Thankful for Our Foreign Readership

One of the many things I'm thankful for this Thanksgiving season are the many faithful readers of Viewpoint who visit us from all over the world. Most of our readers are North American, of course, but we have dozens of regular readers in most European countries as well as in countries in South America, Asia, Australia, the Middle East, and Africa.

To give an idea of what I mean a Google website provides data on visits to blogs and has these stats for the past week on Viewpoint:

• United States 635
• France 50
• Russia 33
• Germany 16
• Canada 10
• Netherlands 9
• Burkina Faso 6
• Australia 5
• Singapore 4
• United Kingdom 3

When I started this blog with my brother in 2004 I never thought it would reach more than just a few friends and family, so I've been amazed and deeply gratified by the growth and constancy of our foreign readership.

I appreciate each one of you, and as I celebrate the American Thanksgiving this year I want you to know that I'll be thanking God for you and asking His blessing on each of our readers, including those who join us from overseas.

Killing the Goose

Once upon a time a farmer had an amazing goose that laid an egg of pure gold every day. The farmer was delighted, but as time went on he wanted more and more. He spent all his new-found wealth on luxuries and demanded that the goose lay two eggs a day to subsidize his profligacy. The goose, however, was unable to supply the extra egg. No matter how hard it tried it just couldn't squeeze out more than one egg a day. The farmer grew wroth with his goose because it couldn't give him all the eggs he wanted, and he beat the poor bird. Eventually, in a spasm of rage, he killed it. When he finally regained his senses he realized the stupidity of what he'd done, but it was too late. He lived out his days a remorseful pauper.

Steve Malanga at City Journal supplies us with a modern version of that old fable by recounting the sorry recent history of California. Once called the Golden State and considered the driver of the American economy, it has now sunk to the point where if businesses were fleeing any faster they'd have gridlock on all the eastbound highways. New businesses are avoiding California as though a nuclear accident had contaminated the entire state, and employment is flat-lining. The reason is, as it often is, the enormous burden the state government has placed on those who want to operate a business in California.

California's legislature, like the farmer in the allegory, has for the last twenty years demanded that the state's businesses lay two golden eggs rather than be satisfied with just one:

Last year, a medical-technology firm called Numira Biosciences, founded in 2005 in Irvine, California, packed its bags and moved to Salt Lake City. The relocation, CEO Michael Beeuwsaert told the Orange County Register, was partly about the Utah destination’s pleasant quality of life and talented workforce.

But there was a big “push factor,” too: California’s steepening taxes and ever-thickening snarl of government regulations. “The tipping point was when someone from the Orange County tax [assessor] wanted to see our facility to tax every piece of equipment I had,” Beeuwsaert said. “In Salt Lake City at my first networking event I met the mayor and the president of the Utah Senate, and they asked what they could do to help me. No [elected official] ever asked me that in California.”

California has long been among America’s most extensive taxers and regulators of business. But at the same time, the state had assets that seemed to offset its economic disincentives: a famously sunny climate, a world-class public university system that produced a talented local workforce, sturdy infrastructure that often made doing business easier, and a history of innovative companies.

No more. As California has transformed into a relentlessly antibusiness state, those redeeming characteristics haven’t been enough to keep firms from leaving. Relocation experts say that the number of companies exiting the state for greener pastures has exploded. In surveys, executives regularly call California one of the country’s most toxic business environments and one of the least likely places to open or expand a new company. Many firms still headquartered in California have forsaken expansion there. Reeling from the burst housing bubble and currently suffering an unemployment rate of 12 percent—nearly 3 points above the national level—California can’t afford to remain on this path.

Malanga traces the history of California's hostile relationship with business since 1974 and claims that at every turn government has imposed policies on business that businesses simply can't afford, and so they're leaving, or dying.

In 2007, California-based Google built a new generation of server farms not in its home state but in Oregon, employing 200 people. The following year, one of California’s most successful tech companies, Intel, opened a $3 billion production facility in Phoenix, Arizona. Earlier this year, eBay, based in San Jose, said that it would add some 1,000 back-office jobs in Austin, Texas, over the next decade.

Smaller firms have exhibited the same pattern of expanding outside the state. In fact, Silicon Valley lost one-quarter of its computer, microchip, and communications-equipment manufacturing jobs from 2001 to 2008, say Valley entrepreneurs.

There is much more in this vein in Malanga's depressing tale, and everyone should read it in order to understand the dynamics at play when government abuses its power to tax and regulate. The moral of the story is simple. It's the same moral captured in the old fable about the stupid, greedy, myopic farmer who killed the goose that laid golden eggs.