Steven Greenhut helps Reason readers put the debates about the California and Texas economies in proper perspective.
In California, Democrats control every state constitutional office and have an iron grip on the Legislature, where they always propose new regulations and seek new ways to secure additional tax revenues. In Texas, Republicans are dominant and Gov. Rick Perry has spent time in San Diego and other California cities luring businesses to the Lone Star State, which prides itself on a low tax burden and more manageable level of regulation.
The rhetoric often has gotten silly, especially given that both states are part of a nation that is highly taxed and highly regulated. Most of the differences are around the margins. Nevertheless, Democrats here pretend that businesses aren’t leaving and that the common critiques of $150,000 pension deals for public employees, sky-high tax rates and punitive bureaucracies are a right-wing, Koch-funded plot to turn the Golden State into Bangladesh.
The latest flare-up centers on a Sacramento Bee cartoon in which Perry says “Business is booming in Texas.” It then shows the recent, tragic fertilizer plant explosion in West Texas. Cartoons are rarely subtle, and the message here is that Texas’ lower-regulation climate is responsible for a blast that killed 14 people and injured 200. Gov. Perry penned an angry letter to the editor. …
… Texas may have relatively fewer regulations than California, but it is also a highly regulated state in a highly regulated nation. The armies of regulators who have descended on the remnants of the fertilizer plant have yet to determine a cause, which doesn’t stop opinion-page editors, cartoonists, and lawyers (several lawsuits have been filed already) from jumping to conclusions about what is to blame there.
Gee, something exploded in Texas so it must be a lack of government at fault, but when something explodes in California it must be caused by corporate greed, even if the explosion came at a government-sanctioned monopoly business. These simplistic arguments divert our attention from productive ways of making our lives safer and better.
Bangladesh is a different story. That tragically poor nation does have many rules and regulations regarding buildings and most other things, but few people follow them. The people there can’t afford to do so. One finds strictly enforced building codes in wealthier nations, but those codes followed the wealth; they aren’t the cause of it. As nations become wealthier they have more money to invest in things such as safety.
When people can barely feed, house, or clothe themselves, they don’t worry as much about things such as, say, second-hand smoke or improper Americans with Disabilities Act regulations. Poorer societies, for instance, are always more polluted than wealthier ones. As they become wealthier, pressure builds for cleaner skies and better water supplies – and for tighter codes for buildings. The answer isn’t to impose tougher rules on poor nations. If Bangladesh adopted Japan’s notoriously tough building requirements, it wouldn’t change anything. People in Bangladesh don’t have the money to rebuild their nation’s stock of buildings.
The best way to improve public health is to reduce poverty. Free markets – not government edicts – are the only way to accomplish the vast improvement in wealth that is a precursor to the better environments we all crave.
