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Comment by michaelchisari | Hacker News Reader

Except that there is overwhelming truth to it. There are now, effectively, two economic models for states to follow, and they're very partisan models. There is the California model (high taxes, high minimum wage, strong environmental standards, strong labor protections, etc) and the Kansas model (cut taxes, privatization, gutting protections). California's growth rate compared to Kansas' growth rate is a matter of night and day.

California is by no means a utopia, but if you're using the standard metrics of a healthy economy, blue states like it are doing things right, and red states like Kansas simply are not.

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There are not 'blue' and 'red' states -- this is an artifact of the electoral college. There are huge 'red' zones mixed throughout 'blue' california. Usa on the whole is purple.

EDIT: Yes, I'm aware of distortions in the electoral college. My point is that some people seem to think that California is this massive blue block and that rural population you know, doesn't matter. The divide is not "red state" vs "blue state" it's cities vs. the rural. Yes the cities have more population. But the rural population exists and if you go for separation they would have to come along too, and maybe they would have something to say about it (such as breaking their rural portions off from your state and rejoining the rest of the USA, for one).

There are huge 'red' zones mixed throughout 'blue' california.

Geographically, yes. But land doesn't vote, people do. By population, it's a huge spread. Hillary beat Trump by over a 30% spread. 61.73% vs 31.62%.

Most of the big "blue" states are similar. In Illinois, it was a 17% spread. Over 22% spread in New York.

You're not disagreeing with his point at all. 60% blue and 30% red still looks like purple to me.

Even the most staunchly blue states have a huge red contingent - and vice versa.

That doesn't change the fact that nearly one out of three Californians voted for Trump (of those who voted, anyways). It's a huge spread politically, but 32% of the population isn't something that can just be handwaved away.

As party sentiment goes, yes, but as far as policy and control goes there are some significant differences.

States also have governments which make decisions (like the one being discussed here). That said, the grandparent comment is a massive oversimplification. California itself had tax revenue problems not too long ago.

California itself had tax revenue problems not too long ago.

In 2011, they had state-wide tax revenue of $282 billion. That was the year Jerry Brown followed Arnold Schwarzenegger as governor, and a series of tax hikes were put into policy.

In 2015, tax revenue was $405 billion.

So what you're seeing is a shift in policy from Schwarzenegger to Brown, and a closing of the revenue gaps because of it.

California has "red" areas, yes, but at the level of state government they are drowned out just as they are in the electoral college. State-level policies are heavily "blue".

You might have cause and effect backwards (hard to know when you can't do experiments) but having a strong economy and wealth due to say Silicon Valley, Hollywood, or Wall Street (however those were created and sustained) might allow people to choose to have "(high taxes, high minimum wage, strong environmental standards, strong labor protections, etc)".

WA state has strong protections and environmental standards, but I wouldn't consider it high tax (no income tax for instance). Is it an outlier?

We have higher sales tax than most, which is regressive and disproportionately impacts lower incomes. Property taxes in certain areas (Seattle) can be higher as well.

But the lack of income tax and higher wages make up for it. My tax burden is about 30% of my income, whereas in other states, Red and Blue alike, it would be anywhere from 30-40%. In general it's a low tax state, which is great for high income earners but not great for the state budget. We've had constant battles over funding education and Washington schools are woefully underfunded.

A point: Seattle, City of has a lower total property tax rate (9.9%) than over half of the other cities in King County.

[0] - http://www.kingcounty.gov/depts/assessor/Reports/annual-repo...

I live in the city and actually didn't know that, good to know.

I didn't notice this until it's too late to edit. I made two mistakes:

First, Seattle's tax rate is 9.25 cents per $1,000, not 9.9 cents.

Second, I made a display error. The rate is not 9.9%; that would be very high. It is 0.925% (just under 1%).

And things like this

http://reason.com/blog/2017/06/01/california-gov-jerry-brown...

What about Texas?

I had a caveat in there about Texas that I decided to remove, should have kept it, but I'll respond here instead.

I think Texas' situation is too unique. They're effectively a petrostate right now. Now, they seem to be doing the right thing with things like the PSF and PUF, so I'd say that their approach, like their politics, is deeply purple, and it's not a terrible approach. But it's very specific, and not necessarily a model that other states can use.

Oil is only about 15% of the Texas economy, I would hardly classify it as a "petrostate". Real estate is a larger percentage of California's economy.

> I think Texas' situation is too unique. They're effectively a petrostate right now.

Conveniently ignoring the fact that California is ALSO a petrostate.

https://www.usatoday.com/story/money/business/2013/08/03/the...

Yes, California is third on a list where Texas is 1st. I don't think that disproves my point. Texas produces 35% of the country's crude oil.

In March of 2017, California produced 14,907,000 barrels of crude oil. Texas produced 102,443,000. That's 7x more. Play that against the fact that Texas' GDP is 2/3rd of California's. Oil has a massive impact in Texas that it simply doesn't have in California.

Texas and California are diversified economies. Texas is more exposed to the oil & gas industry. However, it is still not a petrostate. Which state is the closest to being a petrostate? Alaska (25% exposure).

It is very easy to validate this. Look at the price of oil. It has taken a massive beating over the last years.

Oil Price History: https://fred.stlouisfed.org/series/DCOILWTICO/

If the state is truly a petrostate, it will clearly be reflected in its GDP.

California: https://fred.stlouisfed.org/series/CARGSP

Texas: https://fred.stlouisfed.org/series/TXNGSP

North Dakota: https://fred.stlouisfed.org/series/NDNGSP

Alaska: https://fred.stlouisfed.org/series/AKNGSP

Note the massive drop in oil prices after 2014. Alaska's GDP drops around roughly the same period.

Now let's compare this to ACTUAL petrostates.

Saudi Arabia: https://tradingeconomics.com/saudi-arabia/gdp

Columbia: https://tradingeconomics.com/colombia/gdp

Brazil: https://tradingeconomics.com/brazil/gdp

Norway: https://tradingeconomics.com/norway/gdp

Mexico: https://tradingeconomics.com/mexico/gdp

Kuwait: https://tradingeconomics.com/kuwait/gdp

Russia [1]: https://tradingeconomics.com/russia/gdp

Iran [1]: https://tradingeconomics.com/iran/gdp

[1] Sanctions

See the shortfall in GDP, that is a PETROSTATE.

This is not a good measurement to determine the exposure of the industry to overall economy. It just shows the amount the barrels that can produce. The reason why there is a massive increase in production is due to shale (fracking). The cost of producing oil through fracking is a lot higher than pumping it out of the ground. Because they still have to sell it at market prices, the margin is a lot less for these producers. To compensate for this, these producers have to frack more out of the ground to stay afloat.

Shale Exposed

Texas Field Production of Crude Oil: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M...

North Dakota Field Production of Crude Oil: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M...

Non-Shale Exposed

Alaska Field Production of Crude Oil: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M...

California Field Production of Crude Oil: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M...

I forgot that this is the wrong site to use hyperbole on.

No, it's not literally a petro-state. I stand by my point that it is not a reproducible model for other states.

Texas will support the rest? Ok.

I'm not sure you can take the economic analysis and simply break into red vs blue. It's interesting to look at rural vs urban within those states too.

Texas isn't as strongly on the same policy track as many red states, and it also has a strong oil industry as a big input into it's economy. Though I think they have been looking forward and trying to diversify more recently.

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