The Great American Economic Migration – Part 3
The Rise of the Lone Star State
Senator Phil Gramm has said of Texas: “I love Texas because Texas is future-oriented, because Texans think anything is possible. Texans think big” A tale of 2 states continues as we look closer at the growing economic power of Texas.
57 of the Fortune 500 companies are headquartered in Texas, more than any other state. In 2010 Texas was named Best Business State by CNBC and by Chief Executive Magazine. This excerpt from the Chief Executive Magazine’s report nicely sums up the business world’s view of Texas and California:
“Texas is pro-business with reasonable regulations,” one CEO respondent remarked, “while California is anti-business with anti-business regulations.” Another commented, “California is terrible. Even when we’ve paid their high taxes in full, they still treat every conversation as adversarial. It’s the most difficult state in the nation. We have actually walked away from business rather than deal with the government in Sacramento.”
Unemployment in Texas has been consistently below the national average throughout the entire economic upheaval of the last few years, currently sitting about 2.5% below the national average and almost 5% below California’s rate. Texas has created more jobs in the past year than all the other states combined. In addition to Texas’ role as an Energy industry powerhouse it has seen its Technology sector grow by over 14% since 2002 – California’s rate was 2%. The economic outlook is shining bright The foundation that supports Texas’ robust economy lies in the fact that in Texas both Republicans and Democrats adhere to ideologies of Pro-Business, Economic Growth, Small Government and Low Taxes. The state has no income tax, business friendly regulations, and powerful entrepreneurial incentive system. These business incentive systems have allowed the state to bring in thousands of new businesses and people; Texas has for the past 4 years been the Top Relocation Destination for people and businesses.
Clearly Texas’ economy is exploding and will continue to do so for the foreseeable future. As Dana Johnson, chief economist for Comerica Bank sees it; “Looking ahead, I expect the Texas economy will outperform the nation as it has done for the past five years, accelerating faster than the national economy over the balance of 2010 and into 2011.” Its common sense approach of low taxes, small government and business friendly atmosphere has allowed the state to weather the economic crisis much better than the rest of the nation and it is in a prime position to lead with powerful economic growth.
Well there you have it, The Great American Economic Migration is well under way as more and more people flee high tax states with collapsing economies and move to states with much higher promise and potential. The clearest example of this has been opposing paths California and Texas have taken and we see clearly where the chips have fallen. On the one side you have massive debt and deficits, high unemployment, crumbling infrastructure, businesses fleeing. On the other lies robust economic growth and job creation.