Throwing Business a Bone

Quite a spectacle Tuesday--all those folks in suits and tasseled loafers cramming into the Biltmore to complain about shabby treatment in the Golden State. They sat on their hands as renowned economists spoke of a need to lift wages and invest in education. They looked on mute as a few speakers ventured to make a case for, God help us, investing in the poor. This was a one-issue crowd, and education and poverty were not the issue. “It’s workers’ comp, stupid,” read signs held by pickets outside the hotel. And yes, even the pickets wore suits.

Whatever comes of the Economic Summit, the suits must feel satisfied. From the start, it has been my suspicion that the whole “business climate” crusade had more to do with psychology than economics. The agitating by CEOs and business associations started in the depths of a persistent and vexing recession. Companies were downsizing, merging. Construction tumbled over a cliff, followed by real estate. No one seemed to understand what was going on.

The business types were scared, and they were hurting, and they wanted a sign from Sacramento that somebody cared. They wanted to be patted on the head. Tossed a bone or two. Workers’ comp reform, relief from environmental laws--something, anything, to show that they were appreciated, that they were loved. That the conference is being held at all, then, represents victory, clear evidence that business has captured the attention of elected officials.

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When my doggie doesn’t get enough love at home, he will eat patio furniture and hop the fence. So it went with business. California CEOs started letting it be known they were headed for Idaho or Utah or Mexico--some place where, sniff, sniff, somebody might actually treat them nice, sniff, sniff. This was a costly bluff. That relatively few actually left because of “business climate” complaints has been well-documented; how many incoming businesses were frightened away by the keening campaign is an open question.

In any case, whether a business came or went was its own, well, business. Commerce by nature thrives on enlightened self-interest. Location, location, location, is the entrepreneurial mantra. Also, businesses do not create jobs out of some spirit of philanthropy. They create jobs to make products or provide services in order to turn profits.

Strangely, in this weird season of whining, these fundamentals have been lost. The politicians who now fall all over themselves to appease business interests apparently believe that if we love business, business will love us back, forever. That, God Bless America, is not how the system works.

Another curious aspect of the business climate campaign is its implicit assertion that business is not part of the state power structure. The complainers whimper that the only things this state ever gave them are high taxes and red tape. Campaign contribution reports, however, would suggest that business has enjoyed the best Sacramento access money can buy. And if water projects, university systems, freeways and ports aren’t essential, state-provided economic tools, what is?

Finally, the notion that economic recovery or ruin rests with Sacramento strikes me as odd. Governments don’t run the economy; economies run the governments. But the business leadership clearly doesn’t see it this way. They blame Sacramento lawmakers for the economic mess. They blame discourteous bureaucrats. They blame the AQMD. They blame their workers. They blame immigrants. If they ever blamed themselves, I missed it.

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No, they blamed and whined and threatened. They ate the patio furniture. The summit is proof that the tantrum paid off. The squeaky wheel shall get greased. Sacramento shall deliver workers’ comp reform. Bureaucrats shall tell permit-seekers to have a nice day. None of it, of course, means beans as far as the recession and other fundamental economic problems are concerned, but no matter.

Now I happen to be friends with several small business owners. They are courageous people, risk-takers, an asset to this state. Most have taken their medicine quietly through the recession, without whining, without making threats. But they are scared and they are hurting, and I say throw them all the bones we can. Why not?

At the same time, though, the state officials who have flocked to the Economic Summit to console their friends in the suits might remember this. Those panhandlers outside the Biltmore, they are hurting too. The workers laid off as corporations hunker down, they are hurting too. The school teachers told to take pay cuts, even as they also are told to disarm pupils and assimilate immigrants, they are hurting too. Who speaks for these Californians? When is their summit? Where is their bone?