Texas Is a Shining Example of Right-Wing Governance in Action and That's Why It's a Complete Basket-Case
By Joshua Holland, AlterNet
Posted on June 16, 2011, Printed on June 17, 2011
http://www.alternet.org/story/151325...te_basket-case
Conservative mythology now holds up Texas as a shining example of right-wing governance in action. Republicans would have us believe that gutting the state's social safety net, denying workers the right to bargain collectively and relentlessly cutting taxes unleashed a torrent of “job creation” and, ultimately, prosperity.
Under governor Rick “Goodhair” Perry's term in office, Texas has indeed been a model of conservative governance, but the truth is that it has resulted in anything but prosperity for the people of the Lone Star State. In fact, Texas is not only a complete basket-case, it would be faring far worse today without the help of policies enacted by Democrats at the federal level – policies Perry lambasted as “irresponsible spending that threatens our future.”
The kernel of truth on which the tale of the Texas Miracle is built is that the state has in fact added a lot of jobs over the past decade. In a gushing lead editorial, the Wall Street Journal noted that “37% of all net new American jobs since the recovery began were created in Texas.” The Journal then spun that fact like this:
Capital—both human and investment—is highly mobile, and it migrates all the time to the places where the opportunities are larger and the burdens are lower. Texas has no state income tax. Its regulatory conditions are contained and flexible. It is fiscally responsible and government is small. Its right-to-work law doesn't impose unions on businesses or employees.
In the Journal's hyper-partisan view, the lesson to be learned is that “the core impulse of Obamanomics is to make America less like Texas and more like California, with more government, more unions, more central planning, higher taxes.” That spin was echoed during last week's GOP debate by none other than Newt Gingrich, who asked, “Why [would] you want to be at California's unemployment level when you can be [at] Texas's employment level?”
James Galbraith, an economist at the University of Texas, scoffed at the whole narrative, telling AlterNet, “the notion that our state government is a model is almost enough to beckon the spirit of Molly Ivins back from the shades.” Galbraith said “Texas has been a low-tax, low-service state since the time of the Republic,” and noted that it's “therefore impossible that this fact suddenly accounts for its better job performance over the past few years.” (Texas' record of job creation under Perry is the same as it was under former governor Ann Richards, a Democrat.)
“Texas is an energy state benefiting from high oil prices and the incipient boom in natural gas,” explained Galbraith. “That's an accident of nature.” He added that the state “went through the S&L crisis, had major criminal prosecutions and more restrictive housing finance regulations this time around; hence it was not an epicenter of the subprime housing disaster. That's called a learning experience.” Tighter regulation of the lending industry is also anathema to today's GOP.
Arguably the biggest sleight-of-hand in the Texas Miracle storyline, however, is that many of those jobs were a result of a huge surge in the state's population, much of it fueled by immigration from Latin America (rather than liberal -holes like California).
Texas' population grew by 20 percent over the past decade, and Hispanics accounted for almost two-thirds of that growth. A surge in people created greater demand for goods and services, which leads to more jobs. But the jobs being created in Texas aren't keeping up with the state's expanding workforce – the Wall Street Journal somehow failed to mention that during the exact same period in which it was adding all those new jobs, Texas' unemployment rate actually increased from 7.7 to 8 percent (it also failed to note that 23 states -- including such deep blue ones as Vermont, New York and Massachusetts -- enjoy lower unemployment rates than Texas).
But perhaps the most laughable claim in this whole narrative is that Texas has been “fiscally responsible.” Perry certainly adhered to the conservative playbook, offering massive tax breaks without the deep cuts in services that might inspire a voter backlash. As a result – an entirely predictable one – the Austin American-Statesman reported that “state lawmakers have spent much of the year grappling with a budget shortfall that left them $27 billion short of the money needed to continue current state services.”
CNN adds that while Perry was railing against the Democratic stimulus package passed over the fierce resistance of conservatives, the state “was facing a $6.6 billion shortfall for its 2010-2011 fiscal years,” and “it plugged nearly all of that deficit with $6.4 billion in Recovery Act money.” The stimulus package created or saved 205,000 jobs in Texas, second only to California. But as James Galbraith told AlterNet, while “the state budget has not yet been cut drastically” due to the stimulus boost, “the key phrase is 'not yet.'” Now that the stimulus has run its course, “if projections for the current budget cycle are correct, things will get much worse in the next year.”
