Nearly every election year, a series of analysts and candidates suggest to American voters that the election that year may be the most important of its age.  In retrospect, few can argue that the election of Obama has not been momentous.  The midterm election of 2010 may be a turning point as well – especially for American business.

For decades, American business has wined, dined and lobbied the American politicians. Some have sought preferential tax benefits for themselves or their industries.  Others have sought preferential regulations or corporate welfare for the same reasons.  Still others feed the alligator that is government in hopes that it will be kind to them in the future while it consumes others today.

Perhaps no greater example of the latter mentality exists in California.   Year after year, business interests donate millions of dollars to Democrats in the hope that they will act reasonably.  The coup de grace of which was the 2002 election for Governor between then Governor Gray Davis and challenger, and business man, Bill Simon.  Under no uncertain terms, Simon campaigned on lower taxes and regulations.  Davis offered record deficits and coming tax increases – not to mention an ever increasing regulatory burden.  Incredibly, Big Business gave to Davis three to one over Simon.  They did so because they did not give Simon much of a chance and they wanted to curry favor with Davis – hoping he would be kind to them when he won.

Without a doubt there were two losers in that election.  Simon lost by less than 5 points (far closer than business imagined) and California businesses now face the highest combined tax and regulatory burdens in American history.  In other words, California businesses have received a very poor return on their investments into California Democrat politicians – so much so that California’s desert neighbor, Nevada, leads the nation in new business development.

(more…)