The Latest in a Series, Apparently, On "How Texas Is Dominating the Recession"

By Robert Wilonsky Tue., Aug. 3 2010 at 10:49 AM

Categories: Biz

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First, there was The Economist wondering how Texas had kicked California's economic ass. Then, Fortune examined how "Texas powered through the global fiscal crisis." Now it's The Atlantic's turn at the plate with this piece that wonders how in the heck "Texas is experiencing something like an economic boom" while the rest of the country suffers.

Derek Thompson offers four familiar reasons. So, with a tip o' the Stetson to Macro and Other Market Musings, let's just skip ahead to the last one:

4. Something About Texas
Maybe it's the lack of a state income or capital gains tax. Or the dearth of union workers. Or the plentiful labor supply on the border of Mexico, or the lower wages, or the stable and lean regulations. There's something about Texas that makes it the most popular place for business to do its business, as CEO Magazine and CNBC both found the last year. As Brooke Rollins, president of the Texas Public Policy Foundation, told me: "Our research shows that the more tax incentives and less regulation you have, and the less likely businesses are to get sued, the more likely it is they'll want to come and prosper in your state."

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First and foremost Texas suffers from problems no different than any society that faces an influx of transplants and immigrants. Sadly the superior education of our transplanted brethren apparently did not involve the study of history or sociology. They constantly complain about our education standards and our lack of voter turnout without realizing that in most instances THEY are a large part of the problem. See when you first arrive in a location you are not educated about local happenings nor inclined to get involved in things that you know nothing about. You see how that works? Our natives turn out to vote at about the same rate as any other state and the same can be said of Nevada, Georgia, Florida and Arizona. The disparities only show up when one compares voter turnout in these dynamic states with the rust-belt hell holes fund in the upper mid-west and the north-east. The same thing applies to education. Ohh Massachusetts has higher English scores than Texas...I wonder if that has anything to do with the fact that Texas has thousands of immigrants arrive every year, many of whom are school age and do not speak English. Texas also does not "cook the books" on education the same way northeastern states do. Everyone takes our standardized tests, we don't screen out the bad apples beforehand like they do in many states. It would also be nice if a few of you transplants could bone-up on your Texas history. If you did so you would realize that this state has dealt with economic issues before (Petroleum Bust, Telecom Bust, several real estate busts, et al) and yet here we are. Texas is also a donor state; we send more money to the Federal Government than we get back in Federal Spending. Texas has been this way for quite some time despite the fact that we have more roads (TX has 654,923 miles CA is number 2 with 386,604), the longest international border of any of the lower 48 states and the largest Military Base on Planet Earth. Also quit bagging on the transit system and please quit acting like rail transit is new in Texas. DART has been around since 1983, DTS was around going back to 1964 and prior to that we had streetcars. Plus this is Texas with the aforementioned 654,923 miles of road if you came looking for mass transit you came to the WRONG state. Feel free to return to the NE where you can travel on their clean luxurious, elevated trains and subways. Nothing quite like enjoying a commute with huddled masses and paying a massive tax burden for the benefit. One more thing. As you sit there behind your computer full of integrated circuits, eating your Doritos that you purchased at the local shopping center and paint all Texans as uneducated rednecks you should walk the walk. Get rid of any device you possess that utilizes integrated circuits since those were pioneered by redneck engineers at TI over in Richardson. Then dump out all of your Frito-Lay products because those are all North Texas redneck products as well and never go into another shopping center because, yep, you guessed it, we invented those too.
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My family is perfectly fine, and much of the issue of black babies being born without fathers and black men going into incarceration has more to do with the slave mentality of southern blacks (which is another story. I'm a black from New York). I would in no way join up with the likes of you. I'd rather watch Black Panthers put you and yours into Soviet style block apartment housing.
Black Male Jason: The Democrat party has destroyed your family, most of your black babies are born without fathers or are aborted (it's called the Black Holocost about 14,000,000 to date), impoverished your community, keeps sending your young men down the road that leads them to prison and keeps telling you that the White Man is your enemy and if you don't vote them back into power that "Whitey" will burn your churches. I am your best friend Jason - your only friend. Join me and together we will learn to live free!
Texas is the 21st Century utopia for the modern Robber Barons. Keeping the average populace under-educated just helps keep them underpowered. That way, they won't question basic quality of life issues--like the right for their kids to be able to breathe or be covered by insurance. From Dallas City Hall to the Texas Leg. and Governor Good Hair--the politicians, the majority of them, don't work for you and me--they work for Big Biz. They get elected to make their friends richer. let's keep those regulations of business at the bare minimum. Enron, BP, Wylys, Spanish Toll Road, Monsanto, etc.
