California’s Dreaming –
If there’s one thing that makes you feel like a mosquito at a nudist colony, it’s the lunacies of California.
What I’m saying is where do you start?
When the governor of a drought-stricken state is dynamiting dams—you know, the water-storing kind—shrugging off deficits, carving out exemptions for his billionaire pals, and urging voters to toss another 9 billion at the homeless, you can imagine the treatment small businesses are getting… if any.
Considering how hard it is to run a business in a first-class nanny state, no treatment is probably a good thing. In the words of Ronald Reagan (himself a former governator), the nine most terrifying words in the English language are ‘I’m from California’s legislature and I’m here to help.’
Don’t get us wrong; we love our friends and clients out there.
But with law after law making it impossible for California-based lenders to help small businesses (one of those laws nearly spread to Texas), Gavin and Sacramento deserve all the shade we can throw. I mean, come on: sanctuary cities? Reparations from a state that fought with the Union and wasn’t even slave-owning? There’s crazy, there’s batshit crazy, and then there’s twitching, babbling, watch-me-burn-the-house-down crazy. On street corner after street corner, it’s the last of those three.
If you think I’m exaggerating, don’t take my word for it—ask the refugees living in your neighborhood. In the last few years, some quarter of a million Californians sent U-Haul prices soaring in a mad scramble for the state line. Chances are, you’ve met some of those avocado-on-toast exiles. If you’re like me, you welcomed them, but with some choice words about oh, I don’t know… elections having consequences.
If all this isn’t a slow remake of ‘The Grapes of Wrath’ (but in the opposite direction), I don’t know what is.
What it Means
Now with that out of my system…
CA Senate bill 666—yes it’s that number, not making it up—is bad news for factors. I say ‘factors’ and not ‘LA factors’ because the Golden State’s a bellwether. From bikinis to robot cars, what happens there soon spreads everywhere.
While the bill’s fine print speaks for itself, some unwritten consequences are obvious.
-More requirements, disclosures, and reporting
-Higher legal and compliance costs
-More costs and hoop-jumping for expensive small business
-An ever-shrinking strike zone for small business lending
And most importantly:
-Fewer resources for battered, endangered industries like trucking and manufacturing.
I could lay out the consequences that might ripple out to Texas (more Californians goes without saying), but the writing on the wall is clear enough.
If this thicket of impossible regulations becomes normal there, then the rest of us aren’t out of the woods yet.
Of course, not being out of the woods ever is just part of the hero’s journey.
Lessons from the Journey
In East of Eden, author John Steinbeck evokes California’s on-again, off-again rainfall to remind us of something:
“And it never failed that during the dry years the people forgot about the rich years, and during the wet years they lost all memory of the dry years. It was always that way.”
When it rains, we forget it was ever dry.
When there’s no clouds in the sky, we forget it was ever different.
If more business-killing legislation from a place that was once a business friendly, middle-class magnet tells us anything else, let it serve as a reminder: forgetting our nature, our limits, and the cycles we spin, is deadly.
It’s no accident that the hero who changes, grows smarter, and graduates to a higher existence remembers where he came from. Forgetting his origins is a kind of death—and with no homecoming to spread and celebrate his hard-won achievement, the journey is incomplete.
Knowing ourselves is remembering what tempts and derails us… and for our friends in the Golden State, that might be remembering that the person saying ‘no more, you’ve had enough’ isn’t so much killing the party as trying to save your hide.
So enough insanity.
If California thinks lenders and business owners can’t take care of themselves (and each other) without more rules, then as the old song goes, California’s dreaming.
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