Texas, it’s been said recent years, should inspire California to recapture its lost promise, to polish its fading luster. While the Golden State grapples with a host of Blue State struggles, housing is more affordable in the Lone Star state, taxes are lower, business is welcomed rather than handcuffed, and its economic and employment prospects are high.
At one time, California was not just the envy of a nation, it was the envy of the world. But today, the state has rivals for the attention of migrating masses of entrepreneurs and industrious workers, as well as business investment. Texas has become the most prominent of the anti-California states. As current Texan and one-time state assemblyman from Irvine Chuck DeVore has said, Texas and California offer “two opposing versions of the American dream, one based on liberty, the other, government.”
Lee Ohanian, a Hoover Institution economist who’s noted the friction between the divergent visions, recently argued that California’s “socially and politically fashionable policies” have not been gateways to prosperity.
“Our growth is much lower than in the past and economic inequality has increased to a record high,” says Ohanian.
When calculating the overall tax burden for California’s most productive workers, it tops out “close to the level of tax rates in many Western European countries, such as France, Belgium, and Italy,” he says.
“This level of tax rates has been shown in several research studies to be a key factor in depressing Western European economies and is doing the same today in California.”
Ohanian also criticizes the state’s business regulatory environment (where California ranks “near the bottom across states”); steep housing costs (due in part to “out-of -control land use regulations and restrictions”); failing public schools (it shouldn’t be hard to fire poor-performing teachers while pay needs to be “based on their effectiveness” rather than unions’ political clout); and pointlessly green energy policies (which “are increasing California’s cost of living”).
“The recent history of California economic policies highlights just how important policies are for facilitating economic growth, producing high living standards, and creating economic opportunities for everyone,” said Ohanian.
If California is to regain its go-to-state status, it doesn’t necessarily have to emulate Texas. Florida, under the leadership of Gov. Ron DeSantis, is also building an instructive model.
“Since his Jan. 8 inauguration, DeSantis has done far more than rearrange the gubernatorial furniture,” DeRoy Murdock wrote earlier this month in National Review. “Indeed, he has led a burst of pro-market, limited-government reforms that are making Florida even greater.”
Among the innovations brought by the new governor, who assumed office one day after California Gov. Gavin Newsom took the oath, was a “Deregathon,” which he sees “as a first step toward creating a regulatory climate as welcoming as the Florida sunshine.” DeSantis recognizes that “unnecessary government regulations create a burden upon our businesses, both small and large,” and promised to prioritize an “aggressive and appropriate deregulation” campaign.
One of the Deregathon’s primary targets was the barrier to work created by occupational licensing. Florida is one of the few states whose licensing requirements are a greater burden than California’s.
DeSantis’ agenda also includes broadening the state’s school voucher programs to take them “to another level,” $335 million in tax cuts, a commitment to a “business-friendly environment,” and a willingness to challenge corporatism, especially the state’s Big Sugar empire that’s wielded immense power over Florida politics for decades.
No California governor could even talk about such things in the current political climate, because each element of DeSantis’ market initiatives requires government to yield power.
While trimming government and liberating the economy tend to be politically unpalatable in California, such efforts are well-regarded in Florida. Though the November election was so close a machine recount was needed to declare DeSantis the winner, his post-election policy realignment has driven his popularity sharply upward. According to a February 15–17 Public Opinion Research survey, his job approval rating boomed from the 49.6 percent of the vote he won to 64 percent. Only 24 percent disapprove.
Newsom’s approval ranking is lower at 44 percent, but his first proposed budget, which increases spending by $8 billion, was welcomed with a 70 percent approval rating, according to the Public Policy Institute of California.
Listening to the loudest voices in Sacramento, and to the bulk of the state’s congressional delegation, one would think a heavy government hand built California. But that isn’t the case at all. The California Dream was fostered by limited-government principles much like those Florida is pursuing.