@Rooster- Maybe Texas is just returning the favor for getting bailed out during the S&L crisis. Happy to receive government bailouts when needed and pissed to pay for them when others need it. I guess that's always how it works.
Reality Bites Your Ass says: "Hey Anon, reality just bit your ass." If only we could all be as enlightened and educated as you, then we could all offer such deep thoughts as "reality just bit your ass". Alas, i'm just a redneck and not capable of such profundity.
"Allow me to fix that for you: 'The resulting burden gets put on Average Joe but he doesn't give a shit because he doesn't mind having a steady job, a house, and a good quality of life.' " That sounds great in practice, but you know as well as I do that your 'fix' is over simplified nonsense. These Average Joes don't mind having the wool pulled over their eyes when the deal sounds great, but they start bitching up a storm when the bill comes and they've got to pay up. Sure, they won't flee Texas anytime soon for it, but people didn't exactly leave California at first either...
Catbird, Uh, I happen to be a black male. Don't sit here and weave yarns about how Democrats were fiendishly trying to enslave blacks, when LBJs political opponents weren't exactly handing out candy and kissing black babies to win their votes. If anything they were going to even fatal lengths in order to keep blacks from voting. I don't hold any loyalty to the Democratic Party, and don't insult my intelligence with your revisionist history. LBJ went out on a limb anyway as it was Southern Democrats (who later all left to join Republican ranks) who were a big part of the problem anyway. Blacks took what options were available. It was terror/marginalization versus basic human rights. Not a hard option. Are you now going to tell me how good we had it back in the day? My parents might beg to differ...
@BoHan - say whatever you want about the education level of Texans, but keep in mind the "brilliant minds" running your state have bankrupted it and purged your jobs. Hence, the reason why there's an overabundance of you here. Now those "brilliant minds" will soon be approaching "stupid Texans" for a bailout. I'll go ahead and speak for all Texans, and for that matter the other 48 states, when I say we view the Peoples Republic of California's self-inflicted problem as, well, the Peoples Republic of California's self-inflicted problem...
The manner in which "desegregaion" was implemented by the statists in congress is the root of a spectrum of problems in this country Jason. Lyndon B. Johnson (et al) saw desegration as an opportunity to politically enslave the Black community to the Democrat party as a means to increase the size of government and control over the people. That's the root evil of the mess we have now. You're a smart guy Jason so do the research: Hitler, Stalin, Pol Pot, Mao were all statists who thought that murdering millions of their own citizens was necessary for the state to flourish. Are you a statist Jason?
Catbird, Don't put words in my mouth, catbird. If you think desegregation is a bigger problem than BOEs run by religious zealots with no academic backgrounds and school districts being run by corrupt politicized councils who act like they are lords of feifdoms, then you ought to move to a LDS compound in Utah. Also, when I talk about corrupt district councils, I'm not just talking about some inner city districts, even places like Southlake are not immune. Actually historically the people who screw up the world are the ignorant who go on power-trips and begin eliminating intellectuals and those they feel are too smart for their own good. Nazi Germany, Stalinist Russia, The Khmer Rouge. I can only imagine what you might try to do if given the opportunity. As far as Citizen Palin is concerned, honor student or not, she'll always be a provincial backwater hick.
Jason, are you saying that the American children of today are just too stupid to learn like the ones did 50 years ago? Or that the children of 25 foreign nations somehow hot smarter than American children? It is what it is Jason, to call a fact "racist" isn't a solution, the problem just continues to fester and get worse. The real problem with smart people like you Jason is that they screw the world up for everyone else. And by the way...I hear that Governor Palin was an honors student at Boise State and believe that she'll make a spectacular president.
Hey Anon, reality just bit your ass.
Leave it to a teabagger like catbird to throw out subtle racist overtones, such as referencing Brown vs BOE, and then turnaround and play a victim/race card of their own. I think anyone with half a brain could tell you what the problem is in terms of education in Texas, and teacher unions are at the bottom of the totem pole. When you champion anti-intellectuals like Sarah Palin, who embrace their numbing ignorance, then you are the last person we need to hear from about education reform.
Since Brown V Board of Education in 1954 and the establishment of President Carter's Department of Education in 1979, the US as a whole has plumeted from (culumative scores) number 1 in math, science and reading to number 26. Education is indeed the big problem in Texas (and the country) and the answer is to remove the Feds and teachers unions from the equation. Nothing will change as long as this socialist/racist monster has it's boot on the throats of our children.
Whenever a post about this comes up, you can always count on the tolerant libs and their "stupid redneck" comments. Don't like it here with us rednecks? Then go back from whence you came, oh enlightened ones.
