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.