What would you end up with if you took a bunch of Democratic voting social liberals from California and transplanted them to an entirely different state with no income tax and a light touch regime of business regulation?

You’d end up with the fastest growing city in America:

Austin grew by 33% between 2010 and 2020, far faster than any other large metro area. 

Back in the 1960s, there was a movie entitled How to Succeed in Business Without Really Trying. Austin residents vote Democratic, but they have not been allowed to try out the sort of policy regime that you see in other Democratic areas, such as California. Austin is an island of liberalism plunked down in the middle of conservative Texas.

So what can we infer from Austin’s amazing success?

It seems as though people are voting with their feet for a mix of policies that are socially liberal and economically conservative. Interestingly, the neoliberals who like Austin’s policy regime don’t have a home in either major political party. A two party system can only represent a limited set of policy mixes, and Austin’s is not one of them.

Of course Austin is in the sunbelt and benefits from warm sunny weather.  But then so does California, which is losing population. 

So what’s the fastest growing big city in the cold rainy north? Seattle:

Socially liberal Seattle is embedded in a state with no income tax, due to the fact that Washington’s constitution forbids progressive income taxes. That makes instituting an income tax a hard sell, as even middle class residents understand that they would have to pay higher taxes.

Even though only a small fraction of states levy no income tax, 8 of the 10 fastest growing big cities (during the 2010s) are located in one of those states. The following population growth data is provided by the Brookings Institute:

P.S.  Elon Musk considers himself to be socially liberal and economically conservative, and recently moved his business from California to Austin.

P.P.S.  Bloomberg published a story on a couple of new “supertall” skyscrapers being build in Austin. Even more notable than their height is that they are both residential towers. High rise living tends to be more popular with socially liberal people. Perhaps they enjoy looking down on us.  🙂