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Why California is broke, and Texas is not


By REpro   Follow   Wed, 10 Oct 2012, 3:30pm PDT   5,493 views   63 comments
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http://economy.money.cnn.com/2012/10/10/california-texas-richard-fisher/?iid=HP_River

This coyote may be safe in California but should watch its back in Texas, according to Dallas Fed President Richard Fisher. Dallas Federal Reserve President Richard Fisher is proud of the Texas economy and isn't afraid to let it show.

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REpro   Thu, 11 Oct 2012, 3:24pm PDT   Share   Quote   Permalink   Like (2)   Dislike     Comment 24

BoomAndBustCycle says

Not sure where Texas ranks.

Per Wikipedia:
As of 2010, Texas had a gross state product (GSP) of $1.207 trillion, the second highest in the U.S.[130] Its GSP is comparable to the GDP of India or Canada, which are the world's 12th- and 11th-largest economies, respectively.

Vicente   Thu, 11 Oct 2012, 3:30pm PDT   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 25

Texas population has gone up even faster than it's vaunted job creation rate. Thus unemployment has been rising.

And let's be frank, any oil-producing state makes more money when oil prices are jacked the way they are.

What happens when the wells run dry?

I don't care much for Cato nor Fisher. I'm sure he's well paid for his speaking engagements and he got a good chuckle for telling everyone what they want to hear, which is Texans do everything bigger and better than anyone else.

The reality just doesn't make a headline:

Texas and California are BOTH indebted

See the Texas debt clock:

http://www.usdebtclock.org/state-debt-clocks/state-of-texas-debt-clock.html

California debt-to-GDP: 18.9%
Texas debt-to-GDP: 18.3%

A whole 0.6% advantage, man that's like.... diddly squat.

But you know everyone got what they wanted. Texans patted themselves on the back and the CNN reporter got a funny joke he could print. And Californians are pretty much used to everyone spitting on them for generations, and being told they will fall off into the ocean after the shake & bake and of course the Mad Max period. It would make much more exciting film at least than handing Texas back to Mexico.

freak80   Fri, 12 Oct 2012, 12:00am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 26

Vicente says

And let's be frank, any oil-producing state makes more money when oil prices are jacked the way they are.

Who is jacking oil prices? OPEC?

BobMSN   Fri, 12 Oct 2012, 12:17am PDT   Share   Quote   Permalink   Like (4)   Dislike     Comment 27

BoomAndBustCycle says

California is also the 8th largest economy in the world. (Larger than most countries and red states combined). Not sure where Texas ranks.

China is the 2nd largest economy in the world. Would you move there?

Quigley   Fri, 12 Oct 2012, 12:41am PDT   Share   Quote   Permalink   Like (3)   Dislike     Comment 28

Bob says, "China is the 2nd largest economy in the world. Would you move there?"

Some people are doing that! I hear there's a demand for white guys to follow Chinese businessmen around so their competitors believe they are pursuing deals with Americans and their business is going well.

edvard2   Fri, 12 Oct 2012, 1:08am PDT   Share   Quote   Permalink   Like   Dislike (1)     Comment 29

TechGromit says

I don't know about Austin, but the traffic situation in Dallas Fort-Worth wasn't bad at all. There's no where near the level of traffic Philadelphia or New York has.

Oh, I have no doubt. I actually drove up through the eastern seaboard about 5 years ago: Through DC, Philly, etc. That has to be the WORST traffic I have ever been in. It made traffic in the Bay Area seem outright tame.

Oh- one more thing about TX: the weather. I myself grew up in the South with the heat and humidity. But in TX? Austin is at least in the 90's for months on end and pushes triple digits on a routine basis. Houston? Not only is it miserably hot, but humid as hell. That shouldn't be underestimated because basically you're looking at months and months of unbearable weather.

freak80   Fri, 12 Oct 2012, 1:26am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 30

edvard2 says

That shouldn't be underestimated because basically you're looking at months and months of unbearable weather.

But at least it's sunny unbearable weather.

edvard2   Fri, 12 Oct 2012, 1:37am PDT   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 31

freak80 says

But at least it's sunny unbearable weather.

That's sort of like saying that at least its sunny, frigid weather. Pretty to look at indoors, but miserable to be outside in. I was reminded of how miserable super hot weather can be recently. I drove up to Sacramento a few months ago. As soon as you leave the coast here the interior of Cali turns into a furnace. It was over 100 degrees that day. So hot that it just about knocked you down when stepping out of the car. It was downright unpleasant to be outside. Luckily for me all I had to do was drive back home. But imagine having to live in that sort of heat for 6 months out of the year?

finehoe   Fri, 12 Oct 2012, 1:52am PDT   Share   Quote   Permalink   Like (2)   Dislike     Comment 32

edvard2 says

But imagine having to live in that sort of heat for 6 months out of the year?

