The work-based reality shows, including Cake Boss, Pickers, Pimp My Ride, and America’s Next Top Model
have much to teach us about craft, calling and California’s economy. The
workers in these shows are not the "knowledge workers" we hear so much about.
They are the bakery workers, car shop workers, restaurant workers and small
businesspeople who will be prevalent in California’s employment future. They
bring innovation, care for detail,  and a
service ethos to their jobs.

Buddy Velasco 
is the Cake Boss. As viewers of his reality show on TLC network know,
Buddy runs a bakery in Hoboken New Jersey. The bakery, Carlo’s Bake Shop  has a baking and sales crew of nearly 30,
including Buddy’s mother, four sisters and three brothers-in-law

That old debate over California’s tax burden is making its
familiar reappearance due to a couple of articles I read recently. 

First came Dan Walters’ Sacramento Bee column last Friday titled, "Just the Facts on California’s Tax Burden." Walters acknowledged that,
"Sorting through the tax rhetoric is not easy." He produced data compiled by
The Tax Foundation,
using the measure of taxation as a percentage of personal income, which ranks
California as sixth-highest in the nation based on 2008 figures.

Walters notes this calculation occurred before the 2009
temporary tax increases in the Golden State that the governor hopes to extend.
However, he acknowledges other states have also raised taxes during the
recession and concludes that, "California has one of the nation’s highest
state-local tax burdens."

President Obama and Senate leader Darryl Steinberg have each floated reform of
the government regulatory process as key elements of economic recovery. They’re
right. But for California now comes the hard part: putting meat on the bones of
an important but flexible political talking point.

The good news for policy makers is that the state’s
Little Hoover Commission, a bipartisan citizen panel appointed by the Governor
and legislative leaders (and to which I was recently given the honor of a
reappointment), is in the midst of a comprehensive study on how the
state can improve its regulation approval process. Spurred by a bipartisan
request from Assemblyman Felipe Fuentes and Senator Bob Dutton, the Commission
is examining, in its words, an:

It seems like the stars might be aligning
in California when it comes to regulatory reform for our state. 

Last week, President
Barack Obama announced in a Wall Street Journal column that he is signing an
executive order directing government agencies to review rules and regulations
to ensure they do not unnecessarily hinder economic growth.   Governor
Brown indicated earlier this month that he also favors taking a look at the
regulatory climate in California to make it more business-friendly.  And more recently, Senate President pro Tem
Darrell Steinberg announced that he would support legislation forcing state
agencies to review all regulations and recommend reviewing the states
regulatory processes.  In his words, "Government
needs to be more nimble."

As a small business owner who owns an electrical engineering
company in Bakersfield recently told me, "Regulations are strangling small
businesses out of existence in California." Whether it is onerous diesel
regulations, a pending AB 32 cap-and-trade system, or other restrictive labor
regulations such as the daily overtime requirement, small businesses and their
employees are being bombarded by costly regulatory mandates.

The news from the waterfront last week was reassuring. The Port of Los Angeles said it handled 16 percent more cargo containers last year than in the previous year. And next door, the Port of Long Beach reported it handled 24 percent more – its biggest increase ever.

But what’s not so reassuring is this: The ports’ future still remains a bit tenuous.

That’s because the reconstruction of the Panama Canal continues. When the bigger and better passageway opens in 2014, it can begin handling huge container ships that haul all those consumer goods, automobiles and other stuff from China and the rest of Asia.

Now, those cargo ships are more or less forced to come here, which is why the ports of Los Angeles and Long Beach have become America’s No. 1 and No. 2 ports, respectively. But in about three years, those ships will be free to sail to the Gulf and East coasts – and ports in those areas are beefing up now to lure those ships.

“We have a bull’s-eye on our back,” Geraldine Knatz, executive director of the Port of Los Angeles, told the Business Journal last week.

Remember way back last February when Carly Fiorina suggested that California may want to think about filing for bankruptcy and the state’s political mavens erupted in peals of laughter?

“Rookie mistake,” they solemnly declared. “Everyone knows states can’t declare bankruptcy.”

Time to stop laughing. Turns out that the GOP Senate candidate might not have been wrong, just early.

A New York Times story last week reported that some Washington Republicans are quietly looking into the possibility of changing the federal bankruptcy law to let states file for protection from their creditors, as cities and counties have been able to do since the 1930s. The idea is that by filing for bankruptcy, states can unilaterally dump union contracts, slash pension plans and make other needed cuts to get out from under their crushing debts.

Gov. Jerry
Brown’s $12 billion tax plan will be defeated at the ballot box if he doesn’t
quickly take control over who is delivering his message. In the past few weeks,
former Assembly Speaker and current partner at Mercury Public Affairs, Fabian
Nuñez, and Assemblyman Gil Cedillo have made the media rounds promoting the
need for higher taxes, despite their recent personal controversies continuing
to weigh on people’s minds. 

In late
December and mid January, Univision on its thirty-minute statewide political
show, Voz y Voto, aired some extensive interviews with both Nuñez and Asm.
Cedillo.  They each discussed the
budgetary problems faced in California: the unemployment rates, the housing
crisis, whether business would flee the state if taxes were raised, and their
views on the current deficit. 

As Nuñez
stated that, "we need to find creative ways to get revenue from those that have
it, to balance the budget," Asm. Cedillo was out promoting the view that,
"taxes are not high here" and that the only reason California voters recently
rejected tax increases was because "the truth is the public doesn’t know
reality."  

The budget recently proposed by Governor Jerry Brown contains difficult, but much-needed spending cuts. It more or less seeks to balance revenues with expenses—a challenging task for a state confronting a $25.4 billion budget gap.

That being said, Brown’s budget is foolish. Why? Because it does nothing to improve California’s dismal jobs climate. Instead it would make California even less competitive in the battle for jobs.

For six straight years, California has ranked dead last in an annual survey asking CEOs which state is the best for business. A growing number of businesses are fleeing the state or choosing to expand elsewhere. It should come as no surprise that California’s double digit unemployment rate continues to be among the worst in the nation. We are losing the battle for jobs.

As jobs go, so go state revenues. But most policymakers and academics in Sacramento don’t seem to understand that in order to have revenues, we need a healthy, vibrant economy that creates well-paying jobs for Californians. Tax hikes only serve to worsen California’s long-term budget woes. Voters instinctively understand this, which is why they’ve rejected every proposed tax increase on the state’s ballot since 2004.

Governor Brown has submitted a budget that he claims includes drastic spending cuts. And he has dropped the other sandal by announcing he will also seek massive tax hikes, a package of increases that are essentially the same as those overwhelmingly rejected by voters in May of 2009.

While the expert analysis of the budget plan continues, it has already become obvious that a number of items described as “cuts,” do not represent a decrease in spending, just tricky bookkeeping. For example, Brown shows a billion dollar pay down on the deficit by raiding the voter approved Proposition 10 tobacco tax that goes to support children’s services.

However, one does not need a green eyeshade to see that two areas of state spending that are being held sacrosanct are K-12 funding and prisons. In fact, if Brown’s plan is approved, the prison budget will be expanded from $8.9 billion to 9.1 billion, even though California already spends over twice as much per prisoner than does Texas, and much more than the national average.