put in place a moratorium on future regulations on business.
And all of this exporting of business operations has changed California from a population growth state to a state that now suffers significant annual reductions in population every year. Which is not a surprise that if the jobs keep leaving the state, than the population will follow.

A rock and roll song once proclaimed that “people gotta be free.” In California, we see the same principle at work with companies: companies want to be free to operate their business free of government over regulation, free of repressive government taxation, and free of government bureaucracy hassles. And yet California politicians cannot understand the simple process as their population and economic base erodes right below their feet. So sadly stupid on their part.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

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