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Since the Great Recession, the Texas model – built around lower taxes, less-stringent regulation and pro-business politics – has been the clearly ascendant of the two, with growth seen along a broad array of industries, including construction, manufacturing and technology, as well as energy. This economic diversity helped the state emerge from the recession far earlier than the rest of the country, recovering its 2007 jobs level by 2011. (California barely crawled into positive territory on jobs this past year.) Texas contributed 23 percent of U.S. economic growth in 2012 and 22 percent in 2011. Without Texas’ growth in this decade, the country could well still be in recession. . . California’s “boom” has come later in the cycle than Texas’, and is far more narrowly based, depending largely on the social media bubble, stock gains among its many wealthy residents and a surge in prices of high-end, coastal real estate. From October 2007 to October 2014, California gained a net 162,000 jobs; Texas in the same period added more than 1.2 million. Surprisingly, notes economist Dan Hamilton, the California tech industry has added barely 10,000 net jobs since 2007.

Despite considerable improvement in the labor market, growth in wages continues to be disappointing. One reason is that many firms were unable to reduce wages during the recession, and they must now work off a stockpile of pent-up wage cuts. This pattern is evident nationwide and explains the variation in wage growth across industries. Industries that were least able to cut wages during the downturn and therefore accrued the most pent-up cuts have experienced relatively slower wage growth during the recovery.

With his first bill as a state senator, former Assembly Speaker Bob Hertzberg has proposed a massive shift in California tax policy, one he says better reflects a 21st century economy where information and services make up a huge portion of economic activity. The Los Angeles Democrat proposes extending the state’s sales tax to many services and devoting the money to education and local governments. As a tax hike, the bill requires two-thirds approval – a heavy lift in a Legislature where Democrats have lost their supermajority. But Hertzberg chairs the committee that oversees tax bills and is widely seen as an ambitious politician. Taxes will also figure big this year as political operatives prepare ballot measures for the 2016 election. Education advocates are calling for an extension of the temporary tax increases voters approved with Proposition 30 in 2012, and liberal activists want to change 1978’s Proposition 13 to increase taxes on commercial property. Public health advocates have said they will pursue a new tax on cigarettes this year, through either legislation or the ballot box.

School districts throughout San Diego County are seeing huge electricity bill increases that have soared as much as 40 percent in recent months, according to some officials.

Governor Edmund G. Brown Jr. today took the oath of office as Governor of California and delivered his inaugural address in the Assembly Chamber. The address serves as the Governor’s constitutionally required annual report to the Legislature.

The region’s housing mismatch increasingly affects hiring and corporate location decisions. In early 2014, Charles Schwab Corp. told employees in San Francisco that it planned to move “a significant number of San Francisco-based jobs” to other locations around the country over the next three to five years. The move is expected to involve more than 1,000 of its Bay Area workforce of 2,700.

The past thirty years have seen a dramatic decline in the rate of income convergence across states and in population flows to wealthy places. These changes coincide with (1) an increase in housing prices in productive areas, (2) a divergence in the skill-specific returns to living in those places, and (3) a redirection of unskilled migration away from productive places. . . Income convergence continues in less-regulated places, while it has mostly stopped in places with more regulation.

The state overall has been losing people to other parts of the country since the 1990s. A snapshot of more recent U.S. Census migration numbers shows that nearly three-quarters of those who have left California for other states since 2007 earn less than $50,000 a year.

California officials have no plans to make up for an expiring federal pay incentive designed to entice doctors to treat low-income patients..

. . . Summit leaders have spent the last few months developing a five-year plan that aims to build on these successes. The Summit’s new Roadmap to Shared Prosperity, scheduled for release in January, integrates the work of the Summit’s seven action teams and once again identifies the “right next steps” the state must take between now and 2020 to advance prosperity—from developing a workforce that can compete in the global economy to making needed infrastructure investments and encouraging the state to find new ways to fund these vital efforts.

In this information age, brains are supposed to be the most valued economic currency. For California, where the regulatory environment is more difficult for companies and people who make things, this is even more the case. Generally speaking, those areas that have the heaviest concentration of educated people generally do better than those who don’t.

The danger in focusing on the most superficial indices of economic health, such as the official unemployment rate, is that politicians will pat themselves on the back and not take the steps, such as regulatory reform, that would be needed for broader, sustainable recovery.

Once again, the two agencies are disagreeing over the extent of outmigration from California to other states, but this time, the Census Bureau is seeing less movement than the state’s demographers. “Domestic migration is the big cause,” says state demographer John Malson.

In reality, once a Legislature creates a program and gives regulators broad new powers, it’s unlikely anything will rein it in. Maybe as the Legislature returns, someone can propose a law that requires a careful analysis of old laws. Then again, one can only guess the unintended consequences that would result from that idea.

America’s corporate income tax rate, at 35%, is the highest in the world. A rising chorus would like to bring it more in line with foreign rates, which average around 23%. I have a better idea—abolish the tax. The long-term benefits would greatly outweigh the short-term costs. And revenue from other sources, especially the personal income tax, would quickly make up for it and then some.