Get used to it. That's the future.

edvard2   Fri, 12 Oct 2012, 2:05am PDT   Share   Quote   Permalink   Like   Dislike (1)     Comment 33

finehoe says

Get used to it. That's the future.

Maybe.... maybe not.

REpro   Fri, 12 Oct 2012, 2:10am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 34

I’m visiting Dallas area frequently. Summer indeed is hot. Too hot for me, but the same heat we have in Central Valley or desert area in CA. Just add occasional heavy rain in summer time.

edvard2   Fri, 12 Oct 2012, 2:14am PDT   Share   Quote   Permalink   Like   Dislike (1)     Comment 35

REpro says

I’m visiting Dallas area frequently. Summer indeed is hot. Too hot for me, but the same heat we have in Central Valley or desert area in CA. Just add occasional heavy rain in summer time.

That's why I don't live in the Central Valley either...

REpro   Fri, 12 Oct 2012, 2:23am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 36

Young people can adjust to temp. and humidity fairly easy. Either in Alaska, North Dakota or TX, Louisiana, or AZ.

edvard2   Fri, 12 Oct 2012, 2:35am PDT   Share   Quote   Permalink   Like   Dislike (1)     Comment 37

REpro says

Young people can adjust to temp. and humidity fairly easy. Either in Alaska, North Dakota or TX, Louisiana, or AZ.

So? What does this have to do with the debate? That its "worth it" to endure bad weather for cheep houses? I'll be honest: I lived on the east coast and grew up in the South. Even though I was raised in it, summers was a time we all knew meant putting up with god-awful humidity and heat. It wasn't like we were "used to it", it meant we had to deal with it. The cold up north was unbearable. I absolutely hated it. From October-May the weather was just outright crappy. As in if I didn't dry my hair it would sometimes freeze. Yes- that just sounds like more fun than a barrel full of monkeys.

Weather is totally subjective. Obviously people can live in all sorts of it otherwise places like Michigan, Arizona, and other places that get extreme weather would be void of people. But whenever I go home to visit my family its a reminder that yeah, the Bay Area is expensive. But man the weather is fantastic.

AverageBear   Fri, 12 Oct 2012, 2:36am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 38

This thread reminded me of an article I read back in March: Texas vs California..It's all about BIG STATE GOV'T, and an unsustainable budget, pensions, entitlements, etc.... It ain't rocket-science, folks...

http://www.nationalreview.com/articles/293412/texas-vs-california-chuck-devore

..."While California has more bureaucrats, Texas has 17 percent more teachers, with 295 education employees per 10,000 people, compared to California’s 252."

Vicente   Fri, 12 Oct 2012, 2:46am PDT   Share   Quote   Permalink   Like   Dislike (1)     Comment 39

edvard2 says

I drove up to Sacramento a few months ago. As soon as you leave the coast here the interior of Cali turns into a furnace. It was over 100 degrees that day.

"But it's a dry heat man!" - Hudson

It's only a furnace if you are a coast-dwelling wimp. For those of us who live here, it's just afternoon weather in the summer. As soon as the sun goes down the Delta breeze cools everything off. Most days I don't need to run the AC, just ventilate the house at night and button up in the daytime.

Let me return to my point:

Fisher Bluster headline translation:

"Why California is Broke, and why Texas is VERY SLIGHTLY LESS BROKE (just like many other states)."

That scan well? No, but it's the facts! Unlike the misleading garbage he's selling. Is a Fed governor supposed to blow sunshine up your ass, well apparently so! Keep worshipping him, next I'll see they've caught Ron Paul and Dick Fisher in a torrid embrace.

edvard2   Fri, 12 Oct 2012, 2:56am PDT   Share   Quote   Permalink   Like   Dislike (1)     Comment 40

Vicente says

It's only a furnace if you are a coast-dwelling wimp.

If not having to deal with hotter-than-hell weather makes me a "wimp", well then I reckon there are worse things...

But anyway, its interesting that you have all these people from other states going on and on about ooooohh how BAD things are in Cali. Why should they care? Or is it because they secretly like it here and trash-talking Cali makes em' feel better?

freak80   Fri, 12 Oct 2012, 2:57am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 41

edvard2 says

From October-May the weather was just outright crappy. As in if I didn't dry my hair it would sometimes freeze. Yes- that just sounds like more fun than a barrel full of monkeys.

