A Message to the Governor – Stand Firm and Don’t Sell Business Out

If the Governor is to learn one lesson from the November Election results,
it should be that moving to the Left is not the answer to his political

According to recent press reports, the Governor’s Chief Political Strategist
Mike Murphy blamed the business community for the losses of Schwarzenegger’s
reform package and vowed that the business community will face bad news in
the upcoming legislative session – indicating that an increase in the
minimum wage, further restrictions on greenhouse gas emissions, and a host
of other anti-business proposals loom close on the horizon.

As Murphy chastised the business community at a recent retreat sponsored by
the representative of big business in the state, it was learned that the
California Chamber of Commerce has hired liberal Democrat political
operative Darry Sragow to run its 2006 election efforts. Murphy’s warning
delivered to Chamber of Commerce executives coupled with the Chamber’s
hiring of a liberal Democrat working for anti-business Speaker of the
Assembly Fabian Nunez paints a potentially catastrophic picture for the
small business community in California.

It is no secret that anti-business leaders in Sacramento (the same people
the Chamber of Commerce’s new political director works for) want to force
the Governor into raising taxes, increasing the minimum wage, implementing a
single-payer healthcare insurance regime paid for by small business owners,
and signing off on a whole host of other proposals that would drive the
state’s economy into the ground.

While the Governor may not be in the ideal political position to fight the
anti-business lobby at this particular point, it is certainly no time for
him or his political advisors to concede total defeat and abandon the vision
that propelled him into office in the first place.

Consumers and small business owners want Governor Schwarzenegger to succeed.
They want him to continue the path towards reform. And they want him to fix
the fundamental problems that caused the recall of Gray Davis in the first
place. What they don’t want is for the Governor to veer to the Left and
adopt an anti-small business agenda.

From a small business perspective, the best way to claim victory from the
November Election results is to acknowledge and accept the defeat at the
polls as a message from the voters that they want real comprehensive reform
– not meaningless spending limits and trivial tinkering with minor issues
that avoided the heart of California’s fiscal troubles.

If the Governor is to regain his standing and popularity with the California
electorate, he should reject the calls from those who want to see higher
taxes on the small business community. While large companies (like those on
the Board of the California Chamber of Commerce that hired Speaker Nunez’s
political consultant) can afford to absorb increased costs of regulations
and marginal tax increases, the same is not true of small businesses that
create over 90% of the new jobs in the state. Companies struggling on a
small 1% profit margin cannot afford the increased cost of doing business
foretold by Murphy and advocated by the clients of the Chamber of Commerce’s
new political advisor.

Governor Schwarzenegger is a smart politician. Our hope is that he will
wake up and realize that the real reason he is in office today is that there
existed fundamental problems with the way government operated under Gray
Davis and a Legislature that was decidedly acting against the interests of
small businesses in California. We hope he will dismiss the comments made
by Murphy and send a message to the Chamber of Commerce that now is not the
time to turn the keys to the state over to the same Liberals who nearly
bankrupted the state under Gray Davis.

If Governor Schwarzenegger changes course so dramatically as to raise our
taxes, impose new regulations on our small businesses, and make it tougher
to run a small business; the people will certainly revolt.

We want Governor Schwarzenegger to succeed. To do so, he needs to get back
to the basics and start pushing real reform and articulating to the people
exactly why the reform is necessary to keep California moving forward. The
last thing we need is an Administration willing to raise taxes and increase
the burdens on small business coupled with a Chamber of Commerce that seems
to have accepted defeat and is giving up the fight for California’s economic

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