Dan Walters: California vs. Texas debate rages on
02/12/2013 12:00 AM
10/20/2014 1:37 PM
Unto itself, Texas Gov. Rick Perry's supposed business recruitment trip to California this week is nothing more than a publicity stunt, and a cheap one at that.
Perry is here after spending a few thousand dollars on a radio ad inviting California business to relocate to his state and garnering millions of dollars in free publicity from the California media.
"Building a business is tough, but I hear building a business in California is next to impossible," Perry says in the ad. "There are plenty of reasons Texas has been named the best state for doing business for eight years running."
California politicians, including Gov. Jerry Brown, played into Perry's hand by responding defensively.
"A lot of these Texans, they come here, they don't go back," Brown said. "Who would want to spend their summers in 110-degree heat inside some kind of a fossil-fueled air conditioner? Not a smart way to go."
As a matter of fact a lot more Californians have been moving to Texas than vice-versa of late, probably because its employment opportunities are more abundant while California still has one of the nation's highest unemployment rates.
Perry is highly unlikely to bag any California employers on this trip. Nor, one suspects, does he expect to do so. Unpopular at home after his rather lame bid for the White House last year, Perry knows that bashing California raises his profile at home.
All this gamesmanship aside, however, maybe Brown et al. reacted so defensively because they know that Texas' economy has been booming while California still struggles with a slow recovery from a deep recession.
Yes, some of Texas' prosperity is due to the oil boom. In fact, the California region that most resembles Texas – Bakersfield and environs – is also seeing a surge for the same reasons.
But that merely points up the fact that California has vast potential reserves of shale oil that it is moving very slowly, if at all, to tap.
The differences are more than oil. Texas has a much lower tax structure, including no personal income tax, a much more permissive regulatory climate, and a much lower cost of living, especially housing. That makes it attractive to business of a certain type.
California has its attributes as well, including a much better climate and unmatched natural scenery, as well as first-class research universities and – in and around Silicon Valley at least – a powerful entrepreneurial impulse and access to capital.
The question for California – one that its politicians don't even acknowledge, much less answer – is whether the state's assets outweigh its deficiencies in the global competition for investment capital.
We always assume that today's bust will morph into tomorrow's boom. But Detroit also assumed that it always would be the nation's industrial Goliath.
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