Texas Miracle Seen as a Not-Miracle

By: David Dayen Monday June 27, 2011 9:55 am
firedoglake.com

Rick PerryBeing in California, I hear a lot from Republican lawmakers in this state about the “Texas miracle.” They claim that businesses are decamping to Texas because of their “pro-growth” policies, and driving a boom time there. This will clearly be a signature of the Rick Perry campaign for President if he chooses to run.

Only thing about that: it doesn’t appear to be true. Texas’ economic state, in fact, has plenty to do with tough government regulation of the mortgage sector during the bubble years. Brad Plumer writes:

Texas, economists note, has long been a low-tax, loose-regulation state, but it hasn’t always thrived—between 2008 and 2010, after the U.S. economy collapsed, the state’s unemployment rose faster than in high-tax Massachusetts.
In May, Texas’s unemployment rate, at 8 percent, ranked twenty-fourth in the country, slightly worse than liberal New York’s. What’s more, not all of those vaunted jobs are great jobs: Texas has the highest percentage of minimum-wage workers in the country, and its per-capita income still sits below California’s.

What is clear is that Texas’s population has been exploding, leading to disproportionate job growth. In the past decade, the state added more people than anywhere else, partly due to fast-growing Hispanic families, but due also to migration from other states. So why are people flocking to Texas? It could be the state’s lower taxes, though that probably isn’t a big driver: As Brad DeLong of University of California, Berkeley, has noted, Texans pay, on average, 26 percent of their income in taxes, not much lower than the 28.5 percent average in California.