Tags: Whitney | Texas | place | Business

Meredith Whitney: Texas Is the Place for Business

Wednesday, 22 Feb 2012 11:04 AM

Texas is the best place to start a new business thanks to low taxes, sound economic-management and labor laws and policies that didn't encourage excessive leverage, says Wall Street analyst Meredith Whitney.

California, meanwhile, is seeing dark clouds on its economic horizon.

"Homestead Acts limited the amount of leverage that Texans could take on, therefore no one had a loan-to-value greater than 80 percent. Today you see California debt loads per capita over two times that of Texans," she told CNBC.

Right-to-work laws that cap union power also make Texas attractive, along with some other states, too. "Indiana just went to right to work. Ohio may go right to work. That clearly has been a proven job creator," she said.

Furthermore, Texas has tremendous capacity to handle trade. Houston and Galveston are home to massive port systems, while airports have ample room to expand.

Texas is home to a massive energy industry as well. Investors should expect the Texas educational system to improve thanks to its economy.

"States like Texas that have more money because they've got more business development, they've got stronger economies now (and) have the obligation to put more into their education systems," Whitney says.

"California, that has less money, because its budget and its fiscal situation has been so compromised, is taking the most money of any state out of their education system." Whitney says.

California is currently home to one of the country's top educational systems. "That's going to change simply because of resources," Whitney, the president and founder of Meredith Whitney Advisory Group, told CNBC.

An Indiana Chamber of Commerce study finds that employment grew 100 percent in right-to-work states between 1977 and 2008 but only 57 percent in those without the law, the Associated Press reports.

Oklahoma adopted the measure in 2001 and a year later, the state added 7,822 jobs, says Fred Morgan, president of the Oklahoma Chamber of Commerce.

"In 2002, the Oklahoma Department of Commerce reported that companies announced plans to add the highest number of new jobs since 1995," Morgan says, according to the Associated Press.

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2012-04-22
Wednesday, 22 Feb 2012 11:04 AM
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