Monday, June 03, 2013

Florida & Texas Will Not Steal Businesses From California

Gov. Rick Scott has a novel idea on how to steal businesses from California. Put a billboard somewhere in California. It doesn't matter where.

"I'm working on putting up a billboard out there that has Jerry Brown's picture and mine. We both have the same haircut," said the similarly hair-challenged Scott at a Republican Party meeting in Sarasota County last week. "It's going to say: 'Same haircut, no income taxes. No. 1 in teacher quality. Move to Florida.'"

Scott's idea is so original. It is strange that it sounds a lot like an idea by America's favorite intellectual Gov. Rick Perry. Perry released a radio ad in California declaring that "next Silicon Valley." Does Texas have a place that computer programmers and rich gay people both reside. Otherwise, they aren't the next Silicon Valley. Perry would have at least sounded like he knew what he was talking about if he said next Palo Alto.

Scott had this to say about California's economy.

"Unlike Florida, it is clear California does not have a climate for businesses to succeed," Scott said in announcing that letter-writing effort.

Actually, that is false. California has the biggest state economy in America. California has a bigger economy than many nations. KPCC's business analyst Mark Lacter made this point about how Perry's radio ad is not likely to succeed.

Steve Julian: Mark, what's working for or against him?

Mark Lacter: First off, Steve, his timing in trying to recruit businesses out here is pretty bad. Job growth in California has been outpacing the nation, the state's fiscal situation is improving, the housing market has been coming back over the last few months – this is not the place it was just a few years back. As for Texas, yes, job growth has been strong, but those jobs are often the low-wage, low-skilled kind, and they could easily move from Texas to some other state (or some other country) where the wages are even cheaper. One other point Gov. Perry neglects to mention is the disastrous health care system in Texas. Roughly one quarter of the population is uninsured – that's the highest level in the nation, higher even than California, which itself is pretty bad.

Julian: Then why is he making a big stink about the federal Affordable Care Act?

Lacter: He believes Medicaid should be turned into a block grant for the state, which many experts say could make a bad situation a lot worse. In any event, it's worth pointing out that there hasn't been any great exodus of California businesses and people to Texas. Sure, companies have left over the years in slightly larger numbers than companies coming in, but what's often not factored is the large number of business start-ups in California - way more than in Texas. To give you an idea, more than half of all venture capital funds in the U.S. involve California companies.

Jerry Nickelsburg, senior economist at UCLA's Anderson School of Management, splashed cold water on Scott's billboard idea luring any businesses out of California.

"It is unlikely that these actions would induce a business to move," he said.

Scott and Perry think they can lure Apple or a major movie studio with a billboard or radio ad. That shows amazing stupidity.

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