Back when I was doing regular Texas vs. California updates, this is the sort of video I would feature. It covers why Texas is doing so much better than Europe, though the framing misses a few things I’ve tried to highlight below.
Caveat: I don’t know who “The Economic Matrix” is, but what they’re saying is generally right, but a bit incomplete.
“This is Texas. To most of the world, it’s just one of 50 American states. But if you pulled it off the US map and dropped it into the global rankings as its own nation, it would sit eighth in the world, sandwiched directly between France and Italy, with a staggering GDP of $2.77 trillion. But that’s just the start. In 2025, the Texas economy was bigger than the equivalent of the Netherlands, Belgium, Denmark, and Austria combined.”
“Texas and Europe are separated by more than an ocean. They’re separated by two completely different ideas of how a state should operate. And right now, one of those ideas is winning by a distance that gets harder to close every year. In 2024, the Texas economy grew by nearly 4%. The entire European Union managed 1%, and the gap is only getting wider.”
“The EU spent most of the last 15 years in crisis mode. A sovereign debt collapse left Greece, Spain, and Portugal on the edge of ruin.” I covered the European Debt Crisis (especially among the PIIGS (Portugal, Italy, Ireland, Greece, Spain)) as it was happening, and the thing to remember is that it was (and is) a deficit spending crisis. Like the federal government, European governments insist on spending more than they take in. Real austerity, i.e. cutting outlays until they match receipts, hasn’t failed, it’s been declared difficult and left untried.
“Years of near zero growth followed. The in 2022, Russia cut off the gas and sent inflation across the Euro zone spiking to 9.2%.” Here the video also avoids noting that another big inflation driver was the effects of the Flu Manchu lockdown across most EU economies.
“Through all of that, the Texas economy just kept climbing. The productivity gap tells the same story. Between late 2019 and mid 2024, labor productivity per hour in the Euro zone rose by 0.9%. In the US, it rose by 6.7%. Texas led that charge.”
“Look at the Permian Basin. Oil production nearly tripled in a decade while the rig count was cut almost in half because horizontal drilling and AI-guided extraction meant fewer rigs producing more oil. Same workforce, three times the output.” Oil industry-specific AI has very little do with the current general AI build-out bubble.
“There’s a mathematical reality that makes this trajectory almost impossible to reverse. At 1.5% annual growth, the EU takes roughly 47 years to double in size. At the 3.5% rate Texas usually averages, it takes 20. By the time the EU doubles once, Texas will have doubled twice. That gap compounds and it means every year the distance between these two economic models doesn’t just persist, it accelerates.”
“Mario Draghi, the former head of the European Central Bank, released a landmark report warning that without serious reform, the EU is heading toward what he called a slow agony. Leaders held a retreat to discuss it. Then they went back to their committees.” Future pain is abstract, while the electoral pain of trying to reform things is far more immediate.
“Since 2020, more than 200 companies have moved their headquarters to Texas. Tesla relocated to Austin in 2021. Chevron, one of the largest energy companies on Earth, announced its move to Houston in 2024. Charles Schwab, CBRE, SpaceX. More than half of these relocations came from California alone.”
“These are not satellite offices or mailbox moves. The reason they gave was simple. The regulatory environment in California made expansion too slow and too expensive. Texas made it fast, cheap, and permanent.”
“Spotify was founded in Stockholm, but listed on the New York Stock Exchange. Skype was built in Estonia and Luxembourg, then bought by Microsoft and absorbed into Redmond. ARM was designed in Cambridge, England, then acquired by a Japanese conglomerate and listed in New York. Europe keeps building the talent. America keeps cashing the check.”
“Beneath the growth stats and the corporate migrations, there’s one factor that explains this gap better than anything else: Energy. Texas produces more energy than almost any country on Earth. Not other American states, actual nations. Between 2007 and 2023, while the rest of the United States saw energy consumption drop by about 5%, Texas went in the other direction. Energy use in the state climbed by 21% and the industrial sector alone saw a 28% jump in demand. This was not a state focused on conservation or cutting back. Texas was building oil rigs, refineries, chemical plants, and massive wind installations, all at the same time.” Those wind farm installations were the result of subsidies, and they’re not really building new ones anymore.
