Ken Miller on the California to Texas Migration: A Discussion on Affordable Housing and Taxation

In this episode of "The Fourscore Project," Ken Miller continues his deep dive into the contrasting political, economic, and cultural landscapes of Texas and California. The discussion centers around the stark differences in housing affordability, taxation, and population migration between the two states. Miller examines the impact of California's regulatory environment on housing prices and the resulting migration trends, where middle and lower-income residents are increasingly leaving for more affordable regions like Texas. The conversation also touches on the broader implications of these trends, including the potential for California to experience a "graying" population as younger families move out. Miller further contrasts the tax policies of both states, discussing how California's high-tax, high-service model compares to Texas's low-tax, low-service approach. The episode concludes with a reflection on how these state-level dynamics might shape the future of the United States​.

Episode Transcript

(00:21):
Let's focus from
change the focus just a little bitfrom electric electricity to
the price of real estate homes.
And I mean, just justI was having a conversation
just last night with some young folks.
And as time goes by,

(00:43):
who's a young folkkeeps getting redefined by me.
But these are legitimately young folks,twenties or so,
and they're just two or three yearsin their career.
They're Los Angelinos.
And a couple of things struck me
is that they didn't seem to have much hope
for being able to acquire a home.

(01:05):
The traditional
American dream, Buy your home.
And and, you know,
most of us, we go back when we were twoor three years in our career,
we're looking forward to struggle
to acquire enough to purchase a home.
But past generations,it seems to me, were generally optimistic.

(01:28):
What struck me in this conversation I had
is that therewas a lot of pessimism right?
But here we are.
Los Angelinos.
Does Los Angelinos have a lot of pessimismabout their ability
to acquire the American dream?
If you define the American dream in partas having their own home.

(01:48):
Right.
Comparison between Texas and California
on real estate and home prices.
You know,I would first begin by agreeing that home
ownership is a big part of what we havethought of as the American dream.
It's the basis for creating wealth and

(02:11):
becoming financially secure in one's life
and also just having a sense of ownershipand autonomy and all of that.
So it's it's it's bigger than justwhether one rents or owns.
There's a sense of
I think there's
a virtuous cyclethat comes from from homeownership.

(02:33):
And so it's it's a very important
topic,
one that I'm increasingly interestedin focused on because I think it is
probably the single biggest public policy
failure in Californiathat I can think of over
the last generationand the biggest challenge moving forward.
If you look at Californiain the mid 20th century,

(02:55):
the postwar period, California builta huge amount of new homes.
And no valley was. There.
Fernando Valley built San.
Gabriel Valley, Orange County. Right.
And this is just Southern California.
If you go to the Bay Area, similar
circumstances as well.
And it was affordable.
It was affordable for middle income peopleto buy a home in California.

(03:19):
And that's part of what pulled
normal, averageeveryday Americans from other parts
of the United States into Californiain the push or period.
One of the things that in researchingthis was remarkable to me
is that the population of California
doubled between 1970 and 2020.

(03:40):
In that 50 year period,it was about 20 million in 1970,
and it went up to almost40 million in 2020.
So we doubled the population of the state.
But the state in 1970was pretty well built out.
If you think about it.
These these urban areashad already been pretty well developed.
And so it was a question ofhow were we going to build enough

(04:04):
housing for 20 million new peopleor that 50 year period.
And we just didn't do it.
We didn't come close not only housing,but other infrastructure like roads and
all of that.
And so we've that's sort of the core
underlying cause of our current
housing crisis is that we've got this

(04:25):
unmet us.
The demand is there and the supplyhas not met the demand over time.
We haven't built sufficiently.
And so that pure supply and demand
creates a situationwhere housing prices are exorbitant.
There's not sort of like a new supplycoming in sufficient to

(04:47):
to to meet the demand and also
the price of construction of new homes,
real estate's raw real estate,plus construction and and permitting.
And all of that has been
made exorbitant againby these other values.
For example, labor costsprevailing wage laws and things like that.

(05:09):
It's just more expensiveto pay the workers to build their homes.
It might be a valuable thing,but it adds to the cost, right?
Environmental protections, securein other things
makes it much more difficult to permit
new construction.
And so throughout the state,especially in the coastal area,
it's been very difficult to

(05:29):
build sufficient housing.
And that's why we have the crisis we have.
If you look at other parts of the country,Texas looks a lot today
like California did in the 1950sand sixties.
It's building housesthat people can afford.
Right. In fact.
I think The Economist magazinehad an issue just a few weeks

(05:52):
back quoted you on that, that Texas now
resembles Californiain many ways in the fifties and sixties.
Yeah, that's it'ssomething that's kind of come to me
over time is that if youif you sort of look at in big picture
California
was thriving

(06:12):
as a as a statein the really throughout the 20th century,
but especially in that mid-century periodin the wake of World War Two,
there was this huge influx of people fromacross the country building up the state.
The institutions were growing.
The University of California,
Cal State, building new campuses

(06:35):
in professional sports, teams
moving from the East Coastinto California.
In so many ways, it was the magnetof the promise of America.
And again, it was affordable for ordinaryAmericans to move here and buy into it.
Right
Over time, it'sit hasn't continued to be able to

(06:55):
or to choose to embrace growthin the same way.
And so it California now resemblesor my view New York.
So New York state used to be including New
York City used to be the high growth,high population
corner of the countryand around the mid 20th century,

(07:15):
especially in the 1970s, growthstopped, population growth stopped.
In New York.
It has basically the same population todayas it did 50 years ago.
And so we could be entering into a placelike that
in California, becoming more like New Yorkwere always going to be important.
We're always going to be big,but we're not going to be growing.
They're going to be other partsof the country with the growth areas.

(07:37):
And that's where Texas is, Texas, other
Florida, North Carolina, Tennessee, placeslike that.
Those are the new growth areasin the United States.
And that's where people are going in order
to buy a home, raise a family,
start a start a new company and such.

(07:59):
Another little piece of information.
I had dinner with long timefriends last week
and their son in law and daughter.
Well,the son in law is a very successful lawyer
in Los Angeles
and they're both

(08:20):
son in law, daughter are both
to the left of center of the liberals.
They have a two young kids
in September,
they're leaving Californiaand moving to, of all places, Houston.
Yeah, but he will continue to practiceas a California lawyer,

(08:40):
which means they've made a decisionto bring the family up in Texas.
And he's going to makethe sacrifice to promote to
practice law remotely, which
is now to a large extent possiblewith Zoom and everything else.
Most courtsnow, except the appearances by by Zoom,
if not by phone,and then fly back as necessary.

(09:02):
So it's, you know,tough for the in-person hearing.
And that just really shocked me.
So so so when I heard that,
it dawned on me
that it's not just about politicalorientation.
That's economics, right? Sure.
There's been some polling are institutedid some polling on this.
We asked people we did a national polllast fall and we focused on the five

(09:27):
largest population states California,New York, Florida, Texas and Pennsylvania.
And one of the questions
we asked the poll was,have you thought about leaving your state?
And there is a politicalthere was a political dimension to that
that Republicans in California
were more interestedin considering moving out of state.

(09:48):
Same thing in New York.
Republicans in New York were lookingto move out in Texas and Florida.
It was Democrats who said, I'm moreinterested in getting out of this place.
Right.
So I do think there is,at least to some degree,
a sorting politically in our countrywhere people would rather be in a place
where their neighbors, their stategovernment, more closely aligns

(10:12):
with their own philosophy.
As we were talkingabout before, this visceral
vision of
what they think their cultureand their country should be.
Right was kind of this intolerance thing.
We collectively, regardless of wherewhether you left or you're right,
you know,we've all become more intolerant.
That's rather that's right of you.

