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NorCalBdyBldr
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In reference to Atlantabiolab's long "expose" on what is supposedly wrong with California, I have to point out that all of the information that was quoted described conditions under REPUBLICAN governor Pete Wilson over ten years ago. In fact the information may be older than that because it often takes a couple of years to compile decent data and then get it published. Pete Wilson is the same Governor that signed California's poorly designed deregulation package into law and that is the very law that precipitated and allowed the abuse of the system to create a completely phony "energy crises" in California by republican dominated corporate energy wholesalers like Enron. That had everything to do with bringing the economy to a standstill here in 2001. But because six new power plants were built here since the 2001 "energy crisis" under Democratic Governor Gray Davis as well as some necessary power distribution improvements were made, it is unlikely that this particular situation will occur again anytime soon.
The report that you cited also refers to things that were happening in the very deep California recession of the early 1990's--a time when California was also hardest hit by Federal Military base closures (most of the bases that were closed in the country were in California by far) under President Bush I and Clinton's first term. This was also a time when California's very large aerospace/defense industry corporations were also hit hard by defense cut backs particularly during Clinton's first term. So a LOT of stuff was going on that was negative all at the same time and California had to swallow all of it at once. And yeah, these things were a VERY BIG DEAL at that time. Now we don't have enough military bases to matter if they closed the rest of them so we have been largely weened off of dependency on Federal money which is a good thing. And most of what survived in Aerospace either merged into less corporations to provide those services or they found other areas that their expertise in electronics and engineering could be applied too. So California is no longer particularly depedent on Aerospace defense either and this is also a good thing because again, it is tied to Federal money. So the poor economy was not a result of a handful of industries that left California in a disgruntled mood--they only helped contribute in a small way to an already bad situation. What is good about what happened in the early 1990's is that it restructured the economy in California and eliminated a dependency on Federal money. Accordingly, that kind of situation will not likely occur again for those reasons. The numbers sound large to you because you are located in a small economy. The truth is that they are not large numbers here particularly and were readily replaced after the State as a whole started to recover economically. During the mid to late 1990's, California was adding far more jobs, and decent paying ones, than the labor pool was adding in terms of potential employees. So eventually unemployment became one of the lowest in the nation until the contrived energy crises by the republicans brought things to a standstill again. In spite of it, there are signs that California may be starting to recover again, unlike the rest of the nation. Southern California is particularly showing early signs of recovery. Northern California usually follows southern California out of recessions for some reason. The Sacramento Area is always the last part of the state to enter a recession and the last part to climb out because of the "lag time" with 25% of employment in the Sacramento area being tied to state government. The truth is that the things that don't kill us often make us stronger. So your prediction of the demise of California is probably even farther from the mark than you can conceive of it being. We survived all of that and will survive the current situation too.
It also should be noted that manufacturing jobs have been disappearing from the U.S. for decades, particularly after NAFTA as accurately predicted by Ross Perot which was also signed into Federal law circa 1992. The truth is that the kind of company that will leave California for reasons of less regulatory costs and less employee costs, will ultimately make the next step and leave their new home at a future date for the incredibly cheaper labor and regulatory costs of Asia or Mexico which is close but cheap. We will never be able to compete with those regions of the world in terms of cheap unkilled and semi skilled labor unless you envision an America that most people work 16 hours per day for one dollar or less each day and no benefits. Maybe this is what the Republican vision is all about for all of us. So the gains that others might see are only temporary and are a part of attrition of those industries out of the U.S. altogether.
It is hardly news that local jurisdictions have a lot of leeway in how they implement things in California as well. For every "horror story" that you cited, I can cite ten positive stories about how local governments wanted industry and business and worked very hard to get them and the State agencies that had jurisdiction pretty much just went along with the local decision. So partly it depends on who wants what. As far as I am concerned, I am glad that NAZI owned Fox News decided to leave. Good riddens and don't come back! Obviously the locals felt the same way or they wouldn't have put forth such a lawsuit and apparently the local agency felt the same or they would not have come up with hundreds of mitigations required. This is a classic attempt by the local citizens and a local jurisdiction teeming up together and running a company out of town that they want to get rid of for any number of reasons. And considering it was FOX, I can imagine a LOT of reasons that they would easily be persona nongrata. It is not just their extremist view of the yellow journalism that they try to pawn off as "fair and balanced"--what a joke! But it has a lot to do with how they operate as a company, having such an outlook. I am sure that they were argumentative and combative and general tried to not comply with every requirment that they could think of. This would not surprise me. And retribution for it would not surprise me either. There is definitely an attitude here that is happy to drive "undesirable industries" out of the state. That is absolutely true. But on the other hand, the state works very hard to get the industries they want and is very successful at it. The truth is that I have firsthand seen litterally thousands of things get permitted here without any significant mitigations required and while it does take some time, if you know what you are doing it is not all THAT bad. Most companies pretty much allow for things to take certain amounts of time and while not desirable, it is a reality and sometimes it can certainly be another lesson in patience too. So there is the other side of the story. And I will bank on my own personal experience since I have been closely involved in many projects statewide going through the environmental review process here and I have seen quite a different picture as well. Yes the system is VERY bureaucratic but there actually is a logic to it and if you can figure out that logic, it is not so bad. But that knowledge comes at a price and that is what private consulting is all about. Having the knowledge and ability to get things done for those that are bewildered but willing to pay for your services. There are plenty of people here that have that specific knowledge. And as Henry Ford I pointed out, knowledge can be purchased "relatively" cheaply at least in terms of the bigger picture so you don't personally have to know it all.
