Friday, July 16, 2010

Conversations with Meg Whitman

Meg Says...

...Forbes, a must read for corporate decision makers, ranks California 39th among states for overregulation....(p. 8)

But Meg...

In the May 6, 2010 issue of Forbes, columnist Bruce Bartlett in “Tax Cuts and ‘Starving the Beast’” questions the notion that reducing the revenues of the government with tax cuts reduces government size and spending. History indicates that the opposite is true.

  • After the 1981 Reagan tax cuts, Federal outlays rose from 21.7% of GDP in 1980 to 23.5% in 1983, before falling back to 21.3% of GDP by the time he left office.
  • In 1993, when Clinton pushed through a big tax increase, Federal outlays fell from 22.1% of GDP in 1992to 18.2% of GDP by the time Clinton left office.
  • In 2005 Arnold Kling, a free market economist admitted...”cutting taxes did not help to reduce the size of government.
  • Bill Nikanen of the Cato Institute has argued that Starve the Beast actually increased spending and made deficits worse.

Meg Says....

...California has the 48th worst business tax climate in America according to the Tax Foundation....(p. 8).

But Meg

...According to the Franchise Tax Board, the share of Corporate income paid in taxes has fallen by nearly half since 1981. As Corporate income rose, the share of that income paid in taxes has fallen by nearly 50% since 1981. . California Budget Project, “Searching for Balance”, (p. 36)

Meg Says...

...California’s regulatory burdens costs small businesses about $500 billion a year and has been estimated to cost our state nearly 4 million new jobs...(p. 8)

But Meg...

The Legislative Analyst’s Office (LAO), California’s nonpartisian fiscal and policy advisor, disagrees with the Varshnay and Tootelian’s (professors at California State University, Sacramento) study that generated your claim.

The V&T’s principal conclusions are that the total annual economic cost of all regulations in California amounts to a loss of $493 billion in GSP and 3.8 million jobs. It also concluded that regulatory costs are born almost entirely by small businesses, and in 2007 amounted to over $134,000 per firm.”

The LAO commented that the V & T conclusions “contain a number of serious shortcomings that render its estimates of the annual economic costs of state regulations essentially useless.” Specifically...“The V&T’s finding that the cost of regulations on small businesses amounts to roughly $134,000 per firm annually is overstated. Even if the direct cost of regulations is disproportionately borne by small businesses, as assumed by V&T, dividing $493 billion by the number of small businesses (3.7 million) is inappropriate and results in an overstatement.”...

Meg Says...

...She grew eBay from a start-up with 30 workers to a global company with more than 15,000 employees and nearly $8 billion in revenue.” (p. 8)

But Meg...

...As eBay's local work force swelled to accommodate the online retailer's growth between 2000 and 2005, eBay added 366 managers to its Silicon Valley offices. That net increase included just five additional black managers and no Hispanics.


At a time when eBay was headed by one of the few high-profile female CEOs in Silicon Valley, Meg Whitman, the share of the company's managers and top officials who were female declined to 30 percent in 2005, from 36 percent five years earlier, according to federal employment data....” (The Mercury News siliconvalley.com, 2/10/2010)

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