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.
Copyright © 2011 by Santa Monica Mirror. All rights reserved.