I have never been this worried about the state of our economy, and I’m not alone. Many of the business leaders I meet feel exactly the same.
We have a deep national recession, the worst since the Great Depression, an enormous federal stimulus program that has done little to help generate jobs and a growing federal budget deficit that will burden our children and grandchildren with debt.
Our influence over federal policies may be limited to speaking out, lobbying and voting wisely — and we should do those things. But as business leaders we simply must take more responsibility for what is happening in our own backyard.
Our state, once the Golden State, is among the nation’s worst: a jobless rate topping 12 percent (even higher in some Central Valley counties), a budget deficit of $19 billion and a polarized and ineffective legislative process.
State spending is simply out of control. It grew 30 percent between 2003 and 2007, compared with a 5 percent population increase. To support that growth, the state’s tax burden has grown to the sixth-highest in the nation.
Yet we still overspend, passing deficit budgets and mortgaging our future. We know all government spending — even that financed by borrowing — must eventually be paid with taxes.
The result, as futurist Joel Kotkin pointed out in a 2009 Forbes article, is that “California’s economy — once wondrously diverse with aerospace, high-tech, agriculture and international trade — has run aground. Burdened by taxes and ever-growing regulation, the state is routinely rated by executives as having among the worst business climates in the nation. No surprise, then, that California’s jobs engine has sputtered.”
So, how do we begin to turn around this sorry state of affairs?
I find most business executives agree on what we’d like to see happen: We want to see government run more like we run our businesses. It’s not rocket science.
We want state government to take a hard look at income and expenses, cutting to the bone as many of us have had to do during this downturn. I’m not talking wholesale, mindless cuts. I’m talking careful examination of what is absolutely essential and what can be deferred or done less expensively.
We want to see government run more like we run our businesses.
We want state government to scrutinize state mandates and regulations to see which ones are unnecessary, ineffective or duplicative, and get rid of those that are. Any that limit economic growth should be candidates for the dustbin. Those absolutely necessary for the public good should be structured to minimize economic impact.
We want state government to look for ways to stimulate economic growth. For example, every single government agency should be required to develop its own specific plan for creating economic growth as part of its budget request. Over time, constant attention to economic growth would begin to permeate state government.
Businesspeople solve problems. They have to in order to survive. And in order to survive and revive California’s declining economy, we all need to make our voices heard. To its credit, the California Chamber of Commerce is leading the effort with its “Renew California: CalChamber Economic Recovery and Job Creation Action Plan.”
I urge you to read the plan on the chamber’s website at calchamber.org, and find a way to contribute your own ideas and energy. Unless we in the business community show leadership at this crucial point in our state’s history, I fear we will never again be the Golden State.
With just over a year until the midterm elections, California’s next gubernatorial race is starting to take shape.
Gov. Jerry Brown’s tax measure would raise sales taxes by one-quarter of a percent for four years and increase taxes on incomes of $250,000 or higher by 1 to 3 percentage points for seven years.