Critics predicted California would lose Silicon Valley to Texas. They were dead wrong

Many in the media predicted last year that California’s economy would be smote by Texas.

In January 2021, a month after Oracle and Hewlett Packard Enterprise announced the relocation of their headquarters from Silicon Valley to Texas, NBC News ran the headline: “Tech flight: Why Silicon Valley is heading to Miami and Austin.” The piece quoted an analyst who predicted that the “mini-exodus of tech companies leaving the Valley” would “accelerate in 2021.”

The same month, after Digital Realty announced it was moving from San Francisco to Austin, SFGATE reported: “In mass tech exodus, yet another firm is leaving the Bay Area for Texas.”

That was just one month of negative headlines. But they kept coming.

In July, in a piece repeatedly quoting Elon Musk’s anti-California screeds, Britain’s Independent ran the headline: “Texit: Why high-tech giants are fleeing Silicon Valley for Texas.”

Then, in August, the hype about California’s certain doom went into overdrive, with narrative steroids injected by a report from Stanford’s Hoover Institution. Authored by senior fellow Lee Ohanian and Joseph Vranich — an ex-lobbyist who runs a Texas-based business focused on persuading companies to relocate to Texas — the 45-page report reads as expected: like a co-production of a partisan ideologue masquerading as a serious analyst behind cherry-picked data and a Texas business relocation specialist promoting demand for his services relocating companies to Texas.

“These data show California has clearly lost the incredible dynamism that it once had and is now among the worst states in the country for economic investment,” Ohanian and Vranich asserted. “Texas has become the new California, and California is becoming the new Rust Belt, losing businesses and people to states that offer more opportunities and a better, more affordable life.”

Their paper inspired others who repeated its conclusions. Three days after it was published, a Forbes blogger based a piece on it, declaring Texas the quintessence of success and California an embarrassing loser: “If we want America to remain as attractive on the international stage as Texas is on the national stage, we should adopt policies that make us look more like Texas and less like California.” Days later, the Hoover report’s “findings” were repeated in a wire story that appeared on television stations from San Francisco to Oklahoma to New York, all re-airing the allegation that California’s quality of life is horrible, our economy is dying and Texas is the promised land.

But is life really better in Texas than in California? If data disinfects, here’s a bucket of bleach: Compared with families in California, those in Texas earn 13% less and pay 3.8 percentage points more in taxes. Texans are 17% more likely to be murdered than Californians. Texans are also 34% more likely to be raped and 25% more likely to kill themselves than Californians.

Californians on average live two years, four months and 24 days longer than Texans.

And that Hoover report’s assertions? Did California’s economy die last year? Did tech investment decelerate? Did it lose Silicon Valley to Texas?

In 2021, California created 261,000 more jobs than Texas. California attracted $145 billion more venture capital than Texas. Californians attracted $3,911 per person; Texans, only $364. Far from dying last year, California’s tech industry raised more money than any year on record.

Sadly, the uncritical aping of this erroneous economic narrative reflects not only reporters’ gullibility but also their utility for conservative ideologues and corporate lobbyists, who score political points and regulatory concessions by spreading a spurious story line about California’s decline.

Don’t expect facts to change this. Reporters need a plot twist, and conservatives need California to lose.