| WiiBox3 said: ^Not necessarily bad for business, but bad at keeping businesses in it, since a larger business would like to move to a state which taxes them less, has more relaxed employment laws and a lower minimum wage. The current high unemployment is a trickle down effect. The economy got worse, so businesses left to other states with lower taxes/ more relaxed laws. People lost jobs when businesses moved. People without jobs spend less money and pay less taxes. The state doesn't collect as much tax revenue to fund it's current projects, due to unemployment and borrows more money for some projects. It cancels other projects leading to more unemployment. The state also raises taxes on businesses to help pay off some debt. More businesses leave. More people unemployed. More people need to have their houses foreclosed due to job leaving state and unable to sell house at half the value it was bought for. Without a job people are not able to hire others to do yard work, house cleaning, etc. And the spiral has continued here in California. And that is why California is finally going to for Amazon to tax purchases made by Californians. Also that is why we have the Occupy Wallstreet protests outside of my office on a weekly basis. (The Californian headquarters of Wells Fargo is across the street) |
I don't understand why people are baggin on California for being rated badly by business executives. When I look at connections like the one above I wonder if people understand the whole picture, or just what is being constantly repeated (like a broken record) by the corporate news.
I don't know if you all remember the housing boom/bust. Many jobs were lost in home construction. Before the bust, California had between a 5 - 6 % unemployment from years 2004-2006 which was very similar to Texas. (http://www.deptofnumbers.com/unemployment/california/) The only difference is that California was coming from a bad resession having invested poorly in tech stocks in the last tech boom/bust. Housing was surgin up and California road on the next new bubble. I don't know how much Texas was involved in the housing boom, but I guarrantee that it was not as bad as in California. Houses that originally cost 130,000 dollars where going for almost $400,000 here. It was crazy and people were being fed lies that house prices were never going to come down; however, anyone who has studied a bit of economics could tell you that this type of mentality is total BS. If you don't believe me just look at the current gold/commodity bubble we are on now.
This "trickle down effect" everyone likes to talk about does make sense in your connection. How does unemployment trickle down from the top? Are you talking about education wise? The unemployment numbers Bachelor/Masters/Doctor degrees is way lower than those without a college degree. The only way I can see this making sense is if the the field is no longer in demand, but a college degree still holds more weight then a diploma.
Business left because of a bad economy: This could be true, but I don't see why a business would invest in relocation just to go out of state. There are larger incentives to outsource internationally if they really want to pack up and move. It is not California's fault if other states want to lover their taxes and environmental restrictions to attract California businesses. Thats competition, something I believe is fair; however, I wonder how much money those states will loose and how much enviromental damage they will incur in the long run. They will have to respond to their residents eventurally. It is just a hidden cost that will eventually surface.
I will not argue that job losses lead to less state revenue; I believe even a hobbo understands that logic. The part about the state getting into larger debt, well that is still going on now, but not as rampant as when Arnold was in office. He wasn't a bad man, the problem was that he lost the respect of his party and couldn't get them in line to compromise, so the state had to keep borrowing. Borrowing is worse than taxing actually, but many people in California have a belief that they should not have to pay for social services they want/need/like.
There are many problems in California, but I believe they can be fixed. The unemployment was not primarily caused by businesses leaving the state. It was caused by the deacrease in demand of housing. That is why Nevada, California, and Florida have higher unemployment rates then that national average. These states were riding the housing boom which created a lot of job at the time. When the bubble contracted, the jobs dissappiered; however, the debt many of those people made did not dissapear (subprime loans). Many business could not borrow because banks were not giving out loans; The weaker ones went out of business, while the stronger ones survived, but they had to cut back heavily. This is what bubbles create, and greed with lack of regulation are prime ingridiants.
I can go on and on about this topic, but I'll stop here. Just remember that California is not in such deep sh!t. They can get out of this because it is still a desirable place to live. Some people may not be able to afford it, while others have had to move back to their relatitives. The point is that while Texas may have a better unemployment than California for now, I can go by without using air condition in my car and house all year long (j/k). Unemployment is a cyclical number, it drops, rises, and drops again. Laying the fault on liberals is a weird thing to do when the conservative adminstration that was suppost to be regulating these subprime loans fell asleep at the wheel, lost the power it once had, and is now bombarding people with fear once again to get you to vote for them. Being pro-business does not = a Patriot. Think about this... Would a business execuative choose country over his own interest, the companies, or its share holders? If you think they would, then the brain washing machina has done a great job on you all.
I'm finished. Please excuse the misspelling, I didn't check.
