Thursday, October 1, 2009

No, Your Product

The CA GOP's convention was last weekend, and the folks running for the Republican nomination for the 2010 governor's race took their stump speeches out for a stroll. Steve Poizner is the "right-wing" candidate. His speech was well received (he won the convention straw poll, for what it's worth), but he seems to not realize that this is not 2005: Steve Poizner's Remarks To The California Republican Party Convention
So, this is my 10th California Republican Party convention in a row, and it’s nice to see all my friends and all kinds of folks I’ve been working with over a long period of time. I have to confess, I love coming these Republican Party conventions. It’s the heart and soul of the Republican Party. You all, the turn out, the activists, the ones who really care about growing the Republican Party come to these conventions. Let’s hear it for activists all up and down the state of California. Good for them.
He's saying all this to contrast himself with main rival Meg Whitman, who registered as a Republican practically the day before she formed her exploratory committee. Steve wants you to know that he's an O.G. GOP. This is an important distinction to make, as the CA GOP can see some promise in its 2010 prospects; and, frankly we feel a little burned by our current "Republican" governor.

This years' budget crisis was actually a crisis of big government, resolved only after the GOP demanded, and got, greatly reduced spending without siginificant tax cuts, even though they are in the minority at virtually every level of state government, including the governor's mansion. This is a moment just waiting to be seized by a dynamic conservative candidate who can capture the zeitgeist.
The first thing I want to talk about is some actually very disturbing news this week. I just wanted to start off with some information I know you’ve been following that’s very troubling. But the fact is, Iran just disclosed, actually boasted about having a second uranium enrichment plant that was hidden under tunnels developing weapons-grade material in separate from their – the one that we’ve known about. And the fact is, this presents a huge danger and threat to the national security of the world.
Iran?? IRAN??!! Steve, when Californians think of the word "crisis" these days, the Mad Mullahs don't come to mind. Frankly, this is a bit above your proposed pay grade
You might remember I did work in the White House. I was in the National Security Council. I was in the counterterrorism group. It was a privilege to be appointed by President Bush to focus on national security issues. Hard to believe I started – I can’t even believe this when I think about it – I started September 4th, 2001, one week before the 9-11 Crisis, and I did work with the FBI, the Secret Service, with the Pentagon, with the intelligence communities to build a new homeland security plan for this country post-9-11. Now I had a security clearance that was well above top secret. I can’t even talk about most of the things I worked on. But I can tell you this, the country of Iran poses a huge threat to its own people, to its neighbors, and to the national security of the United States of America and the fact is it’s also critically important that we choke off money flows that are going in to support that corrupt regime.
Sweet Jesus, is he burnishing his national security credentials? He is! He's even bragging about his top secret clearance! Perhaps Steve is planning to solve CA's fiscal and economic crisises by seceding from the US, and he figures he needs to cut a credible figure on the world stage by day one. Does any of this matter right now? I mean, what can Steve Poizner do about Iran, assuming Californians want him to do something?
But I can promise you this, as your insurance commissioner, I’m going to do whatever it takes to make sure that your hard earned insurance premium dollars do not make it into that corrupt Islamic Republic of Iran.
Whew! Thank God CA has such a rough 'n' ready Insurance Commissioner. Next up: an awkward segue.
Now I learned first-hand how to really deal with crises when I was working in the White House, and it was a remarkable thing, watching a national security personnel get that gigantic federal bureaucracy to move quickly and to build a new homeland security plan in pretty short order. It was a great learning experience to see how things can really come together in a crisis.

Well we’re in a crisis here in California now too. Of course we’re not in a national security crisis, we’re in an economic crisis,

Finally, the state's crisis! Next up, a guaranteed standing ovation:
this presents a very special opportunity as Dennis mentioned for the Republican Party of California. We can lead this state out of the worst economic mess it’s been in since its inception in 1850. We can lead this state out of this mess by making decisions based on core Republican Party principles of individual liberty, personal responsibility, a robust and healthy free enterprise system, and small and accountable government.

Now don’t let people come in here and tell you that we need to rebrand the Republican Party. Don’t let people come in here and tell you that we need to reposition the Republican Party, and don’t let people come in here and tell you that we need to reestablish the Republican Party at the center. That is wrong, that is nonsense. We get in trouble as a party when we elect leaders in Sacramento or in Washington, D.C. that abandon these core Republican Party principles. That’s the truth.

Can't disagree with that. Steve was obviously watching the McCain campaign, and was not impressed. As the Tricky One once said, you can't win in CA with just the conservative base, but you also can't win without them.

Poizner then goes through a quick tour of dire statistics that define CA's economic depression. He notes that we have fallen from 6th largest economy in the world to 8th, and that we are losing business to crummy states like Nevada. Not only that, we are losing the globalization competition with the rest of the world. This leads him to make this unfortunate remark:

We compete with the whole world now because of the internet and the global economy. Who are our largest three competitors now? Well there’s India, China, Russia. Let’s just look at those three countries for a moment. These three countries did not matter much to us at all economically speaking as little as 15 years ago. Well that’s changed rapidly.

If you add up all the people that live in just those three countries, 3 billion people, and if you assume that 90% of the people that live in those three countries are uneducated peasants, which is basically the case, you’re still left with 300 million people.

"Undeducated peasants?" I'd say qualitatively they're no worse than asshole tech billionaires. I hope we don't hear that again.

