This
Month in
History
tasked with restoring a Republican majority in the Senate, says California is “a vibrant and vital place that has always produced leaders, but we need a reset of our political psyche and pri- orities, because we are losing it.” Among the state’s manifold woes: MANUFACTURING: California is shedding manufacturing jobs faster than any other state thanks to regula- tion and high taxes, according to a study by the Milken Institute, which found that the state has shed nearly 80,000 manufacturing jobs over the past fi ve years. AEROSPACE:
Cali-
fornia’s once-thriving aerospace
industry
has been all but deci- mated in anticipation of a slowdown in Pen- tagon spending, the lat- est example being aerospace
giant Northrop Grumman Corp.’s announcement that it was cutting 500 jobs and moving its corporate head- quarters from California to Virginia. ENTERTAINMENT: Despite some
tax incentives to stay, Hollywood fi lmmakers are leaving California in droves because they’re forced to use high-priced union labor and because it’s cheaper to fi lm elsewhere. This past year, North Carolina reports that 29 fi lm productions have set up in that state thanks to lower taxes and a gen- erous 25 percent production credit. DEFICIT AND SPENDING: Cali-
fornia, which has the largest budget defi cit of any state, continues to fund projects such as the high-speed rail line from Los Angeles to San Fran- cisco, whose cost, a study revealed in November, could triple to $98 billion. Many California Republicans are say- ing the project, which won’t be fi n- ished until 2033, is a waste the state
COMING AND GOING While California is moving forward with its expensive high-speed rail system (artist’s rendering, above), businesses such as Northrop Grumman (San Pedro location, left) are moving out.
To be sure, the bubble meltdown exacerbated California’s diffi culties. In October 2011, the Small Business and Entrepreneurship Council said California had the greatest recession- related losses in the nation — some 34,166 enterprises simply vanished. But Joe Vranich, a business relocation
50 YEARS AGO 1962
25 YEARS AGO
President Kennedy bans all U.S. imports and exports to Cuba.
simply can’t aff ord, but Gov. Brown and others continue their support. BUSINESS CLIMATE: Chief Execu-
tive magazine found California to be the worst state in the nation for busi- ness because of stifl ing regulations and costs, and the state ranks No. 49 for “business tax climate,” according to the Tax Foundation, a nonpartisan educational organization.
1987
First supernova (SN 1987A) visible to the naked eye since 1604.
expert from Irvine, Calif., says Califor- nians are fundamentally indiff erent to promoting a positive climate for business. “I’m pessimistic about Cali- fornia’s future because the state has a radicalized electorate that doesn’t understand the challenges involved in running a business, or they don’t care,” says Vranich. But Tom Campbell, a former fi ve-
term Republican U.S. congressman from California who served as Califor- nia’s director of fi nance in 2004 and 2005, thinks the “top two” primary system approved by voters last year could lead to positive change. The measure — Proposition 14 —
changed the system to allow candi- dates from all parties to compete in a primary, after which the top two vote- getters compete in a general election even if they are from the same party. The measure was intended to loosen the stranglehold the state’s most par- tisan voters have on primary elections. “‘Top two’ could usher in a new
kind of candidate with less extreme views,” Campbell tells Newsmax. “I’m hopeful this could be a positive for business and for the state, which has become a place where politicians sim- ply can’t get anything done.”
Go West? Not Anymore P
art of California’s problem is that it has lost its luster as a mecca for opportunity. In fact, the U.S. Census reports the fraction of Californians who moved there
from out of state is now the lowest it’s been in a century — down to only about 20 percent. Experts blame the state’s troubled economy, including skyrocketing housing costs and a tough business climate. “California was the frontier, the place people came to with a pipe dream,”
laments William Frey, a demographer at the Brookings Institution. Now, he says, those moving in search of a new lease on life are more likely to go to Nevada, Idaho, or Arizona. Housing costs and taxes are lower there. And there’s an exodus of native Californians as well. “Many of the highly educated people are leaving,” says business-relocation expert Joe Vranich, “and that does not bode well for California’s future.”
FEBRUARY 2012 | NEWSMAX 13
KENNEDY/GETTY IMAGES / SUPERNOVA/SSPL/GETTY IMAGES / TRAIN/©HIGH SPEED RAIL AUTHORITY/
ZUMARESS.COM / GRUMMAN/©RINGO CHIU/
ZUMAPRESS.COM
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