Democrats run Obama's home state of Illinois. That state's response to the profoundly serious economic problems facing so many states has been a massive increase in taxes. Republicans in neighboring states have an opportunity to showcase at the state level how their party would handle our nation's economic crisis. The landslide last November gave Republicans complete control of five state governments in the Great Lakes Region: Pennsylvania, Ohio, Michigan, Indiana, and Wisconsin. Republicans in those states not only control the governorships and both houses of the state legislatures, but the state legislative majorities are big, and Republicans won many secondary statewide elective offices as well. Now, more than any time in a generation, Republicans can actually implement their agenda, limited only by their political courage.
What should these governors and legislatures do? They should act in concert, not in competition, and create an oasis of business-friendly government in a region which desperately needs a true recovery. One first and vital step, as I have written before, is for all these five states to enact Right to Work laws. The cost of labor drops at once when forced union membership is prohibited. Business also has a great deal more flexibility in employing its workforce without union contracts and labor bureaucrats. When labor is cheap, business is more likely to hire people.
Then these states should consider and, if possible, enact a general reduction across the board for all taxes which affect businesses. The cuts need not be extreme, but these should be for every tax rate. Business should know that for every activity in which costs had been calculated before, that cost will now be less because of lower tax rates. If the five Republican states act in unison, then the regional climate will change. State governments look at laws which end at the borders of the state, but business looks at markets and resources which embrace a particular market area. A tax cut in Michigan, for example, might encourage a business to open in Wisconsin or Ohio.
Another helpful goal would be to review and to repeal all laws which hinder enterprise without sound reason. Then adopt something analogous to a uniform code for businesses. Most businessmen are familiar with the Uniform Commercial Code (UCC), which deals with many business situations. It works very well and provides predictable and sensible laws for many commercial transactions. Why not undertake a similar law, but much broader in application, for all of these five states? The UCC is short, simple and sensible. A businessman can keep a copy in his desk, even in his vest. Expanding the scope of clear, concise and fair uniform laws to these five states would not just encourage big corporations to invest in the region, but it would also greatly simplify the management of small businesses. Each of the five states could pass this new code and make it effective the same day. The states could even provide a copy to anyone who wanted to have it.
The regulation of business, also, could be dramatically curtailed. All licenses, permits, and the like should be reviewed to see if they are truly needed or if they are instead things created to help a special business interest. Rules and regulations on business should be reviewed the same way. Economic freedom should be the explicit and desired objective and only what is indispensable to the public's safety or health should be retained. Environmental regulations should be cut back to the minimum necessary to comply with federal laws and regulations.
In the five Republican states from Wisconsin to Pennsylvania, the active promotion of business enterprise through uniformly lower taxes, uniform and rational legal structures, deregulation of everything that can be ended, and a huge "free labor" market would not just promote prosperity in a single state, but the combination of these five states acting in concert would produce synergism. The pressure for neighboring states like Illinois, Minnesota, Missouri, and Iowa to follow suit would be irresistible. The comparison of economic growth under Republicans and economic collapse under Democrats would be a salient fact going into 2012. The model for creating prosperity, which has never been a true mystery, would be illustrated perfectly.
Would it really work? Mitch Daniels in Indiana, using only his medium sized state as a magnet, has produced more sound government and lower unemployment. Multiply Indiana into a nearly contiguous region seven times as large, and the chance of a real wave of growth, in those areas with profoundly pro-business Republicans, could be a tsunami. Republicans pining about their chances against Obama in 2012 are thinking about jousts by the Potomac. Demonstrated policy victory can come much sooner in state governments, and if these are next to Obama's Illinois, so much the better. If done right, that contrast will be the issue in 2012 -- and it is an issue in which Republicans win.