The real question is, why is living in California so much more desirable then living in Texas? If Texas was as desirable, would they have some of the same problems? Ultimately a state(in the US) is made up of citizens, not land or government.
Living in California is more desirable than living in Texas? That might be true for you, but is it true in general?
If we accept the cost of a one-way U-Haul as a proxy for desirability, as http://blog.american.com/?p=9141 does, it suggests that many more people are moving from California to Texas than vice versa, which (if you believe people act on their desire) suggests that Texas is currently a more desirable place to live than California.
Anyone with time to do the work can get data on net inflows and outflows directly from the IRS, starting here:
Why do we choose U-Haul and not housing costs? It seems obvious to me that everything is more expensive in California, including U-Haul. It's cherry picking.
I dunno. Why do people line up in a club and pay $20 cover to get in, while the pub next door has no cover, no lines, and cheaper/better beer?
CA is like that club, where the cover has gotten so expensive, yet the decor is getting old/outdated, and people are deciding it is not worth it anymore.
