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"Business Friendly Climate" is one of the buzz phrases we see and hear a bit more frequently these days. I guess it is a phrase that may have always been around to some extent but is not just limited to the business press. But what exactly does "Business Friendly Climate" actually mean? Googling the phrase brings up millions of pages of hits with apparently every state, city, and town in the country making the claim for themselves. President Obama says the US must become Business Friendly to create jobs. But to me, the more often I see and hear the phrases "business friendly" or "good for businesses," the more I become convinced that the end result will be something that is bad for humans and bad for living, breathing entities.
In case you are curious as to what precipitated this, it was a few articles the last week or so on both sides of the "it's good for business" divide. First up is this article from CNN on Tuesday, July 12 on businesses "fleeing" California:
Buffeted by high taxes, strict regulations and uncertain state budgets, a growing number of California companies are seeking friendlier business environments outside of the Golden State.Carly Fiorina, failed former CEO of Hewlett-Packard and failed California Senate candidate continued the theme of "business friendly" in this opinion piece at Politico, also from Tuesday. Then McClatchy had this from Wednesday, asking in the title "Would looser environmental regulations help the economy?"
While not all companies investing elsewhere are doing so for economic reasons, some are shopping around for lower costs, lighter regulations, stable leadership and government assistance and incentives.
The most popular places to go? Texas, Arizona, Colorado, Nevada, Utah, Virginia and North Carolina, said Vranich. All rank in the Top 13 places to do business, according to Chief Executive.
And there it is. "Looser environmental regulations..." From the article:
WASHINGTON — Republicans in the House of Representatives are waging an all-out war to block federal regulations that protect the environment.It's OK to poison the earth, air, and water but doG forbid anything should be done to stop businesses, right? Just today, the NY Times had this article on how a recently approved herbicide may be killing trees:
They loaded up a pending 2012 spending bill with terms that would eliminate a broad array of environmental protections, everything from stopping new plants and animals from being placed on the endangered species list to ending federal limits on water pollution in Florida,
The terms also include a rollback of pollution regulations for mountaintop mining and a red light on federal plans to prevent new uranium mining claims near the Grand Canyon.
Another Republican-sponsored bill that's before Congress would weaken the nation's 1972 Clean Water Act, taking away the Environmental Protection Agency's authority to step in when it finds state water-pollution rules too loose.
Manufactured by DuPont and conditionally approved for sale last October by the federal Environmental Protection Agency, Imprelis is used for killing broadleaf weeds like dandelion and clover and is sold to lawn care professionals only. Reports of dying trees started surfacing around Memorial Day, prompting an inquiry by DuPont scientists.Good for New York and California. And this leads me right to the point. With all the articles around the Toobz on "business friendly" there are a couple I've found, pointing out some of the fallacies of the phrase. Both Bloomberg with this opinion piece from last Friday and the Fiscal Times also from last Friday had pieces pointing out how the "Texas Economic Miracle" so often touted by Gov Goodhair isn't so much of a miracle after all. From the Bloomberg piece:
In a June 17 letter to its landscape customers, Michael McDermott, a DuPont products official, seemed to put the onus for the tree deaths on workers applying Imprelis. He wrote that customers with affected trees might not have mixed the herbicide properly or might have combined it with other herbicides. DuPont officials have also suggested that the trees may come back, and have asked landscapers to leave them in the ground.
Mr. McDermott instructed customers in the letter not to apply the herbicide near Norway spruce or white pine, or places where the product might drift toward such trees or run off toward their roots.
Imprelis is not approved for use in New York and California because both states have separate review procedures for such products. New York State officials say they have told DuPont that it has detected two problems: the herbicide does not bind with soil, and it leaches into groundwater. The state has told DuPont it will therefore not allow Imprelis to be sold unless the company provides evidence to the contrary.
It’s easy to be charmed by Texas, but it would be a mistake to think the state might serve as a national model. Texas created almost 250,000 jobs in the past two years, nearly as many as the other 49 states combined. Texas leaders, including Republican Governor Rick Perry, credit that success to low taxes and a business-friendly regulatory approach.Of course, the businesses surely do love the low wages aspect. But even in Texas, try living on minimum wage. And I have to be honest, there are many parts of the opinion piece conclusions (passing the so-called "Free Trade Agreements" and repatriating overseas profits at a much lower rate for example) that I find just as wrong as touting low wages as something that is good for people.
Yes and no. Those factors played a role. To a sizable degree, however, the state’s booming payrolls are the result of hard-to-duplicate factors, such as a fast-growing population, and unusually low wages.
The Fiscal Times piece offers a different set of reasons for how maybe Texas isn't quite the shining star:
There’s just one problem with that portrayal. While Texas has created more jobs than any other state in the past two years, the increase is far less than advertised, and the rate is not much higher than a number of other states, including former rustbelt centers like Pennsylvania or liberal sanctuaries like Vermont. In fact, the Lone Star State’s unemployment rate of 8 percent is ranked 24th among states, placing it squarely in the middle of the pack.Why imagine that! Those dastardly, no good, very bad regulations that seem to be the root of all evil for businesses actually protected people in Texas from the very worst parts of the Great Recession.
Moreover, to the extent Texas has done better than other areas of the country, most of its good fortune rests on conditions that are not replicable elsewhere: soaring oil prices have provided a substantial number of new jobs and tax revenue even as higher gas prices put pressure on other state budgets, and an influx of new government defense spending has pumped up revenue. Moreover, the state has used oil revenue to postpone a sharp cutback in state and local government employment, which is about to hit in full force.
In addition, Texas eluded the housing price bubble and thus did not suffer as much from price declines and foreclosures. After the savings and loan crisis of the early 1990s, which hit Texas hard, the state legislature tightened mortgage regulations. Even though Perry touts a free market economy, the new mortgage rules saved Texas from the worst effects of the national housing bust, even as construction employment fell by 95,000 and remains 14% below its pre-recession peak.
Too bad the Beltway Village
And because I can: