Carl’s Jr. Latest Company to Ditch California

After the 2013 death of the founder of Carl?s Jr. ? the ubiquitous California fast-food restaurant chain ? the Orange County Register published an obituary that captured the one-time spirit of the state: ?Carl Karcher, the Ohio farm boy with an eighth-grade education who turned his $326 investment in a hot dog stand into a multimillion-dollar fast food empire, died Friday afternoon. He was 90.? For decades, this was a place where anyone could earn a fortune.

Carl's_Jr._DentonEarlier this week, Carl?s Jr.?s parent company (CKE Restaurants) announced it would relocate from Ventura County to Nashville, Tennessee. The company issued a bland statement. It is ?re-franchising? many of its company-owned locations. ?As such, early next year we will be consolidating our Carpinteria and St. Louis corporate offices in Nashville, which is centrally located and is one of the markets where we have retained company-owned restaurants.?

In 2011, I reported on a California Chamber of Commerce event, where CKE Chief Executive Officer Andrew Puzder ?complained about the permitting process here, where it takes eight months to two years to open a new restaurant compared to an average of 1 1/2 months in Texas.? Then there are all those lawsuits, and work rules that force companies to pay overtime based on daily, rather than weekly, hours. He was mulling a move to Texas then.

Granted, CKE is moving its headquarters, not its restaurants. But the point is well-taken. There is a cottage industry here that denies industrial-era work rules and a maddening regulatory process make any difference to business owners. The idea that there?s a business exodus is just right-wing nonsense, they insist, and they point to research purportedly showing that businesses aren?t really leaving.

Not many big brick-and-mortar businesses shut down and rebuild elsewhere. But companies do shift operations, build their new plants in other states, or just never get started. Corporate types don?t like to blame state officials publicly ? that invites pushback. But at one business-closing press event I attended in a Los Angeles area industrial park, departing owners compared notes about the best places to move outside of California.

However much CEOs would rather live in Malibu than Fort Worth, Texas, they?re not usually apt to actually build a manufacturing plant in Los Angeles or Santa Barbara, despite what liberal economists and reporters might argue.

One widely discussed 2014 article suggested that higher tax rates are, the harder we all will work. ?Some research into tax rates indicates that high rates have the opposite effect: People may work harder, trying to make more money to achieve a desired after-tax income and may slough off if tax rates are lowered,? wrote David Cay Johnston in the Sacramento Bee. Work makes us free, I suppose.

?California proves every day that conservative economic theories are s[–]t. Every. Single. Day,? wrote the left-wing Daily Kos, noting that California grows even though it ranks at the bottom of business-climate surveys. I give Kos credit for using a word often ignored: despite. California remains a global economic leader ?despite its high cost of living, taxes and regulations,? he added. But imagine the growth if it had a sane economic policy.

That high cost of living, by the way, is largely the result of government land-use restrictions that artificially drive up the cost of developable land. It?s also why California has the highest poverty rate in the nation under the U.S. Census Bureau?s new formula. You?d think folks who claim to care about the poor might think more deeply about this.

A recent study found about 10,000 California businesses ?disinvested? in the state over seven years, meaning they moved, closed down, or shifted jobs out of state. Business researcher Joseph Vranich relied on public records. His report includes a long list of companies and what happened to them. He only included ?disinvestments? clearly tied to the business climate.

Officials react as Gov. Jerry Brown did when former Texas Gov. Rick Perry ran an ad campaign luring businesses to the Lone Star State. ?It?s not a serious story, guys,? Brown said during a speech. ?It?s not a burp. It?s barely a fart.? Vranich?s report was a response to Brown?s ?business czar,? who in 2012 said: ?[T]here is no data anywhere where you can find numbers of companies that have either entered or left this state. It?s just not kept ? so there is no justification for the statement that there is this mass exodus from the state of California.?

The resulting data was voluminous. But it was barely a burp in the state Capitol. Currently, the only point of contention is between the Democratic governor and the Democratic Legislature. They both want to spend more on programs, but the former wants to be sure to have enough cash when there?s an eventual recession. The November election is likely to see union-backed voter initiatives to raise taxes and spend more. How can they hurt, given we?ll all be good oxen and pull harder?

This week, legislators are introducing a bill to allow independent contractors to collectively bargain (through a new type of association) with Uber and other companies in the sharing economy. Brown and legislators often point to Silicon Valley?s enduring growth as evidence that California remains an economic hub. Yet this looks like a direct assault on the Golden State?s golden-egg-laying goose, not that state leaders will get it.

They can argue high taxes, regulation, and unionization are good for the economy. But if you were an Ohio farm boy today with $300 in your pocket, would you try to make your fortune in California or, say, Tennessee?

Steven Greenhut is a senior fellow and Western region director for the R Street Institute. He is based in Sacramento.

This piece was originally published by The American Spectator

The California Introduction Machine

Much is made during presidential election periods that the state is merely an ATM machine for candidates. As a solid blue state that has not voted for a Republican for the White House since 1988, California is considered safe for whoever the Democratic nominee will be (we?re talking to you, Hillary Clinton.)