Another problem is that you are citing sources that gave reasons why they left but didn't really cite reasons that companies stay. And no, I don't buy that fear of retribution if I leave answer that was cited--that has got to be the most BS thing I have ever heard. If you leave, then what the hell can this State do to you. And what has it ever done to ANY company that left? Pure fantasy. But this is the stuff that people that are disgruntled because their business didn't make it here say. And frankly, when a business fails or is doing poorly, it has been my observation that the owners are always quick to point out why their lack of success if some else's fault. I have seen it a hundred times.
Another inaccuracy in your report is that state money spent to support "green industries" turned out to be completely false. For example, California now has one of the largest composting industries in the nation. This was started by the Integrated Waste Management Board, Markets Division. They have actually worked very proactively, thinking outside of the box, on this issue in an effort to extend the life of California's landfills by diversion and recycling. This effort has been completely successful and composters are now a large and growing business in California as are recyclers of construction and demolition materials and those that recycle other materials. In fact the competition to get this materials is fairly intense now. As a result of this, the state has essentially met its proposed goal of being able to recycle and divert to other uses fifty percent or more of the material that goes to landfills. Now a lot of fascist republicans will say, who cares, there are plenty of places around the country that can be used for landfills and the environmentalists have lied about us running out of landfill space. The truth is that the waste industry expects it to take an average of ten years to get a new landfill site acquired, permitted and through all the legal challenges before it can be built and operated ANYWHERE IN THE U.S. So considering the considerable legal costs in challenges by NIMBYs--as I said, California hardly holds the corner on that market by any means--there is a defacto limitation on new landfills and those opposed to them are increasing with time and population so as time goes on, the likelihood diminishes. Like it or not, that is a fact. So California actually worked WITH the waste industry to find alternatives. And by diverting or recycling materials that otherwise would have gone to a landfill has accomplished two very important things. One, it has essentially doubled the life expectancy of landfills in this state. That means that industry saves a lot of costs and gets longer use out of their operating as well as newly permitted facilities--and yes, several new very large facilities have been permitted in California very recently and one is pending in San Diego County very soon. The second thing that it caused was an entirely new start up industry that the waste industry and independent operators are scrambling over. There has proven to be a very lucrative market for composted materials in this state. So there is one example.
Another example of green industries that started as state grant money start ups include the wind generating electric industry. California now has in operations 30% of the entire world's wind generated electricity. This causes no air or water pollution and dams no rivers so it does not affect fish runs for commercial or sports fisheries. As a result of the large investment that California has made in this endeavor, the cost of commercial wind generation has been steadily declining because of economies of scale. In other words, if a company has to design and build one prototype wind generator, the cost of one unit is totally uneconomical. But if the manufacturer generates thousands of units, the cost of production per unit becomes incredibly cheaper. This is exactly what happened. So now the cost of wind generated electricity is now almost identical in cost with natural gas fired electric generating plants and more wind units are planned and no longer need government assistance to be viable. The state supplied the seed money for the programs to get them started until they could become viable due to economy of scale. This is also true of the state's support, through the energy commision, of solar energy even for home use. Even now, the state will pay for half of the cost of installing a home solar energy system on your home. That is because there are not enough of them out there to bring the cost down to a competitive level. However, the costs have been consistently coming down as the technology has also been improving and it is anticipated that in less than five more years, this subsidy will no longer be necessary to bring the cost of a system down to a cost competitive level. So sometimes you have to invest the money to see the returns down the road or they will simply not happen at all. This is called having some vision, something that most of the country lacks. Maybe that is why for at least the last fifty years, things start in California and eventually spread to the rest of the country ultimately years after they have happened here first. So there are two more examples of spending on "green industries" that are either successful or on the road to success.
