After six decades of doing business in California, Toyota is moving its North American headquarters to Texas. That means 3,000 of the carmaker’s jobs will be leaving Torrance and going to Plano, perhaps convincing California officials they should stop Texas Gov. Rick Perry at the border the next time he attempts to come to the Golden State for another raid on businesses.
Toyota’s surprise relocation will throw more gasoline on the burning argument about which state is a better economic model for the nation. California and Texas, two giant, powerhouse states that could stand on their own among the world’s biggest economies, are seen as the perfect contrast between a high-regulation blue state and a low-regulation red state. And it is no surprise that people arguing the superiority of one state or the other tend to choose their facts based on their political biases.
Fans of Texas say the state’s lower taxes, lower cost of living and light-handed regulatory system have created a booming economy and thousands of new jobs. People are flocking to the Lone Star State to find employment. According to the Census Bureau, those new arrivals included 64,000 emigrants from California in 2012 alone.
Texas boosters insist that the numbers are clear proof that people -- and businesses -- are fleeing the overbearing, big-government policies of Gov. Jerry Brown and the Democrat-dominated Legislature.
Unfortunately for proponents of that argument, the numbers also indicate that 43,000 people left Texas for California in 2012. As shares of each state’s population, 63,000 Californians and 43,000 Texans add up to the same insignificant number -- 0.16%. And liberals could fairly ask: Were those 43,000 exiting Texans fleeing the appallingly low rates of healthcare coverage, the lack of investment in education, the wretched environmental policies and low wages in Republican-ruled Texas?
When Perry was running for the Republican presidential nomination in 2012, he boasted about how his state’s economy was a jobs machine, leaving it to his opponents to point out that the biggest share of those jobs were in government or in businesses that supplied the government -- not exactly pure fruits of an unencumbered free market.
Economists who weigh in on the argument are as predictable as politicians. Conservative economists see the low-tax, minimal-state-services model of Texas as a blueprint for the future. Liberal economists point to California’s great universities, extensive highway system and sharply improved air quality and note that those are the products of an activist government that invested in the future. If California has struggled in recent years, they say, it is because public investment was neglected for so long under a series of Republican governors and divided legislatures.
For anyone looking to justify his or her opinion, it’s not hard to find stark contrasts between the two big states:
• California has Silicon Valley and Hollywood. Texas has oil and gas.
• California has Barbara Boxer and Nancy Pelosi. Texas has Ted Cruz and Louie Gohmert.
• In California, billionaires get taxed more to pay for programs for the poor. In Texas, billionaires get to keep their money and the poor go without healthcare.
• Brown got voters to approve a tax hike to help balance the budget and fund education. Perry balanced the budget by slashing spending on education.
• In lots of places in California, it’s tough to live on a middle-class family budget. In lots of places in Texas, it’s hard to live outside a church-going, football-loving, white, heterosexual lifestyle.
It was once said that America’s future was being invented in California. Now, some say that job has shifted to Texas. Depending on your point of view -- and your politics -- that is either an encouraging or terrifying thought.
[For The Record, 3:44 a.m. PDT May 2: An earlier version of this post stated that the number of people leaving Texas and California in 2012, as shares of each state's population, equal about 0.0016%. The figure is 0.16%.]