How They Sold Us a Myth

I didn’t believe they could pull it off, but Gov. Wilson and a brigade of doom and gloom propagandists have managed to convince California that businesses are defecting en masse to states that treat them with more respect--and less regulation.

No matter that their dark scenario lacks hard evidence and defies logic. No matter that it has been challenged by knowledgeable economists and government figures, including state Treasurer Kathleen Brown. The myth has taken, and continues to spread. Just this week, the San Francisco Chronicle produced a “special report” on it all, with the tell-tale headline: “Big Business Fed Up With California / High Taxes and Red Tape Are Blamed for Exodus.”

Now comes the next item on the doomsday agenda--to turn the business flight hysteria into tangible gains. Already, Southern California smog regulators appear poised to grant major concessions to industry, while in Sacramento there’s a rapidly growing file of proposed legislation to soften toxic waste laws, revamp workers’ comp, rewrite welfare rules--anything to keep our beloved captains of commerce from departing for Boise.

Amazing.

Like all big lies, this one worked because of persistence. Wilson and organizations such as L.A.’s Economic Development Corp. have pounded the business is fleeing drum for almost a year. They formed campaigns like “L.A. Means Business” to promote this nonsense, and produced dubious research to lend it weight. The media lapped it up. The fall of the gilded giant is an appealing story, and who needs facts when the governor himself insists it’s all true?

To challenge the scenario was to invite ridicule. When economist Joel Kotkin and I wrote columns questioning its validity, “L.A. Means Business” circulated a form letter outlining a counterattack. Supporters were invited to call its organizers and “discuss an appropriate response” before writing letters to our editors. Sure enough, within a few weeks, the poison-pen correspondence began to pile up, accusing us in suspiciously uniform language of sticking heads in the sand and persisting in “a state of denial.”

These angry correspondents often blurred important distinctions. For openers, no one ever suggested that the California economy was robust. Recession, defense industry shakeouts, retail mergers and a general fiscal hangover from the 1980s have bloodied California’s once bulletproof economy; hundreds of thousands of jobs have been lost. It also was agreed that there’s always room to streamline bureaucracy and re-examine government programs.

What I still cannot swallow is the claim that jobs are disappearing largely because of a bad “business climate,” rather than the recession and other economic factors. The lone credible attempt to study this supposed exodus documents only 20,000 jobs lost as a result of disgruntled businesses abandoning California. This leaves unexplained more than half a million more jobs known to have been lost in the last year alone.

In the end, the most logical conclusion remains that some--not all--business leaders and politicians are out to salvage something good from a bad economy. If they can’t reverse the recession, they at least will use the hard times to strengthen their case against environmental and worker safety laws and other old hobgoblins. Go negative, the public relations experts advised them, and so they have gone negative. And it’s working.

There are, of course, problems with this approach. It’s possible Wilson and Co. have created a self-fulfilling prophecy by painting California black. Who would want to move their business into a state that is called “a bad product” by its own governor? They also have gotten in the way of a new generation of more enlightened entrepreneurs, quiet leaders who have accepted tough regulatory standards as part of the cost of doing business in California and who, in fact, see environmentalism not as a evil bogyman but as a potential new industry.

I guess what has bothered me most about the campaign is its tone. Mean-spirited and petulant, it smacks of a shakedown: Play by our rules, or we leave, and take all our jobs with us. Everyone seems to have forgotten that, for most of these jumpy businesses, California gives a lot more than it gets back.

The governor’s criticisms aside, California remains a state of promise and vitality. Its future will not turn on chamber of commerce duels with the Idahos of the land, or on whether we can mollify a few whiny losers. Rather, it hinges on our ability to protect and enhance the beauty of California, its quality of life, its people. And the day we lose sight of that is the day we should all begin to think about moving on.