Coping With Self-Destruction : Is California its own worst enemy?
In a sense the Hughes Aircraft Co. has done California a service.
That’s not easy to say, of course, in light of the fact that the main purpose of Hughes’ press conference Wednesday in San Diego was to announce that it will move all of its missile-building operations to Tucson and will eliminate at least 4,500 jobs in Southern California.
That is a grim action--injurious to the three communities where Hughes will shut down operations and to the state economy, devastating to the families of the affected defense workers.
But even bad news can have restorative value if it is seen as a powerful statement of what is wrong and what must be done to fix the problem. Thus California needs to heed the words of Hughes Vice Chairman Michael T. Smith, who in announcing the decision pointed to the state’s business environment as a big reason for leaving.
THE COMPLAINT: Smith cited the high costs of doing business here and compared California unfavorably to Arizona, which he said makes things easier for workers--much cheaper housing, for instance--and for business--lower business taxes and sane workers’ compensation laws.
What’s particularly galling about this explanation is that it’s the same message that the state got from the California Council on Competitiveness--the panel put together by Gov. Pete Wilson and chaired by Peter V. Ueberroth, businessman and 1984 Olympics guru.
In April that group concluded that resting on its laurels wasn’t going to get the state anywhere and that major reforms to improve the business climate were required.
That report came out in April. Since then little has been done. On Wednesday Hughes said it was checking out.
So what happens next? Anything? Or just wait for another big shoe to drop?
THE CHALLENGE NOW: Many skeptical Californians have been worried that business complaints about the state’s chilly business climate were mere devices to reduce regulation and taxes. They feared that some businesses were crying wolf to get breaks that in better times they would have no chance of achieving.
There may once have been grounds for total skepticism, but now California needs to listen to its business community more carefully than ever.
Without signing off on every suggestion, or swallowing whole every complaint, the state needs to understand that a lot is riding on the health of the business community.
Our ability to do things like fund our schools, house our homeless, inoculate all our children rests on the general revenue picture--and that depends on the ability to generate economic activity.
The economy is in the basement, and business leaders like Hughes’ Smith say they know why. Isn’t it time we listened and, where appropriate, acted? Can we really afford to waste any more time?