Indeed, those cuts are now on their way. The Texas legislature imposed draconian cuts to Medicaid, cut tuition aid to 43,000 low-income students and is weighing $10 billion in cuts to the state's education system. According to Texas state senator Rodney Ellis, D-Fort Bend, the 2012-2013 budget will underfund “health and human services in Texas by $23 billion, 29.8 percent below what is needed to maintain current services.”
But Perry's tax breaks are indeed part of the state's jobs picture; as Time magazine's Massimo Calabresi noted, Perry established several massive business tax breaks “designed to lure companies from other states.”
[But] the funds have been controversial. They have channeled millions of dollars to companies whose officers or investors are major Perry campaign donors and Perry has allowed them to keep their subsidies in many cases even when they fail to deliver promised jobs. More important for the purposes of judging Perry’s job-creating record, even those that do produce jobs don’t necessarily create long-lasting ones, or increase the state’s overall prosperity.
In a report written for Perry last spring, Michael Porter of Harvard Business School noted that such tax breaks “ultimately don’t support long-term prosperity,” because companies that can move easily “are looking for the best deal and when the deal runs out they move” again, taking their jobs with them.
He also found that Texas’ per capita income growth was the eighth slowest of any state in the country between 1998 and 2008. That's because, as the American Independent's Patrick Brendel noted, “Texas has by far the largest number of employees working at or below the federal minimum wage,” and the number of crappy jobs has exploded while this supposed Texas Miracle was taking place. “From 2007 to 2010, the number of minimum wage workers in Texas rose from 221,000 to 550,000, an increase of nearly 150 percent,” wrote Brendel. As a result, Texas is now “tied with Mississippi for the greatest percentage of minimum wage workers, while California had among the fewest (less than 2 percent).”
At a fundraiser this week, Rick Perry, who despite toying with the idea of secession in the past may now be eying a White House bid, told a group of Republican fat-cats that in his state, “you don't have to use your imagination, saying, 'What'll happen if we apply this or that conservative principle?' You just need to look around, because they've been in play across our state for years, generating real results.”
In this, Perry is absolutely, 100 percent correct. He slashed taxes to the bone, handing out credits to his political cronies like they were candy. He decried the evils of Big Government while hypocritically using federal stimulus funds to help close Texas' budget gap in the short term, and now he's using the state's longer term fiscal disaster – one of his own creation – as a premise for destroying an already threadbare social safety net serving the neediest Texans. As a result of these policies, plus immigration and other external factors, his state's added a lot of low-paying poverty jobs without decent benefits. He's added very little in the way of “prosperity.”
In the final analysis, Texas is indeed a shining example of conservative governance, as well as an almost perfect model for winning the race to the bottom.
It's true. Conservative redneck trash is set on destroying this country.
1) they hire illegal immigrants and insist on not being punished
2) they blame everything but themselves
3) they want to control everyone's social life
4) they insist on giving status in society at birth, as long as they get nepotism rights
we start deporting these morons and problems stop disappearing magically
Pretty much sums it up.
Given the amount that they want to short change education in Texas so that they don't have to raise taxes, the very mobility of labor that Republicans say led to people going to a "low tax" state, will take companies out of the state to places where they can find an educated workforce.
I can only stand in awe of the slow-motion trainwreck they are setting up.
Texas' success is due to an accident of geography, but gutting of education funding at all levels, elementary through college, will be definitetly attributable to one party's policies, and that will have real-world effects.
"slow-motion trainwreck they are setting up."
Not so slow. The school budget slaughter deliver immediate wreckitude in a few months.
Alternet vs WSJ. Hmmm
By the way, CA has a load of oil too.
Keep spinning
Do they have an Eagle Ford-scale natural gas boom as well?
Yes, CA oil was a huge source of wealth, as was the SoCal aerospace (iow, govt stimulus) but CA's huge post-WWII boom was also helped by the best public, and free, university system that produced millions of college-educated workers, and entrepreneurs.
The oil is mostly gone, and a voter-determined-tax-policy and 60% legislative majority budget votes has screwed the UCal system badly.
Professor of economics vs. WSJ journalist op-eds
Keep spinning.