(10:32):
So that does,I think, drive some movement.
But like your your young friend who's L.A.
lawyerleft of center is still moving to Houston.
More people are choosing to movefor economic reasons
than for political
alignment. Right.
And so
for them, it's either like better job

(10:54):
opportunities, but even more so, I think
the ability to buy a house.
So probably for the same amount of moneythey could buy
twice the house in Houstonthat they could buy in L.A.
County. Right.
And so if you're raising two young kids,
you want to be in in a neighborhood,in a community where you can have

(11:15):
a nice
house and a yard to play in and maybe,
you know, a higher end community,
then you may have to, you know, move
because you perhaps can't afford that
in California, but you could afford thatin another part of the country.
So absolutely.
I would say and this is drivinga lot of it is economics.

(11:38):
And one of the things you mentioned is,I think, really important
for California as a state to understand
is that remote work changesthe game, right?
The ability to live anywhere and continue
to work in a California based business
is really shaking up

(12:02):
the normal patterns.
We're doing this interviewin downtown L.A.
and all around us are buildingsthat are half empty.
Same thing in San Francisco.
We recently been doingsome some research about
office vacancies in the financial districtof San Francisco.
It's shocking.
It's shocking.
Just in the wake of the pandemic,how many law firms

(12:26):
and other businesses,insurance businesses and such
officeworkers are no longer coming in to work?
Right.
And they canthey can actually, in many cases,
construct their life
so that they aren't actually needingto be physically all the time
in these urban areas in Los Angelesor on the Bay Area or otherwise.

(12:48):
Remote work is no friend of California.
I think that's right.
I think well, is
is no friend of the way California has
been structured and probably no friendto the urban areas in California
that may be friendly to actual individuals
who are able to construct their livesin a way that they prefer to not have

(13:11):
to commute every day and have more timewith their families and all of that.
So it's a very complex,I think, social phenomenon
that we're just beginning to learn about
it. You know, you mentioned
those young folks could pick up
and buy a home in Houston
that's twice as large,which I guess maybe do the rough math on.

(13:33):
It means it's half as expensive.
That's about. Right.
Yeah. Which is about right.
And and, you know, in my simplistic wayof looking at the housing prices
in the Los Angeles area,I always just assumed
it was the lack of supply of more land.
So you either have to go up, which is moreexpensive to build up as opposed to out.

(13:57):
And but apparently
a lot of the reason why the housing buildshave not kept pace with population
growthis not just to reduce available land,
but because of all the regulations,environmental and everything else.
Who goes with itthere also drives up that cost.
Yeah, I would say those are both true.
I mean, we're we're hemmed in by

(14:18):
beautifully hemmed in by the oceanand mountains and such.
And so we don't have
the ability that, say, Dallas FortWorth has to grow endlessly.
It could spread all the way upto Oklahoma City without any obstruction.
I don't don't don't tell.
The Oklahomans that
if we were to have this conversation50 years from now,

(14:40):
I wouldn't be surprisedif it's like one continuous city from
from Dallas. I don't know.
But but
that's just part of it.
The the topography of
of a lot of these sort of high growthareas.
There's no physical constraintthat we have in the Bay Area.
So even moreso that San Francisco just is built out.

(15:02):
It was built out 100 years agoas almost right that
the little peninsula just can't expand.
And so there are physical constraints.
But I think even on top of that,infill development could work
right in a more affordable wayif we didn't
have the regulatory layer, the tax layer

(15:23):
that makes it more expensiveto build here than in other places.
Well. Taxes
we've kind of mentioned taxes in passing.
And I know taxesis a big issue in your book.
The tax world in Texas is very differentthan the tax world in California.

(15:44):
Can you talk spend some timetalking about how that to contrast?
Yeah well it seems to
the taxes is one of the clearest examples
of how our federal systemallows states to pursue different
objectives.
And so we have a situation where

(16:06):
some states construct their tax structure.
I mean, every state needs to raise money,right, to make state government operate.
And they actually states
have to balance their budgets,unlike the federal government.
So there has to be as much revenueas there is spending at the state level.
Right.
And some states, you know, the three
major forms of state level taxation,

(16:29):
stateand local level taxation is property tax
sales tax and income tax.
And then there's that.
You go after that.
And one of those doesn't exist in Texas.
That's right. We'll get through later.I know that. Right.
And and in a fair number
of American states from Nevada and Floridaand others.

(16:50):
Right.
So some states have chosenbasically to take one's
tax laws completely off the table
and income taxes.
One of those in Texasand some other places
other states have relyalmost exclusively on
property tax rate

(17:10):
or and other stateshave a very low property.
And so California is situationas we've kept
property taxes through Proposition13 almost.
The. Jarvis Jarvis partJarvis can initiative in 1978.
And so
that's in our state constitutionand we can only be repealed
by a vote of the peopleand it hasn't happened.

(17:32):
So that put some limitation,our ability to rely on the property tax.
And so we rely more heavily on sales and
in anextraordinary way, we have a high reliance
on income tax in California,especially income tax.
It's very progressive income tax,income tax on the higher earners.

(17:53):
Other states,as you say, Texas has a zero income tax.
It couldn't be different.
I mean, Californiahas the highest personal income tax,
the highest marginal rate of any state,over 13%.
That's on top of your federal income tax.
And especially true since there was taxreform under the Trump administration.

(18:16):
It used to be that statetaxpayers could deduct the amount
they paid in their state taxesagainst their federal income taxes.
Now that's been reduced down to near zero,$10,000 a year.
And so you really do feel the biteif you're a high income person
in a high personal incometax state, you're paying a lot more.
And so that.

(18:37):
Driver to leave California.
Well, is no one can be.
And this is a very interestingquestion is how much are high income
people willing to pay a premiumto live in a state like New York
or a state like California,as opposed to picking up their residence
and moving to state
Nevada, which is true income tax or

(19:00):
Texas or Florida.
And there's been a lot of economistsare looking at this very closely,
looking at tax returns to see wherehigh income people are moving.
And there's a big debate as to whatthe effects of this are going to be.
In the short term.
It's maybe not as highas you would expect it to be in part
because people have reasons to stay put.

(19:23):
Either they've built a businessor they're part of an economic cluster
like Silicon Valley that where they wantto stay and just like good reasons to stay
or they love the environment, the the,
you know, the natural beauty of a placelike California or they've got
parents or children who live hereand they don't want to leave.

(19:44):
So that goesa long way to keeping people in place.
But on the other hand, if people really to
you know,if they're able to sort of negotiator work
around those attachments,especially in an era of remote work.
Right.
It's I think we're going to see moreand more people
making economic decisionsto move to lower tax places.

(20:08):
And that's a real concern for a placelike California.
I would say it's a bigger concernfor a place like, say, Illinois.
Right?
Because California can continue to hold
a lot of people by virtueof the beautiful natural environment
and climate that we have hereand all the amenities.
But if you're a state like Illinois

(20:30):
and Chicago is having a lot of sortof disorder and such, I think it's it's
harder for a place like Illinoisto keep its high income people.
That is maybe for a place like California.
But I wouldn't be too cockyif I were California.
I think it's there's likean indefinite amount that we can tax
wealthy people before they say, enough,I'm going to reorganize my life.

(20:52):
Well, I, I would clearly agreethat most people are willing
to pay a premium for California.
All the natural beautyand all the wonderful climate
that California has.
But I think there is a limitto the amount of the premium.
That's right. People are willing to pay.