Most people outside of Texas think we are all stupid rednecks. Why? Well, watch TV. Chuck Norris Nicole, Jessica, Dog the Bounty Hunter (who was born here), Bush, etc. That's how we are presented, and judging by the comments here, with good reason. Many of you seem to forget that Texas missed the recession on the early 80's only to get nailed with the failed real-estate market later that decade. What? You don't think it will happen again? And I bet Clinton gets blamed for it too. Stupid rednecks. This isn't over yet. Prepare to lose your asses.
Texas....the new India!
@Rooster: There's more than one way to fail. Texas just has not had its limits tested with a maxed out population just yet. That day will come. And say whatever you want about California, your grammar doing nothing not to prove my case, but the random crime of Dallas today, even at fracking Northpark, is much worse than anything that ever happened to me in 20 years in LA. Keep that gun loaded bud. You'll need it.
Look folks, we share a long, largely unguarded, border with a third world hell hole of a failed nation leading to an unending supply of unskilled laborers and adolescent mothers, our urban school districts are managed more like jobs programs than educational institutions, our politicians spend half their days scheming to steal our money and the other half giving our money to their friends, its hotter than hell for four months out of the year, we're running out of water, Jerry Jones and Tom Hicks pass for a civic leaders.....ah hell....just pass the koolade......we're eventually doomed to have government as stupid as California and labor as corrupt as Michigan. Damn...and I was having a good day, too...
Rooster, What he probably meant was that city planning of Texas cities is piss poor and this is reflective on the fact that not only is traffic and pollution horrible in the urban areas, but also almost every Texas city ranks in the top 10 for obesity. The Economist's write up of Texas a year ago certainly had many accolades but had warnings as well, and those warning were that the failure of the Texas educational system and access to health care for the poor is going to eventually hurt growth. Also, a city like Dallas and Houston should have drafted plans for mass transit rail systems 30 years ago. I'm not trying to defend tax and spend or crazy regulations, but Texas has more than it's fair share of shortcomings as well. It's about making the state even better and not resting on laurels.
Chad also forgot to mention our being a primary hub for the narcotics distribution network...
Hey, Chad, California has all those resources AND Hollywood, and they still can't compete with us. Hint: It's not the geography. It's the governance (or lack thereof).
@BoHan - you mean in the population inflow of people coming from states that taxed/unionized their industries/jobs out of their state? . Again, the reason WHY all these people are here, is the policies in THEIR states FAILED.
Someday real soon Houston, Dallas and Austin will all look at Mexico City as a model of urban planning. I mean Houston is pretty much already there. Grab your gas masks and your rifles. We're going to need them with absolutely no educational, environmental or traffic infrastructure in place that are even remotely adequate to handle the population inflow.
You're slipping Daniel. It took 4 to get a rise. usually you can reel one in in 2 or less.
All you fiscal conservatives, please don't pat yourself on the back just yet. Let's see how long all this lasts when the $18 billion state budget shortfall kicks in this year and Perry can't stick his hand back into the federal cookie jar.
"The resulting burden gets put on Average Joe but he doesn't give a shit because he doesn't mind getting brainwashed by puffed up "Texas is awesome!" Allow me to fix that for you: "The resulting burden gets put on Average Joe but he doesn't give a shit because he doesn't mind having a steady job, a house, and a good quality of life." Economics are a fact of life. Have fun being unemployed in MI and CA, and living on "principle" of the way you wish things could be. Try not to let reality hit you too hard.
How about we summarize this for all future publications that want to break "news" about Texas succeeding: 1. Corporation wants to relocate. Texas politicians bend over backwards with incentives to get them to come. The resulting burden gets put on Average Joe but he doesn't give a shit because he doesn't mind getting brainwashed by puffed up "Texas is awesome!" fluff pieces in publications like the ones referenced above. 2. ???? 3. Profit.
Daniel, Mr. True Proud Texan: You're a great example of the pathetic educational system that Texas has. Lord help your children if you're the one in charge of homeschooling them. Don't you have to try pretty hard to misspell as many words as you have? How can you be taken seriously when you can't spell for s**t? Really, you're bringing us all down.
Texas will not be able to continue on this path for the long term. It doesn't have enough educated citizens to fill the jobs it's importing by throwing tax money at companies to relocate here. ========================= Them Texans will bitch about all the out of staters coming here. Face it, with our fucked up educational system, Texans will only be getting the unskilled jobs being created and in this day and age those are leaving our country.
If some of you dislike Texas so much, by all means, relocate your asses back to California, Michigan, Nevada, Colorado and most parts of the northeast. Good luck with that job search. And be sure to enjoy that 1,500 SF, $700,000 bungalow you'll live in.
For a state as big and diverse as Texas it would be hard to not be one of the best states for business. We have a coast for shipping, oil for energy, a good sized agriculture industry, a respectable technology industry, good colleges, and lots of space to expand. I think you would have to actively work to prevent business from coming here.
