California vs. Texas for the Future of America

By Derek Thompson

The 20th century was all about California. The 21st will be all about Texas. While Hollywood rots and the UC system shrivels under a fiscal mess summed up by the number 26 (as in billion dollar deficit), the Lone Star state is poised to become the star of the country. Its unemployment is 2 percentage points below the national average, and it's business record is sterling: Chief Executive magazine named it the best place to do business in America, and it houses the most Fortune 500 companies of any state.

So aruges The Economist. So let's ask: Is Texas ready to be the future of America?


The reason, I suppose, that Texas is so friendly to businesses is that it has long been the national incubator of America's low-taxes/low-services model. That's great for firms and it's undeniable that social services are an anchor around the neck of many state budgets. But before we crown Texas, let's look at the Americans on the other end of the taxes-services dearth. The state's education ranking and health insurance are in the dumps, as it's nearly last in SAT scores, last in percentage of low-income children with health insurance, and so on. In fact in 2005, Texas Monthly did this (registration required) really useful rundown of where Texas ranks in dozens of categories. Texas is last or second to last in the country in:

Percentage of population with health insurance Source 50-1
Percentage of high school graduates age 25 and over Source 50-2
[Percentage] of insured low-income children Source 50-3
Average consumer credit score Source 50-4
Per capita spending on government employee wages and salaries Source 50-5
Per capita spending on government administration Source 50-6
Affordability of homeowners' insurance Source 50-7
Affordability of residential electric bill Source 50-8
Tax revenue raised per capita Source 49-1
Per capita spending on state arts agencies Source 49-2
Total general expenditures per capita Source 49-3
Per capita spending on water quality Source 49-4
Amount of monthly Women, Infants, and Children (WIC) benefits paid Source 49-5

And to go at it from the opposite direction, Texas is listed as first, second or third in:

Percentage of uninsured children Source 1-2
Percentage of home refinance loans that are sub-prime mortgage loans (generally three to four percentage points or more higher than a comparable prime market loan) Source 1-3
Per capita consumption of electricity Source 1-7
Sales tax dependence Source 2-1
Percentage of population that goes hungry Source 2-2
Amount of exposure to ozone pollution Source 2-5
Number of inmates per 100,000 people Source 2-7

Percentage of population that is malnourished Source 3

Update: Well, I fought the comments and the comments won. I originally copied and pasted the lists above in their entirety from Texas Monthly to give a sense of comprehensiveness, but as many commenters pointed out, since many of the categories in which Texas places unfavorably are overall numbers rather than per capita figures, that basically just means I was implicitly bashing Texas for having a bunch of people. Which is pretty unfair. So I've updated the list to include only per capita and percentage figures. Future readers have John Thacker and MSully to thank for the context, which I think is valuable.

This article available online at:

http://www.theatlantic.com/business/archive/2009/07/california-vs-texas-for-the-future-of-america/21083/