So the statement made in your report about the official from Berkeley, California saying that maybe California can corner the market on the green and sustainable industries may be more visionary but more accurate than you think. You are laughing at it now but she said it over ten years ago. But the truth is that California is actually developing quite a few cutting edge green industries and people and businesses here are catching on to it and it is starting to take off. Often it is visionary people that have ideas that sound "out there" at the time that actually are on to something. All success stories begin with an idea, often one everyone else laughed at or they come up with a new twist on an old idea. If you don't have an idea with a twist, it is not very likely you will succeed as an entrepreneur. That is how it starts. The reason it is this way is that you will never break into a mature market with the same idea that the industries in that market are already doing. They have established their customers and methods that work from experience and it is nearly impossible to succeed under those conditions. Additionally, you should realize that industry often wants regulation because it makes it difficult for competitors to enter the field. That is a fact. So sometime regulations become "protectionist" in nature just like trade tarriffs are used for. And because California does, in fact, attract a LOT of creative people that come up with all kinds of strange ideas and is so diverse, may be another reason that things often happen here first. And believe it or not, there are many companies, particularly ones on the cutting edge that will locate specifically in California because these are just the kinds of creative talent that they are looking for and they have to go to where they can hire for there needs as well. A company in manufacturing that hires mainly unskilled labor can locate practically anywhere in the world with shipping costs being what they are ever since the revolution of containerized freight came into being thirty years ago and certain new twists on that concept that are more recent. The reason they can go for cheap labor is the labor doesn't need any skills and does not have to be very smart or educated. Companies that need highly educated labor for their needs are considerably more restricted in places they can go. But if education is all that you need, you still have many options. If creative talent is what you need, then your choice become drastically reduced. Actually, there was a very interesting paper put out on this very topic by a professor at Carnegie Mellon University in Pennsylvania. He was trying to figure out why some places succeed and others don't no matter what they do. He does conclude that it is creative talent that is the most highly sought after nationwide and it only exists in certain areas under certain conditions, i.e. it tends to congregate in certain areas specifically for the same reasons that attract this type of person. And the truth is that the failure of the dot.com industry is probably the saving grace for northern California. He said it in his book but people here have been saying that the dot.coms are destroying us. This was because they were driving housing prices up too fast and things were becoming very unaffordable so people were finding it difficult to stay. At least now things have stabilized. I also know quite a few former dot.comers that now have opened their own businesses, completely away from anything to do with computers interestingly enough.
Oh, and contrary to your republican logic that innovation only happens in the private sector, that is not true at all. It happens in all sectors of the economy. You just haven't been watching. One of the best examples was the space program. If president Kennedy didn't make a commitment to putting a man on the moon and essentially really getting things off of the ground, a lot of great technology would probably not have happened because unique challenges were introduced by doing something so unusual and also a lot of other stuff spun out of it. This is an acknowledged fact. So government money does in fact seed industries and create innovation. It also allows a lot of things to happen that simply would never occur because the private sector needs to make a profit so they often could not have predicted some of the things that happened (nobody could have) and certainly would not have been able to put forth those kinds of financial commitments to things so unkown or unprofitable initially either. So not all government spending is bad as you seem to think.
I find it interesting that inspite all of the things your report claims and it clearly was predicting the end of California based on those things it could not have been further from the truth. Clearly California did not fall apart as your report seemed to indicate over the last ten years and in fact California had a tremendous economy going again until republican factions screwed things up [again] with the contrived energy crisis in 2001. We had even survived the collapse of the dot.coms even though it seems the rest of the nation didn't do as well on that one.
One final point, as was accurately stated to my partner by Sam Zell in Chicago, the owner of one of the wealthiest real estate companies in the country (and his company owned other things like Southwest Airlines at the time) stated that "in order to make money, you invest in companies that are not only dominant in their market, but are in a market that there is a significant barrier of entry for new companies." He said quite a bit more than this but this is the general trend. The man obviously knows what he is talking about in terms of making money. In other words, businesses don't want competition but want as close to a monopoly as they can get. This allows them to make as much money as possible. So like I alluded to above, sometimes regulations are lobbied into place to protect corporations from others entering their maturing market. They simply do not want others to enter the market or to have competition. This way they can charge more for their product or services because it is no longer a competitive market. This is the goal they all work for. So when people make very broad, unqualified and global statements like "the private sector can do things better for less money," they completely miss the truth about capitalism and regulations and look like idiots in the depth of their ignorance. Capitalism, left unchecked, results ultimately in a monopoly or oligarchy which means there is no longer a free and openly competitive market. But this is what all economists are referring to when they describe the market being the most efficient way to produce and distribute goods and services and I completely agree with this in the case of competitive market situations. The intent of many government regulations is to prevent a monopoly or oligarchy from forming and keeping things competitive. They also cover other mundane things like truth in financial reporting and standards of accounting so companies can be compared to one another for investment purposes and to level the playing field. The other truth about government regulations and how they are or are not enforced has to do with who is who and how much pull they have. Like I said, sometimes regulations are lobbied into place by the industry itself to "regulate itself" but in reality to keep others out. What Sam Zell was referring to is that one of the barriers concerning markets were there is a significant barrier of entry for new companies is regulations. He is one of those entrepreneurs that looks to buy out companies that are exactly in that kind of situation among others.
