Companies Leaving California: 5.4 per Week | Hacker News Reader

Companies Leaving California: 5.4 per Week

mjperry.blogspot.com

19 pointscwan17 comments

Read article with grain of salt because the author is currently working for The American Enterprise Institute, which is a well known right-wing entity that is paid to produce "research" and propaganda.

Also, evaluating the merits of the piece itself, I notice it's very carefully worded to imply a certain thing which is not actually backed up by facts or independent evidence, nor does it make an effort to separate correlation from cause. Which is a common hallmark of propaganda. For example, there may very well be a rise in businesses leaving California, but it could also be the case there's a rise in businesses coming into California, or starting up inside of California, or it may actually be a good thing that they're leaving, or even if it is bad in isolation there are other good things that come from it that are more than worth it. Overall, not a serious or trustable piece.

which is a well known right-wing entity that is paid to produce "research" and propaganda.

Implication: "very carefully worded to imply" left-wing think tanks are not so paid.

to imply a certain thing which is not actually backed up by facts or independent evidence

3 of the articles 5 paragraphs cite statistics, including links. 0 out of 2 of your paragraphs do.

For example, there may very well be a rise in businesses leaving California, but it could also be the case there's a rise in businesses coming into California, or starting up inside of California, or it may actually be a good thing that they're leaving, or even if it is bad in isolation there are other good things that come from it that are more than worth it.

In other words, you have absolutely no idea what the cause of business decline in CA is, you cite no data to support the claims you make, and then you accuse the author of creating propaganda.

which is not actually backed up by facts or independent evidence, nor does it make an effort to separate correlation from cause. Which is a common hallmark of propaganda.

Yup.

Can anyone find relative numbers for companies entering CA, and new companies being formed in CA in the same timeframe?

More companies leaving CA might simply be a result of more companies IN CA. The real number to ask about is the ratio of (companies leaving)/(companies currently present) over time.

if it's true that businesses are leaving california (and i'm not sure that it is, since the guy he's citing runs a business pertaining to business relocation -- he is not a disinterested observer here), there could be a hundred different reasons to explain it.

one possible explanation is that california is currently in the process of immolating its public school and university system, which is a direct result of the state government's inability to take in sufficient revenues -- in other words, it may be that taxes are too low.

we also don't know the condition of the businesses that are leaving (are they all doomed to fail anyway?) or ratio of businesses that left to the number of businesses created.

one red flag is that the author is currently on the payroll of the american enterprise institute, a right-wing, pro-big-business "think tank" which is notorious for turning even the thinnest factoids into pro-big-business propaganda.

I agree on all points about the possibly cherry-picked data and the author's motivations. But this

> one possible explanation is that california is currently in the process of immolating its public school and university system

seems silly. However unwise disinvesting in education may be, it takes many years to see the effects. Businesses aren't going to decided to go through the costly process of relocating now just because the elementary school system is going to produce terrible workers entering the job market in a decade.

It may be comforting to assume that the consequences of this won't occur until far in the future, but California schools have been underfunded for many years already, and the effects are with us today.

I live in San Francisco, where the school year has already been shortened by a week each year because of budget cuts. Many of our friends are moving (and in some cases taking their businesses with them) because of this.

sounds like we had a similar reaction! (referring to my top-level comment elsewhere on this page)

I laid off my CA employee in 2009. Never, ever going to hire out of there again. Dealing with intrusive and annoying CA paperwork, unemployment insurance 3x's as expensive, workers comp 2x's as expensive. $800 franchise fee for the privilege of hiring CA workers. You guys complaining that this is propoganda, have not experienced the other side. Most states are easy to deal with for paperwork and taxes. CA is a hassle and I'm still dealing with CA fees and paperwork 2 years later. Try calling their tax office.. 1.5 hr wait to talk to someone. 12.5% unemployment in CA. The worker I laid off, took 2 years to find another job. Yep, businesses that can, will and are leaving. Outside CA, CA has a terrible reputation in the business community, among business lawyers, cpa's. Excessive Government is the problem in CA.

Spend some time in SF or Palo Alto and you'll also see that companies are coming to California in record numbers.

Startups from around the globe come here.

True, but thats because for a startup other benefits of being in CA far outweigh the disadvantages.

"""California currently ranks #49 among U.S. states for "business tax climate" (Tax Foundation) and #48 for for "economic freedom" (Mercatus). """

New York is listed last on those both those rankings yet it's 2010 GDP was booming compared to the rest of the country...

http://www.economist.com/blogs/dailychart/2011/06/us-interac...

That being said, there's no way in hell I'd start a start up in either Cali or New York... because neither are really good fits for me culturally...

Having spent a good bit of time on the east coast, CA and AZ, I tell you that I would start-up in AZ in a heartbeat compared to New England (where I spent my time) or CA.

Why?

Many factors, but the largest are these: cost of living. As someone moves beyond the 20-25 year old living in squalor trying to bootstrap their (1st, 2nd...5th) dream company, you simply can't live to any real standard in either NY or CA (I know, I've tried). In AZ I could buy a nice home in a nice area with access to REALLY nice facilities.

In AZ I have access to ASU and UoA, both of which I recruited out of heavily. There are some really gifted people that come out of there.

I've also got access to 9 months of perfect weather followed by 3 months of not-as-bad-as-everyone-says weather. I've also got natural beauty all around.

There are people that say the talent pool isn't there, and I won't object that the size isn't the same as in CA or NY. Though, I would argue that if you are doing it right in AZ, you can get the top tier people rather easily...and cheaply compared to CA.

The only advantage CA and NY have over AZ is access to money via VCs, and even that is changing. However, I do not argue that most VCs want to be able to keep their eyes on their money and have the companies within shouting distance...though I would contend that the need for money is changing and as people realize this, AZ is going to become and even more attractive destination.

The high home prices (and cost of living in general) in the Bay Area -- especially San Francisco -- could be solved easily with the loosening of housing restrictions. As it stands right now, home builders like myself are stuck with endless bureaucracy and regulations that prevent new homes from being built to increase supply.

I don't think it is limited to companies. Didn't Arrington move to WA just a month or two before Techcrunch was sold to AOL. Coincidence? I think not.

It's not hard to imagine why with laws like this:

http://www.quora.com/Aaron-Greenspan/In-Fifty-Days-Payments-...

http://www.quora.com/Aaron-Greenspan/In-Thirty-Days-Payments...

The $800.00 minimum corporate franchise tax isn't a huge attraction, either.

Unless you're selling toothpicks or gumballs, the $800/year minimum tax is a rounding error. It's not even close to the main reason why a business would or would not incorporate in California (and I say this as someone who has a California LLC and a Delaware C corp).

Enough to buy a laptop every year! But, who cares about small businesses. You have to pay that fee regardless of losses...

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