(21:15):
And I don't know howthat would be quantified.
Maybe it's as a percentage of
their income visibly what
they can exist on in another state,which less cost of doing business.
I suspect that couple, the lawyerand his wife with the young kids,
they were willing to pay a premiumfor many years,

(21:35):
but sometime in the last year or two years
that premium became too expensivefor them, that they weren't willing to pay
that premium.
This, I guess, some speculation of whatthat premium,
the maximum premium might be,because I doubt there's
any type of researchinto that to quantify that.
No, I mean,people are trying to figure that out.
And I think the other thingpeople are trying to figure out

(21:56):
is the balancebetween this economic calculation
and then maybethe political cultural calculation.
If you are a progressive of in
Florida with Ron DeSantis as
as governor, are you feeling like this isthis is getting too conservative for me?
I'm going to look for someplace else?
Or if you're aif you're a conservative in California,

(22:21):
do you think that, you know, Gavin Newsomand the Democrats are just
too left wing for me?
I just I just can't continueto be happy in this environment.
So that is a factor.
And then the economics is a factor.
But I do think there's a sortingthat's happening.
I think in general from blue to red statesfor the largely for the economics

(22:41):
of it, from high cost to lower cost.
And then I think there'sa sorting ideologically from red
to blue states to try to
sort out ideologically.
interesting.
You know, you had a thebut the really cut might surprise
because I'm from a generationthat growing up
Californiawas famous for its youth culture.

(23:06):
Ever go to
go to particularly Southern California
Muscle Beach Venice things happenednew ideas were on the block
every day with that youth culture
very youthful place to be.
And you had a point in your bookthat that caught me by surprise.
But because you said that nowTexas has a higher percentage of people

(23:30):
under 18 than California, and Californiahas been losing young people.
Texas has been gaining young people.
That's right.
What would that all be about?
Well, it it speaks to all of these issuesthat we've been discussing, that
for people who do have children,

(23:51):
that it tends to bewhen when one is relatively young
and twenties and thirties, that is a timewhen people feel more mobile.
They're not as tied downor rooted in their community.
And so that is an age where more people domake this calculation.
Is this a placewhere I want to build my life or not?
And for a lot of people who are children

(24:11):
or they want to have a
home,they want to be able to build a family,
and if the cost is prohibitive,then they're going to look elsewhere.
And so that's a big thingthat's driving the age demographic shift
where California does have,I think, about three points less
percentage in terms of under 18than a place like Texas.

(24:36):
Higher percentage of Californians
are over 65 years old than in Texas.
Right. Okay. That's a shocker.
You know, now Florida would be differentbecause Florida attracts retirees, but
California has a larger percentageof those over 65 than Texas.
And so there's there'sthis gravitation toward

(24:58):
lower cost statesby younger people in general.
And and it's I think that's largely drivenby the economics
that it's just it's much more difficultto sort of
buy a home, build a familyin a high cost place like California.
You know, I
suppose then that
means California is graying

(25:20):
compared to Texas
marginally. Yeah, it is.
And with this, in terms of demographics,
I mentioned that
California grew by double
from 20 millionto 40 million between 1970 and 2020.
It was right about at 2020that we we peaked in population at

(25:42):
I think it was 39.6 or 7 billion people.
California is losing population.
So now over the last
three years or so, for the first timein our history, we're losing population
and we lost for the first timein our history, a member of Congress,
which is determined by

(26:02):
comparative state population.
And if the projections hold,
we can lose several membersin the next reapportionment.
So that's just a measure of
the relative populationgrowth or shrinkage of states.
If you look at othersort of Rust Belt states,
New York,

(26:22):
Illinois,the state's been losing population
comparatively to the rest of the countryfor a long time.
Now California is strikingme, given our history,
is moving into that campof being a population
loser as opposed to again. Right.
And that's huge. Well,
last two or three years,how many people on average

(26:46):
over the last three years,or is California losing to other states?
So I don't have the figures off the topof my head.
In terms of total population,we went from nearly
40 million to we're just now a little bitabove 39 and we can drop below 39.
So that'll be a netloss of a million people

(27:06):
almost if trends continue overjust a few years.
So that's that's a net loss.
In terms of
net domestic migration, we've lost people.
This is not well sort of known.
We've been losing people to other stateson a net basis since the 1990s.
Okay.
If we look at again mid 20th century,

(27:29):
absolutely a net gainer,we were picking up people.
Not a lot of people are movingfrom California to other places.
They're wanting to be hereand people are moving here.
But starting in the 1990swhen we had sort of
the first big economic recession
that was the end of the Cold War,the demise of the aerospace industry,

(27:49):
all of that as people startedto move out of California to other places.
This is also starting to feel the effectsof not enough home construction,
home pricescompared to other places increasing.
And so from the nineties forward,every year we've been losing on average
people to other states.

(28:10):
And so what masked that for a long timewas international migration
into California.
That's why we were still continuingto grow as a state.
It was migration from other countriesinto California.
As that slowed in recent yearsduring the pandemic and such,
we've
we're in a situation where we're actuallylosing total population,

(28:33):
which is it has all sorts of implicationsthat we haven't even started
to experience really in a big wayas a state
to have a shrinking population.
So over the last three years,maybe we've lost a million people
total population, but that's net.
We're still getting peoplefrom outside the country.
That's where we havenatural births. So. That's right.

(28:54):
So that would mean that we're.
Losing hundreds of thousands people.
A year. That's right. Mystically,That's right.
So a lot of people are making this thisdecision that we've been talking about,
you know, giving up
all the natural advantagesand attractions of the state
for some other part of the country,because something's driving them out,
which is in most cases,the high cost of living.

(29:17):
And so So who are these people
that are fleeing California?
Yeah.
So there's been interestingresearch on this that
some people takesort of a sanguine view of those.
They think,
maybe we had too much population,maybe it's better to have fewer people
and especially because the peoplewho are coming in, the domestic migration

(29:41):
into California tend to be peoplewith the ability to pay the premium,
which means that they are highly educated,professional people.
And so those are the people are movinginto the tech sector, into professions
and want to be
in in major urban areaor in the Silicon Valley.

(30:02):
So those tend to be the people movingin that people moving out
tend to be middle, lower income people.
Usually this last lower.
Middle to lower class,typically with lower
educational attainment.
And so those arethe people are being squeezed out.
They don't they're not able to paythis premium we're talking about.

(30:23):
And they're struggling overnot only high housing costs,
but high utilitiesthat we're also mentioning.
Just sort of the highcost of living across the board
is causing themto make this economic calculation.
Could I have a better economic lifein a place next door in Arizona
or Nevada or even as far as Texasor some other state?

(30:45):
So in looking at just strictlyas an economic issue in that grouping,
does that apply acall across all race groups,
all genders?
And yeah, that's not as well understood
as opposedto just the pure sort of economics or

(31:05):
but it's a good question.
And one thing I would say is just there'sprobably been more white migration
out of California when I when I mentionedthe state's population has doubled
over the last 50 years,All of that growth,
all of that growth is fromthe nonwhite population.

(31:25):
Okay.
So the actual population of whitesin California has declined
between 1970 and 50 years later.
I think a term you use in your book,which is common to both Texas
and California, is that most statesare majority minority minority, meaning
the white population is not a majorityin either state.

(31:46):
Right.
And so at some point that becomesalmost like nonsensical because
if it's not, if it
can't be a majority minority. Right.
But in any of it, it's I had to.
Think about. That. Right.The groups. That finally got it.
The groups are
historically racial, ethnic minoritiesin this country, African-Americans,

(32:06):
Hispanic, Latinos, Asians
constitutea majority of both those states.
So just to kind of play outthe demographics,
Hispanics, exactly the same percentageof the population in Texas and Florida.
Texas has about twicethe percentage of African-Americans,
but California has much higher percentageof Asian-Americans than Texas does.