So the long and the short is that while you see no opportunities in California, I see tremendous opportunities here and so do many of the people that live here. while you think you need a 200,000 dollar income to buy a 3 bedroom house here, you are completely wrong about that. Yes, it is true that a 3 bedroom house will likely cost at least $300,000 or more. However, a bank will lend you a mortgage if you have good credit and earn an annual household income of about 1/4 of that which is around a $75,000 yearly household income. So if you and your wife make $37,500 each per year, you can qualify. And $37,500 is not a terribly high income here. So the truth is that most people CAN afford a home and it is not as unaffordable as you think. It is only unaffordable by your standards. Now in your third world economy, where housing is cheap but doesn't appreciate much and the pay is low and consequently you haven't built up much as a result in your 401K plan so you won't have a very good retirement either, you should realize that you are falling behind in a big way. If you get paid even half ass decently, most couples still CAN afford a house here. And it has the added benefit that California real estate trends upward in values a LOT faster than the national average. This has been generally true since at least the 1970's and probably earlier. There are many people that I know that literally made one million dollars or more on a house that they bought for a tiny fraction of that 15 or 20 years ago and it is now fully paid for and they lived in it for the entire time. And contrary to your theory that environmental laws are just a straight add on to the cost of the house, the truth is that the actually market price is very much determined by supply and demand. There is not a lot of leeway to just "add on" costs and pass straight through--that is pure propoganda that businesses want you to believe so they don't get regulated and keep more money in their own pockets and have less requirements. If there were a lot of charges that you could actually pass straight on through, then you are not properly pricing your product to maximize profits. You always charge what the market will allow you to. Your investers would not be very happy with you if you don't. So the truth is that if the environmental rules and other "costs" weren't there, the demand and market being what it is here, the prices would simply not change. They would be very high anyway because the demand is there. Remember there are about 4 buyers for each available new home and that is a very strong demand. Even in a lousy economy. So it doesn't matter. As long as the demand is there, the prices will continue to increase until it hits equilibrium. And that is inspite of the fact that in my town alone 4,400 hundred single family homes were just approved by the "city" for construction this spring and they are already under construction right now. About 3,000 were approved in the previous two years. And contrary to your belief, locally, the builders could not be building at any faster rate than they are now even if they had more land available to purchase and it was already permitted, etc. because they have admitted that they are building AT CAPACITY. Because of this, the city worked out a deal with Caltrans to take over control of a state highway that runs north-south through town. The city will pay for the improvements because they have money and need to get things done and can't wait for the state. The road is being widened right now and several lanes and a turn lane are being added to this formerly two lane road so it can handle the additional traffic. And contrary to your disdain about all of this, because the community has certain standards, what is being built is very decent and attractive and that fact alone will add more value over time because it makes a community that is nice to live in with good but not terribly expensive housing by California standards but certainly outrageous by yours.
Oh, and incidently, one of the southern states that I lived in was Florida in a small town on the West Coast near the Gulf of Mexico. So I have first hand knowledge of what it is to earn a minimal income relative to California standards even though I was able to afford a modest house down there on that. I used to have the same mistaken belief that if you earn less, so you pay less taxes, and live in an area that has cheap housing and everything else is relatively cheap that maybe somehow you are ahead. I have long come to the realization that that is completely wrong. It is exactly the other way around. But that was a period of my life where I was thinking negatively and that was the result. Why do you think that people, and yes businesses too, flood into high cost places like New York City and California? Because there is money there to be made. But it is also very competitive so you have to be pretty adept or you will get squeezed out. The difference though is that large amounts of money CAN be made in these types of places. The problem with the south is that much is locked up in the old boy network and unless you are inside, you are definitely OUT. For almost everyone, there are not great opportunities to make a lot of money there. So the more "visionary" and optimistic and energetic people leave and flock to places like NYC or California for that among a whole lot of other reasons. Remember, as long as you sing the doom and gloom and have your very negative outlook, you will probably not go anywhere exciting in life. It is like Henry Ford said, "if you think you can't, you are probably right."
So all of you that think California is a joke, well keep on thinking it. You probably would not do well here anyway with that kind of thinking. We have plenty of people moving to this state every day and the economy will recover here eventually and we'll survive this too. And frankly, I think the quality of life here is quite good inspite of the current situation. Not only do we have the mountains and the coast but with our climate you can grow almost anything. Locally, the farms produce everything from avocados, to oranges, to olives, to nuts, fruits and vegetables of all kinds. There are also a lot of wineries not far away. There are also dairy farms and cattle ranches so the farmers market is fun to go to because it is all locally produced and very fresh and only costs a fraction of what you'd pay for something not nearly as good or flavorful in the store--oh yeah, and our farmers' market food prices are MUCH cheaper than you pay anywhere in the country. Oh, and because of our long growing season, the farmers' market is open from May until the end of October. And if you want culture, you can always drive a couple of hours down to San Francisco. There are lots of great restaurants and lots to do there as well. And while all you guys think California is a joke, I'll take the sunny days we get through the winter "rainy season" that are 65 degrees as well. And yeah, we also get cold weather that is wet and in the 40's too. But believe it or not, I enjoy that too as it is a change and make everything so green in winter. And the fact that it is clear skies and sunny here from about April 1 through the end of November with typically zero to two days in between that even get thundershowers, hey, I like sunny weather with low humidity and cool nights and warm to hot days for months on end. I like the fact that I can hike among old growth redwoods on a weekend day trip. Or that I can drive to the Sierras with peaks almost 11,000 feet high in a couple of hours and it isn't that far from the Napa Valley wine country. And what other state has temporate rainforests all the way to deserts and everything in between? We have the best and most productive agricultural land in the nation. And frankly, I think it is great that you can drive with the top down along California 1 weaving around the rocky cliffs that plunge hundreds of feet down into the Pacific or go down to the beaches with redwoods on the mountains in the backdrop and rocky islands off shore and watch the Pacific Breakers slam and crash into the rocky coast or watch the surfers riding waves along the sandy stretches between the cliffs. Or take in the natural beauty watching the sea lions, harbor seals, gulls and California Grey Whales migrating offshore or see a herd of elk in the Coast Ranges. Or that I can go over to my relatives in Santa Rosa in Sonoma County for our annual big family get together summer barbecue on the fourth of July complete with fireworks. Or go out on a fishing boat out of Bodega Bay onto the Pacific. So I am glad you all think California's a joke. Because I happen to LOVE it here and can't imagine having to live anywhere else.