And if you live northwest of the mountains like I do, you get the Great Lakes Permacloud too. Bleh.

edvard2   Fri, 12 Oct 2012, 3:07am PDT   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 42

I have a friend who lives in Chicago. Need I say more?

freak80   Fri, 12 Oct 2012, 3:19am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 43

edvard2 says

I have a friend who lives in Chicago. Need I say more?

Chicago is just to the west of the Great Lakes Permacloud. Their winters are sunny compared to places downwind like Michigan, northeast Indiana, Ohio, and western PA/NY. The clouds are generated by the cold air passing over the warmer lake water.

REpro   Fri, 12 Oct 2012, 3:26am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 44

When I moved to BA from East Coast I praised the weather to my friend in NYC. He sarcastically question: “If is so great there, why not everybody live in BA”
Well… people live everywhere, mostly due to job opportunities and some tradeoff is absolutely normal. Choosing place to live voluntarily is a little bit of luxury.

TechGromit   Fri, 12 Oct 2012, 3:53am PDT   Share   Quote   Permalink   Like (3)   Dislike     Comment 45

BoomAndBustCycle says

California is also the 8th largest economy in the world.

Stop your complaining, I live in New Jersey and I get the shaft, I'm last on the list, at 65 cents for every dollar I pay.

bob2356   Fri, 12 Oct 2012, 7:55am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 46

edvard2 says

freak80 says

But at least it's sunny unbearable weather.

That's sort of like saying that at least its sunny, frigid weather. Pretty to look at indoors, but miserable to be outside in. I was reminded of how miserable super hot weather can be recently. I drove up to Sacramento a few months ago. As soon as you leave the coast here the interior of Cali turns into a furnace. It was over 100 degrees that day. So hot that it just about knocked you down when stepping out of the car. It was downright unpleasant to be outside. Luckily for me all I had to do was drive back home. But imagine having to live in that sort of heat for 6 months out of the year?

So don't do it, everyone gets your point. Most people like changing seasons and weather. I've lived in climates from upstate NY to the Rio Grande valley to the Oregon coast and enjoyed them all. I've even spent time freezing my ass off seeing clients in San Francisco fog in "summer" then driving out to Walnut Creek the same day and broiling.

TechGromit says

Stop your complaining, I live in New Jersey and I get the shaft, I'm last on the list, at 65 cents for every dollar I pay.

Yea, but you've got some of the greatest windsurfing around down at lakes bay. Not to mention the scenic wonders of the pine barrens (just kidding, I like the pine barrens).

freak80   Fri, 12 Oct 2012, 8:13am PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 47

TechGromit says

Stop your complaining, I live in New Jersey and I get the shaft, I'm last on the list, at 65 cents for every dollar I pay.

Philistine   Tue, 23 Oct 2012, 8:19am PDT   Share   Quote   Permalink   Like (2)   Dislike     Comment 48

CA is broke partially because it's too damn expensive to live here. 70% of us have no more money left to give to the blood suckers. If it weren't for the Miraculous Weather and Tits Geography, a lot of us would have left long ago to live in a crap state that pays 40% less but costs 60% less.

soopercommuter   Tue, 23 Oct 2012, 9:08am PDT   Share   Quote   Permalink   Like   Dislike (1)     Comment 49

Funny how many of the people here bitch about all the crappy weather or jobs or whatever everywhere but the Coast of Cali. However they still expect the prices of real estate in this area to be the same price as in all those crappy areas than non of them want to live in.

REpro   Tue, 23 Oct 2012, 12:01pm PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 50

I remember times when Connecticut had #1 spot in US economy and was the most desirable state in US. High salary, good benefits, plenty of jobs in manufacturing sector, low cost of housing. Suddenly everything changed when manufacturing sector moved out.

JodyChunder   Tue, 23 Oct 2012, 12:18pm PDT   Share   Quote   Permalink   Like (1)   Dislike     Comment 51

Heh... I like how chuffed with themselves some folks get when maybe two or three months before they committed to a mortgage in California, they were whining about how expensive it was, and how overrated the climate is, and how beautiful flyover country really is.

I've lived (and loved) all over, and I like all climates, even the ones people think of as being unpleasant. Comfort breads weakness.