(32:28):
The the Asian population is approachingone half of the white population.
California,it's about 16% Asian in California,
and the white populationis down around 35%.
So so if these people inthe middle are leaving, yeah,
that only
leavesthe people at the top of the economics.

(32:51):
Right.
And the peopleat the bottom of the economics.
This is the hollowing outof the middle class I think we hear about.
Yeah, yeah.
Is that sustainablein a democratic society
as we know it in this country? Yeah.
I mean, the American system of democracy
has presupposedthat there'd be a large middle class

(33:15):
sort of provide the ballast
for the society that we wouldn't have this
feudal system
essentially a very, very well off and thenthe impoverished at the other end,
but instead those would be we'dhave those classes in society,
but the large mass of societywould be the broad middle, and

(33:40):
we don't really have much experiencein this country of that kind of
polarization,
economic polarization between the havesand the have nots.
But absolutely, in California,we're starting to see more of that,
that there are some
we have by far more billionairesin California than in any other state.

(34:00):
We're producing enormous wealthat the high end.
And then we have the highest povertyrate in the nation
by a substantial marginif it's adjusted for the cost of living.
So there are a lotthere is a about a fifth
of the population of Californiais defined as in poverty.
Right.
And that'sthose are people just living basically

(34:23):
month to month on the margins of society,depending on government
subsidies and sort of working,many of them working very hard,
multiple jobs and really stretchingjust to get by.
You know, every now and then
there's a
phrase that that will come outand that helps to crystallize something.
And I never heard this phrase

(34:45):
before until you mentioned a moment ago,
but the reference to Californiabecoming a feudal society.
Yeah.
That really is stunning.
But it capturesin a way that I never understood before
what actually is going on hollowingout of the California middle class.
And there's a there's a well-knowndemographer, Joel Kotkin, who's

(35:09):
who's used this phrase to describewhat's happening in California.
And he's got compelling
statistics to back up
the phenomenon that we're describing.
Well, you mentioned earlierthat in the last 50 years,
and this was in the context of the housinggetting very expensive,

(35:31):
we have been buildingroads, new roads or repairing old roads.
We pay a lot of
extrataxes on gasoline here in California.
I think that in roughly in California,
we're paying about $5 a gallon,give or take a dime or two in either side.
Right. For regular unleaded,

(35:54):
you go to a place like Texas or Florida,it's about $2 less a gallon.
And I think a good portion of thatis related to taxes.
So where are those taxes going?
Yeah, so
much of the tax is supposed
to be dedicated to road maintenance
and some of it gets divertedto mass transit programs.

(36:17):
Right. But
I would say
more broadly
that you're right, if you again,if you go back to mid-century,
California was the national leaderin building infrastructure,
highways, roads, all of that.
And there was a big commitmentto investment in making

(36:41):
the system sort of
meet the needs of the current population
and was actually built sufficiently to
handle the population growththat was going to follow from 1970 on.
But we haven't kept up with
certainly not new constructionor maintenance of that infrastructure.

(37:01):
And so that's where we feela lot of the stresses and we're paying,
we continue to pay taxes,which to some extent keeps
roads functioning.
But we're not we're not seeingthe level of quality in our infrastructure
that we would expectgiven the taxes that we pay.
Well,I also want to come back and revisit this.

(37:22):
As we mentioned, the Janice decision.
Yeah, we'd also just brushed lightlyon public employee unions and unions
in general,you know, contrasting California
to Texas.
And just again, Janice, I thinkwas a Supreme Court decision that came out
four or five, six, seven years ago
that said, you cannot compel

(37:43):
someone to be in a union and pay dues.
I think it's because it's it'scompelled speech and so forth and so on.
Since the leadership of the unions don't
collect the money, use itfor political purposes, they may not agree
with the political thoughts and ideologyof the individual union members.
And so I think that the public employeeenrollment in California

(38:05):
has been going downwhere it was a few years ago.
But what's a union situation?
And do they have it's anO it's a right to work state, Texas.
Yeah, it's a right to work state.
And for the most part,
public sector employees
are prohibited from collectivebargaining and unionization.

(38:28):
There's a small exception, some
public safety, police
and fire unions,I think maybe only in the largest cities,
Houston. But
for the most part, public sector workers
are prohibitedby law from organizing or striking.
And in fact,

(38:51):
teachers in Texas are again prohibited
from forming a unionthat would collectively bargain or strike.
And if they do strike,
they can be summarily firedand their pensions taken away.
All right.
So there's there's like no quartergiven to

(39:12):
union organizing by teachers
or other public sector employeesin California and I'm sorry, in Texas.
And that that has an enormous effect
on sort of the operation
of public institutions,including schools in Texas.
It also has a political effectbecause part of the superstructure,

(39:35):
I would say, of
Democratic politicsin California is the close connection
between organized laborand the Democratic Party.
And in Texas, the Democratic Partyjust doesn't have that
support structurefrom organized labor in the same way.
So again,these different factors are reinforcing

(39:56):
the red versus blue division.
California had decided in the 1970s
actually to allow for public unionization,
and it you know,
half a century on, we see that
public sector unions, CTAand others are in the California

(40:17):
California Teachers Associationand other public sector unions
are some of the most powerfuland important interest groups in the state
and close allies with certainthe majority Democratic Party.
Whereas in Texas, again,there's there's no counterpart
that the Democratic Party in Texascan rely on for that kind of

(40:40):
support.
I suspect that that factor alone
has a very significant,
if not a huge impact on Californiagoing blue
and Texas going red.
I agree that that's
you know,I lay out all these different factors

(41:02):
and I, I, I placeda little bit of weight on them. But
and I think political culture ultimatelyis at the bottom of all of it. But
one way it's
manifested is in the commitmentto unionization in California
and the resistance to it in Texasand other states.

(41:23):
That's a major factor.
And I think not only arethese states becoming what they are today,
but probably preserving this division,moving into the future.
Right.
I think we have probably a stable,a pretty stable red blue division.
And part of the reason for thatis these underlying supports

(41:43):
or lack of support for
particular political ideologyin these different states.
So we've got the highest income tax
in the nation in California,no state income tax in Texas.
We have
I think that I just

(42:04):
I don't don't think this is in your bookbecause the book came out
before the latest figurescame out in the California budget.
But the current
budget under consideration,
I think, as we speak,
is about 320 billion
and give or take 8 billion.

(42:24):
But we're looking at a $3,334billion deficit,
while on the other hand, Texas budget
is like 120, 130 billion
without any with a $30 billion surplus.
So that's a lot to unpack.

(42:48):
So we're a high tax state,
but we're running a budgetdeficit the current year.
But yet Texas
has a nicebig surplus with no state income tax.
So what's the dynamics with all of that?
So the way taxes are structured,

(43:10):
the tax system is structuredin California.
It's a it's a boom or bust system.
And so when the economy is flourishing,when the stock market
especially or investments are doing well,
we have some very wealthy peoplein the state who profit a lot.
And those people pay a large percentage

(43:33):
of the overall revenue streaminto the state coffers.
And so in boom times,we actually do much better
from a revenue standpointthan a state like Texas.
And then whenthe stock market turns south,
these wealthy
people are not having to payas much tax tax.

(43:53):
They can even claim losses. Right.
And so California,because it's so dependent
on the personal income tax of high incomepeople,
is vulnerable to these swings.
The last governor, Jerry Brown,
was very cognizant of this and he
he was trying to warn his fellow Democratsnot to overspend in the good years.

