Rick Perry and Texas' Real Economic Advantage by "GOPLifer" Chris Ladd As Governor Rick Perry positions for his big run, it’s worth examining what accomplishments he can and can’t take credit for. The importance of the exercise stretches beyond his campaign. You can expect that other states might try to duplicate Texas’ relative success in weathering the economic crisis. It’s important that they replicate what works rather than merely believing the propaganda. First, how well has Texas done? Meh. Perry has touted Texas’s fabulous success in job creation, but it’s not entirely clear what he’s talking about. The state has created a lot of new jobs and the unemployment rate is better than average – it ranks 24th – with unemployment at a stubborn 8%. It is true that Texas’ population is growing rapidly, but the majority of the growth is coming from Mexico. The state has in fact avoided the worst of the downturn. The most important factor in Texas’ success through the recession is that it never experienced the real estate bubble of the ‘aughts, with its accompanying destruction of capital and jobs. The home I bought in Houston in 2001 is worth about the same now as it was then. Real estate in Texas compared to other states has always been practically free. Endless sprawl, no meaningful quality regulation, staggering property taxes, and a lack of public capital have kept values, not just prices, low and flat. Avoiding the worst of that boom and bust gave the state a relative lift while much of the rest of the country cratered. You know who else was untouched by the global real estate meltdown? North Korea. Missing the bust might come down to great policy decisions or it might result from being disconnected from what’s happening in the global economy. Texas is growing, but it is also growing poor. Its high poverty rate, fifth highest in the country, is even more dramatic when you consider its inequality. To quote a report from the University of Texas, “Texas is only one of three states to rank in the top five in each category of poverty – that is, to be in the top five in both poverty rate and income inequality (the other two are Mississippi and Louisiana).” With a gini coefficient of .49, the gap between rich and poor in Texas is slightly greater than Mexico (.48). It should come as no surprise that it also among the worst states in terms of money spent on education (37th), graduation rates (43rd), teenage pregnancy (46th), literacy (47th), and percentage of uninsured (50th). And its government ranks 50th in the U.S. in terms on money spent per capita. The state gets a lot of kudos for low taxes, but again the picture is more complex than it might appear. Since Jesus hates an income tax, Texas is stuck with a bizarre corporate tax structure that creates tremendous confusion and inequity. The state’s gross receipts tax was described by the conservative Tax Foundation as “the most economically harmful tax structure available to lawmakers.” Corporate taxes in Texas are great for some kinds of companies and horrible for others. And I can tell you from my own very surprising personal experience that the move from supposedly low-tax Texas to crazy-taxtational Yankee-land somehow slashed my own tax bill dramatically. Others describe a similar experience. The lack of an income tax puts a heavy tax burden on middle-earning homeowners. But Texas has a natural economic advantage that it should capitalize on. A story might help illustrate. A town here in the Chicago area recently passed an ordinance to regulate the size, color, and locations of RedBox machines – those DVD vending machines you find at the grocery store. Why did they do this? The machines were causing no documented problems. No one in the community had complained about them. They don’t spew waste or make noise. They’re not even ugly. Someone on the town planning commission just decided that there should be some rules. So now the company, which operates nationally, has one more irritating and meaningless set of limits it has to track and comply with. Multiply that absurd example by tens of thousands of municipal and county authorities and you begin to see the scale of the problem. Nothing gained whatsoever by anyone for the significant costs incurred. And no realistic recourse for the job-creating company. A Governor is no position to stop a bored city council in some self-important little suburb from creating obstacles to prosperity for the whole state. It can’t be done. It is a bottom-up problem that infects the whole public sphere and is extremely difficult to curb. The kind of freedom to create and build that Texans enjoy doesn’t come from the Legislature. In fact, the Legislature and the Governor through an unfair system of taxation and a refusal to support schools and other public capital are doing everything they can to undermine the potential of this advantage. Texas’ best economic advantage comes from the culture. You can’t give that to someone. An aspiring Texas entrepreneur will face relatively little pressure to support a union racket, bribe a city councilman, or spend thousands of dollars a month deciphering layers of bizarre and pointless local regulations imposed at every level of an endless state and local bureaucracy. Why? Because Texans don’t tolerate those obstacles. Perry’s greatest accomplishment has been to accumulate a lot of personal power and wealth by cynically indulging the culture’s most self-destructive instincts. Texas has held its ground economically in spite of him. He took over a small government that contributed almost nothing to the people’s welfare and worked to cripple it further. His reckless tax cuts generated the nation’s largest budget hole which he is trying to fill primarily by slashing Medicaid and education. With this culture of open business development, imagine what Texas could accomplish if it had the finest schools, top research institutions, and a first-class communications and transportation infrastructure. Ranking 50th in spending, Texas has plenty of room to get this done if Texans only wanted it. But nevermind. Forcing pregnant girls, one of Texas’ most abundant natural resources, to get a sonagram prior to an abortion is probably more important. There are parts of the Texas Advantage that the rest of the country should emulate. And there are other parts. ----------------------------------------------- Lots of links to supporting articles included on the website.
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All those jobs created in Texas and Perry still runs the govt. budget into the ground, the state has to layoff tons of teachers and hard working people who provide a real service. He must suck even more than I could have imagined.
It's kind of hard to close budget gaps when the jobs you create are mostly low-wage immigrant service jobs that are a function of population growth. It's how the state of Texas manages to "create" lots of jobs but still has very high unemployment, by historical standards.
Rick Perry wrote an op-ed with Nikki Haley about how great they are at managing budgets. http://www.washingtonpost.com/opini...borrow-cycle/2011/07/13/gIQAYYtZEI_story.html The best line of course is that he prioritized our schools in the process.
Rick Perry is going to spread stupidity around America like he is trying to do to Texas. Who the hell goes for education funding first and foremost when deciding to enact budget cuts?
the federal government isn't suppose to be funding education (it is a state issue) so it shouldn't be an issue if he is president.
This is the bottom line. I'm not sure Rick Perry has what it takes to snag the GOP nomination, much less be elected president. You can't take for granted how Republicans around the country will react to him once he goes on the stump. Right now, the concept of Perry's candidacy appears to be strong. But when he starts trolling for votes, count me skeptical. It's July. Let's see what people say about him by December. Perry's handlers have to realize he may not translate well nationally and I wouldn't be surprised if they called it off. The only reason he's governor of Texas is because he fell into the job and entrenched himself.
If the **** brothers want him to run he will, if they don't he won't. Somewhere back in this thread is a post about him taking a "secret" trip to confer with them.
