Tuesday, July 14, 2009

Nuff Said: The Economist on TX vs CA Economies



The editor at the Economist adds in some faint praise for CA just to sound civil, but from an economic perspective, TX's fiscal conservatism wins hands-down.

12 comments:

Anonymous said...

TX's fiscal conservatism and lack of income/state tax is also subsidized by a healthy oil revenue, so it's not all so rosy down there.

Further, just because things switch from one party to another does not necessarily mean that you automatically get welfare state like California. There are several states that are very business friendly and are run by democrats. It's a government effectiveness and cultural thing, not just political ideology driving whether something is business friendly or not.

All that aside I don't disagree with the article that Texas is in much better financial shape than California most of the reasons outlined in the article, but one cannot compare the two exactly. Texas may perhaps have more strengths at the moment, but they are very different and not necessarily a position of strength going forward. Nor is Texas a good model since most of their infrastructure and wealth was built upon oil - a resource rapidly disappearing.

JimDesu said...

Their current infrastructure model is pay-as-you-go development of toll roads, something you'll remember from living in Hampton Rhodes.

Incremental development in cash is a far better model than writing bonds, as it attracts far less corruption. You still get lots of graft of course, especially in Texas, but it comes from getting lower quality than you contracted for, not in paying more for the same quality (or paying more for lowered quality -- think Boston). I believe the former ill to be more broadly sustainable than the alternatives.

Anonymous said...

True - generating the cash through tolls or increases in use taxes to quickly pay off the bonds or paying as you go helps but sometimes projects get to be too big to pay off incrementally, like all the new underwater tunnels they have in Hampton Roads now.
I don't disagree with what you're saying, but Texas is a special case and to overlook the oil revenue is to overlook a lot about that state and its ability to hold to that supposedly conservative model.

boxingalcibiades said...

What TX has already done education-wise has more to do with where I work -- all h.s. students who qualify are allowed into dual-credit courses (so you don't have to waste four years in h.s.). Oil is actually rather overstated -- it's inherently cyclical, and the political class seems to have figured that out. DFW is very diversified. Houston, Austin, not so much, and the "blueing" of the state is indeed a serious threat, as we're swamped with NY and NJ refugees now working in Dallas and expanding the hell out of Frisco and Plano (both of which are now seriously going downhill).

Dunno if the TX model is better, or whether CA's moves lately just suck so bad that even the Economist can figure it out.

boxingalcibiades said...

Though, and JimDesu will back me on this one from personal experience -- TX **does** have much better relations with Mexicans and Mexican-Americans than California does. Last time I was out west, I was appalled at how badly the local hispanic dudes expected me to treat them (one assumes from experience).

Mike said...

Yeah, that is pretty sad. I have observed it in Arizona. MIght be that Texas was much more evenly settled and that the Independence movement was a mix of anglos and Mexicans who were actually both fighting for the Mexican Consitution of 1820 which had been revoked by Santa Anna. Real Texans who know their history understand that, and that makes it harder to have issues. To be entirely honest, the people in Texas that I meet who had the biggest issues with illegals/Mexicans were Mexican Americans, usually the 2 or 3rd generation.

A bit odd.

Mike said...

And the "bluing" is happening all over. Colorado is a huge one. I have had friends who refer to the new refugees from Callyland as "locusts". They fled the problems and then promptly start setting them up again!

JimDesu said...

Well, just like with locusts, you can't communicate with them. If you invest an hour in even-headed conversation, eventually they'll acknowledge your points and declare "yeah, ok, I see where you're coming from", even if they don't agree. Then the next day if you make the mistake of speaking your mind they'll think you're the antichrist all over again. These people have got themselves "morality" and "free lunch" so twisted up together they can't keep anything within the bounds of reason.

JimDesu said...

Just to be depressing, here in California if you argue that we can't afford this year's increase in teacher salaries, this is declared to be a pay cut, judging from the amount they would have gotten, not the baseline. The whole public-sector budget set to increase on autopilot like this, and if you argue that maybe we can't afford that, then the immediate response is a rebuttal to the inferred slight against whatever group on individuals wouldn't get the extra cash.

Maybe we can't afford to give our teachers a raise this year ==> Hey, what do you have against teachers; don't you know how hard they work? Teachers *deserve* to be paid well for what they do....

That sort of idiocy applies to everything they do out here -- they're not trying to fix the budget process, they're playing musical deck-chairs with the patronage-spoils process.

JimDesu said...

@Russ: did any of the Economist's editors piss in your cornflakes, or are you allergic to the Big Mac Index or what?

Russ said...

I have no freaking clue what you're talking about, dude. Oh, the Economist? Man, their writers are sometimes awesome, but I've seen a LOT of b.s. slung from it, too.

The Phenomenon you describe is called "Appeal to Pity" and is one of the classical logical fallacies.

Mike said...

Well, I have seen plenty of people on both ends who the word "logic" is totally foreign and a concept that goes so over their heads its in orbit.

And yes that is freaken depressing. I would have to answer "I have nothing against teachers, they taste great." Then I would have to stand there to see what kind of response I would get.

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