James Quintero‘s last post noted that Texas has been-and still is-the number one job creator in the U.S. In the last year, Texas gained 129,100 jobs; whereas California lost 112,800; New York lost 39,600; and Illinois lost 7,900. And Florida gained only 29,800 jobs.
Why is this happening? There are lots of reasons, but one of them is capital. Specifically, Texas attracts capital from businesses and individuals-seeking to make a profit-who then use a lot of that capital to create the jobs needed to produce the goods and services they believe will earn that profit for them.
I’ll let Victor Cantu, in his book, Cocktail Economics: Discovering Investment Truths from Everyday Conversations, explain why some locales like Texas and Ireland attract capital:
“Capital is another word for money or wealth, and it moves to where it is most welcome. What makes capital most welcome? Two familiar big ideas: low taxes and low regulations. Just look at Ireland. For decades, this island was pretty low on the list of capital friendly locales. But a lot changed toward the end of the twentieth century. First, it got a lot quieter in the north. But what really attracted the world’s capital was the island’s shift to lower taxes. The guns silenced and the government-induced barriers to investment lowered. As a result, Ireland today is blanketed in green, and I don’t mean the kind cows eat.”
Of course, in Texas we’ve proven that a state can have both guns and capital, as long as it gets rid of taxes and regulations.
– Bill Peacock