An embarrassingly large proportion of humanity spends its time cheering for one group of steroid-amped professional athletes over another, as they heroically kick or throw or dribble a ball around in circles. And yet it's almost never considered shameful or pathetic - how often have you heard a sports fan told to "get a life"? More often than not it's actually considered somehow virtuous. So I sometimes find it exasperating that my own interests are so obscure and deprecated despite their enormous long-term implications - I keep track of the progress and development of small, innovative startups trying to create safe, affordable, and reliable rockets capable of taking large numbers of people into space on the cheap. Even for a spectator, it's often frustrating: Progress is slow and occasionally backward. But every once in a while there is a moment that reinforces why I pay attention (e.g., the recent Dragon flight to ISS), and sometimes events in the industry overlap with issues of broader significance. Just such an issue has been raised by the decision of a very promising startup, XCOR Aerospace, to relocate from California to Texas.
There is a small but highly involved community of people that share my interest, and the related ecosystem of entrepreneurs, professionals, visionaries, and just enthusiastic members of the public is commonly known as NewSpace. It's a set of ideas, approaches, and emphases born of recognition that the cost-plus contracting model of NASA procurement and the destructive cycles of political short-sightedness, pork-based decision-making, Big Aerospace complacency, and other perverse incentives in the status quo have failed to realize the promise of a spacefaring humanity.
At the active heart of the movement is a relatively recent convergence of wealthy Silicon Valley talent looking for new challenges, garage tinkerers hashing out robust small-scale rocket systems in industrial premises near rural airports, and visionary entrepreneurs who see business as a means to human development rather than degradation. Although their activities occur in many places around the country - and a few internationally - the operational nexus of NewSpace is more or less in a small airport near Edwards Air Force Base out in the California high desert called the Mojave Air and Space Port. Mostly Mojave is used to test experimental commercial aircraft, but there is also a growing contingent of experimental rocketry and related space systems - a phenomenon that began to grow in 2004 with the successful spaceflights of SpaceShipOne, which was created by a company located at Mojave.
The politics of Newspacers run the gamut, although liberals in the movement tend to be more comfortable with utilizing the private sector than may be usual, and libertarians or conservatives in it tend to be more comfortable than is typical with the ideals of scientific and technological progress. Only the most absurd and self-negating extremes are absent - people who are so left-wing they insist that space must be the exclusive domain of government entities, or people who are so right-wing they can't stand to see people doing anything more constructive than slaughtering or enslaving each other.
So it has been predictably controversial in this little community that XCOR - a universally respected and accomplished NewSpace company with plans that are both ambitious and achievable - decided to relocate much of its operations from Mojave to Midland, Texas: A city that advertises itself as the hometown of George W. Bush (seriously - they actually admit it). According to XCOR, the decision was due to a lucrative package of incentives offered by the state and local government as well as differences in tax and regulatory policies between CA and TX. The company itself and its admirable CEO, Jeff Greason (pronounced "grayson"), have been pretty measured in how they characterize the decision, and have tried to unruffle feathers by noting that significant operations would remain in Mojave.
Given my respect for the people involved, I can't help but give XCOR the benefit of the doubt that the move makes some kind of sense for them - at least in the short- to medium-term. The reduction in cost due to lower taxes and virtually nonexistent regulatory oversight could represent an immediate cash infusion that could be very helpful as the company transitions from experimental development to operations. Over the longer-term, however, they're going to discover rather painfully the endless, myriad costs of low taxes and minimal governance.
The town of Mojave, CA where the airport is located is in a deeply conservative part of the state, which is partly why the region tends to have poorly developed infrastructure, high crime, and not much to do other than get drunk, play with guns, and attend church. And that failure to achieve healthy growth is, ironically, why the area remains relatively attractive to industrial companies whose activities may be loud (rockets are certainly that) or difficult to insure except way out in the middle of nowhere. And like Texas, nearly everything the region has, comes from outside because the entire economic foundation is based on investments made by the federal government or the rest of California. The difference, of course, is that the California high desert is within an hour or two of beaches, forests, mountains, a half-dozen world-renowned universities (and another half-dozen within an hour's plane ride), safe and civilized ungated communities with superb public schools in many areas, and every imaginable entertainment, product, service, and food option.
And there's the small matter of the fact that people actually have legal rights in California that don't involve summarily executing trespassers or beating children - rights that extend well into the ethereal domains of business law, making it possible to get reliable recourse if someone screws you over in a deal. To use an analogy, it's not exactly a hard bargain to relinquish the right to eat foie gras (a law against it recently went into effect here, for those who hadn't heard) in exchange for enforcement of the right to not become foie gras. I don't care how white your collar is or how enterprising you are - life and entrepreneurship are both a lot harder where private money wields peremptory power over rule of law and democratic institutions.
