California Gov. Arnold Schwarzenegger proposed a “California Jobs Initiative” in his State of the State address last week, a legislative package he described in more detail at an event Monday in Torrance. The site was Ace Clearwater Enterprises, which manufactures complex formed and welded assemblies for the aerospace and power generation industries. (The company president is Kellie Johnson, a member of the NAM’s Executive Committee.)

The Governor’s plan is quite substantive, framed around these goals: To create 100,000 new jobs and train an additional 140,00 Californians; to streamline regulations to get shovels into the ground, extending the home buy tax credit; and to eliminate sales taxes on green-tech manufacturing equipment.

The fifth element — tort reform — is worth of special note given the efforts to block or even reverse legal reform in Congress. The fact sheet for the jobs initiative summarizes the section, “Reforming The Legal Climate For California’s Businesses”:

To foster an atmosphere where businesses can thrive, the Governor will propose a series of changes to regulations governing class action law suits, products liability suits and seek to cap punitive damage awards. Unfair and frivolous suits impact where companies locate or expand. California’s current litigation laws lead to large settlements with little value to consumers but become worth millions to lawyers at the expense of California businesses. Current statutes also impede growth by holding businesspersons liable for defective products - even if the seller had no knowledge or control over the defect - and allowing for punitive damage awards that are wildly unpredictable among similar cases.

The Governor will propose a set of statutory changes that will set forth clear guidelines for class action lawsuits improve California’s litigation climate by allowing defendants to appeal class action certifications and by requiring the plaintiff rather than the defendant to pay for notification to other potential class members. In addition, these reforms will provide for limitations on the scope of damages assessed against business persons for defective products and eliminate unreasonable and excessive noneconomic and punitive damages awards.

For more, see the the California Civil Justice blog, “Gov. Schwarzenegger Urges Legal Reforms to Improve Climate for California Businesses, and Dan Pero at AmericanCourthouse.com, “Schwarzenegger to Fight for Legal Reform.”

We continue our look at governors’ states of the state addresses for their references to “manufacturing” or “manufacturers.” Earlier posts on New York Gov. David Paterson, Washington Gov. Christine Gregoire and Kansas Gov. Mark Patterson are below.

California Gov. Arnold Schwarzenegger delivered his final State of the State address on Thursday, Jan. 7, in Sacramento. Schwarzenegger, a Republican, was first elected with the recall of Gov. Gray Davis in 2003 and then re-elected in 2006.

His specific reference to manufacturing (text of speech):

And fourth, since we want California to be the dynamo of green technology, I ask you to pass our proposal exempting the purchase of green-tech manufacturing equipment from the sales tax. That too means jobs. (Applause) Those are jobs for the new economy.

No references to “industry” or its variants.

Again, the exercise is to just search for those terms. All these states of state addresses deal with economic policy; we’re just interested to see if “manufacturing” rises to the level of specific mentions.

Governor Arnold Schwarzenegger delivered his final State of the State address on Wednesday. (News release, speech.)

Jack Stewart, President of the California Manufacturers and Technology Association, issued a statement in response. We’ve highlighted Jack’s comment that applies equally on the federal level.

In 2010 Gov. Arnold Schwarzenegger must address the largest unemployment problem California has seen in 70 years. The Governor was right in his State of the State address that job creation should be our number one priority and we applaud his commitment. However, we don’t share his optimism that the worst is over for the California economy and that we are well positioned to take advantage of the future.

Policies that help only select industry segments are not the answer. We need sweeping policies and strategies that send a clear signal to all employers that California can compete with the rest of the nation.

We were surprised that the Governor limited business regulation reform to streamlined construction permitting. After losing 600,000 manufacturing jobs, 32 percent of California’s industrial workforce, we must go so much farther. A very inexpensive and productive way for the state to grow new high wage jobs is to provide broad regulatory relief . By reforming California’s onerous regulatory burden, California can provide consistency and a more competitive business environment. We urge the Governor and legislature to conduct an in-depth and focused review of the cost impact and effectiveness of existing and proposed regulations.

The Governor and Legislature have an enormous year ahead of them and their goal should be to make California attractive to every kind of manufacturer and high wage employer. We won’t recover without significant employment gains in all sectors of our economy.”

