But unless spending is cut to pay for it — which never happens — other businesses have to pay for the tax subsidies. Holman W. Jenkins Jr. just wrote for the Wall Street Journal how Toyota, after getting tax subsidies from the state, still couldn’t make a profit from its Nummi plant in Fremont. So it decided to cancel the plant.

But that happened at the same time as the “sudden acceleration” crisis, for which it actually was exonerated by the federal government.

The situation led to Elon Musk picking up Nummi at a bargain-basement price for his Tesla plant. Musk also has received state subsidies, although Nevada recently got his battery plant with $2 billion in subsidies of its own.

Jenkins:

To its credit, the Los Angeles Times would level with its readers about Nummi, citing an industry consultant to the effect that “California just isn’t competitive in manufacturing with its taxes, regulations and overall cost of doing business.”

Perhaps the moral is obvious but dishing out handouts to favored businesses like Tesla at the expense of the state’s other taxpaying workers and employers is hardly a solution to California’s problems. And such Mommie Dearest love brings its own Faustian risk: The favored business can find itself, as Toyota did, under pressure permanently to subsidize a money-losing plant as a “success” politicians can point to even as their policies ensure that real success eludes other businesses in the state.

Michigan

Contrast that with the policies of my home state of Michigan. Four years ago the outgoing governor was Jennifer Granholm, who was born in Canada but grew up in California’s Bay Area; she’s now a professor at U.C. Berkeley. According to a Journal editorial:

Democratic Governor Jennifer Granholm was a forerunner of President Obama ’s economic policy mix of raising taxes on everybody while handing out tax favors to the powerful and trendy. Michael Moore got a nearly $1 million tax break to film “Capitalism: A Love Story” in the state. The state awarded $543 million in tax incentives to battery makers in addition to $861 million in federal stimulus dollars. One of the state’s political capital recipients, A123 Systems, has gone bankrupt.

The result:

Unlike its Great Lakes neighbors, Michigan had been bleeding jobs for a decade. Between 2000 and 2009 Michigan lost 825,000 jobs, nearly half in manufacturing. The implosion of the Big Three automakers played a major role, but state policies exacerbated the carnage.

But in 2010, Republican Rick Snyder was elected governor; he’s running for re-election this year. And keep in mind that Michigan has nothing like Silicon Valley, which hardly was fazed by the Great Recession. He cut taxes, rearranged the tax system and got rid of some of the tax subsidies, such as cutting those for film. The result:

What really rankles Democrats is that Mr. Snyder’s tax shock-therapy and 2012 right-to-work law are working. Since January 2012, the Wolverine State’s private job growth (4.5%) has surpassed every state in the Great Lakes region save Indiana (4.6%). Last year, its private GDP growth led the region at 4.6%, compared to 4.4% in Wisconsin, 3.8% in Indiana and 3.5% in Ohio, and 2.6% in Illinois.

Illinois, like California, is run by a Democratic governor who raised taxes, Pat Quinn.

Of course, the weather still is terrible. On the other hand, you can buy a nice, middle-class home in a low-crime suburb for $120,000.

Joe Mathews presents

Yes, California has an above-average unemployment rate and other economic problems, and many of our people and companies are relocating or expanding to states like Texas that offer cheaper living and generous economic incentives. But there’s another way to look at these departures of Californians and California companies: as a colonization of Texas and the rest of the country. 

This colonization is not a sign of decline but of our success. Texas and other states are trying to steal our culture, our companies, and our jobs because we have so many things worth stealing.

If that’s the case, then Michigan is an even bigger “success.” When I got out of the U.S. Army in Feb. 1982, I returned to my native Great Lakes State. Unemployment was a Great Depression-level 16 percent. People were streaming out for Texas or wherever, bringing with them our Michigan charm and tolerance for cold weather.

I drove my father’s car around the Detroit area for weeks looking for work. This was a place where, just nine years before, anyone with a heartbeat could get a great factory job paying the equivalent in 2014 dollars of $120,000 a year. Nothing.

Eventually I ended up back in journalism — but in Washington, D.C. Then I came to California in 1987 during the boom times under Republican President Reagan, who cut national taxes; and Republican Gov. George Deukmejian, who in 1987 actually refunded to taxpayers the tax money the state didn’t need.