Anyway, Steve as a plan to turn things around. I should hope so.
Number one, we absolutely positively have to cut taxes across the board. That’s just essential. We had the highest sales taxes, vehicle license fees, gas taxes, income taxes. I mean this is an incredibly high-tech state. The only solution are broad-based across the board tax cuts and my specific plan is to cut personal income tax rates by 10%, corporate income tax rates by 10%, sales taxes by 10%, and capital gains taxes by 50%. Then we could compete.
Yayyy! Tax cuts! But, uh, are we going to have some spending cuts to go along with the tax cuts? Not yet:
The second part of my jobs plan is tort reform. This is a lawsuit crazy state. The fact is, the average tort rewards in California are 50% higher than the national average. Are there any lawyers here? Would you mind, could ya’ll leave for just a second, because I want to talk about tort reform. The fact is, we know how to do tort reform in California, we did it with malpractice insurance by putting a cap on the amount of non-economic damage awards on malpractice cases, did that about 30 years ago, I can’t believe the legislature did that, that’s what they did. So it’s a common, thoughtful, good approach to tort reform. And now, malpractice insurance rates have been steady here in California while in the rest of the country they have gone up by 500%. Okay, so now let’s do the same thing for all kinds of torts. Let’s put a $250,000 cap on all non-economic damage awards and that will make a big difference in the state of California.
Tort reform? I don't disagree, but this is hardly a radical proposal. Every GOP speech I've heard since 1984 has used tort reform as an applause line. Are you also going to ask for a line item veto and a flag burning amendment?
Third part of my plan is to align our labor laws with the rest of the country.
Now, I’ve been an employer, a lot of you have hired folks, a lot of you care
about workers just as much as anybody. Why does California have to have extreme
labor laws that make us stick out like a sore thumb? For example, only in
California and a couple other states, do you have to pay overtime after 8 hours
in a day rather than 40 hours in a week like almost in every other state.
Um, are you crazy? Do you know how many people out there like the current overtime rules? I promise, it's orders of magnitude greater than the people who don't like them. Why open this can of worms? It practically demagogues itself. Also, you are now on #3 of your 4-part plan and so far we have tax cuts, tort reform, and re-drafting the labor laws. Got any spending cuts on tap?

And one last thing, we have to slay the regulatory beast here in the state of California. Fact is, let’s just be honest about it, if you want to build a new power plant, or a new manufacturing facility, you just can’t. You’ll never get a permit. It will take years and years to go through the byzantine permitting process and at the end, you likely won’t even get the permit. It can take so long that in the course it just drives people to forget, it will just go to some other state.

So, no spending cuts. Disappointing. Not that I disagree about the need for regulatory reform. But, those regulations are promulgated by teeming ranks of bureaucrats empowered to do so by statute. They're not going to stop doing so just because Steve Poizner rolls in and announces that there is a new sheriff in town. Seems like the easiest thing to do would be to eliminate/ consolidate some state agencies, and streamline the regulatory process. But, that's not the direction Poizner's going:

Now, one of the first things I’m going to do as Governor is I’m going to
appoint a Chief Innovation Officer. That person is going to report directly to
me. We are going to create a website. The website is going to be a one-stop
shop. Rather than having to go to dozens of different places to get all the
different city and county and state permits, go to one place, on one website,
and then that Chief Innovation Officer is going to set up a self-funded dispute
resolution system. So if you apply for a permit, you will get an answer, under
my administration, in one year or less. Now, some of you might be thinking,
“well one year sounds like a long time.” That will be a remarkable massive improvement, you can count on that.

Chief Innovation Officer? Just don't call him a "czar," please. And a website? This is what we get when a Silicon Valley billionaire runs for office?
Okay, just one last question and time for dinner here (yayyy! dinner!-psota). What does my jobs package have to do with one of the most important subjects facing all California citizens and that is the big structural budget deficit? Everything, everything. It absolutely matters where companies start and grow.

Now let me just give you one quick example. My last company SnapTrak, you just heard about it. We figured out a way to put those GPS receivers into cell phones, so when you dial 911 from the cell phone, the emergency operators will know where you’re calling from. There are 700 million of them now out there. And we saved hundreds of lives, very proud of it. Sold the company to Qualcomm a few years ago.

So I did some math. How much in taxes did my 100 employees pay before selling the company to Qualcomm? Income taxes, property taxes, sales taxes, excise taxes, inheritance taxes, capital gains taxes, beer taxes, wine taxes, hotel taxes. There are 900 different taxes and fees in the state of California. The answer? $100 million. So if I would have started my company SnapTrak, in my home state of Texas, rather than in California, state and local governments would be $100 million more in the hole.

Now, that is a point worth making. Politics and popular culture have conditioned voters to see businessmen as little more than corrupt abstractions. You literally need to remind people that capitalists/entrepreneurs, or whatever you want to call them, are the only reason there is an economy in the first place. The point about the amount of taxes that Poizner has personally been responsible for generating is a good one, and something many people don't think about. It's so much easier to believe that life is one giant Michael Moore-Oliver Stone production.

Poizner gets an "A" for red meat, and a gentlemen's "C" for failing to focus (Iran??) on the crisis at hand. It's hard to imagine how tort reform and reform of the labor code will lead to a turn around in CA's economic prospects. I know, I know; such reforms will improve the business climate. But businesses aren't failing or fleeing because of the overtime rules; they are being hit with high taxes and byzantine regulations, all in the name of an overweening state government that can no longer fund itself without a major hissy fit by the state's many grasping progressive interests. Little of what Poizner discussed (Iran??) addresses this.

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