Governor Arnold Schwarzenegger last week held a news conference in Industry, Calif., where he announced the signing of a bill to waive state environmental regs and allow construction of a 75,000 seat football stadium. The goal is to attract an NFL football team to the Los Angeles area.

From the governor’s office news release, “Governor Schwarzenegger Signs Legislation to Move Los Angeles Stadium Forward“:

Governor Arnold Schwarzenegger today signed Assembly Bill X3 81 by Assemblymember Isadore Hall (D-Compton) to speed up the construction of the long-awaited, environmentally-reviewed Los Angeles stadium complex. Specifically, this bill exempts activities associated with the development and operation of the stadium complex in the city of Industry from the California Environmental Quality Act – essentially cutting unnecessary red tape to get shovels in the ground, people to work and an NFL team in Los Angeles.< “This is the best kind of action state government can create – action that cuts red tape, generates jobs, is environmentally friendly and brings a continued economic boost to California,” said Governor Schwarzenegger. “This legislation allows us to move forward with the construction of the nation’s greenest football stadium and create thousands of jobs.”

For a football stadium, a waiver? No objection, but if the goal is cutting red tape to encourage jobs creation, aren’t there better projects? Transmission lines from desert solar-energy generating stations, for example.

But that’s California’s dilemma: The only project that can conceivably be built these days without death by litigation/regulation is something that really doesn’t contribute much in the way of primary wealth creation — a football stadium (with an orthopedic hospital, a movie and live performance theater, and office and retail space).

If, as California goes, we all go, the nascent recovery will not survive long. From the California Manufacturers and Technology’s Mpowered blog, “Renewable power mandate’s best-case scenario: 7% rate increase:

Governor Arnold Schwarzenegger could get a Renewable Portfolio Standard (RPS) bill on his desk after the state’s legislative session ends this week.  SB 14 by Sen. Joe Simitian would deny California utilities access to the most cost-effective energy and, according to the Public Utilities Commission, raise the state’s industrial electricity costs at least 7 percent.  The Energy Information Administration states that existing rates are already 45 percent more expensive than the nation and 80 percent higher than the western region.

California industry can barely compete with its neighboring states and energy costs play a major role in that imbalance.  The AB 32 greenhouse gas law that passed in 2006 already allows the California Air Resources Board to implement RPS in a cost-effective manner.   Gov. Schwarzenegger should veto this bill because it will impose huge new costs and threaten high wage manufacturing jobs in California.

Read Letter to Gov. Schwarzenegger

From the Newseum’s online collection of daily front pages.

Along with the Sacramento Bee’s front page election coverage, you’ll see the story below the fold, “After long fight, California’s emission rules are now national policy“:

After millions in legal costs and years of delays, the state’s emissions rules are now national policy, set to drive a nearly 40 percent increase in vehicle fuel efficiency by 2016.

“This has been a huge victory for the state of California,” said Gov. Arnold Schwarzenegger, who was in the audience Tuesday. “As the president said, if it wouldn’t have been for the great leadership of our great state, this would have never happened.”

California Governor Arnold Schwarzenegger flies across country to participate in the White House’s event marking a new agreement on vehicle fuel standards. Now, it’s certainly true that California and the Governor’s relentless push for more regulation helped lead us to this point.

But it sure looks like the governor decided to get out of town before the voters destroy the proposed tax increases he supports at the polls today.

How did California get to such a state of economically wretched affairs?

UPDATE (12:15 p.m.): Heritage has some ideas.

In today’s Wall Street Street Journal, Governor Mitch Daniels of Indiana identifies cap-and-trade as a form of imperialism, as faltering powers in California, New York and Massachusetts attempt to “prop up their decaying economies” by exploiting other states and their citizens.

While not using the term “imperialism,” NAM President John Engler has talked about the same political phenomenon in his recent speeches, drawing attention to California’s economic collapse. Having imposed a high-tax, heavy-regulation, anti-energy regime within the state — driving out manufacturers and other employers — some of California’s members of Congress are promoting the same policies at the federal level. The results will inevitably be the same, stagnation and exodus, only this time businesses will flee farther than Nevada or Arizona.

