The Big Kahuna himself, Government, has been creating – er – waves in the surfing world as the Beach Bums’ supplier of choice, Clark Foam, has finally succumbed to its unremitting regulatory onslaught and closed its doors.
He said he spent $500,000 in fire code fixes, another $400,000 defending himself against an employee’s lawsuit and faced buying a multimillion “scrubber” to comply with emissions law. He also battled with the Environmental Protection Agency over pollution issues at his Laguna Niguel-based company.
Clark – a 44-year old firm, owned and managed by the eponymous inventor – has no less than 90% of the custom market and 75% of the worldwide market and its shuttering has sparked panic buying at dealers all along the world’s coastline.
As Clark said in a faxed announcement:”They simply grind away until you either quit or they find methods of bringing serious charges or fines that force you to close.”
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Sad story, but Clark may have had other options, such as move to Oklahoma. Businesses are leaving California in herds, moving to OK and the surrounding states because of CA’s heavy environmental regulations and taxes. They find the cost of living and business much lower, and the productivity much higher. Maybe Clark was just tired. Anyone buying his name and methods?
How about a sales office in CA and a factory in Nevada, Arizona, Washington, Oregon, Idaho, etc.
Even OK is on the list. If CA does not want you then the aforementioned folks will.
Don’t come to oregon, we’re only slightly better than california when it comes to business environment.
Dude, surfers need oceans. Why work if you can’t surf nearby. Duh.
Actually, Roger, the California business drain is a myth:
http://www.signonsandiego.com/uniontrib/20051027/news_1b27compete.html
Not that California doesn’t suffer from too much regulation, but it would appear that things such as urban clusters, with their decreased transportation costs, skilled populations and abundant customers, outweigh the fewer regulations of remote places like Nevada and Arizona.
Anecdotally, one of my most favorite Mexican restaurants, JIMBOYS, has been expanding up to wazoo all over the central valley (Sacramento). God bless em’.
Roger M:
It doesn’t matter if a company can set up shop somewhere else, what matters is the fact that resources are being allocated differently then they would be under free market conditions. Capital ought to go where it is valued the most. A previous blog entry summed it up, “Dude, surfers need oceans. Why work if you can’t surf nearby. Duh.”
Setting up a surf shop in a near by state, instead of where the market dictated, California, could be hurtful to the company. Not only could sales be hurt, so could the labor market for surfboard salesmen and shop hands. Would a surfboard company that is moving to Oklahoma be willing find knowledgeble associates? Most likely the local labor market in Oklahoma would include cowboys and farmhands, not surfers.
Why would a business owner want to tarnish his reputation by hiring employees that don’t understand the product?
He could start an educational program to train the cowboys and farmhands about surfing, but this is a cost he would not have had under the free market condtions. He could have hired local surfers who have both formal and informal knowledge about surfing equipment and techniques.
An entrepreneur can only take so much abuse from the regulatory state. Would you want to set up your business somewhere else, after you were a well established widget maker in widgetland just because of all the red tape in widgetland?
Clark _could_ move to that great surfing country — Australia.. hint, hint.
The state of California has its head up its butt with regard to what its regulations and taxes are doing to its economy, businesses,and its citizens. Not all businesses have to get up and leave CA for that to be a bad thing, simply drive out key businesses and individuals and you change the economic ecology of the state for the worse.
Anyway, discussions of environmental laws that are not based in property rights are always going to be fruitless.
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