Thursday: What the two states’ “frenemy” relationship says about the economy. Also: An update on the pandemic.
Good morning.
(This article is part of the California Today newsletter. Sign up to get it delivered to your inbox.)
First, we have an update on the alarming trajectory of coronavirus cases in California:
Wednesday was among the worst days in the pandemic for California, with more deaths reported in the state than on any other day, and eight counties, including San Joaquin, Riverside, Orange and Santa Clara Counties, setting daily case records, according to a New York Times database.
[Track California’s coronavirus cases by county.]
The Sacramento area’s intensive care capacity dropped to 14.3 percent, leading to a new stay-at-home order in that region, while the situation became more dire at hospitals across the state.
In the San Joaquin Valley, available intensive care capacity was at 4.2 percent and in Southern California, it was 9 percent.
Still, not all the news was devastating. The state is expecting the first waves of vaccines to arrive soon.
And officials quietly reversed a widely criticized policy requiring playgrounds to close as part of shutdowns.
[What to know about the regional stay-at-home order.]
Texas vs. California
Now, a lighter look at an old divide:
Every so often, something sets it off — the “rivalry” between California and Texas, the nation’s two most populous states, America’s big blue-versus-red battle.
This time, technically, it was Elon Musk’s revelation that he had moved from California to the Lone Star State.
Speaking at a conference hosted by The Wall Street Journal on Tuesday, Mr. Musk, the billionaire Tesla magnate, said that California had become less accommodating to successful entrepreneurs and start-ups, comparing the state to a sports team that takes winning for granted.
“They do tend to get a little complacent, a little entitled, and then they don’t win the championship anymore,” he said.
[Read the full story here.]
As the former resident “Texas versus California” chronicler for The Dallas Morning News, I have written about the migration of people and companies from California to Texas approximately one zillion times before.
California, with its steep housing costs, raging wildfires and strict business regulations, has been losing residents to other states, with Texas as the most popular exodus destination. Of more than 653,000 people who left California last year, about 82,000 went to Texas, more than to any other state, according to census figures.
As my colleague Sarah Mervosh (a fellow Dallas alum) and I reported, Mr. Musk’s move — symbolic as it may be — hit a little different in the midst of a pandemic that has accentuated the divides between the two states and accelerated the untethering of corporate jobs from geography.
Not long before Mr. Musk said he’d finally gone to Texas, Hewlett Packard Enterprise, a spinoff of Hewlett-Packard, which has been credited with starting Silicon Valley, said this month it would move its headquarters from San Jose to Spring, Texas, near Houston.
[If you missed it, read more about what Apple’s plans for a Texas expansion said about Silicon Valley.]
And not long before that, the financial services giant Charles Schwab said it would move its headquarters from San Francisco to the Dallas-Fort Worth suburbs.
Since both of those companies already had significant workforces in Texas, though, those moves were in some ways also symbolic. But they’re also evidence that Texas’s longstanding economic strategy has continued to work.
Texas leaders have tried to woo companies and residents from the Golden State with promises of lower taxes, fewer regulations and eye-poppingly cheap housing — at least compared with California. In 2013, Rick Perry, then Texas’ governor, visited California and ran radio ads urging businesses to “flee” the coast. His successor, Gov. Greg Abbott, has eagerly picked up the mantle.
The state and its suburbs, in particular, have been among the nation’s fastest growing for years.
Of course, the growth in Texas has been propelled by the use of millions of dollars in tax breaks and incentives, an opaque, poorly regulated practice that has come under increasing scrutiny after the huge, public search by Amazon, based in Seattle, for a place to build a second headquarters. (Cities in the Dallas area competed fiercely, offering billions in incentives, while some in Los Angeles were actually relieved when the city was out of the running.)
[Read about why California’s population growth is the slowest it’s been in more than a century.]
And while Texas may represent a theoretically lower-tax, lower-regulation utopia for people like Mr. Musk, who fought pandemic restrictions, not everyone is about to pack up and move east.
“You will know that California has truly crossed a line when home prices start falling,” Christopher Thornberg, a founding partner of Beacon Economics, a consulting firm in Los Angeles, told me. As it is, he said, “there is more demand to live in California than to not live in California.”
Mr. Thornberg said he believed that California had made policy mistakes in responding to the pandemic that might negatively affect the state’s business climate. But, he added, remote workers who have the option to leave “are sure as hell not moving to Texas.”
Read more:
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In May, Mr. Musk threatened to move Tesla’s headquarters, fuming, “I’m not messing around.” Catch up on what happened. [The New York Times]
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A test of a SpaceX prototype that Mr. Musk hopes will someday send people to Mars launched, flew several miles high and then hit the ground too fast and exploded. [The New York Times]
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Economists at the University of California, Los Angeles, are predicting a roaring ’20s in California. [The Los Angeles Times]
Here’s what else to know today
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Gov. Gavin Newsom announced Liane Randolph as his new pick to chair the powerful California Air Resources Board. [The Desert Sun]
If you missed it, the board will be instrumental in implementing ambitious plans to ban the sale of new gas-powered cars statewide by 2035. [The New York Times]
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The Federal Trade Commission and more than 40 states accused Facebook of buying up rivals to illegally squash competition. [The New York Times]
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Lake Tahoe will close to tourists on Friday. [The San Francisco Chronicle]
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Pantone has picked its colors of 2021: “Ultimate Gray” and “Illuminating” — together, they represent the light at the end of the tunnel. [The New York Times]
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Meet the 94-year-old creator of Orange Bang, Los Angeles’s soft drink “underdog.” [L.A. Taco]
California Today goes live at 6:30 a.m. Pacific time weekdays. Tell us what you want to see: CAtoday@nytimes.com. Were you forwarded this email? Sign up for California Today here and read every edition online here.
Jill Cowan grew up in Orange County, graduated from U.C. Berkeley and has reported all over the state, including the Bay Area, Bakersfield and Los Angeles — but she always wants to see more. Follow along here or on Twitter.
California Today is edited by Julie Bloom, who grew up in Los Angeles and graduated from U.C. Berkeley.
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Why We’re Talking About the California-Texas Rivalry, Again - The New York Times
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