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» The Ornery American Forum » General Comments » California shows the way (Page 4)

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Author Topic: California shows the way
TomDavidson
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What do you think I'm "helping," precisely? I'm only pointing out that your numbers are meaningless. I think California is generally a better place to be than Texas, but have arranged my life so I rarely have to be anywhere near either.

If you want to start a thread about how Walker's policies are destroying Wisconsin, though, while comparing/contrasting Minnesota, I'd be mildly interested. Although I still think state "competitions" are loathsome.

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Wayward Son
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You should note, Rafi, that these statistics cover a period between 2004 and 2013, right through the Great Recessession, when all businesses were doing badly.

Things have changed greatly since then.

As this article from the New Yorker details, "[t]hese days, ... no one is talking about the lessons California should learn from Texas."

quote:
California’s economy is improving, and its budget is finally balanced—partly because of budget cuts and a voter-approved tax hike in 2012, and partly because the stock-market boom has translated into more tax receipts from California’s wealthiest residents (the ones with those high income-tax rates). These changes happen to come as Texas, the nation’s biggest oil-producing state by far, is grappling with a collapse in oil prices, which has depressed the price of a barrel of West Texas Intermediate crude oil to under fifty dollars a barrel for the first time in more than five years. It will be several months before the government publishes figures on G.D.P. and business creation for the period coinciding with the drop in oil prices, but already there are signs of trouble. Michael Feroli, the chief U.S. economist at JPMorgan Chase, said in December, “We think Texas will, at least, have a rough 2015 ahead, and is at risk of slipping into a regional recession.” The Texas budget, too, could be hurt by lost oil and gas taxes.
The reasons are obvious.

quote:
The concerns about Texas’s fortunes speak to a misperception of the state’s recent boom, and of California’s bust. Texas’s outperformance of California had a lot to do with factors beyond the control of politicians like Perry and Newsom—namely, the importance of real estate to California’s economy, and the importance of oil to Texas’s. In 2008, the real-estate and rental-and-leasing sectors were responsible for about sixteen per cent of California’s G.D.P., almost double the proportion in Texas. So it was inevitable that California was hit harder by the housing crash that sparked the recession than Texas was. At the same time, Texas benefitted disproportionately from a rise in oil prices in recent years. Oil and gas extraction makes up about eleven per cent of Texas’s economy, compared with one per cent of California’s. In 2008, the year the recession began, the price of a barrel of West Texas Intermediate crude oil hit a record, topping a hundred and forty dollars a barrel; the price fell later that year, but it recovered relatively fast, reaching a hundred dollars again by 2011. Mark Muro, the policy director at the Brookings Institution’s Metropolitan Policy Program, told me that the recent natural-gas boom, coupled with rising oil prices, has been largely responsible for Texas’s growth, in G.D.P. as well as in employment and new business establishments, since the recession. The role of policy measures like low taxes and the light regulation of businesses was probably overstated, he said.
So while you keep looking at the past for justification of your conservative views, Rafi, you'd best not look at the present, or the future. Because they are disputing your argument better than I ever could.

And perhaps you should look to Kansas for a better example of how policies affect life and the economy. [Smile]

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LetterRip
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Wayward,

that is a big reason I hate comparisons of state and country economic performance. Often times there will be factors that drive such a huge part of the economy for each state/country that comparisons will be meaningless.

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Wayward Son
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quote:
quote:
--------------------------------------------------------------------------------
Originally posted by TomDavidson:

quote:
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Still a net loss, representing $26 billion.
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It should be noted that this "net loss" is an estimate.

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Not really helping. Even if it's off by 50%, still billions.

Oh, yes, one last thing. That $26 billion figure appears to be from the 10 years period from 2004 to 2013. That averages to $2.6 billion per years.

That's was a whopping 1.3 percent of California economy in 2013. [Eek!]

If this rate of $2.6 billion a year continues, Texas' economy will catch up with California's soon.

If you consider 130 years from now "soon." [Smile]

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NobleHunter
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One thing about Canada being so dominated by resources is we're a lot less likely to fool ourselves that a region's economic success is due purely to good management by the local government.

I don't think anyone credible was saying that Alberta's economic boom was caused by how well the Progressive Conservatives were running the province. Likewise, the recent swing to the NDP hasn't caused the current downturn. It's all about the oil.

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LetterRip
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NobleHunter,

Alaskans do fool themselves - attributing positive and negative economy to government action/inaction that are basically purely about oil boom/bust cycles.

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NobleHunter
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But they would compare themselves to the rest of the US, much of which is not resource-based.

Though maybe the thesis doesn't hold because Ontario, Quebec, and BC aren't especially resource-based economies, though primary industries can be very important. Perhaps it's the different mythology about the role of government then. Hrum.

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