The report that you cited also refers to things that were happening in the very deep California recession of the early 1990's--a time when California was also hardest hit by Federal Military base closures (most of the bases that were closed in the country were in California by far) under President Bush I and Clinton's first term. This was also a time when California's very large aerospace/defense industry corporations were also hit hard by defense cut backs particularly during Clinton's first term. So a LOT of stuff was going on that was negative all at the same time and California had to swallow all of it at once. And yeah, these things were a VERY BIG DEAL at that time. Now we don't have enough military bases to matter if they closed the rest of them so we have been largely weened off of dependency on Federal money which is a good thing. And most of what survived in Aerospace either merged into less corporations to provide those services or they found other areas that their expertise in electronics and engineering could be applied too. So California is no longer particularly depedent on Aerospace defense either and this is also a good thing because again, it is tied to Federal money. So the poor economy was not a result of a handful of industries that left California in a disgruntled mood--they only helped contribute in a small way to an already bad situation. What is good about what happened in the early 1990's is that it restructured the economy in California and eliminated a dependency on Federal money. Accordingly, that kind of situation will not likely occur again for those reasons. The numbers sound large to you because you are located in a small economy. The truth is that they are not large numbers here particularly and were readily replaced after the State as a whole started to recover economically. During the mid to late 1990's, California was adding far more jobs, and decent paying ones, than the labor pool was adding in terms of potential employees. So eventually unemployment became one of the lowest in the nation until the contrived energy crises by the republicans brought things to a standstill again. In spite of it, there are signs that California may be starting to recover again, unlike the rest of the nation. Southern California is particularly showing early signs of recovery. Northern California usually follows southern California out of recessions for some reason. The Sacramento Area is always the last part of the state to enter a recession and the last part to climb out because of the "lag time" with 25% of employment in the Sacramento area being tied to state government. The truth is that the things that don't kill us often make us stronger. So your prediction of the demise of California is probably even farther from the mark than you can conceive of it being. We survived all of that and will survive the current situation too.
It also should be noted that manufacturing jobs have been disappearing from the U.S. for decades, particularly after NAFTA as accurately predicted by Ross Perot which was also signed into Federal law circa 1992. The truth is that the kind of company that will leave California for reasons of less regulatory costs and less employee costs, will ultimately make the next step and leave their new home at a future date for the incredibly cheaper labor and regulatory costs of Asia or Mexico which is close but cheap. We will never be able to compete with those regions of the world in terms of cheap unkilled and semi skilled labor unless you envision an America that most people work 16 hours per day for one dollar or less each day and no benefits. Maybe this is what the Republican vision is all about for all of us. So the gains that others might see are only temporary and are a part of attrition of those industries out of the U.S. altogether.
It is hardly news that local jurisdictions have a lot of leeway in how they implement things in California as well. For every "horror story" that you cited, I can cite ten positive stories about how local governments wanted industry and business and worked very hard to get them and the State agencies that had jurisdiction pretty much just went along with the local decision. So partly it depends on who wants what. As far as I am concerned, I am glad that NAZI owned Fox News decided to leave. Good riddens and don't come back! Obviously the locals felt the same way or they wouldn't have put forth such a lawsuit and apparently the local agency felt the same or they would not have come up with hundreds of mitigations required. This is a classic attempt by the local citizens and a local jurisdiction teeming up together and running a company out of town that they want to get rid of for any number of reasons. And considering it was FOX, I can imagine a LOT of reasons that they would easily be persona nongrata. It is not just their extremist view of the yellow journalism that they try to pawn off as "fair and balanced"--what a joke! But it has a lot to do with how they operate as a company, having such an outlook. I am sure that they were argumentative and combative and general tried to not comply with every requirment that they could think of. This would not surprise me. And retribution for it would not surprise me either. There is definitely an attitude here that is happy to drive "undesirable industries" out of the state. That is absolutely true. But on the other hand, the state works very hard to get the industries they want and is very successful at it. The truth is that I have firsthand seen litterally thousands of things get permitted here without any significant mitigations required and while it does take some time, if you know what you are doing it is not all THAT bad. Most companies pretty much allow for things to take certain amounts of time and while not desirable, it is a reality and sometimes it can certainly be another lesson in patience too. So there is the other side of the story. And I will bank on my own personal experience since I have been closely involved in many projects statewide going through the environmental review process here and I have seen quite a different picture as well. Yes the system is VERY bureaucratic but there actually is a logic to it and if you can figure out that logic, it is not so bad. But that knowledge comes at a price and that is what private consulting is all about. Having the knowledge and ability to get things done for those that are bewildered but willing to pay for your services. There are plenty of people here that have that specific knowledge. And as Henry Ford I pointed out, knowledge can be purchased "relatively" cheaply at least in terms of the bigger picture so you don't personally have to know it all.