“The reason Texas could pull this off comes down to one decision made decades ago. Texas built its own power grid, specifically to escape the slow motion gears of federal regulation. The result, solar capacity that grew 32% in just 2024, wind generation that leads every other American state, and a massive natural gas fleet running underneath it all to keep the lights on when the sun goes down, cheap, abundant, predictable, and fast to build.” Again, the solar build-out was aided by subsidies.
“For decades, the European energy models rested on one assumption. Buy cheap gas from Russia, build out renewables slowly, and keep industrial costs manageable. When Russia invaded Ukraine in 2022, that assumption collapsed overnight. Wholesale energy prices went vertical. Industrial electricity costs in Germany suddenly hit three to four times what businesses in Texas were paying for the exact same power.”
“Look at what happened to BASF, the largest chemical company in the world. For over 150 years, their home was Ludwigshafen, Germany, a sprawling industrial complex on the Rhine that employed tens of thousands. After 2022, they announced billions in cuts to that site. Plants shuttered, thousands of jobs gone. But BASF didn’t disappear. At the exact same time, they were breaking ground on new facilities in Freeport, Texas. Same company, same products, two completely different decisions driven entirely by the price of electricity.” Probably not just electricity. Union work rules in Germany are considerably less flexible than those in right-to-work Texas.
“France tried to escape this trap by leaning into nuclear power, which once covered 75% of French electricity needs. But that infrastructure is aging. New reactor projects like Flamenville have run tens of billions over budget and more than a decade behind schedule, and the political will to build more has been stuck in debate for a generation. The old Russian gas model is dead. The nuclear renaissance has not arrived. And permitting a single wind farm in the EU can take 7 to 10 years.”
“In Texas, the same process often takes a few months. Energy prices act like a hidden tax on everything from manufacturing steel to running a server farm to heating a bakery. European businesses pay that tax every single day. And Europe does not have the gas, does not have the grid independence, and does not have the permitting speed to change that.” Actually, Europe does have oil and gas reserves it refuses to develop.
“Cheap energy is a huge piece of the puzzle. But the real accelerant for the Texas economy has been something even harder for Europe to copy. And it starts with one number. The average top personal income tax rate across 35 European countries is 38.5%. In Denmark, that number hits a staggering 60.5%. In Germany, France, and Italy, high earners face rates between 45 and 50%.”
“In Texas, the state income tax rate is zero. It’s always been zero, and the Texas Constitution actually makes it illegal for the state to introduce one without a direct vote from the public. This is not a temporary policy that a new government can reverse after the next election. It’s locked into the foundation of the state.”
“Texas still has high property taxes, so the total burden on a normal resident is not as dramatic as that 0% headline suggests. But for the people these economies are competing over, the math is brutal. A senior software engineer in Munich earns roughly €75,000 and takes home about $45,000 after income tax and social contributions. The same engineer in Austin earns $140,000 and takes home over $105,000. same skills, same screen, more than double the money in their pocket at the end of the year. Between 2020 and 2024, Texas startups pulled in over $46 billion in venture capital. In Q1 2025 alone, Texas tech companies raised nearly $3 billion, the biggest single quarter the state had seen in over 2 years, with massive deals in cyber security, defense tech, and biotech.”
“Compare that to the other side of the Atlantic. The entire European Union raised about $17.5 billion for AI funding in all of 2025. The US raised nearly $70 billion for generative AI alone by midyear. Not total tech, not all venture capital, generative AI alone. These two regions are not competing in the same category.”
“The EU’s regulatory framework was designed to protect consumers and level the playing field. GDPR [General Data Protection Regulation], the AI Act, 27 different national compliance regimes stacked on top of each other. The intentions were sound, but the unintended result is that the compliance costs favor massive American companies like Google and Microsoft, who can absorb them easily over smaller European rivals who can’t.”
