California Leavin’: This State Is in a State of Denial
Stephen Moore /
Photo: Getty Images
Everyone knows how you diplomatically break up a romantic relationship that has come to an end. The problem, you say to the one you’re splitting from, isn’t you, it’s me.
That’s the latest line from Toyota executives explaining why the world’s largest car company is moving a major headquarters out of Torrance, Calif., to Texas.
This wasn’t about California being uncompetitive, Toyota’s North America CEO Jim Lentz announced. He added that it’s unrelated to all this “juicy” talk of a “confrontation between California and Texas.” Toyota moved, Lentz assured Californians, because “it doesn’t make sense to have oversight of manufacturing 2,000 miles away from where the cars were made… Geography is the reason not to have our headquarters in California.”
And the amazing thing is that the press and politicians have actually bought this story. The Los Angeles Times ran with it and assured its readers that “taxes, regulations and business climate appear to have had nothing to do with Toyota’s move.” They actually wrote that – in a front-page news piece.
Never mind that Texas has had four times the job growth of California over the last 20 years.
Never mind that the Texas unemployment is about 50 percent below California’s.
Never mind that nearly every business climate index has California in the bottom 10 and Texas in the top five.
Never mind that California has been losing net taxpayers to interstate migration over the last three years.
Never mind that incomes are growing at a faster pace in Texas than in California.
“For Californians to pretend that they are doing as well as Texas is a great delusion,” laments Arthur Laffer, a Reagan economist — and a transplant from California to Tennessee.
Joseph Vranich, an expert on corporate relocations, has counted more than 200 major companies with tens of thousands of employees that have left the Golden State over the last four years. I guess the Times would conclude: The problem is them, not California.
One wonders what it will take for politicians and the California media to figure out there is something wrong with the Golden State.
The first step in solving an addiction is to admit you have a problem. California can’t even admit it overspends and overtaxes. Meanwhile, people can move to Texas — where there is no state income tax — and save up to 13 percent more of their income.
Is California worth it? For more and more business owners, the answer is no. Most will want to keep selling things in California, so they will use the Toyota line. The problem is me, not you, California. But when the one who’s walking out the door says this, it’s always really about you.
Stephen Moore is chief economist at The Heritage Foundation and co-author of the New York Times bestseller “The Wealth of States.”