California’s Seven Deadly Mistakes
In a recent post, the OC Register’s small-business columnist, Jan Norman, posted a blog entitled GM’s Seven Deadly Mistakes. These are seven classic management mistakes that took GM from a great symbol of American enterprise, to a bankrupt and nationalized failure. I thought it would be fruitful to apply these to California’s current budget crisis. Here is the list:
1. Failure to read the “tea leaves”. California’s budget crisis has been long in coming. The state’s anti-business policies in everything from taxation to environmental regulation have made California’s business environment toxic. Last year’s historic budget delay, and the $42 billion dollar budget gap the February budget was meant to close, was a “leading indicator” that further budget troubles loomed ahead.
Term Limits and Waxman’s Tobacco Bill
If Congress had term limits, President Obama wouldn’t have been in the Rose Garden Monday, signing a bill that gives the Food and Drug Administration its long-sought control over tobacco products.
The bill had been stalled in Congress since the early 1990s and only made it to the president’s desk after more than 15 years of effort by Democratic Rep. Henry Waxman of Los Angeles.
For those doing the math, that’s longer than California’s six-year limit for Assembly members, eight-year limit for state senators and the 14-year limit for a combined legislative career.
When California voters approved term limits back in 1990, the stated purpose was to open up government to a wider range of elected officials, citizen legislators who would serve their term in office and then, Cincinnatus-like, put aside politics to return to the farm or insurance office or car dealership or whatever.
Virtually Bleeding Money
When MySpace said last week that it was lopping off 30 percent of its staff, you could almost hear the air rushing out of the Web 2.0 bubble.
Granted, the Web 2.0 bubble may not be as spectacular as its dot-com counterpart of the late ’90s, but surprisingly big it has gotten to be, nonetheless.
In fact, MySpace is one of the big reasons it got so pumped up to begin with. Rupert Murdoch plunked down an astounding $580 million four years ago to buy what is, after all, a fairly simple social networking site. Of course, that price didn’t seem so inflated when Google later agreed to give the Beverly Hills-based MySpace $900 million over three years in an advertising partnership.
But, as it turns out, both were inflated prices, and both pumped more air into the hollow business model.
Kamala’s Pimple Politics
Kudos to the Los Angeles Times’ Michael Finnegan for skunking the Chron on the Kamala Harris story. It was a rather revealing piece of journalism that may make Kamala Harris the candidate to be Attorney General of California with the worst credentials ever.
Finnegan’s story reported on Harris’ “Back on Track” program to rehabilitate convicted first time criminals, some of whom wound up allegedly killing, intending to kill, and at the very least, robbing innocent citizens of San Francisco. Many were illegals, and several were definitely out of control repeat offenders who should have been behind bars instead of in back of the classroom.
Harris, the San Francisco District Attorney, attempted to soften the blow to her image and credibility by blaming the illegal immigration issue in general for the specifics of her lack of judgment. Referring to an allegedly vicious attack by one of the convicted criminal illegals in her program, she said, “The immigration issue, as it relates to the Izaguirre case, obviously is a huge kind of pimple on the face of this program.”
Just How Bad Can It Get
Yesterday, The Milken Institute released a new report titled, Manufacturing 2.0 – A More Prosperous California. The report was released in cooperation with the California Manufacturing and Technology Association (CMTA).
According to the report, California has 21 percent fewer manufacturing jobs in 2007 than in 2000, compared with a decline of 20 percent nationally and 13 percent among seven states that are competing for the same types of manufacturing jobs. It went on to say that driving the decline is California’s reputation for an unfriendly business climate, comparatively high tax rates, a restrictive regulatory climate and unsustainable government spending.
I am just surprised that litigation was not also included. In addition to the items mentioned above, one thing that impacts economic development and steers businesses to other state or countries is a state’s litigation climate. All of these items go hand in hand at turning businesses away. I can see why Governor Perry in Texas is having such a great time.