I've always thought of California as something of a basket-case, at least politically. I was surprised when I ran the numbers and discovered that during this decade, California has actually outperformed Texas, albeit slightly. From 2000 through 2009, per capita economic growth in California at 31.6% was slightly higher than Texas at 31.5%. California was disproportionately affected by both the collapse of the Tech Bubble and the Housing Bubble compared to Texas. Also, Texas is a net exporter of energy whereas California is a net importer of energy. You can calculate all the data from these sites. BEA : Gross Domestic Product by State California QuickFacts from the US Census Bureau Texas benefited greatly from a quintupling of oil prices during the decade, was not as affected by the collapse of the Tech Bubble in the earlier part of the decade as much as California, and did not experience the same catastrophic boom/bust real estate cycle as California did. Yet California actually outperformed Texas. I have an article I will post later.