Thursday, July 5, 2012

A Hopeful Sign for America...

In general, businesses and individuals make decisions more rationally than governments do.  An example from current events gives me some hope about U.S. politics, for reasons that will take a bit of explaining.

Airbus (the European aircraft manufacturer and only major competitor to Boeing) recently decided to locate a new plant in the U.S. to help it win future contracts with the U.S. government.  But where would they locate that plant? 

Would it be in Washington state, alongside Boeing, with tens of thousands of appropriately skilled workers nearby?  No. 

Would it be in California, with tens of thousands of high-tech workers readily available?  No.

Where, then?  Why, Alabama, of course.

What?!?  Alabama?  Why would any manufacturer in its right mind locate a plant in a state that epitomizes (to the legions of urban “progressives”, anyway) redneck hicks?

Perhaps for the same reasons that Mercedes and Toyota have already located plants there: business-friendly political environments, large and well-educated workforces eager for jobs, and low taxes.  Alabama is a right-to-work state (translation: unions are constrained), has a top income tax rate of 5%, a sales tax rate of 4%, and some of the lowest property tax rates in the country.

So why does this give me some hope about my country's future?

The fifty states that currently make up our union are in competition with each other, and a significant component of this competition relates to the political environment.  Good ideas in the political environment tend to win the competition.  This has been happening in Texas for the past decade – business-friendly politics has resulted in Texas having a booming economy and being relatively unscathed by the housing bubble.  It also has the largest rate of population growth of any U.S. state – our citizens are voting with their feet. 

My hope stems from this: in the long term, the political marketplace afforded by the fifty separate states will reward the winners.  And the winners are being chosen by people and businesses as they make decisions about where to live, or where to locate their business.  Alabama looks like one of the winners right now.  California lobbied Airbus hard to get that plant, and failed.  Politicians and citizens alike took note.  The more this happens, the less defensible the progressive economic death spiral becomes.  In the end, we all win.

So...I takes my hopes where I can get them.  And I'll take some here, with this news...

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