By contrast, Michigan’s population actually declined in the last decade. Detroit just went bankrupt, and in 60 years has lost 2/3 of its 2 million population.

If that “success” pattern holds for California, its population will drop from 38 million today to 12.7 million in 2074. That will please anti-people environmentalists and the California Coastal Commission, as the state, as actually has happened to Detroit, returns to the wilderness.

Commentary

Dec. 21, 2012

By Chriss Street

With the California unemployment still well above the national average, the Golden State might look to the Auto State for how to spur job growth.

Last week, Michigan Gov. Rick Snyder signed legislation to enact Michigan’s first right-to-work law for both private and public-sector workers, although public safety workers were exempted.

The law makes it illegal to require workers to either join a union or pay union dues without their permission.  The law was heralded by conservatives as protecting workers’ right of free association, but was scorned by liberals as destroying jobs at good wages.  But as a reward for Michigan’s new pro-jobs environment, General Motors announced it will bring back production of the iconic Chevrolet Camaro to the Michigan from Canada.

Snyder had served as the chairman of the board of Irvine, Calif. computer maker Gateway, Inc. and Ann Arbor-based Ardesta Venture Capital.

He ran for governor in 2010 on the motto, “I’m pro worker,” and has lived up to that. Since taking office in Jan. 2011, Michigan unemployment has dropped from 10.9 percent to 9.1 percent in Oct. 2012.

Heckled

In his first public appearance after signing the historic legislation, Snyder was heckled as the keynote speaker for Michigan State University’s commencement ceremonies last Saturday as he encouraged students, “We want Michigan to be attractive to you so you stay here.” Inundated by news organizations that had been hoping for some wild protests and counter-demonstrations, Snyder tried to avoid controversy by saying, “I’ve talked enough about public policy this week…my preference is always to talk to the graduates.” But he did recognize, “There are some people here that don’t agree with me today.”

Speaking about his own post-college experiences, Snyder said he chose an accounting job in Detroit over a higher-paying offer in Houston, because the company helped foster his career and allowed him to stay closer to his family and friends.

Union supporters and protesters sneered at Snyder’s noble words as hypocritical rhetoric. “We are here to show our appreciation for the MSU students,” said Bill Reed, president of UAW Local 602 in Lansing. “The trouble is, the governor has not shown that same appreciation. This legislation harms these students’ future.”

The Camaro decision represents at least 1,000 union jobs and comes as a big win for Michigan’s hard-hit auto sector over foreign competition.  It seems that, after the GM bankruptcy, higher productivity at plants in the United States is reducing GM’s capital investment costs and improving profitability.

Kristin Dziczek, the director of labor and industry at the Center for Automotive Research, said labor costs for new hires in Michigan are now lower than the wage costs for veteran unionized peers in Canada. “There’s a considerable number of entry-level people and a lot of the older workers have already retired or taken retirement incentives,” she said.  Dziczek added that that the relatively strong Canadian currency, known as the loonie, is dragging down the Canadian manufacturing sector versus American competition.

Ontario plant

In an interesting twist of fate, the Michigan job gains will be taken from GM’s Ontario plant that was the scene of one of the most vicious strikes in labor history.  From April 8-23 1937, more than 4,000 workers struck for better wages, working conditions, a seniority system and the recognition of their new United Automobile Workers union.

The UAW was to be an affiliate of the recently created Congress of Industrial Organization that was organizing industrial workers throughout the United States.  Ontario Premier Mitchell Hepburn vigorously supported GM management’s efforts to try to keep the CIO out of Ontario.  To break the strike, Hepburn even created his own police force, known as “Hepburn’s Hussars” and “Sons-of-Mitches.”

Fellow unionists, neighbors and communist activists funded the GM Canada striking workers for two weeks. Eventually GM capitulated over fears of losing markets to its competitors.  In the April 23, 1937 agreement, GM accepted many of the union’s demands, without recognizing the union.  To gain recognition, the union leadership publicly repudiated the CIO connection.  But everyone knew it was a great CIO victory and the first major one in Canada.  The strike marked the birth of industrial unionism in Canada.

