TIME FOR GOP TO CHANGE BUSINESS CLIMATE RHETORIC

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, DECEMBER 3, 2010, OR THEREAFTER

BY THOMAS D. ELIAS
“TIME FOR GOP TO CHANGE BUSINESS CLIMATE RHETORIC”

For most of this century, Republicans running for high office in California have proclaimed that only they can stem the tide of jobs and businesses leaving California, a phenomenon they blame on the Democrats they often say have controlled state government for decades.

The theme has only worked once, for outgoing Gov. Arnold Schwarzenegger when he seemed to spend more time in the parking lots of small businesses that anywhere else as he ran in the 2003 recall election.

But GOP claims about the allegedly rotten business climate in California ran aground this fall, when candidates Meg Whitman and Carly Fiorina often seemed to imitate Schwarzenegger, but could not achieve anything like the electoral results he did.

Which means it’s high time for Republicans to develop a new theme. It’s happened before, the party having to abandon a tried and tested campaign claim because it no longer worked. That came in the late 1990s, when Republicans abruptly quit blaming Democrats for rising crime rates and saying they were the only ones tough enough to solve the problem.

Why did they change that one? Laws passed by Democrats in control of the state Legislature (like three-strikes-and-you’re-out) helped produce a steady drop in crime rates and an equally consistent rise in the prison population.

Republicans are up against a different problem today, one they are so far trying to deny very loudly.

For their claims about businesses leaving California in droves and migrating to other states are simply not true.

An autumn report from the studiously non-partisan Public Policy Institute of California – funded with dollars from the estate of Bill Hewlett, a founder of the huge Hewlett-Packard electronics firm – found that “few businesses move into or out of California.

“Most job gains are due to the births and expansions of locally owned businesses; most job losses are due to the contractions and deaths of locally owned businesses,” the report added.

In recent years (the study covered the years 1992-2006), PPIC said, basely 1.7 percent of all job losses could be attributed to businesses leaving the state. That’s far less than the 6.9 percent of jobs that migrated from the District of Columbia to other states, or the 4.5 percent exodus from Delaware and the 3.9 percent from New Jersey.

What the report didn’t say, but what is clearly evident from anyone who studies California newspapers closely, is that the real estate collapse of the last three years is the single biggest reason for the state’s job losses and high unemployment. California’s growth has long been built on population influx and the housing that has had to be built to meet the needs of newcomers.

The sudden disappearance of new construction left tens of thousands of carpenters, masons, plumbers and roofers out of work. It forced scores of companies – from real estate brokers to air conditioning contractors, concrete suppliers to swimming pool builders and carpet stores – to shut their doors and lay off staff.

This is starkly visible in the pages of the state’s newspapers, where real estate advertising has been sharply down for the last two years, while the foreclosure category of legal advertising is way up in many places.

Those air conditioning businesses didn’t move to Nevada or Idaho (Nevada unemployment and foreclosures are higher than California’s); they just shut down.

But Republicans seem reluctant to confront these realities. Rather than accepting the PPIC’s numbers, many conservatives want to cling to their campaign theme. Some have resorted to called PPIC a “liberal think tank,” when its studies and polls finger Democratic weaknesses as surely as they do those of the GOP.

Instead of citing hard numbers, conservative bloggers and pundits have turned to business relocation advisers who stand to profit from creating the impression many firms are leaving California and to statements like this one: “It’s obvious to anyone that businesses are leaving in big numbers.”

If so, they apparently don’t show up in solid statistics. The frequent statement also ignores businesses that are moving in -- and there always are some.

None of this, of course, diminishes the threat of outsourcing jobs to foreign countries, something many California businesses continue doing. From newspaper graphic artists to computer programmers and from technical support workers to assembly line positions of all sorts, jobs have migrated overseas.

But that’s something Democrats usually complain about, not Republicans, whose candidates (see: Fiorina) and their biggest contributors have sometimes been those who hired the most foreign workers in the most remote locales.

BothDemocrats and Republicans have proved impotent to stop that kind of move.

Which doesn’t excuse the Republicans for persisting with an obsolete, inaccurate campaign theme that has only worked once, and then only when employed by a celebrity candidate who probably would have won no matter what anyone else did.

-30-

Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net