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August 15, 2011 8:35 AM Miracles, myths, and mirages

By Steve Benen

For the foreseeable future, we’re likely to hear quite a bit about the “Texas Miracle” — the fact that the Lone Star State managed to stave off the worst of the Great Recession’s effects. Gov. Rick Perry, now a leading Republican presidential candidate, will tell voters who can bring similarly magical results to the nation.

Paul Krugman today helps set the record straight.

It’s true that Texas entered recession a bit later than the rest of America, mainly because the state’s still energy-heavy economy was buoyed by high oil prices through the first half of 2008. Also, Texas was spared the worst of the housing crisis, partly because it turns out to have surprisingly strict regulation of mortgage lending.

Despite all that, however, from mid-2008 onward unemployment soared in Texas, just as it did almost everywhere else.

In June 2011, the Texas unemployment rate was 8.2 percent. That was less than unemployment in collapsed-bubble states like California and Florida, but it was slightly higher than the unemployment rate in New York, and significantly higher than the rate in Massachusetts.

Texas has also benefited from a rising population coupled with a low cost of living.

[T]he high rate of population growth translates into above-average job growth through a couple of channels. Many of the people moving to Texas — retirees in search of warm winters, middle-class Mexicans in search of a safer life — bring purchasing power that leads to greater local employment. At the same time, the rapid growth in the Texas work force keeps wages low — almost 10 percent of Texan workers earn the minimum wage or less, well above the national average — and these low wages give corporations an incentive to move production to the Lone Star State.

So Texas tends, in good years and bad, to have higher job growth than the rest of America. But it needs lots of new jobs just to keep up with its rising population — and as those unemployment comparisons show, recent employment growth has fallen well short of what’s needed.

That’s not a miracle; that’s a mirage.

I’d add, by the way, that Texas has also benefited from state government spending that’s risen “faster than inflation and population growth,” and spending in Texas increased even more under Perry than under his predecessor, George W. Bush. Perry has also taken on more state debt at a pace that eclipses the national government, “paying for much of [Texas’] expansion with borrowed money.” (thanks to R.P. for the tip)

Just a few tidbits to keep in mind in the midst all the talk of “miracles.”

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

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  • DAY on August 15, 2011 8:42 AM:

    Perry's like the dust jacket of a NYT best selling novel: Looks terrific, until you open it, and actually start to read.

    (Formulaic plot, cardboard characters, no suspense- is this an undiscovered work by Ayn Rand?)

  • walt on August 15, 2011 8:49 AM:

    If Texas is such a "miracle", why does Rick Perry need federal disaster aid for its drought? You'd think all those rock-ribbed rugged individualists could handle something like that.

    Apparently, they're "takers".

  • kparkplace on August 15, 2011 8:55 AM:

    looking at Census data, something like two-thirds of Texas's population growth between 2000 and 2010 came from an increase in the Hispanic population. For some reason I doubt that is the kind of growth plan that Tea Party folks want for America.

  • c u n d gulag on August 15, 2011 8:57 AM:

    The "Texas Miracle" is exactly what the Conservatives want for the rest of the country:

    Shitty low wage jobs with few if any benefits!

    HOOZAH!!!

  • E. D. on August 15, 2011 8:59 AM:

    I just keep wondering what the Governor would look like without the shoulder pads.

  • berttheclock on August 15, 2011 9:06 AM:

    Steve, perhaps, you could write a thread about the disconnect between the Bushites and the Perryites. It is my understanding Perry has never been welcomed by the Bush camp. Perry has been having problems generating money from that side, however, his Super Pac money is being raised on the Fundie side

  • j on August 15, 2011 9:13 AM:

    I personally think the biggest problem in the next election will be election fraud and voter caging. Today on DU there is an article that says the results in Wisconsin from the past recalls are considerably different than the exit polls show, it really is worrying.

  • Anonymous on August 15, 2011 9:15 AM:

    I love me some Krugman. However, Americana are not going to be able to follow this. The media will not go out of its way to explain things properly. Remember Death Panels? I do. And Perry will say over and over again that almost half the jobs created in the USA were from Texas. That he created them. He will brush off the explanations as nonsense from liberals from the NYT. I get what Krugman is saying. I have an economics degree. You guys understand it. You are well educated and follow politics closely. How many people expect Americans to follow Krugman's arguments? I hope Obama's team does not count on Americans following these details.

  • Live Free or Die on August 15, 2011 9:19 AM:

    Anonymous=LFoD

    Also, I saw Debbie Wassermann Shultz try to explain this on Face the Nation. She was horrible. When you are elected, like it or not, you get the blame when things go badly and the credit when things go well.

  • berttheclock on August 15, 2011 9:25 AM:

    Sort of an irony that several wish to tout the wise words of Krugman, especially, after he has been blasted by some of our more zealous comrades in arms at this site for criticizing the policies of Obama.

    So, is this a take Perry to task equals Good? Whereas, take Obama to task equals Bad?

  • sick-n-effn-tired. on August 15, 2011 9:40 AM:

    What Cundy said ;
    A permanent underclass. The new feudal system.

  • davidp on August 15, 2011 9:45 AM:

    People believe what they want to beleive. Perry's claims fall in with a well established narrative about America and free enterprise. It's hard to see the facts making much headway against it

    Has anyone noticed? Perry would be perfect in the role of hero in a 1960s cowboy show, Gunsmoke or something. That by itself makes me think he's going to be a formidable candidate. A large number of people are going to think he's what a president looks and sounds like, and that will be enough to decide their vote.

  • Anonymous on August 15, 2011 9:55 AM:

  • Zorro on August 15, 2011 9:55 AM:

    Facts + figures are for elitists.

    -Z

  • zandru on August 15, 2011 10:03 AM:

    When DeBunking the TX 'Miracle'

    ... always be sure to add that the same can be said for the "Texas Miracle" in education. The way they got test scores to go up dramatically was - by cheating. And also lying.

    Use the phrase 'Texas miracle? More like a Texas mirage!' whenever you get a chance, whenever the name of Rick Perry comes up.

  • Anonymous on August 15, 2011 10:54 AM:

    What about that dreaded federal stimulus money that Perry used to balance TX's budget?

  • Texas Aggie on August 15, 2011 12:05 PM:

    Check out what percentage of the jobs that Goodhair "created" through his Texas Miracle™ were public service jobs. I don't remember the numbers, but they were more than half. I suspect that most of them were in public education because of the growth in population that Steve mentioned with the attendant kids, but now that he has cut the state education budget by almost 10%, those jobs are going to disappear. Keep track of them.

    Another thing to note is that neighboring states have had falling unemployment rates while ours continues to rise. And now our rate is somewhere in the middle of the US.

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