Michigan was hammered with a “D” rating in the 2009 Index of Worker Freedom, while Snyder’s predecessor, Democrat Jennifer Granholm, still was governor.

But the success in attracting the Camaro back after passing right-to-work legislation is motivating the Republican-controlled Legislature to adopt more pro-business legislation:

* HB 5024 would increase penalties for violation of Michigan’s mass picketing statute and allow employers to seek legal means to stop mass picketing;

* HB 5023 would increase penalties for illegal public-sector strikes;

* HB 5026 would allow employers to more easily hire new workers during labor union disputes.

With more GM jobs on the way, Snyder is proving that passing right-to-work laws is great for workers. It’s a lesson California should drive to prosperity.

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]]> https://calwatchdog.com/2012/12/21/ca-should-emulate-mi-jobs-creation/feed/ 11 35805 https://calwatchdog.com/2012/12/12/audacity-mich-shows-calif-gop-how-to-revive-party/ https://calwatchdog.com/2012/12/12/audacity-mich-shows-calif-gop-how-to-revive-party/#comments Wed, 12 Dec 2012 21:13:57 +0000 http://www.calwatchdog.com/?p=35505 Dec. 12, 2012

By John Seiler

When I was growing up in Michigan in the 1960s, the Democratic Party mostly dominated the state. Kennedy, Johnson and Humphrey won the presidential contests. Democrats controlled the Legislature. And labor unions dominated the Democratic Party. Much like in California today.

One difference was that Michigan’s governors were Republicans, but they were liberal Republicans in the Schwarzenegger mold. In particular, Gov. George Romney, Mitt’s father, imposed the first state income tax and more than doubled the state budget in just six years in office. He was a Democrat in all but name.

But in the 2010s, Michigan’s Republican Party is resurgent — and offers lessons to California’s down-and-out GOP. L.A. Times columnist George Skelton and many others have suggested that the CA GOP would do better if it just became a lot more like the California Democratic Party.

The Michigan experience suggests the opposite. Two years ago, the state was a mess after eight years of Democratic Gov. Jennifer Granholm, Canadian born but raised from childhood in California’s Bay Area. Like Schwarzenegger, she also had a career in Hollylwood acting, although hers was brief. She now is teaching at U.C. Berkeley, so California taxpayers are paying for her pay, perks and pension as she teaches impressionable young minds how to misgovern.

Instead of trying to imitate Granholm and other Michigan Democrats, Michigan Republicans did the opposite: They strongly backed major budget reforms and tax cuts. They were rewarded with victory. The party now has large majorities in both houses of the Michigan Legislature. And Rick Synder is the popular, and mostly conservative, governor.

This has occurred even though the state remains mainly Democratic and voted for Barack Obama for president. The last time Michigan backed a Republican for the Oval Office was way back in 1988, the same as California.

A big reason for Republican success is that voters trust them to deal with the state’s financial messes, including effectively bankrupt Detroit. It’s not exactly clear what will happen, but actually dissolving the Motor City is one option.

In a similar fashion, former Mayor Richard Riordan has warned that Los Angeles is headed for bankruptcy.

Taking on the unions

A key part of the Republican resurgence in Michigan is taking on the unions. The Great Lake State was the cradle of the union movement a century ago. But now it has become a liability, with unions impeding reforms — the same as in California.

In the November election, the unions placed on the ballot Proposal 2, called by the unions the “Save Our Jobs” initiative. It would have given unions almost total authority over the state. Critics charged that it even would have protected unionized public-school teachers that were drunk or dealing drugs in the classroom. (That’s close to how California’s unions succeeded in defeating in our Legislature SB 1530, by state Sen. Alex Padilla, D-Los Angeles. It would have made it easier to get rid of teachers that use sex, drugs or violence against students.)

For Michigan’s union-backed Proposal 2, according to Ballotpedia, the unions massively outspent opponents by 22-to-1.

But Proposal 2 lost anyway, 57 percent to 43 percent.

Aggressive GOP

In the past, Republicans would have sighed in relief and gone back to their country clubs. (That’s certainly what Republicans did in California in the mid-1990s during their brief period of ascendance in the state Legislature.)

Not this time. As you may have heard, the Michigan Legislature just passed right-to-work laws, which Snyder signed into law. Payback time.

