Time To Get Serious About Texas War On California

Saturday, 23 Feb 2013, 9:40:00 AM

Tom Elias

Thomas B. Elias, Columnist
Santa Monica Mirror Archives
Thomas B. Elias, Columnist

It’s easy to see the four-day job-poaching foray into California just

completed by Texas Gov. Rick Perry as an isolated incident. But this was really

just the latest skirmish in an economic war the Lone Star state has waged

against California for more than a decade.

The energy crunch California

endured between 2000 and 2002 was the earliest episode in this conflict. One

year-2000 scene in a waiting area of Houston’s Intercontinental Airport (now

named for the first President George Bush) indicated the mindset behind

it.

A crowd of youngish men

milled around in expensive suits, mocking California as they awaited a

Continental Airlines flight to Los Angeles. Many were employed by big energy

trading companies like Enron and Dynegy (both now defunct in large part due to

their illegal market manipulations).

Jokes rippled through the

throng, themed on how their companies were ripping off California “grandmas” for

what would eventually amount to more than $10 billion in excessive electricity

costs.

The manipulations that so amused the Texan yuppies sent California

reeling through an unprecedented crisis of rolling blackouts and escalating

rates. A steady barrage of attacks on California’s reputation and economy has

followed.

Of course,actual war was never declared. But then-Gov. Gray Davis did

speak publicly of calling up the California National Guard to force the restart

of power plants in this state that had been purchased and then temporarily shut

down by energy trading firms.

Charges abound, too, about other Texas companies trying to gouge

Californians: The Consumer Watchdog advocacy group has claimed that Valero, for

example, averages a 37 percent higher profit on every barrel of oil it produces

in California than at its refineries elsewhere. Is that one reason gas costs

more here than anywhere else in the Lower 48

states?

Perry’s latest sortie in this conflict began with radio commercials in

which he took some shots at California’s business

climate.

This won him enormous publicity here and back home, where he continues

trying to recover from his goof-up presidential campaign of last year, when he

quickly went from early favorite to early dropout in the race for the Republican

nomination.

Perry spent most of his time here trying to convince some businesses to

move to Texas and away from this state, America’s largest market for most

products. California Gov. Jerry Brown laughed off Perry’s effort, calling it “not a

serious story…it’s not a burp, it’s barely a fart.” He mockingly invited Perry

to try harder. “Everyone with half a brain is coming to California, home of

Apple, Google, Hollywood studios,” he said, adding an invitation for Texans to

“come on over.”

But the Perry effort and the economic warfare of which it is part are no

laughing matters. California consumers got back pennies on the dollars extorted

by corrupt energy traders during the electricity crunch. Some California

companies have relocated to or placed new plants in Texas, to the extent that

Democratic Lt. Gov. Gavin Newsom went there shortly after taking office in 2011

to study what Texas was doing.

The bottom line turned out to be this: Texas and its cities offer some

companies big incentives to locate there, from subsidized land to years of tax

exemptions. The state has lower taxes on corporations and individuals than

California mostly because of its oil and gas depletion levies, which more than

make up for revenue that otherwise would have to come from income tax.

Meanwhile, Texas- and Oklahoma-based oil operators like billionaire T. Boone

Pickens resist fiercely every time California considers imposing a similar levy.

California is now the only major oil producing state without such a

tax.

As in any war, there can be turncoats. A prominent one this time is Chuck

DeVore, a former Republican California assemblyman who migrated to the Lone Star

state and became vice president of policy for the conservative Texas Public

Policy Foundation.

DeVore now tries to spin negatives about Texas into positives – one

example being the fact that his adopted state ranks last in percentage of adults

with high school diplomas. He points out that California is third from last, but

ignores the fact that the numbers in both states are pulled down by their vast

populace of immigrants, many with minimal formal

education.

Then there are Texas state legislators who at Perry’s bidding authorized

a study to find ways of enticing California businesses to their state, targeting

California and no other state. Why only California, and not Oregon or New York

or North Carolina?

Real wars have begun between nations over far less than Texans have

inflicted on California, so this is more than a mere joke. It’s time for Brown

and the California Legislature to stop laughing and do something about Texas,

whose denizens have schemed for more than a decade to harm this state and all

its citizens.

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