“None of this means Texas has it all figured out, because the truth is it hasn’t. The most visible problem is housing. In 2019, a median Texas family earned 62% more than they needed to buy a median home. By 2023, that cushion had collapsed to just 7%. Not 62%, 7%. Over a third of Texas households now spend more than 30% of their income on housing.” That’s a national problem, partially engendered by the Flu Manchu shutdowns, partially by restrictive local building codes. “Affordable housing” blather snipped, since this is just more unnecessary government subsidy and intervention.
“The workers who actually build the Texas economy, the Tesla line workers, the nurses, the warehouse staff, can’t afford to live in the cities their labor is building anymore. They commute in from further and further out, and the roads, the housing, and the services all fall behind.” Partially true, partially false. Austin housing prices exploded, but have come down dramatically. Dallas and San Antonio prices spiked, then plateaued. Houston prices have continued climbing, but gradually.
“When a place grows this fast, the infrastructure simply can’t keep up.” True of Austin, less true of Houston, though having to rebuild certain interchanges is making things a nightmare for certain commuters.
Discussion of energy grid problems and the 2021 ice storm snipped, since I think we’ve covered those enough here.
“The problems in Texas are the problems of a place growing too fast. The problems in Europe are the problems of a place that is barely growing at all. In that sense, Texas and Europe have something in common. Both are stuck. The difference is that Texas is gridlocked because too many people are trying to get to work. Europe is gridlocked because too many committees are still deciding whether to build the road. Right now, Texas has its sights set on overtaking France, a G7 nation. At current growth rates, that gap closes faster than most people realize. And France’s response, like the rest of Europe’s, has been to wait and see.”
“The real question isn’t whether Europe can change. It’s whether it actually wants to change badly enough to feel the pain that comes with it. Because while Brussels is still writing the rule book, the game is already over for the economies Texas has already passed. The ones still in its path just haven’t checked the scoreboard yet.”
Left out of this coverage: Texas has a constitutionally mandated balanced budget, while the overwhelming majority of European nations keep running budget deficits to keep their cradle-to-grave welfare states afloat.
Not to mention a government run by Republicans rather than unstable coalitions including the Greens…
Fusion GPS, the DNC and Hillary Clinton sampaign-funded organization behind the fake Trump dossier, has been paying journalists.
In this week’s MSM scumbag sexual harasser sweepstakes, both CBS and PBS fire Charlie Rose after sexual harassment accusations from eight different women.
You know the Arab-Egyptian Peace Treaty signed after the Camp David Accords in 1979? Jimmy Carter did his best to derail it.
Carter wanted his Geneva talks. He didn’t care that the peace process already begun by Sadat and Begin might lead to peace, Carter wanted his plan or nothing. You see Carter’s vision of a Geneva conference would be run by the U.S. and the USSR, and Israel would be facing the terrorist PLO, and Israel’s neighbors including, Egypt, Syria, Iraq, Libya, Lebanon, and Jordan. It would not be a negotiation because when one considers that the Arab countries were Soviet satellites, and the Carter administration’s ideological orientation was anti-Israel it seemed to ensure the conference would be all the participants vs. the Jewish State.
Thankfully Carter couldn’t stop the approaching peace train. Within days Israeli journalists were allowed into Cairo, breaking a symbolic barrier, and from there the peace process quickly gained momentum.
Can a Ketogeneic (low-carb) diet cure diabetes? Evidence suggests a firm maybe.
Environmental activist convicted. “A Montana jury found Leonard Higgins of Portland, Oregon, guilty of criminal mischief and trespassing. Higgins could face up to 10 years in prison and a $50,000 fine on the felony criminal mischief charge.” (Hat tip: Steve Malloy’s Twitter feed.)
Larry Correia spells out exactly what writers “owe” their fans on unfinished series installments: namely “Jack” and “Squat.”
“As A Male Feminist, I Really Think I’d Absolutely Crush It If I Ever Had To Publicly Apologize For Sexual Misconduct.” Heh: “I’d use the word ‘apologize’ and say ‘I’m sorry.’ I’d check off all the boxes that feminist Twitter looks for in an airtight apology, and I’d continue expressing remorse in the ensuing weeks to wow the world with the magnitude of my self-reproach.” (Hat tip: Instapundit.)