(44:17):
He even brought up the biblical exampleof the seven years of plenty,
followed by the seven years of famine.
And he said there'sgoing to be a famine coming, so be ready.
And so he instituted a recall,the rainy day fund.
And that's that's going to,you know, cushion the blow a little bit.
But the swings are so bigthat we really do
have a big problem in Texasbecause they aren't reliant

(44:38):
on a volatile income or revenue streamlike the income tax.
They get their money.
They get their money from sales tax,
from property tax for local
and then to some extent from thingslike oil extraction.
It's it's you know, people think, that'show Texas is able to finance itself
without income taxes is oil and gas.

(45:00):
But as you mentioned, they justthey have a much more modest budget and
more modest, you know, set of expectationsof what state government should do.
And they they don't spend as much.
And so they don't need to collect as much.
And that's why they're able to balancebudgets even with lesser revenue.
By talking about the unpredicted abilityof the California revenue stream.
It reminded me of the Los AngelesDodgers and playoffs.

(45:22):
So they may have the best recordin baseball, but who knows what's.
Going to happenin the playoffs, right? That's right.
And the one thing we haven't talked about
is the comparative approach to poverty.
And the two states
and welfare issues,
health care support things,things of that nature.

(45:44):
How do the two states compare or cut?
Again, this is a stark contrast
that is reflected in the national debate,but it plays out
in particular ways in the States and
we get to see this very clearly
because these states are, you know,
sometimes called tri factors,which that one

(46:06):
party controls the governor's officeand both houses of the legislature.
And so there's there's no meaningfulopposition by the minor party.
And so the majority party is ableto pursue an ideologically pure agenda.
And so in California, that agenda meanswe're going to provide as much government
subsidized health care and welfare

(46:29):
as we can for indigent, low income people.
That includes people who are not
legally in the country and undocumentedimmigrants.
There's a commitment to provide medical,
which is Medicaid, for Californiaresidents, home
to undocumented immigrants, and to provideessentially universal health.

(46:51):
Government supported health care in Texas,by contrast, the state,
its view of poverty alleviation
is we try to keep the cost of living low,
which means as a relatively poor person,you can subsist in the state.
And we actually think that providinggovernment assistance to you has

(47:12):
a negative, unintended consequence andthat it makes you dependent on government.
Was a huge difference.
There's a huge difference,and that's an underlying difference
that drives the policy in both places.
In California, the belief is poor peopleare poor for reasons beyond their control.
Large social structuresand we have as a society
have an obligation to provide basic

(47:35):
needs of poor people.
And so in Texas, that plays out that Texas
continuesto refuse to adopt Medicaid expansion,
which was part of Obamacaremore than a decade ago.
And even though the
federal government pays 90% of the cost
and the state only has to pay 10%,Texas says we don't want to pay that 10%.

(47:58):
We're going to give that 90%of federal money on the table
because we're afraid that oncewe start paying 10%, we're going to become
sort of pulled into this systemand it's going to be unsustainable
for us over the long term.
To quote a member of the Corleone family,once you're in, you're never out.
That's right.
And I think,
you know, there are some political leaderin Texas that says it's like crack.

(48:23):
Once you start, you can't get off it.
So it's.
Interesting to see.
That that's a. Huge difference.
And then again, I guess it comes backto the taxation structure in California.
It's that
for lack of a better number,
the top 1% of the taxpayers
in California are or funding

(48:46):
the welfare programfor the people at the bottom,
whatever percentage that that's might be,what, 40%, 50% of the people that.
Something like that.
I'm not sure the exact figures,but it's a very large percentage
of Californians who are on Medi-Cal.
Right.
And part part of the reason for that,I think, is that many of the wealthiest

(49:07):
people in the stateare philosophically progressive.
These are people who've made their fortunein the tech sector.
And as a matter of a personal philosophy,
they actually think that government is agood thing and we should be providing for
poor people.
And so they they sort of acceptthat in a way that we might not think of

(49:29):
in the inthe old division of the country into the,
you know, the wealthy conservativesand the
and the working class liberalsand sort of capital versus labor.
It doesn't work that way in Californiain the same way anymore.
I mean.
I guess the visible exception to thator the most famous exception,
although technically it's not tech.

(49:51):
Tech, right, is Elon Musk.
Yeah.
And, you know, I would categorize himas part of the Silicon Valley culture with
with tech.
You know, it's not computersin the same way, but it's it's
definitely technology.
And so he is an exception.
There'sthere's some other outliers out there.
But you know, the

(50:12):
you know, Zuckerberg
and others are sort of more emblematic,I think, of the the tech oligarchs,
Tim Cook and others,they're they're progressives in many ways.
Right. And so,I mean, there are ways in which
Silicon Valley
tech oligarchs do not line up

(50:34):
with every elementof the Democratic Party agenda.
I think
labor relations is is one of those.
So as we saw with like Uber and Lyft
resisting the move to unionize
drivers and such like that,there are ways in which
there's some tensionswithin the Democratic Party coalition,

(50:54):
but in general, ona lot of social and cultural issues,
our wealthiest people alignwith the Democratic Party in the state.
It made me think I believe it'sWinston Churchill.
If you're a Lincoln fan,you're most likely a Churchill fan.
But but he said,
if you're not a liberalwhen you're 20, you have no heart.

(51:18):
And if you're not a conservative,when you're 50, you have no brain.
And I was thinking of that
because the tech worldis pretty young world
and I'm not surewhat Zuckerberg is now, but
with E-40.
They might be about that. About that.
So we're talking about generally youngerpeople.

(51:41):
Do you think this phenomenonof the Silicon Valley billionaire set
being more progressive
is more of a indication of youth,
or is there something else going on?
Maybe there's something to that,but I think it's deeper than that.
I think the Silicon Valley culture,interestingly,

(52:05):
is a product of the Bay
Area culture of the 1960s, right.
Which is
Steve Jobs spoke about thisand wrote about this, that
the inspirationthat a lot of people in this latest
generation of tech people, if you go backearlier, the Hewlett Packard

(52:28):
sort of generation where they're buildingmainframe hardware, stuff connected
with the defense industry, they tendedto be sort of moderate Republicans.
But the more recent generation,
the software folks and movingmoving forward,
they tend to be creativeswho are more aligned

(52:50):
with the countercultureof the sixties in the Bay Area
than they are with sort of the militaryindustrial complex of World War Two.
And so I actually think that there's a
there's a real belief in Silicon Valleythat they are going
to make the world a better placeand that part of that progressive vision

(53:12):
and are not wedded to tradition or
the status quo in any way.
Have you seen the movie?
It's about Michael Jordan.
It may even be called Jordan.
Have you seen you.
Know, I've seen the trailer for it,but I haven't seen. It yet.
Yeah.
And the founder of Nike is a knight,but his first name, Phil Knight, is.
Phil Knight for. Phil Knight. Yeah,

(53:33):
of course.
Nike is famouslyas an organization to the left.
But I decided to read up a little biton Mr.
Knight. He's a writer going Republican.
Does that right Surprised to hear that.
You write huge checks?
Is that right to Republican candidates?Yeah. Yeah.
But I guess technically that's not techand it's up from another era as well.

(53:55):
Right.
So so it's a little bit different.
And, you know, talking about,you know, Silicon, Silicon Valley,
of course, we now have Silicon.
Beach, that's right.
Here in Santa monica.
I don't yeah,I don't want to say Los Angeles.
That wouldn't be fair to Santa monica.
And so it'syou know, it's Silicon Beach. And then
we keep
hearing these new silicon,you know, in various places in

(54:17):
in southern Southern California,little enclaves of the tech world.
And and then I think that in Texas,
the tech world is.
Austin Yeah, that's where the centeredit's centered in Silicon Hills.
So the whole country.
Right.
And it's and that's a liberal enclaveIt it same famously

(54:39):
is the BerkeleyI think you know Texas the.
Berkeley of Texas.
That's right right So you know I would saythat the political culture
of the contemporary tech sectorleans left and progressive.
Absolutely.
Yeah.
What we knowon the stability of the current structures
we got California's a high tax,high service state.

