Jason Stanford, 6/22/2015 [Archive]

How to Produce Your Own Texas Miracle

By Jason Stanford

Rick Perry's running for president again, which means we have to endure a bunch of talk about what he calls the "Texas Model." The rest of us call this the "Texas Miracle," or the economic special sauce of low taxes, low regulation, low spending, and tort reform that he says created boom times in Texas while the rest of the country struggled. Hire me, goes his logic, and I'll make sure someone hires you. Being president is good work if you can get it.

Luckily for the rest of America, now you don't need to go to extreme measures such as electing Rick Perry to enjoy your very own Texas Miracle. To spare you the indignity of getting alternately bullied and charmed by a guy who can't count to three, here are easily reproduced instructions to build your own turbo-boosted job creation machine. Have fun!

First—and this might be tricky—be a border state. Perry likes to brag about how many people move to Texas every day. What he doesn't ever mention is how many leave Texas every day, bless their hearts. In 2010-11, the total net migration to Texas by U.S. citizens was only 83,634, or a little more than the population of Longview. Most of the population boom over the last decade came from Mexico and Central America thanks to Texas being a—you guessed it—border state.

It's not enough to simply share a border with the teeming masses yearning to breathe free. To engineer your own economic miracle, it also helps to sit on top of oceans of oil and gas. While the rest of the country was digging out of the Great Recession, Texas was surfing an energy boom. Oil production between 2010 and 2013 went up by 126 percent right along with prices, according to the U.S. Commerce Department's Bureau of Economic Analysis

Sure, Texas has diversified its economy since the 1980s oil bust, but that's like saying the New York Yankees rely less upon high-priced free agents these days. A-Rod is playing in pinstripes, and Texas' balance sheet is still drenched in oil. Economist Paul Krugman calculated that a little more than a third of Texas economic boom was fueled by oil and gas since 2005.

Last, be big. Give me land, lots of land under starry skies above. That will decrease population density, which decreases housing costs. At the height of the housing boom in 2006, the median Texas house price was 57 percent of the national average. When the market cratered elsewhere in 2010 but didn't here thanks to mortgage regulations, the median price only rose to 75 percent of the national average.

To sum up, be a big state on a border with Mexico, and produce more natural gas than all of OPEC and more oil than Venezuela. It's that easy.

Ignore all that stuff Perry says about low taxes, low spending, low regulation, and tort reform. Apparently that's hokum.

Turns out, middle-class families in California pay slightly less of their income in combined state and local taxes than do similar families in Texas, 8.2 percent to 8.6 percent. In California, state and local taxes make up 4.5 percent of private-sector gross state product, less than the national average of 4.8 percent. Texas clocks in at 5.2 percent.

When Perry became governor back in 2000, your typical Texas household made $52,227, adjusted for inflation. In 2013, that figure rose to $53,027, according to the accounting firm of Whoop, Dee, and Doo. What's worse, a study led by Raj Chetty and other eggheads at Harvard University and the University of California at Berkeley found that Texas children born into poor families were less likely to get rich than were kids in—God help us—California.

It's not a perfect system.

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©Copyright 2015 Jason Stanford, distributed exclusively by Cagle Cartoons newspaper syndicate.

Jason Stanford is a regular contributor to the Austin American-Statesman, a Democratic consultant and a Truman National Security Project partner. You can email him at stanford@oppresearch.com and follow him on Twitter @JasStanford.

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