That's why innovative, world-altering businesses keep popping up in California while places like Texas have to lure unwary professionals and companies to relocate: The internal economies of low-tax, no-regulation states consistently fail to produce the requisite talent or business environment to grow without constant external infusions. I don't see Mountain View or Palo Alto crawling on their knees to attract companies from Texas, and I certainly don't see Mojave begging the various and sundry firms operating out of Texas or Florida to relocate the way those states are constantly begging and trying to bribe out-of-state businesses to move there. In fact, I don't see California feeling particularly compelled to draw business from anywhere else, although it certainly isn't allergic to accepting emigres. And the funny thing is that right-leaning commentators within NewSpace seem to think this lack of parasitic behavior is evidence that CA is uncommitted to the industry, or is "brushing it off": Quite the contrary, it's simply an awareness of the fact that we create industries in this state - we don't have to forage for them in other people's back yards because we're too cheap to pay taxes.
Now, I'm sure XCOR's experiences in Texas will hardly be as excruciating or dehumanizing as that of someone who works a low-wage job, but the costs of all that chaos and the private predators it unleashes to screw people over with impunity add up. I wish XCOR good luck trying to enforce their business agreements - including the incentive package they were offered, which I wouldn't buy for ten cents on the dollar - let alone get their money back when a contractor defrauds them. Maybe after the company is nice and situated with its resources invested, the state changes its mind about the size or other details of the incentive package, or the particulars are delayed, or maybe they decide some other company would provide a greater return. Maybe some officials decide they need to wet their beaks a little to exercise their efforts on its behalf, just to ensure that anything the company was promised is delivered. I'm sure the state's psychotic muppet Governor would be very sympathetic to complaints if this happened - although he might want a taste of the action himself, just to compensate him for his trouble. Do insurance companies cover extortion? XCOR might want to look into that.
But hey, I don't specifically know Midland, so maybe it's a civilized place with a better social environment than the rest of the state. Maybe it advertises its association with George W. Bush only to be ironic or to stimulate war crime tourism. But just as a general precaution, any XCOR employees who are not white and devoutly, intolerantly Christian should be prepared to endure routine assaults on their dignity and intelligence from every direction. The rocket business isn't the most demographically diverse, so they probably won't have to deal with the pervasive racism except tangentially - it's a culture shock even to a white person coming from a sane state to be confronted by the cavalier bigotry on display in Texas.
Granted, that's not the most relevant consideration to a rocket company, but the attitude it illustrates isn't limited to race, and doesn't respect any public/private boundary. They should be prepared to have militant religion foisted on every aspect of their lives, and to endure shockingly invasive and inappropriate questioning about their beliefs, deranged sermons, and acts of intimidation from random interlopers - cops, school administrators, doctors, politicians, neighbors, etc. And if anything about them is likely to trigger a right-wing bigotry tripwire - e.g., sexual orientation, mixed race heritage, disbelief in religion, moderate or liberal politics, etc. - they should be prepared for a surreal level of ongoing hostility, up to and including petty criminal acts. If you don't go to church, be prepared for someone to inform you in a sinister but faux-ingratiating tone that your absence has been noticed. Only a minority is like that, obviously, but don't expect anyone to stick up for you against those who are - control of the social status quo is totally conceded to them.
Of course, nothing stops XCOR from ditching Texas once its million petty irritations, failures, and corrupt practices start to add up to a significant drain on resources, so they might be able to squeeze some value out of Texas and then move on before they actually have to deal with...Texas. So hopefully they're keeping some kind of exit strategy at hand and not resting the future of their company on the hospitality of a dysfunctional, corrupt, third-world state directly in the path of every disaster headed for this country, both ecological and political.
This commentary, BTW, didn't just spring out of the blue: I've been reading some of the comments of other NewSpacers, and a usual suspect on the right came out of the woodwork to use the move as an opportunity to extoll the "virtues" of the medieval / Saudi Arabian business culture in Texas and condemn California's soshullisticky economy. In particular, a nutcake named Rand Simberg who intersperses his space bloggings with political commentary that (I'm not exaggerating) have at times sounded like they belonged on Rwandan genocide radio rather than the words of an American.