(55:00):
Texas is a low tax, low service state.
But I believe the major cities in Texasare Democrat.
That's right.
And we're in California.
They're not cities are not Republican.
So so it's so so Californiapolitically strikes me as more monolithic.
LA Blue.

(55:20):
Yeah, I think that's true, that there's aninteresting tension between
the majorcities in Texas and the state government.
And structurally citiesanswer to the state
government even more so than state'sanswer to the federal government.
And so part of what the agendaof conservatives in the state government

(55:41):
in Texas is to constrainthe ability of local governments to pursue
progressive projects, to banfracking or to ban
plastic bags or to raise the minimumwage at the local level.
There's been these dustups in Texasbetween
progressive citiesand the state government.

(56:03):
We don't have quite the same thing here,although I would say
there has been something on
housing, actually, it's not necessarilya Republican or Democratic,
but it's sort of a stateversus local tension where the state is
trying to drive more housing constructionand a lot of local governments,
sort of Huntington Beach famously,and some other places

(56:23):
have have pushed back against that,against those kind of state mandates.
And so there is, you know, an interesting
tension between state and local authorityin both states.
But it is more monolithic,I would say in California,
the resistance tends
in Californiatends to be in the rural areas.

(56:44):
Interestingly, a little fact,
there are more Californianswho voted for Trump
in the last electionthan the residents of any other state.
Well, that's an interesting fact.
Three more Trump voters.
In California.
Single state than any.
Other than even Texas, which is the secondlargest population state.
And Trump won Texas decisively.

(57:06):
But there's just so many more votersin California
that even though Trump got in the thirtiesin terms of the percentage,
he got more total vote.
So that suggests like,you know, several million Californians out
there were not bought into the progressive agenda or voting.
TRUMP And and so it's not totally monolithic at the voter level, but in terms of

(57:31):
who represents,
you know, who's who's in power,
political power in Californiais absolutely the Democratic Party.
You know, these littlevery fascinating details
is enough to drive some folks to the barand have a good glass.
Of. Scotch.
And at the debate, what is the reasonfor at all And the what?

(57:55):
You know, listening to the tensionin the Texas cities
and the rest of Texas,the state government,
you know, kind of suggest that maybe Texasisn't that urbanized of a state,
But I think Texas ismaybe the most urbanized state
of all as a percentage of its populationor its still.
Yeah, I don't know if it's where it wouldrank, but it's a high percentage

(58:18):
of Texanslive in the five biggest metro areas.
So it's Dallas, Fort Worth, Houston,Austin, San Antonio and El Paso.
So that's, you know,that's a large percentage.
So why aren'twhy isn't the state democratic?
It has the suburbs around those large
in those large metroshave hung in with the Republican Party.

(58:39):
And the rural areasare overwhelmingly red.
And so that's that's sort of the political
divide in Texasis between the core blue cities
and then the suburbs of the battlegroundsand increasingly close.
So if you look at the vote marginsin Texas, Republicans are winning
consistently, but the margins are muchsmaller than they are in California.

(59:04):
With the Latino population.
You know,
it is
generally more to the rightthan the Latino population in California.
Yes, it is.
And a lot of speculationabout where that might be.
So some people point to religion

(59:24):
so that Texas is part
is a more religious culture generally.
And sometimes Texas has been called
the heart of the Latino Bible Belt,
so that there is a more of a religiosity
among Latinos in Texas than in California.

(59:46):
Another factorgetting back to unionization
is that Latinos immigrating
into California, many of them
working in blue collar jobs, janitors and
maids and hotelsand restaurant workers and such.
I get join unions and are incorporatedin the political process

(01:00:08):
through the union and become mobilizedand vote Democratic in California.
Then that doesn't happen in Texasas we've as we've talked about.
So there it's interestingthat immigration flowing from
Latin America into these two places.
But the and identical percentage of thepopulation, again, 40% in both states.

(01:00:29):
But they that the political behavior isdifferent in these two different places.
So there is there's likea cultural economic difference
in the Latino population in the two states
that plays itself out in the politics.
And the best guess for that would be
the difference in the influence.

(01:00:50):
And then maybe to some extent,the religiosity.
Religiosity,you know, just a broader culture.
It's a more conservative culture.
And if you immigrateinto a conservative culture
that affects you more,and if you immigrate into a more liberal
and progressive culture that shapes yourthat's not just for immigrants, it's for
for anybody.
It tends to be that you become morelike your neighbors politically

(01:01:13):
and your friends.
An interesting point,because that never occurred to me
to even ask.
QUESTION But
are the folks who living in Mexico
along the Rio Grande border,which this is probably incorrect,
but I'm making an assumption
that many of the Latinos in Texascome from that part of Mexico.
But is that part of Mexicomore conservative

(01:01:35):
than the Mexicans who live,you know, in Baja
or in Tijuana areas?
Yeah, that's a great question.
I don't know the answer to that.
I don't know enough about Mexican politicsto know, like,
is there a geographic divide within Mexico
that would sort of mirror our geographic

(01:01:56):
divide in the United States, red and blue?
My guess isthere might be an urban rural divide,
but I am not sure about that.
That's a project.
That. Research project for one of.Your take. Another idea of students.
That's a good one.
I like that. Yeah.
One of your students are probably goingto give me a master. Class.
At night about 11:00.It should be out. So.

(01:02:17):
Well, we talked.
About the religiosityand we really haven't touched any
in any detail specifically
about the comparative issues,you know, the culture wars.
And I think we all kind of know Texas
and California are ups and ends of that
tug of war,

(01:02:38):
key key cultural war issues, differences
between the two states, reasons for it,how they're being addressed and so forth.
Yeah, I mean, we could
sort of go through the list of thingsdividing the nation as a whole.
So that would be immigration.
Interestingthat there's been a divide there.
You know, if youif you go back to the 1990s, California

(01:03:01):
was more restrictiveon immigration than Texas was.
So Proposition 187,which was backed by Governor Wilson
and the Republican Partywas very restrictive on immigrant rights
and especially undocumentedimmigrant rights.
And at the time, Texas was seen as beingmore sort of welcoming to immigrants.

(01:03:22):
Over the last 30 years or so,there's been an.
Act that the Texas legislature passed
undocumented, guaranteeing undocumented.
For the DREAM. Act, Dream Act, DREAM Act.
That's the law in Texas,as. Far as I know.
And it was you know,this is allowing undocumented immigrants
to go to university, stateuniversities and pay in-state tuition.

(01:03:45):
Basically,
California's got that now.
But that wasn't true in the ninetiesand Texas was ahead.
And more generally, George W Bushat the time that Pete Wilson was promoting
restrictive immigration policies was knownas being more welcoming of immigrants.
This is, you know, within the debate,the Republican Party and the party

(01:04:07):
as a whole has moved into the restrictivemode,
is represented by Trump and others.
And so
Texas has sort of followed that.
And as you know,
Governor Abbott
has famously
to taking a very restrictive viewon immigration, building,

(01:04:27):
you know, the ownthe Texas version of the wall and putting
forces at the border and and sendingimmigrants on busses to the blue states.
So that's, you know, immigrationwould be one where you would see a clear
red state, blue state division that playsout in California, in Texas, abortion on

(01:04:48):
in the headlines over the last yearwith the ending of Roe versus Wade.
It give states the ability to divergesignificantly on abortion policy.
And Californiahas doubled down on abortion rights, has
made noises like it's going to, you know,
be supporting womencoming from other states

(01:05:10):
into California to have abortionsif they can't get it in their own state.
Whereas Texas, like a lot of other redstates, has been much passed, much more.
Restrictive abortion on that issue.
Is California offering to paytransportation expenses to come here? I,
I don't know the answer to that question,but I wouldn't be surprised, I think.
And it would pay for the procedure.

