Man Without Qualities

Thursday, September 26, 2002

Simon and Davis

The Man Without Qualities has for some time believed that reports of Gray Davis' inevitable triumph over Bill Simon have been greatly exaggerated, and, frankly, amateurish. I therefore cheerfully welcome signs that the Wall Street Journal now seems to agree, as indicated in these excerpts from an editorial in today's Journal:

California Governor Gray Davis signed a bill mandating paid family leave this week, just as a new survey of executives rated the state's "business climate" the worst in the nation. Consider these two more signs that Republican challenger Bill Simon still has a chance to beat Mr. Davis next month.


The paid leave law is a bonanza for unions that Mr. Davis wants to turn out to vote in November. It is, however, one more burden for business, which will have to finance this attempt to import European economic vigor. Current federal law mandates only unpaid leave and exempts companies employing fewer than 50 people; progressive Sacramento is sticking it to every Mom and Pop store in the state.

This is one more reason for job creators to leave what was once an entrepreneurial mecca. The recent survey, by Development Counsellors International, found that 57% of 283 executives rated California the worst state in the nation to locate a business.


It takes some doing to turn California into a business bust, considering its climate, resources and tremendous talent base of 35 million people. But the state's politicians have done it by piling ever more regulations and costs on employers. The state's workers' compensation system is out of control, with premiums rising as much as 120% this year. In February, as a payoff to trial lawyers, Mr. Davis signed a bill doubling workers' comp payouts.

All of which explains why Mr. Davis still faces a close re-election contest. California hasn't elected a Republican statewide since 1994, and the media long ago declared Mr. Simon a goner. But a new poll this week shows him within striking range at 40% to 32%, with one in five voters still undecided. This is bad news for an incumbent whose record voters know.


One recent [Davis] ad asserts that "a jury of 12 Californians ruled Simon's company defrauded its partner." That ad ran after a trial judge threw out the civil fraud jury verdict against Mr. Simon. The judge declared that Mr. Simon's company was the real victim of fraud and awarded it $125,000 in legal fees.

Mr. Simon is trying to refocus the debate on such trivia as the state's economic future. The Republican is proposing to slash the capital-gains tax -- which hits Silicon Valley hard -- curb lawsuits and workers' comp, and reform endangered species laws that punish agriculture. He also wants to expand cooperation with private contractors to rebuild the state's neglected roads. All of this is worth debating, along with a state budget deficit already expected to be at least $10 billion next year.


Watching the polls, the national GOP is finally saying it will throw as much as $2 million into the race. And Mr. Simon recently loaned his campaign $4 million. But that pales compared to the $31 million that Mr. Davis has in the bank, money raised from business on the promise that he'd veto the kind of onerous mandates he is now signing to save his career.

California voters tune into politics notoriously late, and many are clearly unimpressed with both candidates. The magnitude of the state's problems, Mr. Davis's enduring negatives and the fact that Mr. Simon can now run free of his legal problems means they may yet deliver an upset.

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