Racing to the Bottom

Nevada IOUOur neighbors to the East are substantially different to us. They have different goals, and a different world view on how we should treat our citizens, how we should educate our children, and what kind of services we should provide.  Usually, it’s no big deal. They do their thing, we do ours.

Of course, times are different now.  For a long time, we have had many advantages that come from a more progressive government: better educated workers and better services available to businesses.  It’s hard to claim much of an advantage in that realm now that we’ve gone ahead and slashed pretty much everything.

And now, the Nevada Development Authority is bringing their anti-tax message to California, trying to pick off California businesses. To this point, there is little evidence that companies are leaving the state because of the taxes, and it could be argued that any businesses that are leaving, are just as much due to lack of services.

But this works really, really well for the CalChamber. It sets them up so well, you might even begin to wonder if the Chambers of Commerce all across the country are coordinating a race to the bottom. One state Chamber of Commerce (or in this case, Development Authority) tosses a little stink bomb like this little ad into another state, and the recipient state gets to argue how taxes are too high. Say, something like this:

And California Chamber of Commerce President and CEO Allan Zaremberg thinks that, despite the recession, California still has a lot to offer. But he said the ad’s focus is a warning that the state should steer clear of raising taxes.

“Nevada is trying to steal businesses based on taxes, so we in California have to be sensitive to that message and make sure we don’t increase tax burdens on california businesses,” he said in a statement. “Just as is the case in California, Nevada’s economy is hurting and that is why they are aggressively trying to lure businesses away. I would match California’s higher education system and quality of life against theirs any day.” (CapAlert 8/7/09)

Well, isn’t that convenient for Zaremberg, it plays right into the right-wing message that he and his cronies, such as Arnold, have foist onto unreceptive Californians.  If we keep this headlong nosedive to the bottom up we’ll soon discover there’s not a whole lot left to fight over.

One thought on “Racing to the Bottom”

  1. So we’d better learn how.

    But on a hopeful note, the Ventura County Star published a good essay by Thomas Elias today, puncturing the myth.


    But a thorough study by the Public Policy Institute of California conducted just after Schwarzenegger exploited this theme ad nauseam in 2003 found no such flight. In fact, the PPIC now says there are so many thriving businesses here that there’s an impending shortage of college-trained workers to fill the jobs they now offer or will create over the next few years.

    Then there are the latest population figures, somewhat startling. Against the myth of population loss comes the reality of an actual 400,000-plus population gain over the last year, just about the same pace as most of the last decade.

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