A Bit Of California-zation Could Help Texas’ Economy

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Calling Texas the “quintessential entrepreneurial state,” Gov. Greg Abbott used SXSW as an opportunity to pitch tech executives on Texas’ start up business credentials. Texas may be a favorite tech relocation and expansion spot, but the largest of those firms got their start in California.

Texas Republicans have done a crack job of rebranding California’s government as a failed experiment, treating it much like an Aggie joke that the whole state could get in on. Texas Governor Perry (an actual Aggie) spent the last few years in office on job poaching expeditions to the Golden State, and the current Governor Greg Abbott has taken aim at local control warning against the California-ization of the Lone Star State.

That may soon change. California has assumed the top spot for job creation and over the past 12 months has created over 100,000 more jobs than Texas, where the economy has cooled from lagging oil prices. And, according to Bloomberg, California is not only “the best state to business,” but it is in part do to what many of these local progressive initiatives targeted by Abbott seek to address.

“Places that prepare for big 21st-century challenges such as urbanization, climate change and globalization are likely to be the most successful. California companies lead the U.S. in confronting these risks with superior results for shareholders and bondholders.”

Texas is an increasingly urban state, so it is seems like a natural progression that local control would be challenged from conservative statewide officials, but now it is evident that that play is harmful to the growth of the high income tech economy.

Texas staked its claim as a low regulation state, holding itself directly in contrast to California. However, when it came to the 2009 housing bubble it was Texas’ strict lending laws that prevented a subprime disaster in the state.  Also, Bloomberg has found that, “maybe high taxes and strong regulations don’t daunt business leaders if well spent and well aimed.”

They reported that companies based in California outperformed the S&P 500 by 23% over the last four years including in industry areas Texas likes to brag about like healthcare and biotech.

As tech executives rightly know, there is much more to consider in where to expand business operations than just the regulatory system — there is quality of life. That’s a major reason why Austin is a tech hub and every year more companies relocate more employees, and professional conference attendees (including SXSW) decide to stay and seek one of the many high paying jobs that have helped put Austin at the top of America’s list of booming cities.

Many companies have joined the fight for the freedom to marry while the Texas Legislature sets a record on the number of bills filed to discriminate against the LGBT community. Texas cities are leading the charge in creating the type of urban environment that attracts employers and employees, while the self-styled champions of business use the guise of religion to score political points with primary voters. 

When it comes to fighting against the federal government GOP leaders see the benefit of local control and call it “laboratories of democracy,” but when municipalities and counties complain of an overbearing hand by the state, they claim to be preventing a “patchwork quilt of regulation.”  Well, anyone who has travel across Texas knows it is in fact a patchwork a quilt, diverse with people and customs who all deserve equal protection under the law.

But, anyone who is familiar with Texas politics knows the most persuasive arguments are economic. Now that we have the best evidence yet, it’s time for Texas’ state leaders to to invest in the infrastructure of our economic future, or at the very least not undermine the policies that will lead to our success.

Follow me on Twitter at @joethepleb.

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About Author

Joe Deshotel

Joe was born and raised in Beaumont, Tx, but live music and politics brought him to Austin. He has worked in and around government and elections for over a decade including for a member of US Congress, the Texas Legislature, the Mayor of Austin. He currently serves as Communications Director for the Travis County Democratic Party. He is most interested in transportation, energy and technology issues. He also likes Texas Hold'em and commuting on his electric skateboard. Follow me on Twitter at @joethepleb.

1 Comment

  1. You do know that California population is more than 50% bigger than Texas. The raw jobs numbers STILL have Texas leading when you factor such.

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