Sunday, March 21, 2010

TEXAS VS. CALIFORNIA

There's an interesting story from Washington Examiner (link) discussing the coming economic crisis in California (which has been notably called "The Greece of America") and the flourising economy in Texas which enjoyed a decade of robust growth, low taxes, favorable demographic outlook and superior public services. Not surprisingly, unions in free labor market in Texas did not allow public sector unions extracting $100 million from taxpayers for TV-adds in defence of the status quo for public employees:

"Californians have responded by leaving the state. From 2000 to 2009, the Census Bureau estimates, there has been a domestic outflow of 1,509,000 people from California -- almost as many as the number of immigrants coming in. Population growth has not been above the national average and, for the first time in history, it appears that California will gain no House seats or electoral votes from the reapportionment following the 2010 census... Texas is a different story. Texas has low taxes -- and no state income taxes -- and a much smaller government. Its legislature meets for only 90 days every two years, compared with California's year-round legislature. Its fiscal condition is sound. Public employee unions are weak or nonexistent."

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2 comments:

  1. David12:02 AM

    I hear about this a lot in my economics classes -- I am in Texas :)

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  2. Rok Spruk8:26 AM

    It's great that there's a lot of discussion considering these highlights because it's a practical topic where Economics 101 and Macro 101 can be applied easily.

    Recent data from Joint Economic Committee (http://jec.senate.gov/public/)have shown that Texas economy enjoys strong macro fundamentals. It enjoys one of the lowest unemployment rates on the West Coast, the foreclosure rate is very small and earnings decline has been small compared to other states.

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