Bob's plan to restore jobs to California
It used to be: California or Bust. Now it's busted California. California used to be the best State in the Union. California used to be the place that you could go to and start over. California used to be golden. Not anymore.
The recession of 2009 is fact. Unemployment in California rose from 8.4% when Obama took office, to 12.5% in October, with an expected CA Unemployment rate of 12.7% in November, according to the EDD. This occurred despite more government spending at both the state and federal level than any other 12 month period in history.
How bad is bad? Let's look at recent history in Santa Clara County. According to the California Employment Development Department (http://www.labormarketinfo.edd.ca.gov) the unemployment rates were: January 1990 + 3.5%. The lowest unemployment was in December 1999+ 2.2%. The average unemployment from 1990 + 2009 was 6.4%. This means we have almost twice the "normal" unemployment. If you look back even further, Santa Clara County has NEVER had unemployment at this rate. Even during the great depression, Santa Clara County had jobs and welcomed fellow Americans from the East. Silicon Valley went from cherry orchards to Apple Computers in just a few years. It was the near perfect weather, tied in with the pioneering ethics of the old West that combined to make the best city in the world. Through boom and bust, San Jose has always come back stronger than it was before. I believe it will again.
What has changed? Is it all the housing bubble? Is it the failure on Wall Street? Whose fault is it? I see several factors + The housing bubble burst because the government encouraged banks to make increasingly more risky loans, while also encouraging individuals to take on more and more debt in the form of low interest rates and low savings rates. It's no wonder people were doing more and more. If you had a loan you could not, or could just barely afford, it was no problem. You would just wait six months and refinance and pull out your new "equity". People would charge up their credit cards, refinance the house, and do the whole thing all over again. Who wouldn't? As long as housing prices keep going up, and interest rates are negligible, there is no reason not to. What happened over time? Credit card debt rose, mortgage debt rose, savings dropped, factories cranked out new cars, new TVs, new furniture, new everything.
And what was all of this expanding growth based on? Were we getting 25% more efficient each year? Were we making fantastic leaps in technology? What was driving the drive? As in all economics, the major force driving the expansion was the expansion itself. The belief that the conveyor belt would always keep running kept it running. As soon as cracks started to appear, housing prices that had been rising at double digit rates suddenly started to slow, and even drop. The first ones hurt were those who happened to be in the "wrong" phase at the wrong time. All of a sudden, they couldn't refinance, and then they couldn't afford the mortgage. This built upon itself, dropping housing costs, reducing demand for cars, TVs, furniture and everything else. This drove factories to slow production as inventories rose. This put more people out of work, which caused more mortgage failures.
The initial cause and the fuel for the fire + Liberal government, either Liberal Democrats or Liberal Republicans. Own your own home + a right. Own the latest electronic gadget + a right. Free healthcare + a right. Who eventually pays? All of us. Who loses? Again, look in the mirror.
The failure of Wall Street is a direct result of the extreme liberal banking laws of the past decades. Wall Street found that it could take these low cost mortgages and re-sell them for profit. They bundled the risky loans together and sold them to individuals, governments, and institutions across the world. When the housing crunch began, it was only a matter of time before these toxic properties became obvious.
This was bad, but it wasn't the crime that was to come. Being "too big to fail", the government stepped in and bought the banks. This is called "Nationalization" or "Socialism". To take into public ownership an industry or asset. By using TARP, the US government took a big step towards becoming the USSR Government.
And then it was GM's turn. Another nationalization of a major industry. Billions of dollars spent on "saving jobs". The Cash For Clunkers program actually sent more money to Tokyo instead of Detroit. Was this a good use of taxpayer money?
And of course + health care. The US take-over of 1/6 of the economy. How is that free-enterprise? How is that "limited government"? What would Thomas Jefferson say?
So, let's take a look + the government is making a power grab at every major industry in the economy. How is that working out? How many jobs have been saved? How many houses have been returned to the poor? How much has the price of living gone down? I thought I said in paragraph 1 that California is bust? Big Government is obviously not working. Big Government is a disaster. It's time for People Power! A Government for the people, by the people, and of the people should not be allowed to perish from the face of the earth.
I said that what built California was the spirit and work ethic of the Old West. I stand behind that. Nobody expected government to take care of them. They knew they had to look out for themselves, and for the people in their community. People worked the land. People worked the sea. People worked the fields and orchards. People worked the railroads, the ranches and the fishing fleets. People WORKED! If you didn't have a job, you went out and found one, or started a new business and hired yourself. California must get back to the Golden Age. We must relight the fire and passion of the West.
Nobody knows what the next dot com industry will be. I do know that it will be found and developed by Californians. It will be done here, but only IF we can stop the companies, employees, and capital from leaving.
Why are they leaving? The food industry cites growing regulations as the primary reason many are leaving, or at least canceling plans to expand. The Aerospace industry sites tougher safety laws, lower wages elsewhere, greater tax incentives, and fewer "non-industry" regulations as to why many of them have left the Golden State. Defense spending in California is down while we continue to wage two wars. Where did the Defense jobs go? Texas, Oregon, Washington, and the East Coast have seen growth in Defense spending.