Another problem is that you are citing sources that gave reasons why they left but didn't really cite reasons that companies stay. And no, I don't buy that fear of retribution if I leave answer that was cited--that has got to be the most BS thing I have ever heard. If you leave, then what the hell can this State do to you. And what has it ever done to ANY company that left? Pure fantasy. But this is the stuff that people that are disgruntled because their business didn't make it here say. And frankly, when a business fails or is doing poorly, it has been my observation that the owners are always quick to point out why their lack of success if some else's fault. I have seen it a hundred times.
Another inaccuracy in your report is that state money spent to support "green industries" turned out to be completely false. For example, California now has one of the largest composting industries in the nation. This was started by the Integrated Waste Management Board, Markets Division. They have actually worked very proactively, thinking outside of the box, on this issue in an effort to extend the life of California's landfills by diversion and recycling. This effort has been completely successful and composters are now a large and growing business in California as are recyclers of construction and demolition materials and those that recycle other materials. In fact the competition to get this materials is fairly intense now. As a result of this, the state has essentially met its proposed goal of being able to recycle and divert to other uses fifty percent or more of the material that goes to landfills. Now a lot of fascist republicans will say, who cares, there are plenty of places around the country that can be used for landfills and the environmentalists have lied about us running out of landfill space. The truth is that the waste industry expects it to take an average of ten years to get a new landfill site acquired, permitted and through all the legal challenges before it can be built and operated ANYWHERE IN THE U.S. So considering the considerable legal costs in challenges by NIMBYs--as I said, California hardly holds the corner on that market by any means--there is a defacto limitation on new landfills and those opposed to them are increasing with time and population so as time goes on, the likelihood diminishes. Like it or not, that is a fact. So California actually worked WITH the waste industry to find alternatives. And by diverting or recycling materials that otherwise would have gone to a landfill has accomplished two very important things. One, it has essentially doubled the life expectancy of landfills in this state. That means that industry saves a lot of costs and gets longer use out of their operating as well as newly permitted facilities--and yes, several new very large facilities have been permitted in California very recently and one is pending in San Diego County very soon. The second thing that it caused was an entirely new start up industry that the waste industry and independent operators are scrambling over. There has proven to be a very lucrative market for composted materials in this state. So there is one example.
Another example of green industries that started as state grant money start ups include the wind generating electric industry. California now has in operations 30% of the entire world's wind generated electricity. This causes no air or water pollution and dams no rivers so it does not affect fish runs for commercial or sports fisheries. As a result of the large investment that California has made in this endeavor, the cost of commercial wind generation has been steadily declining because of economies of scale. In other words, if a company has to design and build one prototype wind generator, the cost of one unit is totally uneconomical. But if the manufacturer generates thousands of units, the cost of production per unit becomes incredibly cheaper. This is exactly what happened. So now the cost of wind generated electricity is now almost identical in cost with natural gas fired electric generating plants and more wind units are planned and no longer need government assistance to be viable. The state supplied the seed money for the programs to get them started until they could become viable due to economy of scale. This is also true of the state's support, through the energy commision, of solar energy even for home use. Even now, the state will pay for half of the cost of installing a home solar energy system on your home. That is because there are not enough of them out there to bring the cost down to a competitive level. However, the costs have been consistently coming down as the technology has also been improving and it is anticipated that in less than five more years, this subsidy will no longer be necessary to bring the cost of a system down to a cost competitive level. So sometimes you have to invest the money to see the returns down the road or they will simply not happen at all. This is called having some vision, something that most of the country lacks. Maybe that is why for at least the last fifty years, things start in California and eventually spread to the rest of the country ultimately years after they have happened here first. So there are two more examples of spending on "green industries" that are either successful or on the road to success.
So the statement made in your report about the official from Berkeley, California saying that maybe California can corner the market on the green and sustainable industries may be more visionary but more accurate than you think. You are laughing at it now but she said it over ten years ago. But the truth is that California is actually developing quite a few cutting edge green industries and people and businesses here are catching on to it and it is starting to take off. Often it is visionary people that have ideas that sound "out there" at the time that actually are on to something. All success stories begin with an idea, often one everyone else laughed at or they come up with a new twist on an old idea. If you don't have an idea with a twist, it is not very likely you will succeed as an entrepreneur. That is how it starts. The reason it is this way is that you will never break into a mature market with the same idea that the industries in that market are already doing. They have established their customers and methods that work from experience and it is nearly impossible to succeed under those conditions. Additionally, you should realize that industry often wants regulation because it makes it difficult for competitors to enter the field. That is a fact. So sometime regulations become "protectionist" in nature just like trade tarriffs are used for. And because California does, in fact, attract a LOT of creative people that come up with all kinds of strange ideas and is so diverse, may be another reason that things often happen here first. And believe it or not, there are many companies, particularly ones on the cutting edge that will locate specifically in California because these are just the kinds of creative talent that they are looking for and they have to go to where they can hire for there needs as well. A company in manufacturing that hires mainly unskilled labor can locate practically anywhere in the world with shipping costs being what they are ever since the revolution of containerized freight came into being thirty years ago and certain new twists on that concept that are more recent. The reason they can go for cheap labor is the labor doesn't need any skills and does not have to be very smart or educated. Companies that need highly educated labor for their needs are considerably more restricted in places they can go. But if education is all that you need, you still have many options. If creative talent is what you need, then your choice become drastically reduced. Actually, there was a very interesting paper put out on this very topic by a professor at Carnegie Mellon University in Pennsylvania. He was trying to figure out why some places succeed and others don't no matter what they do. He does conclude that it is creative talent that is the most highly sought after nationwide and it only exists in certain areas under certain conditions, i.e. it tends to congregate in certain areas specifically for the same reasons that attract this type of person. And the truth is that the failure of the dot.com industry is probably the saving grace for northern California. He said it in his book but people here have been saying that the dot.coms are destroying us. This was because they were driving housing prices up too fast and things were becoming very unaffordable so people were finding it difficult to stay. At least now things have stabilized. I also know quite a few former dot.comers that now have opened their own businesses, completely away from anything to do with computers interestingly enough.