REpro   Sat, 17 Nov 2012, 2:01am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 52

The petitions for secession from the U.S. filed by Texas, Louisiana, and five other states have collected more than 25,000 signatures each, which the White House website says is enough for review and response.

http://news.msn.com/politics/seven-states-qualify-for-secession-response-from-white-house-3

bob2356   Sat, 17 Nov 2012, 3:47am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 53

REpro says

The petitions for secession from the U.S. filed by Texas, Louisiana, and five other states have collected more than 25,000 signatures each, which the White House website says is enough for review and response.

http://news.msn.com/politics/seven-states-qualify-for-secession-response-from-white-house-3

Wow, over 100k Texans out of 25 million want to succeed. Oh wait, anyone can sign, not just Texans. So 100k people out of 7 billion people on earth have signed. Msn had a really, really slow news day it looks like.

Check out some of the other petitions, funny stuff. I like the motorcycle riding judges petition.

B.A.C.A.H.   Sat, 17 Nov 2012, 4:03am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 54

REpro says

I remember times when Connecticut had #1 spot in US economy and was the most desirable state in US. High salary, good benefits, plenty of jobs in manufacturing sector, low cost of housing. Suddenly everything changed when manufacturing sector moved out.

Silicon Valley

Used to be, we exported real stuff to the rest of the USA and the ROW. Now, all we export is IP, and Cool-Aid.

marcus   Sat, 17 Nov 2012, 4:13am PST   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 55

REpro says

Why California is broke, and Texas is not

Prop 13, 1978

thomaswong.1986   Sat, 17 Nov 2012, 5:39am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 56

Dan8267 says

I thought this too, but Texas is one of the few red states that actually pays more in federal taxes than it receives in federal funding.

did you factor in how many moved to Texas and rest of the south over the past 10-20 years.

Only 33% in CA are natives.. the rest moved out to the south... you have a greater than 50% chance that you will also move south for either a job or retirement.

So get used to good old fashion smoked BBQ and lots of Beer...

Domestic Net Migration in the United States: 2000 ... - Census Bureau

www.census.gov/prod/2006pubs/p25-1135.pdf

by MJ Perry - Cited by 25 - Related articles

thomaswong.1986   Sat, 17 Nov 2012, 5:40am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 57

bob2356 says

Wow, over 100k Texans out of 25 million want to succeed. Oh wait, anyone can sign, not just Texans. So 100k people out of 7 billion people on earth have signed. Msn had a really, really slow news day it looks like.

Wanna count the number of names on the Declaration of Independence...

Automan Empire   Sat, 17 Nov 2012, 5:57am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 58

Miraculous Weather and Tits Geography
^^^^^^^^^^^^^^

LOL, yeah that keeps me going too...

bob2356   Sat, 17 Nov 2012, 10:08am PST   Share   Quote   Permalink   Like   Dislike     Comment 59

thomaswong.1986 says

Wanna count the number of names on the Declaration of Independence...

Only you would be silly enough to compare the Declaration of Independence signed by all the major leaders of the time to the white house website petition page.

mell   Sat, 17 Nov 2012, 11:12am PST   Share   Quote   Permalink   Like   Dislike     Comment 60

Automan Empire says

Miraculous Weather and Tits Geography

^^^^^^^^^^^^^^

LOL, yeah that keeps me going too...

Me three! Chicks and weather are unbeatable.

REpro   Sun, 18 Nov 2012, 5:27am PST   Share   Quote   Permalink   Like   Dislike     Comment 61

marcus says

REpro says

Why California is broke, and Texas is not

Prop 13, 1978

How many places in CA have 1% straight tax today? Maybe bare land.

Bellingham Bill   Sun, 18 Nov 2012, 11:19am PST   Share   Quote   Permalink   Like   Dislike     Comment 62

marcus says

Prop 13, 1978

This is actually a good point. Texas actually has a pretty aggressive property tax regime. Plus they didn't allow their economy to go flim-flam in the 2000s, by limiting people to 80% LTV ratios on refis etc (they learned from the S&L/oil patch crisis of the 1980s).

Bellingham Bill   Sun, 18 Nov 2012, 11:29am PST   Share   Quote   Permalink   Like   Dislike     Comment 63

REpro says

How many places in CA have 1% straight tax today?

? It's not the rate it's the assessor valuation, which is limited to 2% per-year increase.

Thanks to Prop 13, the apartment I lived in in 1990 is now paying pretty much the same property tax it was then, even though rents have more than doubled (nearly tripled).

Land $1,302,912
Improvements $2,434,406

80 units so the assessor is valuing each unit at $46,000. Actual market value is around $300,000.

The assessed property tax per unit is $30/mo. Rents are $1700-2700.

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