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March/ April/ May 2014 Oops: The Texas Miracle That Isn’t

Conservatives say the Lone Star state’s recent record of growth validates their economic agenda. That record crumbles upon inspection.

By Phillip Longman

Is Texas our future? The question got kicked around during the last presidential campaign when Texas Governor Rick Perry was briefly riding high. Everywhere Perry went he appealed to Republican primary voters by describing what he called the “Texas Miracle.” As Perry told conservative talk show host Glenn Beck, “Since June 2009, about 48 percent of all the jobs created in America were in Texas. Come add to it.” In his stump speech Perry would click off what he said were the four major reasons his state had come to lead the nation in job creation—without ever forgetting a one of them. They were, he said, low taxes, low regulation, tort reform, and “don’t spend all the money.”

Perry’s prospects in that political season quickly faded, of course, after that moment—instantly viral—when he froze during a debate while trying to remember which three federal cabinet agencies he had vowed to eliminate. Neither his cringe-inducing exclamation of “oops” nor his subsequent explanations that he had experienced a “brain fart” while distracted by Mitt Romney’s smile were enough to save his candidacy.

But the debate over whether Texas has anything important to teach the rest of America has continued to build. One reason is that even though Perry didn’t get to replace Barack Obama in the White House, he has continued to boast about his Texas Miracle, including in radio ads that have caused an uproar everywhere they’ve aired across the country. “Building a business is tough, but I hear building a business in California is next to impossible,” Perry intones in one, before pitching California businesses to move to Texas.┬áIn another, he announces, “I have a word of advice for employers frustrated by Illinois’s shortsighted approach to business. You need to get out while there is still time. The escape route leads straight to Texas.”

When Perry launched a similar radio campaign attacking New York for excessive regulation and inviting its businesses to “Go Big in Texas,” he inspired the comedian Lewis Black to strike back with a “Don’t F*** with NY” video that aired on The Daily Show with Jon Stewart. “You say we got too much regulation,” Black countercharged. “We’ve got Wall Street. They break the law for a living and never get punished.”

Yet that observation wasn’t enough to prevent more and more rank-and-file conservatives, along with a growing number of nonpartisan observers, both in and out of Texas, from also taking up talk of the Texas Miracle. Among conservatives, a typical formulation contrasts Texas with the supposedly failed state of California. For example, Chuck DeVore, a Republican member of the California State Assembly before decamping in disgust for the Lone Star State, has a new book out entitled The Texas Model: Prosperity in the Lone Star State and Lessons for America. In it, DeVore explains that

Texas spends less, taxes less, sues less, and secures for their people the liberty to earn a living, keep more of what they earn, and live where they want. Is it any wonder that for more than ten years, Americans have been moving to Texas while Californians have been fleeing as fast as they can sell their home and pack? Texas and California represent two opposing versions of the American Dream, one based on liberty, the other, government.

The idea that vast numbers of Americans are “voting with their feet” for liberty and prosperity by abandoning blue states and moving to Texas has become conservative gospel.

Another typical formulation appeared recently in the American Spectator. After celebrating Texas’s lack of an income tax, John R. Coyne Jr. went on to exclaim that “with its coolness toward regulation, its suspicion of government stretching back to Reconstruction, and its respect for private enterprise, Texas provides a model for any part of the country willing to set aside the conventional collectivist economic pieties.” Few conservatives, especially Tea Party types, want to defend the economic record of the last Republican president. But that still leaves them with the Texas Miracle as putative proof of concept for the benefits that would accrue if, say, the country would just accept the economic prescriptions of Texas Senator Ted Cruz.

Some liberal voices have, of course, risen up to offer rebuttal. In 2012, New York Times columnist Gail Collins published a book entitled As Texas Goes … How the Lone Star State Hijacked the American Agenda. Within Texas, liberal legislators (and there are a few) have updated a publication every year since 2003 entitled “Texas on the Brink,” which provides rankings meant to point out the state’s worst deficiencies, such as being last in the percentage of the adult population who graduated from high school while being first among the states in carbon dioxide emissions and in the share of the population lacking health insurance.

Yet within the last year or so, the Texas Miracle meme has nonetheless gained more promoters and attention in the wider culture. Time magazine, for example, recently ran the headline “Why Texas Is Our Future,” arguing in a cover story “that Americans are seeking a cheaper cost of living and a less regulated climate in which to do business; Texas has those in spades.” A new book written by a former correspondent for the Economist and respectfully reviewed by the New York Times is entitled Big, Hot, Cheap, and Right: What America Can Learn from the Strange Genius of Texas. Another new book, Texas Got It Right, contains a foreword by veteran mainstream media executive Walter Isaacson, currently CEO of the Aspen Institute, in which he proclaims that Texas’s “can-do spirit and love of independent thinkers, innovators, and entrepreneurs is something that could help kick up our whole economy.”

So rest assured that Texas boosterism will loom large again in the next presidential election, and not just because Rick Perry is showing clear signs of another run at the White House. Texas has indeed outperformed the nation as a whole in job creation during the Obama years. And it has done so with a state government under the total control of ever-more-conservative Republicans, who now hold up that fact as validation of their whole economic agenda. Progressives, and everyone earnestly interested in improving the nation’s economic performance, need to confront all this Texas bragging and find out what, if anything, it proves.

In recent remarks before the Dallas Breakfast Group, Richard W. Fisher, president and CEO of the Federal Reserve Bank of Dallas, exclaimed, “I am never shy on Texas brag.” This is saying the least. In countless speeches, Fisher has laid out out what is probably the most substantive case for a Texas Miracle, using mostly Dallas Fed data.

Fisher first emphasizes Texas’s comparatively rapid rate of job creation. Over the last twenty-three years, the number of jobs has increased twice as fast in Texas as it has in the rest of the country. Many people might imagine that most of those new jobs pay low wages, but that turns out not to be true. To be sure, Texas has more minimum-wage jobs than any other state, and only Mississippi exceeds it with the most minimum-wage workers per capita.

Phillip Longman is a senior editor at the Washington Monthly and a lecturer at Johns Hopkins University, where he teaches health care policy. He is also a senior fellow at the New America Foundation, where Atul Gawande is a board member.

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