(Investor’s Business Daily) Economy: When not making excuses for President Obama’s dismal economic record, liberals try to explain away Texas’ stellar growth. But what choice do they have? The Lone Star State proves limited government works.
After Gov. Rick Perry entered the presidential primaries in 2011, the left made a determined effort to dismiss the fact that his state had outperformed the rest of the country.
Economist and New York Times columnist Paul Krugman called it the “Texas Unmiracle.” Time magazine dismissed Texas’ burgeoning growth as mere luck. Others chimed in along the same lines, insisting that low taxes, limited government spending and a business-friendly environment couldn’t possibly have anything to do with Texas’ better-than-average growth in GDP, jobs and incomes. And so, as Krugman put it, Texas “offers no useful lessons.”
Now that Perry is giving hints of another presidential run, the debunking effort is undergoing a resurgence.
An article this week in Washington Monthly written by Phillip Longman and titled “Oops: The Texas Miracle That Isn’t” spends 4,700 words claiming to have exposed the miracle as a fraud. But his debunking effort turns out to be phony.
Longman admits Texas has “outperformed the rest of the country in its growth of high-paying jobs.” That, he says, is “potentially a very big deal.” So he spends the rest of the article trying to explain it all away. He argues, for example, that the growth is almost entirely due to the boom in oil and gas production, though that industry directly accounts for just 8% of the new jobs.
In any case, he overlooks the fact that the oil and gas industry is doing well because Texas — unlike other energy-rich states such as, say, California — isn’t smothering it to death with regulations.
Longman then tries to deny the fact that people are flocking to Texas from other states in search of opportunity by citing just one year’s data on net migration — from 2010, a relatively low year for Texas.
Truth is that, since 2000, Texas has enjoyed a net migration of more than 2 million people, accounting for 40% of its total population growth, according to Census Bureau data. Between 2005 and 2012, nearly a quarter-million came from California alone.
Another way to look at it: In just five years, $14.4 billion worth of income shifted from other states to Texas, according to the Tax Foundation. Over the same years, liberal bastions such as California lost $15.8 billion, New York $21 billion and Massachusetts $4 billion.
Does that look like a “low level of net domestic migration to Texas”? Clearly, people are moving to Texas for a reason. And that mystifies those on the left because Texas has fewer government services, doesn’t try to soak the rich and spends less per student on education. Never mind that Texas students get a better education than those in big-spending California, according to a McKinsey & Co. study. Or that it has a lower poverty rate than California and New York.
And this migration trend isn’t limited to Texas. Between 2000 and 2011, the states with the biggest gains were more conservative, while the biggest losers were all liberal, according to a state freedom index report from the George Mason University Mercatus Center.
Longman also tries to claim Texas has been falling behind other states in per-capita income. But he fails to adjust for cost-of-living differences between states, so his numbers are meaningless.
Yes, Vermont’s per-capita income is now 5% higher than in Texas, as Longman says. But it costs about 25% more to live in Vermont, according to various cost-of-living calculators. Indeed, when you adjust for the vast differences in living costs across the country, Texas climbs from 26th to 11th in state per-capita income.
Fact is, Texas has pursued decidedly un-liberal policies. It has one of the lowest levels of government spending, among the lowest tax burdens and consistently ranks as the most business-friendly state in the nation.
As a result, its real economy grew 13% between 2009 and 2012 — twice as fast as the nation overall. Private-sector jobs climbed 12% since Obama’s “recovery” started 4-1/2 years ago, compared with 7% nationwide. And per-capita income has been rising faster — 50% since 2000 vs. 44% nationwide.
Longman’s right about one thing: This isn’t a “miracle” at all. Texas is just an example of what invariably happens when a state, or nation, pursues free-market economic policies. And that’s why the left is so desperate to make its success disappear.
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