Oh, and contrary to your republican logic that innovation only happens in the private sector, that is not true at all. It happens in all sectors of the economy. You just haven't been watching. One of the best examples was the space program. If president Kennedy didn't make a commitment to putting a man on the moon and essentially really getting things off of the ground, a lot of great technology would probably not have happened because unique challenges were introduced by doing something so unusual and also a lot of other stuff spun out of it. This is an acknowledged fact. So government money does in fact seed industries and create innovation. It also allows a lot of things to happen that simply would never occur because the private sector needs to make a profit so they often could not have predicted some of the things that happened (nobody could have) and certainly would not have been able to put forth those kinds of financial commitments to things so unkown or unprofitable initially either. So not all government spending is bad as you seem to think.
I find it interesting that inspite all of the things your report claims and it clearly was predicting the end of California based on those things it could not have been further from the truth. Clearly California did not fall apart as your report seemed to indicate over the last ten years and in fact California had a tremendous economy going again until republican factions screwed things up [again] with the contrived energy crisis in 2001. We had even survived the collapse of the dot.coms even though it seems the rest of the nation didn't do as well on that one.
One final point, as was accurately stated to my partner by Sam Zell in Chicago, the owner of one of the wealthiest real estate companies in the country (and his company owned other things like Southwest Airlines at the time) stated that "in order to make money, you invest in companies that are not only dominant in their market, but are in a market that there is a significant barrier of entry for new companies." He said quite a bit more than this but this is the general trend. The man obviously knows what he is talking about in terms of making money. In other words, businesses don't want competition but want as close to a monopoly as they can get. This allows them to make as much money as possible. So like I alluded to above, sometimes regulations are lobbied into place to protect corporations from others entering their maturing market. They simply do not want others to enter the market or to have competition. This way they can charge more for their product or services because it is no longer a competitive market. This is the goal they all work for. So when people make very broad, unqualified and global statements like "the private sector can do things better for less money," they completely miss the truth about capitalism and regulations and look like idiots in the depth of their ignorance. Capitalism, left unchecked, results ultimately in a monopoly or oligarchy which means there is no longer a free and openly competitive market. But this is what all economists are referring to when they describe the market being the most efficient way to produce and distribute goods and services and I completely agree with this in the case of competitive market situations. The intent of many government regulations is to prevent a monopoly or oligarchy from forming and keeping things competitive. They also cover other mundane things like truth in financial reporting and standards of accounting so companies can be compared to one another for investment purposes and to level the playing field. The other truth about government regulations and how they are or are not enforced has to do with who is who and how much pull they have. Like I said, sometimes regulations are lobbied into place by the industry itself to "regulate itself" but in reality to keep others out. What Sam Zell was referring to is that one of the barriers concerning markets were there is a significant barrier of entry for new companies is regulations. He is one of those entrepreneurs that looks to buy out companies that are exactly in that kind of situation among others.
