Tough Love


Over the last two weeks, I have had the good fortune to sit down personally with both the current mayor of Los Angeles, Antonio Villaraigosa, and the city’s former mayor, Richard Riordan.

The separate meetings were under different circumstances – a roundtable discussion with Mayor Villaraigosa regarding reforming the much reviled Los Angeles city gross receipts tax - and with former Mayor Riordan in a far more casual setting at “Bruin Woods,” a family retreat at Lake Arrowhead.

Both discussions were candid and spirited.

While I don't agree with much of Mr. Villaraigosa’s politics nor his tendencies toward self-aggrandizement, I was impressed with the fact that even though he has spent most of his career in the public sector, he had a good understanding of the local tax and regulatory considerations that either contribute to or distract from a city’s business and job creation climate.

At a minimum, he was empathetically aware of the massively negative social impact of private employers leaving the city for other locales with more favorable business climates.

And as New York Mayor Michael Bloomberg has noted, it is at the “big city” level, far more so than at state capitals and in Washington, where the real work of public - private business partnership is being done.

This is because mayors face daily the intercity competition for the people and capital that pay the taxes that fund their governments.

This competition is fought on fronts including public safety (and both LA Mayors pointed out that city crime levels are the lowest they’ve been since the 1950’s), infrastructure, regulation, and tax policy.

Now the really GREAT thing is that on all of these fronts and more, local Democrats and Republicans are in agreement that pro-business policies are no longer an ideological choice, but a necessity for basic 21st Century relevance.

You see, because just like in the technology industry where decades of high efficiency competition have brought the cost of computers down over 99% in real terms, so too are market forces working their “tough love” magic on governments the world over.

So ignore the "it bleeds, it leads" media.

Ignore the side show that is politics as it is presented in our Drudge Report and our Huffington Post age.

The real game in government and politics these days is happening well below the radar.

It is happening in tens of thousands of little innovations, little loosenings, little efficiencies that politicians and technocrats are implementing daily.

And it doesn’t matter whether they want to make these changes or not.

They HAVE to because if they don't people and capital will just vote with their feet and leave.

To less regulatory onerous pastures, to lower tax seas.

This is great cause for cheer and enthusiasm for entrepreneurs and executives looking to start and grow businesses.

So now…what are you waiting for?

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