Why is California Economy Tanking as Texas Economy Grows?


Demographic researchers have compared America's two most populous states, California and Texas, in an attempt to identify why the former is imploding economically, and the latter is growing and creating wealth. They found four major reasons, says Ryan Streeter, a senior fellow at the London-based Legatum Institute.

Texans on average believe in laissez-faire markets with an emphasis on individual responsibility:

* California's policy-makers favor 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.

Californians have largely treated environmentalism as a "religious sacrament" rather than as one component among many in maximizing people's quality of life:

* Environmentally-based land-use restriction centered in California has 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.

California has placed "ethnic diversity" above "assimilation," while Texas has done the opposite:

* "Identity politics" has created psychological ghettos that have prevented many of California's diverse ethnic groups and subcultures from integrating fully into the mainstream.

* Texas, on the other hand, has proactively encouraged all the state's residents to join the mainstream.

The two states have opposite views on regulation and litigation:

* Texas has focused on streamlining the regulatory and litigation burden on its residents.

* Meanwhile, California's government has attempted to use regulation and litigation to transfer wealth from its creators to various special-interest constituencies.

Source: Ryan Streeter, "America as Texas vs. California," The American, November 23, 2009.

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