The reforms guarantee workers the right to join a union — or not join a union. The unions have boiled over with hatred. For them, “freedom” means forcing others to join their union. Here’s a typical response (note: bad language in the YouTube):

But here’s what it really means. An old journalistic comrade of mine, Patrick McGuigan of Oklahoma, described what happened when his state passed similar legislation:

“Congratulations, Michigan.

“In 2001, after decades of debate and a multi-million dollar campaign, voters in Oklahoma approved a ballot question enshrining the right to work in the state Constitution.

“Today, Oklahoma City has the lowest unemployment rate of any large American city. The state has outperformed much of the nation even during the depths of the Great Recession, and is projected to become one of the top states for job creation in the first quarter of 2013. Per capita personal income growth is outpacing the nation.

“Ultimately, the same results will come to Michigan.

“Monday, President Obama said the fight over Michigan’s right-to-work proposal is about politics and ideology, not economics.

“Politics is indeed part of the equation in any major policy shift in any American state — and that was certainly the case in Oklahoma in 2001, and in Indiana last year.

“But in the end, the proof is in the pudding: Oklahoma is evolving from its longstanding status as a poor, bottom-tier state into a steadily growing economy with a bright future — and that’s all about economics. Still, the strongest arguments for right to work are moral, rooted in rights of voluntary association and personal liberty.”

Audacity!

California desperately needs political competition. A one-party state never turns out well, whether in California or Cuba.

If Republicans want to get back in the ring and compete in California, the wrong strategy would be to mirror the Democrats.

Instead, they should look to the feisty Michigan GOP. They should take direct aim at the powerful unions. Make it a David vs. Goliath contest.

For starters, how about a right-to-work initiative on the ballot in 2014? Make sure it’s not a compromised initiative, like Proposition 32 was this year. The California unions ran ads attacking the loopholes for “special interests.”

Instead, get the ballot language from Oklahoma’s initiative, Question 695, which now is Section 23, Article 1A of the Oklahoma Constitution (text below). Make the new initiative about the unions themselves. Make it about union power. Because then the very exercise of that power — spending tens of millions of dollars in attack ads — itself is turned against the unions.

And every Republican in the state should make the right-to-work initiative the center of his campaign. No Democrat would dare buck the unions and back it. So it would be a clear contrast.

That also would help win Latino voters to the GOP. Because even many Democrats, such as former state Sen. Gloria Romero, are sick of how the the teachers’ unions care less about Latino students’ poor performance than about maintaining spiked pensions for teachers who aren’t even teaching any more.

When California state finances fall off a cliff, as they soon will, voters will look for the culprits. And as in Michigan, those culprits will be obvious: The Democratic Party and its union string-pullers.

For California Republicans, the key to victory is the same as when Danton exclaimed to the French Assembly in 1792: “Audacity! Audacity! Always audacity!”

————————

Here’s the language of Article 23, Section 1A of the Oklahoma Constitution:

SECTION XXIII-1A.

Right to work.

A.  As used in this section, “labor organization” means any organization of any kind, or agency or employee representation committee or union, that exists for the purpose, in whole or in part, of dealing with employers concerning wages, rates of pay, hours of work, other conditions of employment, or other forms of compensation.

B.  No person shall be required, as a condition of employment or continuation of employment, to:

1.  Resign or refrain from voluntary membership in, voluntary affiliation with, or voluntary financial support of a labor organization;

2.  Become or remain a member of a labor organization;

3.  Pay any dues, fees, assessments, or other charges of any kind or amount to a labor organization;

4.  Pay to any charity or other third party, in lieu of such payments, any amount equivalent to or pro rata portion of dues, fees, assessments, or other charges regularly required of members of a labor organization; or

5.  Be recommended, approved, referred, or cleared by or through a labor organization.

C.  It shall be unlawful to deduct from the wages, earnings, or compensation of an employee any union dues, fees, assessments, or other charges to be held for, transferred to, or paid over to a labor organization unless the employee has first authorized such deduction.

D.  The provisions of this section shall apply to all employment contracts entered into after the effective date of this section and shall apply to any renewal or extension of any existing contract.

E.  Any person who directly or indirectly violates any provision of this section shall be guilty of a misdemeanor.

Added by State Question No. 695, Legislative Referendum No. 322, adopted at Special Election held on Sept. 25, 2001.

By John Seiler

The problem with public-employee unions getting collective bargaining is that they then sit on both sides of the negotiating table. “This is our opportunity to elect our own bosses,” as union leader Ronda Walen put it in an election two years ago.

If you elect your “own boss,” then it’s not surprising that your “boss” — you — is over-generous with pay and benefits because other people — the taxpayers — pick up the bill.

As public coffers dive down in bankruptcy, people around the country are reacting.

In Wisconsin, Republican Gov. Scott Walker pushed through reforms that limited government-union power. A state judge just struck down the reforms, but there will be appeals.

In California, we have on the November ballot Proposition 32, the “Paycheck Protection Initiative,” which would ban unions heisting money directly from members’ paychecks.

Also, in Michigan, voters will need to reject Proposal 2, the so-called “Protect our Jobs Amendment.” The unions are pushing it because it would, among other things, “Invalidate existing or future state or local laws that limit the ability to join unions and bargain collectively, and to negotiate and enforce collective bargaining agreements, including employees’ financial support of their labor unions. Laws may be enacted to prohibit public employees from striking.”

Basically, it would ban the Michigan Legislature from itself passing something like Walker’s reforms. Initiatives still could do so by effectively repealing Proposal 2, should it pass.

Michigan is a heavily unionized state. But its unions, unlike in most places, largely are in the private sector, especially the United Auto Workers union. The problem is not private-sector unions. If you don’t like the UAW, you don’t have to buy GM, Ford or Chrysler cars. You can buy something else.

But with government unions, you have no choice — except to move. Otherwise, if you stay put and subject yourself to their tyrannies, you become their tax slave.

Of course, the limit eventually is reached when the tax slaves’ backs start breaking from the immense load placed upon thems, which is where we are now, especially on the public pension issue.

The government-worker unions can elect their “own bosses” all they want to, but now, like in “Spartacus” (1960 movie picture above), the tax slaves are revolting.

By John Seiler

The only reason anyone in his right mind lives in California and pays massive high taxes is for the great weather.

But the weather has been terrible. I live half a mile from the beach in Huntington Beach. Unlike Gov. Jerry Brown and other rich folks, I don’t have air conditioning. Here’s what I’m putting up with at 2:30 pm:

And it looks like we’re going to have thunderstorms tonight.

Hot, muggy, stormy. That’s what I left in Michigan! Where the taxes are lower and you can get a decent house in a great neighborhood for $100,000. And Michigan’s unemployment rate, 9 percent, now is much lower than California’s staggering 10.7 percent.

Here’s the weather in my home town at 5:30 Michigan time (2:30 California). It doesn’t start getting cooler there for about an hour, so this is an apt comparison:

For days like this, all state taxes should be canceled. No sales taxes. And income and property taxes should be cut by 1/365th for each day the weather is horrible.

If they don’t, I’m calling U-Haul.

By Brian Calle and Josephine Djuhana

It should come as no surprise that the economic growth rates and prosperity for states with excessive regulations and taxes are much lower when compared to states with fewer regulations and modest taxes. Incentives, such as low taxes and humble regulations, attract business and investment, which in turn spur economic benefits and job growth. It is not Republican or Democrat, liberal or conservative, “it’s just good economics,” as Arthur Laffer, noted economist and economic advisor to former President Ronald Reagan, likes to say.

California lawmakers ought to take note.

Laffer’s new book, “Eureka! How to Fix California,” was commissioned by the Pacific Research Institute, CalWatchDog.com’s parent think tank. The former California resident attempts to knock some sense into the political class in Sacramento, urging policy makers to focus on good economics instead of politics as usual. He wrote the book, he said, to create a blueprint for reforming California— to put the once Golden State back on a path of prosperity.

Laffer looked at various state economic data and found some significant disparities between states that instituted progressive income tax policies versus those that did not—particularly the gap in state growth between states with income taxes and states with none.

