Toyota Leaves California For Texas – No Thanks To Jerry Brown.

I have lived in California for many years having moved here from the Washington D.C. area to get away from both D.C. and the accounting profession. That was way back in the early 1960s, when California seemed to be much more attractive and vibrant than now. Having Ronald Reagan elected governor didn’t hurt the image either. But to say that the gloss is off of the Golden State is an understatement.

It is an inescapable fact that California is hostile to business. The democratic controlled legisalature seem not to realize that healthy businesses create jobs. A healthy job market is good for everyone, especially the middle class. I recall when practicing law that it cost a small business trying to incorporate $800.00 in minimum franchise tax fees, a tax that had to be paid whether the business was successful or not. I thought that minimum fee was unconscionable then and still do. But that’s just one example. There are many others.

Nissan moved to Nashville many years ago, Occidental Petroleum announced it is leaving Los Angeles at the end of the year, and now Toyota is leaving Torrance, California and moving its U.S. base to Plano, Texas, taking some 3,000 jobs along with it. It may be tough to single out any one person to blame for this but I think much of the fault lies with Governor Jerry “Moonbeam” Brown. As pointed out in a recent media piece, not only is Brown’s claim that California is back “fraudulent,” the fact remains that the state is on a course to financial ruin. This will undoubtedly hurt the middle class the most. Brown is a lackluster career politician with little imagination and initiative. He should have seen the Toyota move happening some time ago and taken steps to try to prevent it. Perhaps if he spent more time trying to improve California’s business climate instead of pursuing his $68 billion “boondoogle” bullet train project Toyota might still be here.

Admittedly this is an oversimplified view of what has transpired. But it seems to me that more could have been done to avoid this disappointing situation. Moreover, I have not read of any attempts to find creative solutions to this state’s hostile business environment. Maybe the democratic controlled legislature in Sacramento just doesn’t care.

California had the opportunity to elect a younger, more vibrant governor, Meg Whitman, in the last election but chose the hidebound Brown. Now the state is paying the price for that shortsightedness. What the state needs is dynamic leadership and more resourcefulness, qualities that are clearly lacking now in the Governor’s office. As you may have guessed, I’m not a Jerry Brown fan. I still can’t get over his appointing Rose Bird as Chief Justice of the California Supreme Court. That was admittedly during his first term as governor back in the 70s. But she had had no prior experience as a judge, none, and I felt then, as I do now, that it was probably the most irresponsible act of any politician I had ever seen.

In all fairness it should be noted that Brown’s current budget seeks to repay some $11 billion in state debt. This does reflect some degree of fiscal responsibility in Sacramento. Nevertheless much more fiscal innovation is needed. The state is approaching $1 trillion in unfunded debt with no plan for paying it off. Losing Toyota does not help.

I am beginning to believe that California is simply too big to be managed by the likes of Jerry Brown. Splitting the state up into more than one state may be the best answer. The more I think about it, the more I like it.

Copyright©2014 Arnold G. Regardie. All rights reserved.

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