Obvious To Everyone Except Politicians

The Whited Sepulchre has a post explaining why his company built its new west coast warehouse in Arizona rather than California. His two-word summary: "regulatory hell."

He provides more detail than that, of course, but those two words serve as well as any to explain the Golden State's plight. Here's more.

In Chief Executive’s eighth annual survey of CEO opinion of Best and Worst States in which to do business, Texas easily clinched the No. 1 rank, the eighth successive time it has done so. California earns the dubious honor of being ranked dead last for the eighth consecutive year.

Say what you will about Texas governor Rick Perry's dismal performance during his presidential campaign, but give him credit for one thing: he may not be responsible for all the good things Texas has going for it, but he didn't screw it up. That's more than most politicians can claim.

It may be no accident that most of the states in the top 20 are also right-to-work states, as labor force flexibility is highly sought after when a business seeks a location. Several economists, most notably Ohio State’s Richard Vedder and Harvard’s Robert Barro, have found that the economies in R-to-W areas grow faster than other states, have higher employment and attract more inward migration.

Yet another argument that unions are counterproductive to employment and business growth.

California’s enduring place of perpetual decline continues in this year’s ranking. Once the most attractive business environment, the Golden State appears to slip deeper into the ninth circle of business hell. The economy, which used to outperform the rest of the country, now substantially underperforms. And its status as the most ruinously contentious place to operate remains undisturbed in eight years. Its unemployment rate, at 10.9 percent, is higher than every other state except Nevada and Rhode Island. With 12 percent of America’s population, California has one-third of the nation’s welfare recipients. Each year, the evidence that businesses are leaving California or avoid locating there because of the high cost of doing business due to excessive state taxes and stringent regulations, grows. According to Spectrum Locations Consultants, 254 California companies moved some or all of their work and jobs out of state in 2011, an increase of 26 percent over the previous year and five times as many as in 2009.

Unions. Excessive regulation. People vote with their feet, and it is becoming increasingly obvious that they are voting for right-to-work states and freedom from regulatory hell. Why don't our national 'leaders' see that?

That's a rhetorical question, of course. The answer is special interests and entrenched bureaucratic self-interest.

Sigh...