Basically, Simberg has at times advocated wars of extermination or outright imperial conquest when he isn't talking about NewSpace, spouts Bizarro World rhetoric about President Obama, and at times I've expressed puzzlement at this strange hybrid creature who hates mankind but finds the means of its ultimate liberation so fascinating. He's actually pretty well-respected on the space front, even though he is literally and unabashedly a fascist on other matters. I respond to excerpts from his commentary about the XCOR move:
In the grand scheme of the ongoing economic disaster being wrought by Sacramento, it’s perhaps not a big thing, but it’s very symbolic.Note how he begins by characterizing California's share of the global economic disaster wrought by federal-level deregulation of the banking industry as a consequence of Sacramento. To the extent this state has contributed to its own troubles, it is largely via the destructive anti-tax nuttery encoded in law by Prop 13 decades ago - something which has prevented the state from compensating for the revenue shortfall caused by the worldwide economic decline, and continually eroded education, transportation, healthcare, and all other infrastructure. Rand is fond of making alternate-universe, question-begging pronouncements like this.
On the same day that the California legislature passed a law authorizing an unaffordable low-speed, “high-speed” train along the heavily traveled corridor connecting the San Joaquin Valley metroplexes of Bakersfield and Madera (where only three percent of the projected riders live), a promising young California company, like so many in recent years, announced that it was pulling up at least some of its Golden State stakes and heading to the Lone Star State.Rand conveniently fails to note that this is only the initial stage of the rail, and is only being approached first because it's cheapest - which is only necessary because of (a) the aforementioned recession that economic policies he supports caused, and (b) the corrupt Republican Congress choking off federal funds to high-speed rail projects throughout the country precisely because they know such projects are economically stimulative and want the economic crisis they created to continue for political reasons. In other words, Sacramento is spending money rationally to benefit the economy of this state, and the shortcomings Rand is laughably condemning are a result of policies he supports.
The fact that California (currently, anyway) has a government that works to benefit its people is part of why this is a more functional, more prosperous, and more business-friendly state than those continually poisoned and bled by anti-democracy ideology. You don't have to operate like a Somali warlord to make money here, and you don't have to surrender your rights to be employed. That's why California competes with the likes of Japan and Europe, not with other US states - Texas isn't even in the same league. And that's why there are no tears in Sacramento when some individual company or other relocates - usually, under most circumstances, it's their loss, and the economic space they vacate tends to be quickly filled up by some new company.
One prominent example: The joint Toyota-General Motors manufacturing plant called NUMMI in Fremont, CA closed its doors in April of 2010, with production shifted to Texas. One month later, the factory was purchased by Tesla Motors, and today is ramping up production of Model S EV that is revolutionizing the automotive industry. That's how things work in a healthy, innovative economy. So Texas is welcome to our sloppy seconds and obsolescing industrial dinosaurs the same way that China is welcome to them - and the attraction is largely the same for most companies (slave labor and preferential treatment) - but it's just silly to pretend that California state is "unfriendly" to business, or that Texas of all places would be a better fit for a fledgling high-tech startup.
It would be more credible to claim that rainforests are unfriendly to trees, so you should uproot them and plant them in Svalbard: There's no mean, oppressive canopy stopping them from growing there. Of course, there's also no soil, but who needs logic when you have the Cato Institute on your side? California is a big state and it's not perfect, but it would have a lot fewer problems if more conservatives would leave - only very few of them ever do, because under most circumstances that would be contrary to their financial self-interest. So we always have this powerful contingent of politically conservative people who have gotten rich off this state, and then try to use the money they got from it to turn it into Texas so no one else can get rich and dilute their political power. Because really when people like that say California is "anti-business," they're not talking about the economic activity of business - their continued presence here more than proves that they're just fine with the money they can make here.
Rather, they're complaining because the state government doesn't behave as their personal butler; they're complaining that their employees have rights, and behave insolently by insisting on their enforcement; they're complaining that the people of the state aren't as stupid as they wish they were; they're complaining that being rich isn't enough, because they want to rule their own little kingdoms without "interference" from the peons who should be grateful to work for them; and most of all they're complaining because social mobility still exists to some extent in this state, and they find it offensive to their egos and threatening to their interests that mere mortals are permitted to get rich without their permission. Basically, they just don't like people. Especially people who have the temerity to act like their equals despite having less money. But leave for Texas? Of course not - they know better.
