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Hullabaloo


Wednesday, February 13, 2013

 
Responding to Rick Perry

Texas Governor Rick Perry has undertaken an initiative to steal away jobs from California. First came an a small ad buy in California, followed by a personal tour of California in which he met with a number of business owners around the state encouraging them to move to Texas. Californians aren't terribly worried about it, though:

California officials, however, aren't that concerned. Business relocations account for only .03% of annual job losses and the state is doing well economically, according to the Governor's Office of Business and Economic Development.

"I can understand why Rick Perry is interested in California. We were the national jobs leader for most of the last year with 257,000 new private sector jobs," said Kish Rajan, the office's director. "Real job creation comes from California's history as a national leader in start-ups and the expansion of homegrown businesses."
Jerry Brown himself was even less kind:

"It's not a serious story, guys," the Democratic governor told reporters at a business event here. "It's not a burp. It's barely a fart."

The ad buy Perry announced Monday is relatively small, at about $24,000, but it gained widespread attention in the media. Brown called the amount "the smallest entry into the media market of California."

"If they want to get in the game, let them spend $25 million on radio and television," Brown said. "Then I'll take them seriously."
Still, some communities may be directly affected by Perry's overtures. One of those is the city of Oxnard, where Rick Perry is attempting to steal away the planned $20 million expansion of Haas Automation, a machining company located in Oxnard. Perry met with owner Gene Haas yesterday, and yours truly was on hand to protest. The Ventura County Democratic Party (of which I'm the Chair) also issued the following statement:

Ventura County Democrats hope that Texas Governor Rick Perry will learn from California’s recent success how he can improve his state’s dismal record on poverty, wages, education standards and social services. The Golden State has the most Fortune 500 companies of any in the nation, with over 100,000 new businesses started every year. We’re confident that despite Rick Perry’s effort to steal away the fruits of California’s labor to prop up the hollow Texan economy, California businesses will see past his empty promises and continue to enjoy California’s warm, prosperous and demand-driven economic climate.
It's also worth noting that Gene Haas went to prison for tax evasion and witness intimidation. There's little doubt that Rick Perry targeted him as someone particularly sensitive to tax issues.

But as Greg LeRoy persuasively argues in his excellent book The Great American Jobs Scam, most companies don't actually make their location and expansion decisions based on tax and incentive policies. They do so based on a variety of other factors, including education, cost of living, quality of life, and many others. They simply pretend to make decisions on that basis in order to force competing communities into concessions that ultimately won't significantly affect the final decision.

It's more than likely that Gene Haas is playing the same game: using the attention to play Texas and California off one another to extract concessions that won't ultimately affect his final decision.

Regardless, the proper way to respond to the predations of red state governors like Rick Perry is to point out the egregious failures in their own states. Failures like high poverty rates, low wages and inadequate education standards. There is no reason for blue states to be on the defensive when the likes of Rick Perry come calling. Blue states tend to be the leaders in innovation and high-wage job growth, while red states hollow out their economies with low wages and low quality of life. No matter where they live, either to defend their own states or to change them, progressives shouldn't shy away from saying so.


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