Individuals are getting tired and leaving too. More people now leave California each day than come in. Families are being forced out as they lose their jobs, their homes, and their dignity. Many search for months for a job in San Jose, only to find that what jobs are available have gone to India. I had and engineer friend of mine confide that three years ago, he was making $110/hr and was considered a GOD at his company. Now he's been laid off for over a year, has no money, and can't find a job at $30/hr. He has lost his home, lost his wife, and even had to take his dog to the pound because he couldn't feed him.
Tourism is down as people don't want to see the homeless wandering the streets of San Francisco. People don't want to fly to LA and pay $100/night for a hotel room, and then find they owe another $40/night in taxes. And this is just the hotel. All of the major tourist cities in California are citing significant drops in tourist dollars. Why is California losing its luster?
Image is everything. When I was growing up, California was the place to go. Movies, TV, songs all told of the possibilities available in California. As soon as I was old enough to leave Colorado, California here I come. I found a State that had a list of jobs in the paper longer than the sports section back home. I found a State that had education available for almost no money. In Colorado, one year of college would have cost me three years of wages. In California, I would have to work almost three days to afford San Jose State. I found a State with fish in the ocean, sunshine in the sky, and people working everywhere.
The other day, I was listening to a national radio talk show. They were commenting on a possible regulation that some other state was proposing. The host commented + if you do that, you'll be as bad as California! The Wall Street Journal ran an article recently about States that were in "Danger of Foreclosure". They warned that other States could fall victim to their own legislatures, just as California has allowed it legislature to run amok and destroy the State.
So that's the problem. What is my solution? How would I put California back to work?
1 + Public works projects which target business needs + rebuild California's trains, planes, and automobiles. + Work on the water transfer systems + bring water to where it is needed and store water in times of plenty for times of drought. Build California's energy infrastructure + no more rolling black-outs.
2 + Reduce excessive regulations + such as the higher fuel economy requirements on California cars. I would propose a non-partisan panel of industry leaders, scientists, educators, and politicians be given a mandate to isolate and remove as many restrictive regulations as possible.
3 + Improve education + please see my paper on Education of how I would address this key item.
4 + Reduce taxes + reduce taxes on individuals and on corporations. This will give incentives for companies to come to California, increasing total State revenues. The State Legislature saw what an advantage it was to raise taxes last April, only to see revenues fall as more people lost jobs.
5 + Special "Investment Tax Credits" for companies and individuals investing in start-up companies which hire at least two employees. Also, I would propose special tax incentives for individuals who start up their own one person business.
6 + Enforce the laws at hand. + Pursue companies and individuals who hire and exploit illegal immigrants. Please see my paper on Immigration for how I would address this sensitive issue.
7 + Stop "selecting" which industries will be favored. Rather than mandating "green" jobs, or "green" energy, let the market decide which jobs and what types of energy are needed by the people. Support growth, not just green growth. If the market forces want green, then it will provide the incentives to manufacture and sell "green".
8 + Encourage giving. The culture has developed to look to the State to provide everything. We need to get back to letting the non-profits provide what they provide best, and get the State red tape out of it. If we can build an environment where people see the benefit of helping their fellow man, we can "wean" the social misfortunate off the public dole. There was a time in this State when people would meet at the neighbor's house and have an old fashioned barn raising. We need to build that mentality back. Encourage people to get to know their fellow citizens. When somebody is in trouble, they should be able to look to the church, the rotary clubs, and to concerned citizens to help. How can the State do this? The opposite of the way the State killed the culture + reduce government handouts, and increase tax incentives for donations. Make it the "cool" thing to help. Make it "right" to care about your neighbor. This may sound very cold to the liberal crowd. I know and fully understand that there are many truly unfortunate people out there, through no fault of their own, which have fallen on hard times. I also know that this country was built on the poor starving masses, yearning to be free. But those same starving masses went out and started businesses, started lives, and built this state! They didn't march for free health care.
I don't know how many jobs this will build in California. I do know that in the very short term, there would be a lot of people very upset. Whenever you stop giving people handouts, it takes them a long time to decide you really meant it, and they go find work for themselves. There will be instances of individuals who genuinely are hurt by the policies. I accept that. I also accept that there are non-government agencies ready, willing, and able to do a much better job providing for that person than the State ever could. Just as withdrawal for a junkie is hard, withdrawal from the public dole will be harder. Just as good as withdrawal eventually is for the junkie, withdrawal from the State is even better. Someday very soon I hope to see some young kid arrive in California with hope in his eyes. I want to see some family pick up stakes elsewhere and move to California for a new life. I want to see the next great boom start right here in Silicon Valley!
You can keep drinking from the cool-aide and watch as California rots away, or you can join me to build a better California for all of us!
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