California economy did not lose to Texas in 2021

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Kelly Soderlund, right, works with a colleague at the TripActions office in San Francisco, Friday, Aug. 27, 2021. The shift to a hybrid work model is ideal for people like Soderlund, a mother of two young children who works in offices in San Francisco and Palo Alto, California, for TripActions, which has approximately 1,200 employees worldwide.  (AP Photo/Eric Risberg)

Kelly Soderlund, right, works with a colleague at the TripActions office in San Francisco, Friday, Aug. 27, 2021. The shift to a hybrid work model is ideal for people like Soderlund, a mother of two young children who works in offices in San Francisco and Palo Alto, California, for TripActions, which has approximately 1,200 employees worldwide. (AP Photo/Eric Risberg)

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Many media predicted last year that California’s economy would be hit by Texas.

In January 2021, a month after Oracle and Hewlett Packard Enterprise announced the move of their headquarters from Silicon Valley to Texas, NBC News headlined, “Tech flight: Why Silicon Valley is heading to Miami and Austin.” The article quotes an analyst who predicted that the “mini-exodus of tech companies leaving the Valley” would “accelerate in 2021.”

The same month, after Digital Realty announced it was moving from San Francisco to Austin, SFGATE reported, “In the massive tech exodus, another company is leaving the Bay Area for Texas.”

It was just a month of negative headlines. But they kept coming.

In July, in an article repeatedly citing Elon Musk’s anti-Californian screeds, the British Independent headlined: “Texit: Why tech giants are fleeing Silicon Valley for Texas.”

Then, in August, the hype around California’s certain fate accelerated, with narrative steroids injected by a report from Stanford’s Hoover Institution. Written by Lee Ohanian and Joseph Vranich, a former lobbyist who runs a Texas-based firm focused on persuading businesses to move to Texas, the 45-page report reads as intended: like a co-production by a partisan ideologue posing as a Serious analyst behind hand-picked data and a Texas business relocation specialist who promotes demand for his Texas business relocation services.

“These data show that California has clearly lost the incredible momentum it once had and is now among the worst states in the nation for economic investment,” Ohanian and Vranich said. “Texas has become the new California, and California is becoming the new Rust Belt, losing businesses and people to states that offer more opportunity and a better, more affordable life.”

Their article inspired others who repeated its findings. Three days after it was published, a Forbes blogger took inspiration from it, declaring that Texas was the epitome of success and California an embarrassing loser: “If we want America to remain as internationally attractive as Texas is on the national stage, we should adopt policies that make us look more like Texas and less like California. A few days later, the “findings” of the Hoover report were repeated in a report that aired on television stations from San Francisco to Oklahoma to New York, all rebroadcasting the claim that the quality of life in California is horrible, our economy is dying and Texas is the promised land.

But is life really better in Texas than in California? If the data is sanitized, here’s a bucket of bleach: Compared to families in California, those in Texas earn 13% less and pay 3.8 percentage points more in taxes. Texans are 17% more likely to be murdered than Californians. Texans are also 34% more likely to be raped and 25% more likely to commit suicide than Californians.

Californians live on average two years, four months and 24 days longer than Texans.

And the claims of this Hoover report? Did California’s economy die last year? Has tech investment slowed? Did he lose Silicon Valley to Texas?

In 2021, California created 261,000 more jobs than Texas. California attracted $145 billion more in venture capital than Texas. Californians drew $3,911 per person; Texans, only $364. Far from dying last year, California’s tech industry raised more money than any year on record.

Unfortunately, the uncritical ape of this misguided economic narrative not only reflects the gullibility of journalists, but also their usefulness to conservative ideologues and corporate lobbyists, who score political points and regulatory concessions by spreading a false story about the California’s decline.

Don’t expect the facts to change that. Journalists need an intrigue and conservatives need California to lose.

Max Taves is a lifelong Californian and writer.

Max Taves
Max Taves is a lifelong Californian and writer. Max Taves

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