Eleven states introduced progressive income taxes within the past fifty years—Connecticut, New Jersey, Ohio, Rhode Island, Pennsylvania, Maine, Illinois, Nebraska, Michigan, Indiana and West Virginia. And of the 11, all states declined as a share of the U.S. economy. Michigan’s economy, for example, was at 5.08 percent of the US economy in 2005; that percentage slid to 2.64 percent in 2010. Like Michigan, Ohio’s wealth diminished as a result of similarly poor economic policies, Laffer argues. “The only things that still look nice in Ohio are the public government buildings,” remarked Dr. Laffer, during a recent stop on his book tour in Orange County.

Laffer also explores migration patters between states with varying tax rates; comparing “right-to-work” states—states where employees retain the right to decide whether or not to join or financially support a union—and “forced unionism” states—where an individual must pay union fees as a condition of employment and has forced union representation.

Right-to-work growth

In right-to-work states, Laffer found more economic growth, while “forced union” states trended the opposite direction.

The 22 right-to-work states experienced a 52.83 percent jump in gross state product; on the other hand, the 28 “union-shop” states had a 41.72 percent gross state product growth, less than the 46.61 percent US average.

“Right-to-work” states also trumped their forced-union counterparts in personal income growth, payroll employment growth, population growth and net domestic in-migration. Part of the reason that the growth gap is so large is that employers have a tendency to move away from forced-union states, not just to scale back wages and salaries, but also to avoid intrusive union rules, lawsuits, work stoppage threats and more.

Laffer’s proposal to reform California’s tax system should come as no surprise for those who have followed his work. He calls for a flat tax for the state of California; one simple tax on net business sales, and another on personal unadjusted income. His proposal does call for keeping “sin taxes” on the books, those taxes on cigarettes, etc., that are more meant to alter behavior than to raise revenues. Those concerned with the role of government in legislating personal decisions might argue that such sin taxes ought to be ousted as well.

California’s current tax system causes much unsettling volatility in state tax income year-to-year by making budgeting at the state level often incoherent. For example, in 2001, income from capital gains taxes (and other onetime revenues) made up a quarter of state tax revenue, according to Laffer.

And California has so many taxes (Laffer stopped counting after he studied 162 of them) that the tax code is overwhelmingly and unnecessarily complex, hence Laffer’s push to simplify it.

Looking at Sacramento today, though, there appears to be no political will in the legislature or with Gov. Jerry Brown to reform the tax code and especially institute a flat tax. Laffer dismisses that, noting that, when Brown ran for president in 1992, Brown proposed a national flat tax, making it part of his platform in the Democratic primary. “He was the first prominent presidential candidate to ever propose a national flat tax,” Laffer said. Optimistically, Laffer argues that, given the right situation, Brown could be amenable.  We shall see. Brown, this time around, seems more beholden to public employee unions than during his previous stint as governor.

“Political partisanship is ruining the politics of our country,” Laffer concludes. Fixing California requires a nonpartisan effort to eliminate excessive taxes and regulations, and to create a business-friendly environment that encourages economic activity. Laffer’s blueprint, in short, challenges California politicians to put partisanship aside and embrace simple economics.

California never has had the worst U.S. unemployment rate. During the Great Depression, we weren’t hit as hard as most other states. Hollywood and the aerospace industry took off. Food exports to other states and the world grew. Famously, the Okies drove out here for work, as depicted in the novel and movie, “The Grapes of Wrath.”

But next month, or the one after, California could have the worst unemployment rate in the country, a dismal achievement that says too much about the anti-business, anti-middle class climate in the state.

In new figures, the Bureau of Labor Statistics of the U.S. Labor Department reported that California unemployment dropped a little in April, to 11.9 percent, from 12 percent in March. The national rate is 9.0 percent. That’s all to the good. But California’s improvement was just 0.1 percentage-point. The state still suffers the second-worst jobless rate, behind Nevada.

Nevada’s unemployment rate dropped to 12.5 percent, still the worst in the country. But the BLS notes, “Nevada experienced the largest over-the-month unemployment rate decrease in April (-0.7 percentage point).”

If that pattern holds next month — Nevada’s unemployment dropping 0.7 percentage point and California’s dropping 0.1 percentage point — then California would be tied for the worst unemployment rate.