So the long and the short is that while you see no opportunities in California, I see tremendous opportunities here and so do many of the people that live here. while you think you need a 200,000 dollar income to buy a 3 bedroom house here, you are completely wrong about that. Yes, it is true that a 3 bedroom house will likely cost at least $300,000 or more. However, a bank will lend you a mortgage if you have good credit and earn an annual household income of about 1/4 of that which is around a $75,000 yearly household income. So if you and your wife make $37,500 each per year, you can qualify. And $37,500 is not a terribly high income here. So the truth is that most people CAN afford a home and it is not as unaffordable as you think. It is only unaffordable by your standards. Now in your third world economy, where housing is cheap but doesn't appreciate much and the pay is low and consequently you haven't built up much as a result in your 401K plan so you won't have a very good retirement either, you should realize that you are falling behind in a big way. If you get paid even half ass decently, most couples still CAN afford a house here. And it has the added benefit that California real estate trends upward in values a LOT faster than the national average. This has been generally true since at least the 1970's and probably earlier. There are many people that I know that literally made one million dollars or more on a house that they bought for a tiny fraction of that 15 or 20 years ago and it is now fully paid for and they lived in it for the entire time. And contrary to your theory that environmental laws are just a straight add on to the cost of the house, the truth is that the actually market price is very much determined by supply and demand. There is not a lot of leeway to just "add on" costs and pass straight through--that is pure propoganda that businesses want you to believe so they don't get regulated and keep more money in their own pockets and have less requirements. If there were a lot of charges that you could actually pass straight on through, then you are not properly pricing your product to maximize profits. You always charge what the market will allow you to. Your investers would not be very happy with you if you don't. So the truth is that if the environmental rules and other "costs" weren't there, the demand and market being what it is here, the prices would simply not change. They would be very high anyway because the demand is there. Remember there are about 4 buyers for each available new home and that is a very strong demand. Even in a lousy economy. So it doesn't matter. As long as the demand is there, the prices will continue to increase until it hits equilibrium. And that is inspite of the fact that in my town alone 4,400 hundred single family homes were just approved by the "city" for construction this spring and they are already under construction right now. About 3,000 were approved in the previous two years. And contrary to your belief, locally, the builders could not be building at any faster rate than they are now even if they had more land available to purchase and it was already permitted, etc. because they have admitted that they are building AT CAPACITY. Because of this, the city worked out a deal with Caltrans to take over control of a state highway that runs north-south through town. The city will pay for the improvements because they have money and need to get things done and can't wait for the state. The road is being widened right now and several lanes and a turn lane are being added to this formerly two lane road so it can handle the additional traffic. And contrary to your disdain about all of this, because the community has certain standards, what is being built is very decent and attractive and that fact alone will add more value over time because it makes a community that is nice to live in with good but not terribly expensive housing by California standards but certainly outrageous by yours.
Oh, and incidently, one of the southern states that I lived in was Florida in a small town on the West Coast near the Gulf of Mexico. So I have first hand knowledge of what it is to earn a minimal income relative to California standards even though I was able to afford a modest house down there on that. I used to have the same mistaken belief that if you earn less, so you pay less taxes, and live in an area that has cheap housing and everything else is relatively cheap that maybe somehow you are ahead. I have long come to the realization that that is completely wrong. It is exactly the other way around. But that was a period of my life where I was thinking negatively and that was the result. Why do you think that people, and yes businesses too, flood into high cost places like New York City and California? Because there is money there to be made. But it is also very competitive so you have to be pretty adept or you will get squeezed out. The difference though is that large amounts of money CAN be made in these types of places. The problem with the south is that much is locked up in the old boy network and unless you are inside, you are definitely OUT. For almost everyone, there are not great opportunities to make a lot of money there. So the more "visionary" and optimistic and energetic people leave and flock to places like NYC or California for that among a whole lot of other reasons. Remember, as long as you sing the doom and gloom and have your very negative outlook, you will probably not go anywhere exciting in life. It is like Henry Ford said, "if you think you can't, you are probably right."
So all of you that think California is a joke, well keep on thinking it. You probably would not do well here anyway with that kind of thinking. We have plenty of people moving to this state every day and the economy will recover here eventually and we'll survive this too. And frankly, I think the quality of life here is quite good inspite of the current situation. Not only do we have the mountains and the coast but with our climate you can grow almost anything. Locally, the farms produce everything from avocados, to oranges, to olives, to nuts, fruits and vegetables of all kinds. There are also a lot of wineries not far away. There are also dairy farms and cattle ranches so the farmers market is fun to go to because it is all locally produced and very fresh and only costs a fraction of what you'd pay for something not nearly as good or flavorful in the store--oh yeah, and our farmers' market food prices are MUCH cheaper than you pay anywhere in the country. Oh, and because of our long growing season, the farmers' market is open from May until the end of October. And if you want culture, you can always drive a couple of hours down to San Francisco. There are lots of great restaurants and lots to do there as well. And while all you guys think California is a joke, I'll take the sunny days we get through the winter "rainy season" that are 65 degrees as well. And yeah, we also get cold weather that is wet and in the 40's too. But believe it or not, I enjoy that too as it is a change and make everything so green in winter. And the fact that it is clear skies and sunny here from about April 1 through the end of November with typically zero to two days in between that even get thundershowers, hey, I like sunny weather with low humidity and cool nights and warm to hot days for months on end. I like the fact that I can hike among old growth redwoods on a weekend day trip. Or that I can drive to the Sierras with peaks almost 11,000 feet high in a couple of hours and it isn't that far from the Napa Valley wine country. And what other state has temporate rainforests all the way to deserts and everything in between? We have the best and most productive agricultural land in the nation. And frankly, I think it is great that you can drive with the top down along California 1 weaving around the rocky cliffs that plunge hundreds of feet down into the Pacific or go down to the beaches with redwoods on the mountains in the backdrop and rocky islands off shore and watch the Pacific Breakers slam and crash into the rocky coast or watch the surfers riding waves along the sandy stretches between the cliffs. Or take in the natural beauty watching the sea lions, harbor seals, gulls and California Grey Whales migrating offshore or see a herd of elk in the Coast Ranges. Or that I can go over to my relatives in Santa Rosa in Sonoma County for our annual big family get together summer barbecue on the fourth of July complete with fireworks. Or go out on a fishing boat out of Bodega Bay onto the Pacific. So I am glad you all think California's a joke. Because I happen to LOVE it here and can't imagine having to live anywhere else.