Once upon a time, southern California was a center of human spaceflight. In the sixties, Rockwell International and McDonnell Douglas (since absorbed into Boeing) built many of the machines that took men to the moon, and later, Rockwell built the space shuttle in Palmdale and Downey, and McDonnell Douglas was a major contractor for the space station in Huntington Beach.Back in the days of 70%-80% top-level federal income tax rates, nationwide infrastructure development, rigorous social welfare programs on both the state and federal level, rigorous regulation of business, and a California before Prop 13: In other words, when the entire nation and most of the states went against everything today's conservatives preach and invested massive amounts of taxpayer money in growing the economy through infrastructure, education, social safet nets, and technological development. I.e., exactly the opposite of what Texas is today, and exactly the opposite of what Rand Simberg is citing this historical anecdote to argue for. This is how wingnut logic works: Because California was once an explosive industrial center at the zenith of liberal politics, we should do the exact opposite of that! Up is down, black is white, slavery is freedom. Rand Simberg, ladies and gentlemen.
What Texas offers, though, beyond the direct financial incentives, is a much more business-friendly and employee-friendly environment.We've dispensed with the laughable claim that Texas is more "business-friendly" than California, but "employee-friendly"? Is that kind of like "To Serve Man"? "We here at Texas Beef Co. are very friendly to our cattle"? Employees don't have rights in Texas, and even what rights they're supposed to have via federal law are simply ignored. Employers do whatever they please with few or no consequences - the strong prey on the weak with impunity, the rich on the poor, the big companies on the small companies, and none of it has anything to do with economics: Just the personal power of greedy, malignant narcissists with money who think their bank accounts make them superhuman and everyone else less-than. The business climate is petty, dystopic, sociopathic, and not a good cultural fit for an industry motivated by human optimism and progress. Now for some examples of what Rand considers the state of soul-crushing Communist tyranny imposed by California:
Even people with modest salaries pay almost ten percent of their salaries in California income tax. In Texas, that rate will go to zero.Ten! Teh horror! We pay a 1970 libertarian's wet dream tax rate, and all we get in return is this crummy state full of well-protected natural wonders, Nobel Prize-festooned universities, overwhelming economic dominance across dozens of industries, beaches that aren't covered in oil slicks, schools that don't teach children the Earth is flat and 6,000 years old, breathable air thanks to tough pollution controls, drinkable water, healthcare, a relative paucity of cross-burnings, and businesses other than fast food, gun stores, liquor stores, and megachurches in most communities.
But who wouldn't line up to trade that and any semblance of rights as an employee and a human being in exchange for not paying taxes? In the same vein, I should stop eating food because then I won't have to pay grocery stores for it. Then I can stop drinking water or doing anything indoors so I can stop paying the utilities. Mo' money! Who needs to pay a store for real clothes when you can just make your own out of discarded burlap potato sacks? You don't need your children to learn how to read, write, or think critically - let them learn life lessons the old fashioned way, in a street gang or working in a meth lab in exchange for stale McDonald's cookies: That would teach them a solid work ethic, so they don't grow up to become whiny libruls who think 2 + 2 = 4 and that gubmint makes life better when it's not in the hands of conservatives. In fact, they wouldn't grow up at all, so you don't have to feed them anymore! Mo' money!
In California, Proposition 65 requires warning signage for every fluid on site, with fines for failure to post — just one more burden on a company that builds and operates rocket-powered vehicles.Forcing companies to put up signs noting potential safety hazards on an industrial site? Oh the humanity! Think of all the critical, job-creating uses to which that one-time cost of $19.95 could be put if it didn't have to be invested in signage. Of course, you don't need those signs in Texas - hell, if not for federal regulations, you wouldn't need anything other than form letters regretfully informing families of worker deaths and letting them know the cost of cleaning up the bodies had been duly deducted from the deceased's back-pay.
Could Mojave have competed with Midland’s offer? Cash-strapped California might credibly offer an excuse that it can’t afford to hand out the millions in financial incentives that Texas is, if it weren’t for the fact that they just approved the “high-speed” boondoggle that will cost the state’s taxpayers billions.How dare California spend money on critically needed infrastructure that would serve millions of people and create hundreds of thousands of jobs when it could be doling out bribes to business owners for the privilege of their mere presence? That's just downright sane and reasonable, and we know what that leads to - fluoridated drinking water.
But the real problem is the regulatory environment. Jeff Greason, XCOR’s CEO, warned Governor Brown’s envoy in April that “California can have either all the regulation or all the business, but it can’t have both.”And yet it does have both, and has had both for decades. I'm sure there's some advantage in such saber-rattling just to get some attention in Sacramento, but the fact is that if XCOR no longer found the use of Mojave's facilities worthwhile, they would leave completely instead of making a partial transition while maintaining an operational foothold in California. Greason undoubtedly knows if they simply up and left, someone else would just take their place at Mojave - maybe not a rocket company, but some other high-tech, entrepreneurial aerospace business cultivated by the very economic circumstances that are being railed against.
