The Texan Non-Miracle

Monday, February 09, 2015

A leftist congressman has kicked off the 2016 presidential debate and has, perhaps, unintentionally done Americans a favor by calling Texas a "crazy state" for (gasp!) not joining ObamaCare's state exchanges. John Fund reports on the inevitable retorts by Texan politicians and considers the evidence.

First of all, the state has been a rare bright spot in our nation's economy for the past several years. For example:

[B]etween 2007 and 2014 -- the period covering the recession and the slow recovery that followed -- Texas created 1.4 million net new jobs. During the same period, the rest of the nation wound up losing 400,000 jobs. The falling nationwide unemployment rate is largely the function of people's exiting the work force entirely.
And this has been in a state with the nation's second-lowest cost of living.

Fund does a little bit of digging into what Texas has been doing differently from the other states and finds something I hadn't been aware of, but that has seen the Lone Star State move in exactly the opposite direction as the rest of the country in one area foundational to a free economy, rule of law:
Those at the top of the corporate ladder clearly recognize Texas's strengths. For each of the past ten years, CEOs polled by Chief Executive magazine have rated Texas first in the nation for economic-development climate and job growth. What is the secret of Texas's success? Rick Perry isn't shy about sharing his thoughts. "It's all about four points," he told me. "First, don't spend all the money. Second, keep the taxes low and under control. Then have regulations that are fair and predictable so business owners know what to expect from one quarter to the next. Finally, reform the legal system so that frivolous lawsuits don't paralyze employers who are trying to create real wealth." [link in original]
While this isn't exactly laissez-faire, it is relatively better than most other parts of the country. I will add that, although the article itself could also do a better job of analyzing current policy in Texas, it does note some inconsistencies that have been less than successful, such as an attempt by Perry to subsidize new business moving into the state.

For fellow pro-capitalists, articles like this will help show what the strengths and weaknesses of some of the Republican presidential hopefuls are. Facts such as these can help us decide whether there really is an acceptable candidate in the running. They can also, with better analysis, show us where Texas could improve, in much the same way the contrast between that state and California shows us how far from even a predominately capitalist mixed economy we have already moved.

-- CAV


Today: Reworded part of last paragraph. 

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