More than a half century ago California passed New York to become America\u2019s most populous state. It was not only first in population, but\u00a0an industrial, agricultural, and technology behemoth that also provided most of the nation\u2019s entertainment.<\/p>\n
Today that primacy is threatened as never before, most powerfully by Texas, whose pro-business policies, low taxes and growing technical skill are propelling its economy.<\/p>\n
People are voting with their feet. <\/p>\n
A general view of the Golden Gate Bridge and the skyline of downtown San Francisco. USA Today Sports<\/p>\n
By 2050, for example, Texas<\/a> is now slated to pass California in population, driven both by both immigration and domestic migration. Its economy is growing far faster, and it is\u00a0now the headquarters of many former Californian companies<\/a>.<\/p>\n This year, for the first time, Texas passed California and New York as a headquarters<\/a> for the nation\u2019s largest companies. Even the establishmentarian Economist<\/a> recently proclaimed the Lone Star State is \u201cAmerica Inc.\u2019s new centre of gravity.\u201d<\/p>\n What should concern us are the reasons for this shift. After all, people don\u2019t move to Texas for better weather or scenery. Or for reasonable policies on issues like abortion.<\/p>\n Nor is it that Texas has smarter people. Four of the nation\u2019s leading engineering schools<\/a> are located in California, including Stanford, Caltech, UCLA, and Berkeley \u2014 compared to one Texas school.<\/p>\n Texas did not manufacture California\u2019s decline. To paraphrase Shakespeare<\/a>, the blame is \u201cnot in the stars but in ourselves\u201d.<\/p>\n Start with the mindset. For much of the past 100 years, California provided the nation\u2019s dreamscape. LA differed from the\u00a0East Coast intellectual establishment, which looked down on the rest of the country. Hollywood embraced America, with Westerns, war movies, detective dramas and tales of small-town life, epitomized by Frank Capra\u2019s \u201cIt\u2019s a Wonderful life.\u201d<\/p>\n The Austin, Texas skyline is seen on Sunday, August 16, 2026. Austin is one of the fastest growing cities in America. SCOTT MOORE\/Shutterstock<\/p>\n Today Hollywood is occupied by people who often seem to despise their own\u00a0country. Radical politics creeped into programming, as epitomized by last year\u2019s agitprop Oscar underperforming winner, \u201cOne Battle After Another,\u201d which lionized undocumented immigration, the shooting of law enforcement, and revolutionary violence.<\/p>\n Having turned away from the country that nurtured it, Hollywood has been losing audience for years<\/a>, with the exception of occasional blockbusters. The elite stars may still be well-paid and overcovered, but nearly 42,000\u00a0entertainment jobs<\/a> left town in 2024 and 2025.<\/p>\n Meanwhile, other places \u2014 Atlanta<\/a>, Nashville<\/a>, even New Jersey<\/a> \u2014 have been expanding their entertainment sectors and building new studios, while Paramount<\/a> is considering a move out of state.<\/p>\n Taylor Sheridan, the creator of Yellowstone and Landman, is building a massive new studio<\/a> in Fort Worth, Texas. Sheridan\u2019s work, widely ignored<\/a> by our progressive Hollywood elite, focuses on American stories, warts and all, but without the condescension of the studio elites.<\/p>\n In other industries, including high-tech, companies increasingly look to Texas. California\u2019s\u00a0high energy prices could limit the expansion of its AI industry, which requires enormous amounts of energy<\/a>. With a wealth tax looming, the technology nabobs will also have to face\u00a0California progressives, and their counterparts elsewhere<\/a>,\u00a0who increasingly oppose data centers and impose anti-competitive regulations on AI.\u00a0<\/p>\n A general view of the skyline of Houston is seen. Christopher Sadowski<\/p>\n Arguably the most serious flub concerns the space industry. By chasing out Elon Musk and Space X, a company started and still dependent on Californian expertise, we\u00a0handed Texas the keys to arguably the most promising industry of the future.<\/p>\n Musk\u2019s departure has also meant that rocket production won\u2019t be where it should be \u2014 San Pedro, the Inland Empire, the Sacramento delta \u2014 but in places like Brownsville and Bastrop. Musk also\u00a0 now plans for a new chip factory<\/a> outside Houston that, if completed, would be the world\u2019s biggest building<\/a>.\u00a0<\/p>\n Or go to the Starlink HQ in Bastrop, a small town 30 miles from Austin airport, and marvel at\u00a0 the\u00a0 gleaming headquarters, now expected to expand<\/a>,\u00a0looming over the Texas prairie. All I could think when seeing this amazing structure was that it should have been in Long Beach.<\/p>\n Since 2019\u00a0 the state\u2019s share of high-tech jobs<\/a> has dropped from 19 to 16 percent.\u00a0\u00a0\u00a0<\/p>\n California still retains unmatched expertise in high-tech industries, but current\u00a0preeminence is not permanent: New York and Massachusetts used to be big players, too.<\/p>\n To be sure, AI firms are developing\u00a0 an emerging epicenter<\/a> in San Francisco, but that is highly unlikely to\u00a0 create net new tech\u00a0jobs. Instead, the latest boom largely produces rewards for the investor class<\/a>, a handful of entrepreneurs, and well-compensated \u201cgenius\u201d programmers<\/a> .<\/p>\n But\u00a0there is little opportunity\u00a0 for middle- and working-class Californians in\u00a0places like San Bernardino, Oakland, or south LA. For them, the only win is that massive\u00a0capital gains fortunes can support an ever-growing welfare state<\/a> \u2014 at least until the AI bubble<\/a> bursts and more billionaires head out.<\/p>\n To thrive once again, California needs to refocus not just on elite industries and research, but also on nurturing blue collar and business service jobs for everyone else. Right now, we don\u2019t do that anymore. <\/p>\n Texas, with its crappy weather, unspectacular scenery, and sometimes coarse culture, does.\u00a0\u00a0\u00a0<\/p>\n Joel Kotkin is Presidential Fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute.<\/p>\n Download The California Post App, follow us on social, and subscribe to our newsletters <\/p>\n California Post News: Facebook<\/a>, Instagram<\/a>, TikTok<\/a>, X<\/a>, YouTube<\/a>, WhatsApp<\/a>, LinkedIn<\/a> \t\t\t\t\t\t
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