He also appears cognizant that there is simply no avoiding this state if they intend to build an industry: California has a lot of very adventurous rich people, a lot of high-tech R&D-heavy corporations, and a lot of research universities that would contribute to the customer base, and we have a licensed spaceport in the middle of a desert with restricted airspace and decades of experimental programs under its belt. California is the origin of the industry, the origin of the money flowing into it (via Silicon Valley), and will represent a hefty proportion of the demand for what it provides. Texas...not so much.
When California’s idiotic new carbon trading law comes into effect this year, the company is going to have to start tracking every gallon of fuel it burns and report it to the state.Heavens to betsy! How would that even be possible?! That would require some kind of advanced, high-tech, Star Trek thingamabob that counts fuel consumption. Surely such a blue-sky technology would cost millions to deploy and operate, and would be completely impractical for any business other than General Electric or Google. Why, we would have to remake the entire educational system for workers to be able to operate such an esoteric doohickey. Those crazy Californians and their pie-in-the-sky fantasies of a fuel gauge...what nonsense will they think of next! And then the reporting part...my God, they would have to write down a number on a piece of paper and then at the end of prescribed interval copy that number down on another piece of paper and mail it! Surely it would take a quantum physics doctorate to perform such a delicate procedure!
No one in Texas will care.Until they start dying in significant numbers from climate change-induced hyper-heatwaves with indices above 130 degrees - an example of which already happened last year. And then there's the destruction wrought by more powerful and more frequent storms, as well as the higher insurance premiums that will inflict on businesses, in addition to the cascading economic damage caused by natural disasters. California is somewhat lucky in that our hot climates are dry and we really don't have any stormy climates, so Texas will be way ahead of us in bearing the brunt of climate change. I suppose one could call it poetic justice, or karma, or just plain historical symmetry. Any way you slice it, California is doing what makes sense and Texas is just being stupid and lazy as usual - or at least, the handful of arrogant, entitled rich people who own and rule Texas as their private property are being stupid and lazy as usual. They'll be just fine no matter what happens to the "little people" who make their lifestyle possible.
For “fiscal constraints” read “too many promises of pensions to prison guards and teachers, too many trains to nowhere, and too little revenue as we destroy the businesses that remain in the state.” For “policy constraints” read “irrational fantasies that by having our own carbon trading scheme we will somehow heal the planet.” And so, the once-visionary state that long ago nurtured the fledgling aerospace industry is apparently choosing to use taxpayer money to fund a nineteenth-century transportation solution doomed to failure, while chasing away an innovator of a twenty-first century transportation business that had been trying to revive it. And the gold continues to tarnish in the once-Golden State.Can't you just feel the collective IQ of the entire world dropping as you read this deranged nonsense? He thinks pensions are an economic drain rather than part of the purpose of having an economy in the first place, responsibly addressing one's share of a global problem (with localized consequences) is a "fantasy," and only the accomplishments of previous generations of liberals who people like him castigated in the past are to be lauded while those of the present are to be condemned. Part of the reason I enjoy debunking and laughing at Rand Simberg is that his comments wrap all of the myriad pathologies, fallacies, and stupidities of the right-wing mentality into a nice, neat little package with a bow on it.
But to return to the crux of the issue, XCOR - I don't deny there might be some short-term benefit to its move, and it will probably have significant operations in Texas anyway to serve the Midwestern customer base, but I find any claim that it reveals something good about Texas or bad about California laughable. Low taxes and low regulation are not an ideal environment, they're a tradeoff that over the long-term adds up to lower profits and far less innovation than an economic environment built to cultivate enterprise rather than merely subjugate and silence the labor pool. Enterpreneurs want to make a difference in this world, not rule it like some kind of Goa'uld in a ten-gallon hat.
So fundamentally it seems like California and Texas have different definitions of business, and the one here is the one that fostered the aerospace boom even one as benighted as Rand Simberg acknowledges; that created Silicon Valley; and that made XCOR and numerous other companies possible via infrastructure investments, education, and the nth-generation flow of capital from previous entrepreneurial achievements in this state. And the one over there, well...the blood-soaked fossil fuel Mafia and big-box retailers aren't exactly triumphs of human ingenuity and freedom, are they? But there is Texas Instruments. I've always liked their calculators. Good job, Texas.