(01:05:31):
I believe so.
Again,
and there's a intentionality
around this, I think, on both sides.
So a poke in the eyekind of thing from both.
Folks in the eye, from both sides.
And so Gavin Newsom, I think moreso than Jerry Brown, his predecessor,

(01:05:53):
and GregAbbott, you know, thrives on this.
Ron DeSantis of Florida thrives on
they they love to have a partizan foil.
It helps them internally within theirtheir own base, within their own state.
So the most popular.
What would Muhammad Ali be with.

(01:06:13):
Joe Frazier? Frazier Joe Frazier. Right.
So you need it.
You need an opponent.
And what they don't have intheir own states
is a worthy partizan opponentbecause it's in California.
There's no Republican that can go toeto toe with Gavin Newsom, you know?
Right.
And so what you have to do isyou either have to go against Trump

(01:06:34):
if he's in the White House oryou go against some Republican governor.
And that that becomesthe way that you sort of get the the media
and the national platform and
profile is by playing upthese state level differences.
And as we've again, polarizedinto these red and blue states,
it makes it much more easy to do thatthan it was a generation ago.

(01:06:56):
You know, say, well,what we got blue versus red.
What impact does that have on whatwe've been talking about, Texas versus
California?
But how does this play out on the biggernational scale?
Does it raisethe stakes of what happens in Washington?
Yeah,
well, one of the things to say about thatis it's remarkable to me

(01:07:20):
that at least since 2000,so that's almost a quarter century now,
we've been completely evenly divided
between these two parties.
The White House
toggles back and forth on a regular basisbetween Republicans and Democrats.
The Chad era Chad, they're.
Right around here, Chad.

(01:07:40):
They're in in in Congress.
Much more
back and forth between 1954 94.
There's 40 unbroken years of Democraticcontrol, the House of Representatives.
There's nothing like that.
Now we go back and forthand there are large majorities.
We don't have that.
We have very narrow majorities
and control bounces back and forthbetween the two parties.

(01:08:02):
And so we have this equilibriumin Washington that makes it impossible
for either side to have a durable majorityin the way that, say,
Franklin Roosevelt and the New Dealcoalition was for a generation.
Right.
And so instead, what happensis that the Partizan

(01:08:23):
division plays out at the state leveland in these states
because they have doneone party has dominance,
were able to pursue the progressive agendaor the conservative agenda.
And so that's what we're seeing.
But most of the policy, innovation,innovation and direction in this country
is happening at the state levelas opposed to in Washington, D.C.

(01:08:45):
That'swhere a lot of the action is and work.
And what's the question?
To get to your question,what what does this mean for the country?
It's an open question.
How divergent can publicpolicy be at the local level
and still kind of for us to hold togetheras one country?
Right.
How how opposed can we be?

(01:09:08):
Well, this is gettingto a very frightening subject.
And, you know, you had quoted
the Housedivided language from Abraham Lincoln.
You know,
how do we survive?
You have a state like Texas

(01:09:28):
that is now growing.
California isseems to be losing population
maybe in another ten or 15 years.
Popular populationwise, there rough parity.
So you have red states entrenched
here, blue states entrenched,and everybody's intolerant of everybody.

(01:09:50):
Can we.
You know, can we. Be a house. Divided?
I mean, that's in some waysthat's the question of our era.
The political question and moving forwardis how does this country
cohere if we've got such division,
not just
sort of in the aggregate,but localized in these

(01:10:11):
in these political communitiesand these different parts of the country
and people ask, are we headed for a civilanother civil war?
You do hear a lot of conversation.Right? Right.
And I actually don'thave that particular fear.
And there are some reasons for that.
The civil war of the 1860sdivided a country

(01:10:34):
that was not really fully integrated.
It was still a young country.
There was there was not the same level ofnational integration that we have today.
It was dividedboth very starkly regionally.
And there were this huge economic socialdivision around slavery and non slavery.

(01:10:55):
The and this competition for who'sgoing to control the West.
Right. And,
you know, in
some ways, the the range of issuesthat divides us nationally
today is broader than it waseven at the time of the Civil War.
But we have,I think, these countervailing factors
that will hold the country together.

(01:11:18):
We are so integrated as a nation.
It's been more than a centuryand a half of integration since the Civil
War, economic, political, social,commercial integration,
you know, corporationsoperating in all 50 states
and professional sports leagues.
And, you know, so many ways thatwe think of ourselves first as Americans

(01:11:40):
and then secondly,as residents of the state,
the kind of mobility that we have acrossstate lines
moving from place to place,from red to blue and such.
So even though the sorting is real
and is in many ways to me troubling,I don't see, you know,
an actual partition of the countryor civil war being our future.

(01:12:03):
But I do think we have to find better waysto manage the conflict,
which I think requires betterpolitical leadership at the National level
and also,I think, a moderation at the state level.
So this performative
competition between these red
and blue states and more of a sense of,you know, we're in this together.

(01:12:25):
Well, that's a bit of encouraging news
that we're not in an
equivalent in 1860
and that that's encouraging.
I have to.
Have to admit that I amin terms of the ultimate driving force.
I'm just as confused as has ever,you know, with

(01:12:50):
hindsight, Looking back on to the 1840s,fifties
and sixties, it's easy to see what,you know, the two
economic systems in the questionof slavery, Western expansion
all wrapped up in the state rights thing
as driving that division.
It's now crystal clear
in hindsight, right?

(01:13:11):
I have to confessI am still as confused as ever.
What's the ultimate driving force?
Why we're drifting blue and red.
Any thoughts on what
the ultimate answer to that is?
You know.
You know, if I if I were to pinpoint
one thing,I do think it's this fundamental
worldview vision of what

(01:13:35):
our country should beand is a progressive vision.
Again, that's
it's got a lot of energy behind it,
saying that we have a lot of historical
inequalitiesand injustices that we need to remedy
and anything that getsthe way of that needs to be

(01:13:57):
defeated.
And we need to build a new country
that's based on a progressive foundation
and then is the other side that is
views that
that project with fear and loathing,
fearful of what it would meanfor their own

(01:14:20):
understandingof what it means to be an American
there,
their sense of their cultural identity.
And and so that's that's the base level
I mean, if
politics is about the distributionof economic goods, it's much more easy
to sort of negotiate that and come upwith compromises and such.