Yet, candidates from both major parties come to the Golden State for the gold ? dollars for their campaign accounts.

In this coming election, however, at least on the Republican side, the race is wide open. Before GOP candidates can hit up the California ATM machine, many need to introduce themselves to California voters and donors. And that?s been happening now.

Potential Republican candidates have been making the trek to the Left Coast to meet and greet without necessarily asking for money. There have been, and are scheduled, a number of non-fundraising events.

Wisconsin Governor Scott Walker recently made a number of appearances in Orange and Los Angeles Counties. On Monday of next week former Texas Governor Rick Perry will be in Los Angeles and Ventura County for gatherings. Tuesday will find Florida Senator Marco Rubio speaking to Town Hall Los Angeles and a month later at the same venue Ohio Governor John Kasich will make an appearance. Ted Cruz is expected to be back in May and Rand Paul in June.

Carly Fiorina, who should need no introduction to California Republican donors after her U.S. Senate run in 2010, is expected to make the rounds here next month.

With so many potential candidates, California donors want to get to know the candidates before they decide whom to back.

So the mating ritual is in full swing. But let?s not be fooled ? in the end its all about the money.

Joel Fox is editor of Fox & Hounds and President of the Small Business Action Committee.

Originally published by Fox and Hounds Daily

Rick Perry speaks at rally in Orange County Sept. 8 (part 1)

Is Rick Perry the one?

For those concerned with a philosophically conservative, free market approach to government and economics in the White House perhaps look no further than Texas Governor Rick Perry who at the Republican Presidential Debate, hit the core principles that ought to be most important to conservative and Republican voters: responsible military policy, free market economics and aggressive entitlement reform.

Going into the GOP debate at the Ronald Reagan Presidential Library the spotlight was hoisted on Rick Perry as the new kid on the block and the frontrunner in the campaign. As a debater in the presidential setting, Perry has far less experience than many of those in the race, especially former Massachusetts Governor Mitt Romney. Even if one were to concede that Perry did not carry himself as a slick debater, when examining his debate rhetoric closely, it becomes clear what Perry believes and why he might be the best choice to lead a new movement within the Republican Party, and more importantly, the nation.

Perhaps the most thoughtful insight into the economic philosophy of the Lone Star State chief were his comments during the debate about chastising the use of government spending to stimulate the economy.? President Obama, Perry argued, ?has proven for once and for all that government spending will not create one job. Keynesian policy and Keynesian theory is now done. We?ll never have to have that experiment on America again.? Perry appears not to believe in government manipulation of the economic system to spur job creation and activity in the economy. While Perry does not say it outright, he defacto endorses a more Austrian approach or a pure free market approach to economics.

His criticism of government involvement in economic activity is also evident in his beliefs about how jobs are created: ?You want to create jobs in America?? You free the American entrepreneur to do what he or she does, which is risk their capital, and I?ll guarantee you, the entrepreneur in America, the small businessman and woman, they?re looking for a president that will say we?re going to lower the tax burden on you and we?re going to lower the regulation impact on you, and free them to do what they do best: create jobs.?

Perry though, is by no means a free market purest?at least on the state level?his use of enterprise to lure businesses to Texas is problematic, but he makes it clear through his rhetoric frequently that states should choose policies that work best locally. One example of this were his debate comments on health care policy, ?we understand that if we can get the federal government out of our business in the states when it comes to health care, we?ll come up with ways to deliver more health care to more people cheaper than what the federal government is mandating today with their strings attached, here?s how you do it, one-size-fits-all effort out of Washington, D.C.?

Perry?s harsh rhetoric on Social Security also demonstrates that he will push hard as president for entitlement reform. His comments accurately calling Social Security a ?Ponzi scheme? have been widely publicized and criticized but during the debate he did not back away from his statements even when challenged by Romney: ?It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you?re paying into a program that?s going to be there. Anybody that?s for the status quo with Social Security today is involved with a monstrous lie to our kids, and it?s not right.?

Perry did not go as far to call for changing the Social Security system during the debate like former Godfather?s Pizza CEO Herman Cain did when he astutely advocated for the Chilean approach to Social Security. ?I believe in the Chilean model,? Cain said, ?where you give a personal retirement account option so we can move this society from an entitlement society to an empowerment society.? Perry has not demonstrated a willingness to advocate the same approach as Cain perhaps because of the problems it caused the President Bush while in the Oval Office.

As for military policy, Perry advocated a more sensible approach showing a skepticism towards imperialistic approaches to foreign policy. ?I don?t think America needs to be in the business of adventurism,? Perry said. ?Americans don?t want to see their young men and women going into foreign countries without a clear reason that American interests are at stake. And they want to see not only a clear entrance; they want to see a clear exit strategy, as well.?

Emphasizing differences in foreign policy with the Obama administration Perry said ?We should never put our young men and women?s lives at risk when American interests are not clearly defined by the president of the United States, and that?s one of the problems this president is doing today.?

Characterizing Perry?s first debate performance as blockbuster would be a stretch but when dissecting his rhetoric one might be led to believe that Rick Perry is the real deal.