Poor people have a lot to blame for getting steam-rolled by the corporate-friendly Perry...rather than sitting home feeling disenfranchised by all politics they need to get their asses to the booths and vote their best interests..
ndeed, those cuts are now on their way. The Texas legislature imposed draconian cuts to Medicaid, cut tuition aid to 43,000 low-income students and is weighing $10 billion in cuts to the state's education system. According to Texas state senator Rodney Ellis, D-Fort Bend, the 2012-2013 budget will underfund “health and human services in Texas by $23 billion, 29.8 percent below what is needed to maintain current services.”
But Perry's tax breaks are indeed part of the state's jobs picture; as Time magazine's Massimo Calabresi noted, Perry established several massive business tax breaks “designed to lure companies from other states.”
[But] the funds have been controversial. They have channeled millions of dollars to companies whose officers or investors are major Perry campaign donors and Perry has allowed them to keep their subsidies in many cases even when they fail to deliver promised jobs. More important for the purposes of judging Perry’s job-creating record, even those that do produce jobs don’t necessarily create long-lasting ones, or increase the state’s overall prosperity.
Not to mention, Galbraith is a well respected economists...
With any luck at all, the GOP ticket will take care of that for us.
*knocks on wood*
With all this going on, I will say that I am happy that I was lucky enough to be awarded a 2500 dollar state grant for the next year of grad school.
It's kicked the outta my daughter's scholarships this year.
Why are libs so bitter about TX doing well and CA doing ty?
Dude's a liberal hack
http://en.wikipedia.org/wiki/James_K._Galbraith
@ you being on RG's side. I'm sure he appreciates it.
, maybe they can get asshat Krugman to weigh in.
What does Krauthammer have to say about it?
Well, I didn't get anything last year so I am pleasantly surprised... Couldn't have come at a better time either, since I just took a 10% paycut at work.It's kicked the outta my daughter's scholarships this year.
Really??? I don't care about CA or how they are doing (at least not in the context of this conversation). I care about TX doing ty.
move to texas and find out. we are the minimum wage capitol of the country! I'm proud to be a Texan!
TX would do a lot better if it seceded from the Union (and the US pulled out all of its federal facilities out of TX).
... and yet you can't really poke holes in what he has said.Dude's a liberal hack
http://en.wikipedia.org/wiki/James_K._Galbraith
If he is such a hack, doing so should be pretty easy, should it not?
They are in for a shock, as those programs are required by law to be "actuarially sound", meaning you can't simply not fund them.the 2012-2013 budget will underfund “health and human services in Texas by $23 billion, 29.8 percent below what is needed to maintain current services.”
Either you kill them entirely or man up and raise the taxes needed to pay for them, as you are legally obligated to do if you accept them.
Schadenfreude.
I find it hilarious that the people most against raising taxes are the people whose lap this falls in, i.e. a problem that requires raising taxes.
Dude's a liberal hack
http://en.wikipedia.org/wiki/James_K._Galbraith
In a report written for Perry last spring, Michael Porter of Harvard Business School noted that such tax breaks “ultimately don’t support long-term prosperity,” because companies that can move easily “are looking for the best deal and when the deal runs out they move” again, taking their jobs with them.
He also found that Texas’ per capita income growth was the eighth slowest of any state in the country between 1998 and 2008. That's because, as the American Independent's Patrick Brendel noted, “Texas has by far the largest number of employees working at or below the federal minimum wage,” and the number of crappy jobs has exploded while this supposed Texas Miracle was taking place. “From 2007 to 2010, the number of minimum wage workers in Texas rose from 221,000 to 550,000, an increase of nearly 150 percent,” wrote Brendel. As a result, Texas is now “tied with Mississippi for the greatest percentage of minimum wage workers, while California had among the fewest (less than 2 percent).”Doesn't sound quite like a "liberal hack".Michael Eugene Porter (born May 23, 1947)[1] is the Bishop William Lawrence University Professor at Harvard Business School. He is a leading authority on company strategy and the compe iveness of nations and regions. Michael Porter’s work is recognized in many governments, corporations and academic circles globally. He chairs Harvard Business School's program dedicated for newly appointed CEOs of very large corporations.
Yet another thing you have not, and probably will not, actually address.
So go hide behind the LMAO smiley, and let the grown ups who can deal with reality run the state, please.
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