(01:14:40):
But if it's about one's identity and one'sbelief about who we are as a people,
I think we used to have a lot moreconsensus around that than we do today.
Well, that sounded likethen the primary explanation.
And unlike the Civil War era,which was at the economic, you know,
two very fundamental ways of existing,

(01:15:04):
which one of whichunfortunately include slavery, you know,
where now seems to be ideologicalas opposed to economic.
Yeah,I would say about that, the Civil War
era, that in many ways it was,you know, different economic models.
But it got to the point where
there theredefinitely was an ideological commitment

(01:15:27):
on the North,not for everybody in the north,
but for a big portion of the north,that abolition was a moral imperative.
And in the South,a kind of reactive ideological commitment
that, slavery was actually a positivegood, right.
And so and so once you get intothat ideological entrenchment,
that is much harder.
And I think that's partly what ledthere wasn't like an ability to negotiate

(01:15:50):
how to how we can maybe have like gradualabolition of slavery over time.
And it was it was too entrenched right.
And so
the thing that's, I think, most concerningabout our current circumstances, it's
not just about economic differencesor things that are easily negotiated

(01:16:11):
because it's more fundamentaland it goes deeper into notions of
of identity and ideology,
which are harder for people to give up.
Right?
So it I've been
slowly progressing in JamesMcPherson's book about the Civil War,
and I was the other day on the chapterwhere Charles Sumner

(01:16:34):
gets on the floor of the Senate,and this is after they've been murdered,
murders of free oilers in Kansas byslaveholders marauding over from Missouri.
And he goes on a two day thing that
it wasn't the bestdiplomatic choice of words.
It was a lot of very harsh words. And then

(01:16:56):
President Brooks
from the congressman from South Carolina
was outraged and took his silver goldtipped cane, went over and found Sumner
sitting in a chair and beat himsenseless on the head, almost killed him.
And I think Sumner was couldn'treturn to his seat for four years either.
And then listeningto the reaction in the north

(01:17:19):
was outrage
about President Brooksand then the media or the press
coverage in the South was hurray, rightfor Preston Brooks.
And I was thinking that, are we that far?
Yeah.
You know, we we yes,we become intolerant of each other,

(01:17:40):
but are we as intolerant
as Sumner and Brooks were in 1855 or 56?
Whenever whenever that was.
I kind of took some solace reading thatbecause I don't think we're that far.
Yeah,
I guess you disagree.
I guess I'm afraid that some of us are in
that place, you know, peopleon the extremes on both sides.

(01:18:02):
And I'm hopeful that there's
a middle,a sensible middle that will hold.
Right.
And would not embrace
the keening of a senator or
other acts of violence
and would step backand recoil against that.

(01:18:25):
But it's I I'm less confident of thatthan I used to be.
Unfortunately, after the events of January6th and other things.
And just again, the intensification of our
political division
and I think the coming yearis going to be a difficult political year.

(01:18:45):
The 2024 elections.
So we'll know more,
I think, in about 2 to 3 years about wherethings stand for us as a country.
But it's I agree with you, we're not thereyet and I hope we never get there.
Let me let me just kind of digress
from the social issues

(01:19:06):
real quick and come back.
I touch upon this again, but
how sustainable
is the California model?
From our conversation,it seems like to me that the Texas model
is more stable and sustainable,and it may float back
and forth between blue and redgenerally to the red side.

(01:19:30):
But but there will be periodicblue governors or,
you know, control of the statelegislature.
But California seems to be,
as far as we can see, to the horizonirrevocably
blue with a modelthat depends on a unpredictable
revenue stream that is creating a

(01:19:53):
basically an elite class.
And then you have the serves
and more of that phrase and
the question to me is, is the Californiamodel exportable to other states?
And ultimately as a sustainable.
You you know, it'sthose are two different questions.

(01:20:14):
I apologize. No, no.
But I think it's it's the latter question.
Is it sustainable is an open question.
I, I don't think it's exportableto other states.
There's a verythere are very few states in the country
that could impose the kind of
taxation and regulatory costson individuals and business

(01:20:36):
and hope to keep their populationand businesses in place.
And those are placeswhere there are strong economic clusters.
So like Wall Street
in New York, the
entertainment industry in Los Angeles,
to some extent Silicon Valley,those are places where

(01:20:57):
the the pole of
economy, culture, all of that
allows a state to be high cost, Right.
At an extreme level,I don't think, you know,
40 or more
or I think maybe ten or so states, Hawaii,maybe.

(01:21:20):
Right.
There are few statesthat could sort of charge the premium.
But your average state, South Dakota,is going to be able to be a high cost
California like state.
No way. Right.
And so it's not exportablefor the most part.
Is it sustainable here? Open question.
Just again,because it's such an extraordinary state,
there's so much capital that's been builtup, social capital, cultural capital.

(01:21:45):
There's so many natural advantagesthat it may be sustainable for a long time
or it may not bethat just the accumulated costs.
And we're starting to see with thethe net exit of population
of California, the actual ammunitionof the population, that

(01:22:05):
it we can't sort of
sustain a a government at the level
that progressives want in a state.
Let me just change the crosshairson that question.
Yeah, a bit.
I guess sustainability
is is is is a question,
but is it sustainable yetstill able to maintain

(01:22:26):
the traditional American conceptof a powerful middle class?
Yeah. Yeah.
doubtful.
Doubtful.
So much evidence that
this state for again,a lot of well-intentioned
reasons have pursuedhas pursued policies that

(01:22:49):
make it too expensivefor the middle class to live here.
You mentioned in your bookand and we're almost out of time.
That's right.
I would like to go on for the next
6 hours now, but
we're getting close to the end.
And a very fascinating conversation.

(01:23:10):
It and
you mentioned the Irish
miracle in your book and
so I ended up just
looking up all about the Irish miracle,because I always assumed
until recently that Irelandwas one of the poorer countries in Europe,

(01:23:30):
which was indeed true up until about,I think, 15 or 20 years ago,
but now is the second richest in Europe
and it appears to be secondaryas a result of
Ireland adopting Texas like policies.
Have I read that right?

(01:23:53):
So I can't claim to be a real expert
on on Ireland,but to the extent that I understand it,
I think there's been intentionalityin making Ireland
a more business friendly place,and it's been paid benefits.
And I guess that'swhat I would say to California is
there is an underlyingprogressive culture here underlying

(01:24:17):
desire to pursue environmental
protectionand worker rights and all of that. And
I think the challenge for
California'sis to do that in a way that doesn't
unduly burden businessesand middle class individuals.
So in the same way that the statewants to be economically

(01:24:42):
I mean, I'm sorry,wants to be environmentally sustainable.
Right.
And to providefor the future of the planet,
it should also be thinking abouthow can we be
economically sustainablefor those who are not billionaires
or the well off

(01:25:03):
people who are livingin gated coastal communities right.
Those people are fine.
They can paywhatever premium to live here, but
the state, I think, doesn'tpay close enough attention
to the burdens it's placing on average
middle and working class Californians
in pursuit of its overall agenda.

(01:25:25):
To those in Sacramento,who may watch this.
I think you have laid down the challengeand I hope they hear and listen
for all
who love the state of California andeverything it's meant to the United States
and to all the people who have lived hereover the many, many decades.

(01:25:46):
So the challenge is there.
I think that underlying that challengeis that to the extent
that California is sufferinga hemorrhage of people
in high cost, it's a
to a large extent a manmade problem.
But if it's manmade problem,it can have a manmade cure.

(01:26:06):
Yeah, I hope so.
This this is a special place.
I love it here as a fifth generation.
Fifth generation.I have no intention of leaving.
I love this state for many reasons.
I love the spirit of innovationand openness
and creativity and
and wonder in this place.
And I hope that policy adjustments

(01:26:29):
can be made tomake it again, a place that's
welcoming
and opento people of all economic backgrounds
and not just to the wealthiest among us.
Well, Professor Ken Miller.
ROSE Professor at RoseInstitute of Claremont
McKenna,this has been a wonderful conversation.
And once again,

(01:26:51):
his book is Texas Versus California.
It's a one and with a bookmark
of it's a wonderful book,
and I urge everybodyto pick it up and read it.
It will be a tremendous enhancementto anyone's
understandingof what divides Texas and California.
Blue from Red Buzzer. MILLER Thank you.

(01:27:13):
Thank you very much.