I had to hop out to the United Arab Emirates (UAE) and back this week for work. It's 15 hours each way and gives one plenty of time for reflection. When I am overseas I often ponder how the place de jour is the same and different than B'game. The UAE is, as its name implies, a combination of historically independent emirates--notably Dubai and Abu Dhabi. As you can see from the photo below, they are brand new cities rising from the desert. A central location and gold trading were the historical advantages. Today oil, the central location and an open economy with no taxes are the fuel for amazing growth. Nothing in the picture below existed 15 years ago! And there is another city just like it about 60 miles away.
So I was left to ponder how California is reacting--competing, really--in this global economy. The Dubai airport took over the #2 slot for international traffic from Paris de Gaulle last month and expects to dethrone Heathrow in 2015. Governor Moonbeam, aided and abetted by some clueless voters, is busy raising tax rates. The newspapers are reminding everyone to make those big purchases before the sales tax rate rises next week. The guy in the article says it's not a big deal because people are used to the increases--evidence of another clueless voter--myopic and under-educated.
And we can say the same about energy costs. Today's Wall Street Journal editorial titled "California's Coming Green-Outs" discusses the 2006 law that requires our utilities to get 20% of their power from renewables by 2010 which was then increased to 33% by 2020. There are just a couple of wrinkles
California residents and businesses already pay rates that are 25% to 60% higher than the national average. Excessive energy costs have helped to obliterate the state's manufacturing base.
And the push for legislated percentages of renewables will only exacerbate that exodus. Meanwhile we are competing with the UAE, Oman, Quatar, Singapore and the next wave of developing nations. We have our advantages for sure, but why are so many of our weaknesses self-inflicted? It is going to be interesting (scary) to see if the "barbell economy" can carry its weight.