Want proof positive that government policies profoundly impact an economy? Look no further than California.
The Golden State has everything going for it — vast natural resources, rich agricultural land, its position as gateway to the Pacific, and innovative high-tech industries. So why has such a blessed state gone from an economic powerhouse to the verge of bankruptcy? Government policy.
Americans have often looked west for economic opportunity, a better way of life, and all the latest trends in business, technology, pop culture and demographics. Historically, California has been on the leading edge of American competitiveness and ingenuity.
But these days, the Golden State is setting a bad example.
The state economy has been dragged down by reckless spending, massive budget deficits, unsustainable government pensions and one of the highest tax burdens in the nation. California’s addiction to excessive government has so badly eroded its business reputation that companies large and small are leaving the state in droves.
Californians continue to see their incomes fall while chronic double-digit unemployment plagues the state.
Meanwhile, other states with much less to offer are faring better economically. They’re doing so by enacting policies that boost economic growth, create jobs, attract businesses and capital, and tackle tough challenges head-on.
Why should Americans care about the fate of California? Put simply, the American economy cannot fully recover unless California fully recovers. If it were a nation, California would have the world’s ninth-largest economy. One in eight Americans lives in the state. Our country needs its energy, ideas, innovation and workforce.
The chamber’s initiative includes the release of an in-depth study outlining the competitive challenges and economic changes that are reshaping California’s job market. The study, along with recommendations to reform how the state treats its businesses, workers and taxpayers, can be found on a new website: www.TheCaliforniaComeback.com.
California can continue to kick the can down the road, attempt to spend its way to prosperity and squander its advantages. Or it can face up to its challenges, get spending under control, develop its resources and implement business-friendly policies. It’s the difference between California Dreamin’ and a California Comeback. And the nation has a lot at stake.
— Tom Donohue is president and CEO of the U.S. Chamber of Commerce.