Anyone who thinks that President Obama's economic policies will spur strong growth should consider U-Haul rates between California and Texas.Continue reading.
Renting a 20-foot truck one-way from San Francisco to San Antonio, for example, will cost $1,693. But the U-Haul tab to go in the opposite direction is just $983.
To University of Michigan economist Mark Perry, who has tracked this "U-Haul Index," the difference in these rental rates is the result of straightforward supply and demand.
Put simply, far more people want to leave California for Texas than vice versa. Why? Because California's economy is moribund while Texas' is thriving.
"The American people and businesses are voting with their feet and their one-way truck rentals to escape California and its forced unionism, high taxes, and high unemployment rate for a better life in low-tax, business-friendly, right-to-work states like Texas," noted Perry, who is also a scholar at the American Enterprise Institute.
The problem is that Obama's economic policies are pushing the country to be more like the California people are leaving and less like the Texas they're flocking to.
"Every dream program that the administration embraces — cap and trade, massive taxes on the rich, high-speed rail — is either in place or on the drawing boards" in California, notes Joel Kotkin, executive editor of NewGeography.
Like President Obama, California's Gov. Jerry Brown pushed for a substantial new tax on the "rich" that raises the top rate to 13.3%, a hike voters approved in November. Even before these taxes kick in, California was the fourth most heavily taxed state, according to a ranking by the Tax Foundation.
Also like Obama, the state is regulation happy. The Mercatus Center at George Mason University ranks California as one of the four worst states in terms of regulations. The state also imposes one of the heaviest tax burdens on businesses.
As a result, California consistently ranks at or near the bottom for business friendliness.
And like Obama — who has pushed federal spending up to historic highs for the past four years — per-capita spending in California has climbed 42% from 2000 to 2010, even after adjusting for inflation. The state is now one of the biggest spenders in the country.
The contrast in economic policies between California and Texas — which otherwise share many things in common, since both are big-population border states with lots of immigrants — could not be more striking.
Obama Copies California, While State's Residents Flee to Texas
An absolutely amazing development, but no surprise givien the long-standing stagnation of this once "Golden State." At IBD, "Obama Policies Copy Moribund California, Not Texas":