Monday, May 05, 2014

California vs Texas: Politics Have Consequences

Joel Kotkin, in the Orange County register:
Toyota’s decision to pull its U.S. headquarters out of the Los Angeles region in favor of greater part of an ongoing process of disinvestment in the L.A. region....

The Toyota decision also reflects the continued erosion of California’s historic economic diversity...capped this year by the announced departure from Los Angeles of the headquarters of Occidental Petroleum. Blessed with huge fossil fuel reserves, California once stood as one of the global centers of the energy industry. Now, with the exception of Chevron, which is shifting more operations out of state, all the major oil companies are gone, converting California from a state of energy producers to energy consumers...

As did the oil industry, the auto industry, and, particularly, its Asian contingent, came to Southern California for good reasons... Back in the 1980s, the expansion of firms like Honda, Toyota and Nissan seemed to epitomize the unique appeal of the L.A. region – and California – to Asian companies. Today, only Honda retains its headquarters in Los Angeles (Nissan left in 2005)
The state and local politicians and those who vote them into power have apparently made it clear they don't want manufacturers, or even any other politically incorrect business's befouling their sensibilities with jobs.
Since 2000, one-third of the state’s industrial employment base, 600,000 jobs, has disappeared, a rate of loss 13 percent worse than the rest of the country.

But, the prevailing notion in California’s ruling circles seems to be, if you have Google and Facebook, who needs dirty, energy-consuming factories or corporate operations filled with middle managers? Silicon Valley crony capitalists and urban developers who support our political class, and are willing participants in various subsidized green energy schemes, have little interest in traditional manufacturing, regardless the damage inflicted on blue-collar workers....
Good riddance, say the pols.

More here.

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