I don’t mean to pick on the author of this Fortune article, it may have been assigned to him and he probably didn’t select the clickbaity title (Here are 4 Reasons Why Texas Beats California in Recession). The piece itself is pretty well-written, even if it’s saying something that we are all aware of.
Of course Texas came through the recession in better shape than California did. One has oil & gas and people with true grit, the other went Cuckoo for Cocoa Puffs and now must pay for their real estate speculation sins for some time to come. Fortune adds some other reasons for why Texas has been > California throughout the downturn…
1. Diversity of jobs – accountants over homebuilders.
2. It pays to be friendly to business owners.
3. Taxing sales instead of income distorts the economy less and allows for more flexibility.
4. Power of the people can backfire.
But very few individual states are in good shape – the debate over whether federal tax dollars should be used for state bailouts has just begun. Pitting Texas against California or Florida against New York or even Northern Michigan against Southern Michigan is a bit like goading two slumbering homeless men into a videotaped fight for the internet.
In short, it’s just ugly.