A humorous factor occurred on the best way to California’s collapse. It did not occur.
We preserve listening to that the Golden State goes down, down, down. Final yr, it suffered the primary drop in inhabitants since information have been stored. And there is that parade of pure plagues — the droughts, catastrophic wildfires and infernal warmth.
A largely hostile right-leaning media go on and on about California’s excessive taxes and varied liberal excesses. Californians, their story goes, are leaving in droves for low-tax, lax-regulation locations like Texas. And it is true that some massive California names — Oracle, Charles Schwab, Hewlett Packard and Tesla CEO Elon Musk — have moved their headquarters there.
However is that this the entire image? It isn’t. As Bloomberg Information reviews, California’s economic system is hardly headed for catastrophe. Quite the opposite, it’s No. 1 among the many states by most financial measures. Moreover, it’s rising from the pandemic in superb form.
And so when Texas Gov. Greg Abbott mentioned final February that California makes use of “heavy-handed authorities techniques that drive away companies,” California Gov. Gavin Newsom needed to reply. “We stay the fifth largest economic system on the planet,” Newsom’s workplace mentioned. “No. 1 in Bloomberg’s Innovation Index and residential to twenty of Fortune’s prime 100 quickest rising corporations on the planet.”
California’s small inhabitants loss final yr largely mirrored former President Donald Trump’s curb on new visas. Whereas some folks do go away California, others arrive. Lots of the newcomers are immigrants with grand ambitions and a need to dwell in a welcoming place.
Because the pandemic attracts to an in depth, California is sitting fairly with an working price range surplus of $75 billion. That is the product of a surging economic system and the gathering of capital positive factors taxes. It could appear that a number of wealthy Californians didn’t transfer to Texas in any case.
Due to this surplus, California has launched into what Newsom calls the “largest state tax rebate in American historical past.” Two-thirds of Californians are receiving Golden State stimulus checks totaling virtually $12 billion.
What about financial development? California’s gross home product has jumped 21% over the previous 5 years, leaving Texas’ 12 % achieve in its shadow. Even New York state, one other of Abbott’s targets, outdid Texas with a 14 % rise in state GDP.
If California had been a rustic, its development price would have exceeded that of Japan, Germany and the complete U.S. Solely China grew quicker.
“For all its bluster as being ‘greatest for enterprise,’ Texas cannot match California’s innovation,” Bloomberg mentioned. Some 18% of California’s company areas are devoted to analysis and improvement. The share of Texas services for analysis and improvement are slightly below half that of California’s.
Throughout a warmth wave final August, elements of California suffered rolling blackouts, main Texas Sen. Ted Cruz to predictably snark that the state was “unable to carry out even fundamental capabilities of civilization, like having dependable electrical energy.”
Six months later, in fact, blackouts left tens of millions of Texans in darkness with out warmth or electrical energy or, in some circumstances, operating water. Abbott used the event to troll inexperienced vitality advocates, blaming the disaster on freezing wind generators. Wind provides solely 20% of the state’s vitality, and it was famous amid laughter that Greenland’s generators just do wonderful in subzero climate.
A few of the coolest folks I do know dwell in Texas — and California is dwelling to quite a lot of moronic woke campaigns, such because the try and take Abraham Lincoln’s title off a San Francisco college. However right-wing efforts to painting California as an financial failure resulting from its liberal politics wither within the warmth of information. On financial prowess, Texas actually shouldn’t mess with California.
Observe Froma Harrop on Twitter @FromaHarrop.