Texas is emerging as the "new California," according to a report in The Economist, a leading financial and political magazine published in the U.K.
The economic and continuing budget crises in the Golden State are making California less alluring and presenting Texas as the hope of the future.
"These days California’s unemployment rate is running at 11.5 percent, two points ahead of the national average. In such Californian cities such as Fresno, Merced, and El Centro, jobless rates are higher than in Detroit. Its roads and schools are crumbling. Every year, over 100,000 more Americans leave the state than enter it," according to the report.
"Back in its golden age in the 1950s and 1960s, it offered middle-class people, not just techy high-fliers, a shot at the American dream — complete with superb schools and universities, and an enviable physical infrastructure."
Now the American dream resides elsewhere, deep in the heart of Texas.
"The state has coped well with the recession, with an unemployment rate two points below the national average and one of the lowest rates of housing repossession. In part this is because Texan banks, hard hit in the last property bust, did not overexpand this time," according to the report.
Also, Texas clearly offers "a different model" based on small government, according to The Economist. Texas has no state capital-gains or income tax, and a business-friendly and immigrant-tolerant attitude. The state is home to more Fortune 500 companies than any other state — 64 compared with California’s 51 and New York’s 56.
"As happens to fashionable places, some erstwhile weaknesses now seem strengths; flat, ugly countryside makes it easier for Dallas-Fort Worth to expand than mountain-and-sea-locked LA," according to the report.
Ed Feulner, founder of the think tank, The Heritage Foundation, said the reason for this shift is that there is a different intellectual climate in Texas than in California. On the Heritage blog, he wrote "ideas are the key. We must change the climate of ideas in America. For now, liberals hold political power and are making political gains. But they are powerless to turn collectivist schemes into successful policies. For evidence, look no further than California, a testing ground for liberal ideas."
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