What Rooster said. And while your at it, take you're evolution theory with you back to MI and CA so you can be libarel branewashed oh sorry I mean "educated." Maybe you libarels came from monkeys but I come from the sweet baby Jesus and if they don't teach the contreversy about Darwin I will homeschool my children so they don't get branewashed!!! Anyway Darwin lived way back with Shakespeare and stuff you call that "progresive"! lol Yes I'm a true Texan and there is plenty more of us where I come from it's know wander corporations will be banging down are doors trying to get in for genarations to come!!! -- True Proud Texan
@JF You hit the nail on the head. The population that we're failing to educate will not be able to live better more fulfilling lives with higher incomes than their parents and grandparents. That's IF they can get jobs in a knowledge economy. I hate how the impetus is to make this a simple matter of business good regulation bad hulk smash. The picture is much more nuanced.
California and Texas are two extremes of the spectrum. Quality of life is shit in Texas for a majority of the population. They can't afford health care, are deeply in debt, and uneducated. Neighborhoods are crime ridden and pollution abounds. It's not whining. Lol it's a fact. You can find jobs though, despite the low wages. But what's good for business isn't always good for quality of life. Not even close. Texas and Cali. The solution lies somewhere in the middle.
Unfortunately, it's usually all or nothing. States that try to protect their air and water also generally try to protect their workers. That is, until there really aren't many jobs left to protect. Texas will not be able to continue on this path for the long term. It doesn't have enough educated citizens to fill the jobs it's importing by throwing tax money at companies to relocate here.
I guess all the crybabies can go back to MI, CA, and all the other states that taxed and/or unionized their businesses to death, are mired in red ink, and currently have no jobs. I mean, the policies they cry about that we don't have here are what bankrupted their states and drove them here to begin with, but I guess that's how they think it's supposed to be done. We'll go ahead and stay here with our jobs, low taxes, and decent standard of living. You're welcome to stay if you like, and we'd love to have you, but please leave the policies that bankrupted your respective states there. We don't want them here.
Look, if you can afford to eat more, then you are going to crap more too.
Boy, you people cry like someone who's been, well, proven wrong. Again.
Is it the best of times or worst of times? Yes, businesses are less likely to get sued here and are essentially unregulated. What does this mean? It means Texas, air, water and ground pollution has sky rocketed and our state is treated as national landfill. Our land, air and water belong to every Texans and by refusing to regulate protection of these assets, our kids and grandkids will be left with a fouled state that may or may not be something that can be cleaned up, but certainly there will be no money to pay for clean up. The destruction of natural resources is also evident in the sell off of state assets to foreign private enterprise. We're getting ready to pay Spain everytime we take 183 for the next 52 years. Why? B/c Perry is too much of a wuss to say the T word. How about a 5 cents a gallon gas tax and Tex. Dot pays for Texas' roads, or for that matter, keeps the 52 year stream of income on tolls for Texans? Call me crazy, but mortgaging our roads to foreign governments is virtually treasonous and yet this is being done by the Governor who wants to suceed! I don't get it. Again, pissing away a limited state resource. The "business friendly" legal climate also means that individual rights have been decimated and folks killed and/or permanently injured are regularly left out in the trash heap by the crooked Texas Supreme Court. Ask the 42 families of the dead in the BP explosion near Houston how business friendly Texas is as they were all left without redress by a Texas Supreme Court decision that changed 50 years of precedent in order to protect businesses from paying for the consequences of their actions. Business friendly is a cute slogan dreamed up by the US Chamber of Commerce. A more accurate description of what that means is business rape of pillage of state resources and Texas citizens.
"Same conditions lead to an extremely high rate of poverty, poor schools, undrinkable water, and air the consistency of a nasty, toxic, wet blanket." But.....we are prospering....right? I know I am!
I would like to know what states strike a balance between good for business and quality of life. Just because Texas is a great for business doesn't necessarily mean it's a wonderful place to live/be sick/get educated/visit a park. I'm all for eliminating government OVER-regulation: I don't need my kids protected from Happy Meals, but I would like them protected from unsafe drinking water.
"Our research shows..." What a crock of s***. No offense to those guys, but they do not "do research." Much like the SMU guy, the conclusion is decided in advance. In fairness, their liberal counterparts in CPPP do the same thing.
Yeah, there's something about cheap, many times illegal labor, low business taxes, and the ability to completely destroy the environment with no consequences that drive the economic wheel in Texas. Same conditions lead to an extremely high rate of poverty, poor schools, undrinkable water, and air the consistency of a nasty, toxic, wet blanket. Check out the research from A&M that says due to poor quality schools, average real dollars per citizen over the next decades will fall about $6k. Does that really make for a great 'bidness' environment? Maybe we could do away with minimum wage and really jack up the ratings.
That quote about sums it up. Maybe our esteemed national leadership will take note...