Mark Steyn, the columnist, sees a slightly different dynamic at play, that of the Europeanization of America. But again, California is the example. From Imprimus:

To a penniless immigrant called Arnold Schwarzenegger, California was a land of plenty. Now Arnold is an immigrant of plenty in a penniless land: That’s not an improvement. One of his predecessors as governor of California, Ronald Reagan, famously said, “We are a nation that has a government, not the other way around.” In California, it’s now the other way around: California is increasingly a government that has a state. And it is still in the early stages of the process. California has thirtysomething million people. The Province of Quebec has seven million people. Yet California and Quebec have roughly the same number of government workers. “There is a great deal of ruin in a nation,” said Adam Smith, and America still has a long way to go. But it’s better to jump off the train as you’re leaving the station and it’s still picking up speed than when it’s roaring down the track and you realize you’ve got a one-way ticket on the Oblivion Express.

Or maybe pull the emergency brake?

Two relevant headlines:

• San Jose Mercury News, “As California budget mess deepens, Schwarzenegger proposes huge new cuts“
• USA Today, “Calif. voters ready to join tax revolt“

From Gino DiCaro of California Manufacturers and Technology Association, “Why Not California # 9 - Gregg Industries?: “Last week a single phrase shrewdly captured the state’s job woes: ‘California is catering to so many special interests, it has lost its focus on the common interest.’”

DiCaro has been writing on “Why Not California?” for some time now, and the latest entry is about business recruitment: Nevada woos manufacturers, California drives them out. His recurring theme is the anti-business tax and regulatory climate created by the state’s lawmakers and other elected officials. Consider all the “green jobs” going to other states, DeCaro noted in an earlier entry:

Could one of the main answers be that business costs are so high in California that we will never see significant green investments; that workers in other states will be the chief beneficiaries of California’s environmental mandates and that California’s brightest and best are fleeing to states that put a high priority on economic growth?  The latest cost of doing business survey by the Milken Institute finds that operating costs for California manufacturers are 38 percent higher than for their competitors in Tennessee.  Is it any wonder that investments in industries that create high-wage jobs routinely bypass California?

The state is suffering yet another budget crisis, and elected leaders in Sacramento have put multibillion dollar tax increases before the state’s voters on May 19. California-based talk show host Hugh Hewitt looks at the latest poll numbers and concludes that voters are going to reject the tax increases by large margins.

Hugh’s a partisan and he often offers advice to California and national Republicans, but partisan politics notwithstanding, he’s right on with this analysis. Washington is taking America down California’s path, and it’s a doomed direction economically and politically:

The important lesson in the California melt-down and the voters reaction top it and rejection of a tax-hike solution set is that President Obama and the Congressional Democrats are following strategies very similar to those adopted by Sacramento.  People like the president just as they liked Arnold when he was elected and then re-elected.

But they hate high taxes and lousy services, complicated government schemes to regulate their businesses and their lives, and especially deceitful, self-serving posturing by elected officials. Arnold is now about as highly esteemed as Gray Davis before him.  Like Arnold, President Obama has started his time in office with high popularity, but that popularity won’t protect his electability when the public absorbs the fact that the taxes he is planning are even more staggering than those imposed in the Golden State, and the government growth he is engineering even more vast than that which has occured on the west coast.

It’s important to include the Californian-run U.S. House in this analysis. It’s almost as if there’s a strategy to make the rest of the United States as uncompetitive as California. Higher taxes, expensive energy, rigid labor markets and crushing regulations nationwide could marginally improve the Golden State’s position within the country but are a disaster in the global economy.

“Schwarzenegger says his `Terminator’ might be back”

Schwarzenegger confirmed in a Webcast interview that his image might appear in next month’s “Terminator: Salvation,” the fourth movie in the franchise about a showdown between humanity and machines.

The governor says he made it clear he had no time to shoot new footage but that the filmmakers are playing with technology to insert his image from the earlier “Terminator” movies.

The movie is released May 21. Shoot, too late for him to use his appearance to urge Californians to join him in voting for the $16 billion in tax increases on the May 19th statewide ballot.

But maybe there’s a PR angle if the measure passes: “California’s economy has been terminated. Now see the movie. That’s the only salvation you’ll get.”