Originally posted by: Michael
Here's a list of reasons why businesses are leaving (and taking revenue):
Fortune article
Michael
Good read there.
You anti recall folks are really something else.
Lets look at the facts.
When Davis took office California had a SURPLUS in it's budget. How big of a surplus? Well in davis's first year as govener he spent a few million in executive orders to try and get that surplus under a cap that mandates that the state cut sales tax. He failed to spend enough.
When davis ran for reelection he clained the defict was somewhere around 5-7 BILLIOB Dollars. he assured voters that it was relativily small and that they would work it out. Experts at the time were saying that it was much closer to 20 or 30 billion.
Shortly after the election Davis "realized" that the budget was in far worse shape than he imagined with a 20+ billion dollar deficit. That number grows every day.
Davis has blamed the budget crisis on the electricity crisis he claim was created by the power companies yet the states spemding on electricity is not mnear the dicifit and that doesn't take into consideration the INCOME the state gets from selling that power.
While Davis cannot be blamed for the intial cause of the power crunch he can and should be held responsible for his total ineptitude in dealing with the said power problem.
Shortly after Davis took office the people of san diego found the flaws of the new deregulation plan. As power bills spiked The mayor and a few local officals made a trip to Talk with the gov. They had a big question why in So. California where there is a surplus of electricity were it's people paying 2,3,4, and even five times the going rate for electricity. Mayor Golding asked the Gov to allow our power providers to BYPASS the power exchange and deal directly with the producers of the power. The gov said that the problem would pass. Fast forward a few months and now people in San DIego are really starting to feel the pinch. Stores are half lit. Some are closing. Again the elected local officials look to davis for help. This time Davis agrees and places a price Cap on SDG&E. So SDG&E is still forced to purchase from the power exchange (and it's screwy bidding system) yet nust sell it power to consumers at a fraction of its cost to get it. Davis assures the people of san diego they will now have affordable power (with a brankrupt provider but hay who's counting). Noy this system was freat for the users of electricity but not so hot for the providers (selling at a HUGE LOSS and All). SDG&E along with the local leaders realize while this makes my power bill go down it really didn't fix the problem. That problem remains with the bidding system at the power exchange.
Davis's Next move was pure genius. Rather than wait for San Diego to plummet into the abyss that is economic Chaos he dicides that it would be wrong to only make the people to suffer from this idiotic power scheme so he ensure that every california can feel the pain. The entire state will now buy power from the power exchange under it's still UNCHANGED bidding system(more on that later). Now with every provider in the state seeing red davis decides that if proce caps can work for the consumer they can work for the provider. So now all power produced AND sold in the state of califonia will be sold at a price well below market value. Power from out of state will still go through the power exchage.
Now If I make a product and I can sell it for TWICE the amount somewhere other than where I am you would be silly not to ship that bad boy out. The really fvcked part about Davis's caps is that they created a HUGE shortage because the power comapanies are going to sell to the highest bidder. And Califonia had no chance of that. Now the companies were able to sell that power for more money than than they could get in california in say utah. Now they could buy power in utah and transmitt it back to california and sell it for top dollar through the power exchange (sense a trend here). This was perfectly legal for COMPANIES but municipalies are not allowed to "piggyback"
Davis finally decides that the power exchange is not really working and decides to help ease the tension of not knowing when the state will start buying power at a reasonable rate answers our questions. it will be about twenty years. Davis signs long term contracts with providers that insure californians will pay top dollar for a while. Not to worry though this will not be passed along to the consumer as davis will have the state buy the power, sell it at a loss so everyone can have a nice small power bill ( and a larger tax bill to boot)
now if this was davis's only flaw I might not have a problem (actually I would) but he has done alot more.
Incluing closing privte run prisons even though they provided the service better and cheaper than the state run ones.
I really haven't seen grey do anything that impressed me and the energy crisis was one of the reasons I chose to leave california. I still read my paper and try to keep up on the news. My folks still live there but are looking to leave soon.
Califonia has run off any bussiness that can do bussiness somewhere else and will continue to until someone stops the bleeding. Davis has procen time and time again that he is not the guy to deal with crisis.
