Many readers don’t want to hear another horror story about doing business in California. Because I live and practice law in California, I am perhaps more sensitive than other pundits to the ongoing collapse of the state’s economy, and I also have a front row seat to the parade of regulatory insanities that march by on a near-weekly basis, even as the businesses that once made the state an economic titan line up to head east.
Earlier this week I wrote on the so-called "Green Chemistry Initiative” for the Washington Examiner, and one of my law partners quickly emailed to let me know that wasn’t even the worst business news out of the state that week! Gary Wolensky subsequently posted at HughHewitt.com about the California Supreme Court’s decision in Kwikset Corporation v. The Superior Court of Orange County, and the phone has been ringing and email in-box filling up since then with exclamations of disbelief. The decision opens the doors to thousands of new nuisance lawsuits against every product on every shelf in California, even as the new “green chemistry” regulations when they appear in final form will apply to all products sold in the state. 2011 is opening with a double feature horror flick for job generators even as the state careens towards unofficial but very real bankruptcy.
None of this made it into Governor Jerry Brown’s state-of-the-state address Tuesday night. The always charismatic Category 5 political force delivered a characteristically interesting and provocative talk, but not a paragraph of it dealt with the underlying woes besetting the state: No one in their right mind would start a new manufacturing concern here.
And why would they? There are a dozen states with not just better tax and regulatory legal regimes, but far, far better systems. Florida doesn’t have an income tax, for goodness sake, much less one that is in double digits. Texas doesn’t threaten every manufacturer and every purveyor of every product with “green chemistry” labeling regulations in excess of 90 pages. The Supreme Court of Arizona isn’t going to decree that lawsuits can proceed regardless of any allegation of actual injury.
California has become a giant experiment in how to kill job creation, and with the jobs all the tax revenue those jobs produce and all the good things those tax revenues support like public education and roads.
The state has fundamentally gone off the rails, and almost certainly will have to hit bottom before it can begin to rebuild.