Sunday, October 28, 2007

The ghost of Jon Talton - the Republic's doom and gloom piece on Arizona's economy

The Republic ran one of its periodic hit pieces on Arizona's economy today, which sounded suspiciously like it was written by former business columnist Jon Talton. Talton's Marxist analyses of the Arizona economy have been thoroughly refuted by espressopundit. The article contained several charts comparing Arizona with other similarly sized cities. Nowhere was there a disclaimer that Arizona's statistics are going to be significantly distorted because of the high population of illegal immigrants as well as recent legal immigrants. So the charts reflecting low wages and low education levels aren't really accurate. If the high number of illegal immigrants in Arizona were removed from the survey, Arizona would probably fare as well as the other cities.

In the one area Arizona is actually doing better than other cities, its low cost of housing, the article conveniently leaves out a graph comparing it with the other cities. When you take into consideration the lower cost of housing, Arizona's lower wages are no longer significant - they make sense from an economic perspective.

One of the areas Arizona is lower than other states is in venture capital. That's not surprising considering how hostile Democrat Governor Janet Napolitano has been to tax breaks for businesses and investment. Only with considerable capitulation by Republican legislators on increasing spending for Napolitano's pet programs did Napolitano agree to give in on a couple of small tax breaks such as corporate tuition tax breaks - not really even anything that would encourage venture capital. It's no surprise that a lot of capitalists don't want to invest in a state with mediocre tax rates when there are other states with fewer regulations and lower taxes.

The article complains about the lack of Fortune 500 companies in Arizona, and the lack of fast growing companies. This is rather humorous, because if Arizona did lead in this area, the article would criticize Arizona for being taken over by greedy corporate interests that destroy independent bookstores. Fears of Arizona not having enough hi-tech and biotech companies are misplaced. Arizona is the 2nd fastest growing state in the nation. Everyone wants to move here, especially people from the state that ranks tops in these comparisons, California (San Diego was the city compared). Eventually Arizona will have more scientists, computer geeks, and engineers in sheer numbers which will force companies to branch out here. Google already has. Of course, that fact was conveniently overlooked in this article, because it didn't support the point of the article which was that Arizona is being relegated to a manufacturing and customer service state.

Overall, I was pretty cheered up by the article. If you can read through the b.s., it actually paints a pretty optimistic picture of Arizona as a fast-growing state. And once Napolitano is out of office, if we can get a Republican governor in who won't veto business-friendly laws, we can expect to do even better.

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