And for the year spanning April 2010 to April 2011, Nevada’s unemployment rate dropped 2.4 points, but California’s dropped only 0.5 point.

Michigan, which for most of the Great Recession suffered unemployment above 15 percent — worst in the country — also has improved rapidly. According to the BLS, “Michigan recorded the largest jobless rate decrease from April 2010 (-2.9 percentage points).” Its unemployment rate now is 10.2 percent, and is converging rapidly on the national rate of 9 percent.

Gov. Jerry Brown, the Democratic Legislature and the government unions that control them keep taking a crow bar to the heads of state businesses already bleeding on the tarmac. As business leave the Pyrite State, go bankrupt here, or never come here, we’re mostly missing the national economic recovery.

And when the next recession strikes, which could be soon, in California it’s going to be a real doozy.

May 23, 2011

Michigan has been mired in a Depression a lot longer than California. But late last year its unemployment rate, long the worst in the nation, dropped to third-worst. California moved up to second-worst, behind Nevada.

Michigan and California both have new governors replacing highly unpopular governors who ran up deficits. In Michigan’s case, Republican Gov. Rick Snyder (pictured at right) replaced Democrat Jennifer Granholm. In California’s case, of course, Democratic Gov. Jerry Brown replaced Republican Arnold Schwarzenegger.

Why is Michigan improving, but California isn’t? I think it’s because, during last fall’s election, businesses could look into the future. Snyder had an easy win and Michiganders thought he was serious about his pro-business reforms to create jobs. By contrast, Jerry Brown, who also had an easy win, was seen as a tool of the government-employee unions who paid for much of his campaign, and wouldn’t rock the status quo that has made California the most anti-business, anti-taxpayer state in the country.

After the election, that has been borne out. Brown is pushing a $12 billion tax hike, instead of serious pension and other reform.

Snyder, reports today’s Detroit News, is working to create jobs:

As other Midwest states face shortfalls in their upcoming budgets, Gov. Rick Snyder is charting an unusual path by slashing business taxes as a primary solution.

Snyder’s plan employs deep cuts to education and localities, like that of Wisconsin’s governor, but he’s distinct in proposing a generous tax break for businesses in hopes of spurring economic growth while increasing the tax burden on seniors’ pensions and low-income families.

Well, I don’t like increasing taxes on anybody. Basically he’s ending exemptions for public pensions, including Social Security. He should have just skipped that part.

Michigan’s top income tax rate, 4.25 percent, still will be less than half California’s top rate of 10.55 percent (under the Brown proposal). And it’ll even be less than half the second-highest California rate, 9.55 percent, which hits the middle class and kicks in at around $50,000 income.

Michigan has nothing like California’s jobs-slaughtering AB 32. And with the median price of a home well less than $100,000 even in some of the nicest neighborhoods, Michigan is set to take off.

Of course, the auto industry will tank again if gas prices keep soaring. Detroit remains an rusted-out hulk of a once-great city. And then there are those winters.

But at least Michigan is hitting the accelerator on economic growth. Gov. Brown has thrown California into reverse.

March 7, 2011

Michigan improved from 12.8% the month earlier. And with a new Republican governor, Rick Snyder, focusing on growth, it probably will drop below California’s rate. Snyder’s Web site says:

Government continues to function as it has in the past and taxpayers are feeling the squeeze. They’re not convinced they’re receiving real value for their money. State government remains bloated, inefficient and resistant to meaningful reform. Effective customer service to citizens is the exception, not the rule.

Sound like anything you’re hearing from Jerry Brown? Here’s what I found on Jerry’s Web site:

California is the preeminent leader in environmental and energy technology because early on we adopted policies and incentives that encouraged efficiency and renewable energy. Today, our state has a visionary plan that will not only combat global warming, but will also reduce foreign energy dependence and unhealthy air emissions. It is absolutely imperative that we continue to lead and not back off these policies that will create the jobs of the future.

He’s obsessed with imposing the jobs-killing AB 32 on the state.

And it figures, of course, that California’s Republicans would not be forward-looking jobs creators like Snyder, but AB 32 Luddites like Arnold Schwarzenegger and Meg Whitman.

Maybe I’ll move back to my home state, Michigan.

But I’ll wait until the spring.

Dec. 19, 2010