Thursday, December 3, 2009

Texas vs. California

From Carpe Diem:

From "America’s Future: California vs. Texas" in Trends Magazine:

What's the worst state to do business in? According to readers of Chief Executive magazine, it's California. In the same poll, Texas won first place as the best state in which to put your headquarters. As reported in The Economist, the two largest states in the nation have very different philosophies and very different success rates.

What’s wrong with California, and what’s right with Texas? It really comes down to four fundamental differences in the value systems embodied in these states:

1. Texans on average believe in laissez-faire markets with an emphasis on individual responsibility. Since the '80s, California’s policy-makers have favored central planning solutions and a reliance on a government social safety net. This unrelenting commitment to big government has led to a huge tax burden and triggered a mass exodus of jobs. The Trends Editors examined the resulting migration in “Voting with Our Feet,” in the April 2008 issue of Trends.

2. Californians have largely treated environmentalism as a “religious sacrament” rather than as one component among many in maximizing people's quality of life. As we explained in “The Road Ahead for Housing,” in the June 2009 issue of Trends, environmentally-based land-use restriction centered in California played a huge role in inflating the recent housing bubble. Similarly, an unwillingness to manage ecology proactively for man’s benefit has been behind the recent epidemic of wildfires.
We've had dozens of posts on California's economy, here's a sampling:

The California Miracle: Ain't
Lahde Capital letter to investors: short California, and CMBS
A Couple Reasons California Isn't the Energy Efficiency Utopia it Claims to Be
Arnold Schwarzenegger to sell off San Quentin, Memorial Coliseum to ease budget crisis
California May Resort to IOU's, Opportunity for Secondary Market?
What the heck, Goldman Sachs got it's start with Marcus Goldman shrewdly discounting commercial paper.
It's all in the discount rate and turnover. Volume and spread. Don't get caught with a defaulting hot potato and you're minting money [and mixing metaphors -ed].
California holds a garage sale -- with cars autographed by Schwarzenegger
"California seen lagging behind U.S. recovery" And: "California bets small investors will buy short-term notes"
Can Calpers keep its promises?
California to withhold a bigger chunk of paychecks "Technically, it's not an income tax increase:"
Worst-case for California's budget deficit next year? $25 billion

Here's a great cover of "California Sun" by the Ramones: