The open secret of prosperity 8

When not making excuses for President Obama’s dismal economic record, liberals try to explain away Texas’ stellar growth. But … the Lone Star State proves limited government works. …

Economist and New York Times columnist Paul Krugman called it the “Texas Unmiracle.” Time magazine dismissed Texas’ burgeoning growth as mere luck. Others chimed in along the same lines, insisting that low taxes, limited government spending and a business-friendly environment couldn’t possibly have anything to do with Texas’ better-than-average growth in GDP, jobs and incomes. And so, as Krugman put it, Texas “offers no useful lessons”.

We quote from an Investor’s Business Daily report on the economic success of Texas – resulting from its “un-liberal policies”.

An article this week in Washington Monthly written by Phillip Longman and titled “Oops: The Texas Miracle That Isn’t” spends 4,700 words claiming to have exposed the miracle as a fraud. But his debunking effort turns out to be phony.

Longman admits Texas has “outperformed the rest of the country in its growth of high-paying jobs.” That, he says, is “potentially a very big deal.” So he spends the rest of the article trying to explain it all away. He argues, for example, that the growth is almost entirely due to the boom in oil and gas production, though that industry directly accounts for just 8% of the new jobs.

In any case, he overlooks the fact that the oil and gas industry is doing well because Texas — unlike other energy-rich states such as, say, California — isn’t smothering it to death with regulations.

Longman then tries to deny the fact that people are flocking to Texas from other states in search of opportunity by citing just one year’s data on net migration — from 2010, a relatively low year for Texas.

Truth is that, since 2000, Texas has enjoyed a net migration of more than 2 million people, accounting for 40% of its total population growth, according to Census Bureau data. Between 2005 and 2012, nearly a quarter-million came from California alone.

Another way to look at it: In just five years, $14.4 billion worth of income shifted from other states to Texas, according to the Tax Foundation. Over the same years, liberal bastions such as California lost $15.8 billion, New York $21 billion and Massachusetts $4 billion.

Does that look like a “low level of net domestic migration to Texas”? Clearly, people are moving to Texas for a reason. And that mystifies those on the left because Texas has fewer government services, doesn’t try to soak the rich and spends less per student on education. Never mind that Texas students get a better education than those in big-spending California, according to a McKinsey & Co. study. Or that it has a lower poverty rate than California and New York.

And this migration trend isn’t limited to Texas. Between 2000 and 2011, the states with the biggest gains were more conservative, while the biggest losers were all liberal, according to a state freedom index report from the George Mason University Mercatus Center. …

Fact is, Texas has pursued decidedly un-liberal policies. It has one of the lowest levels of government spending, among the lowest tax burdens and consistently ranks as the most business-friendly state in the nation.

As a result, its real economy grew 13% between 2009 and 2012 — twice as fast as the nation overall. Private-sector jobs climbed 12% since Obama’s “recovery” started 4-1/2 years ago, compared with 7% nationwide. And per-capita income has been rising faster — 50% since 2000 vs. 44% nationwide. …

Texas is just an example of what invariably happens when a state, or nation, pursues free-market economic policies. And that’s why the left is so desperate to make its success disappear.

No state can have a truly free market when the federal government is regulatory, controlling, and redistributive as it is now. But Texas shows what can be done even in these trying circumstances.

Listen to Governor Perry of Texas. It’s a thrilling and rousing speech.

(Hat-tip for the video, our reader and commenter donl)

  • Roger

    Ok, ya’ll can stop coming here now! It’s get’in a bit crowded, what with all the illegals and yanks. It’s start’in to turn blue! Actually, it’s looking more like Northern Mexico, since the feds won’t do their job, and won’t let the locals handle it the old fashion way! Over half of public school students in Texas are hispanic. No, I’m not a racist. I just want the laws enforced. Texas was once a part of Mexico, and we have a long tradition of cooperation with legal immigrants and legal workers. The defenders of the Alamo called themselves Texicans!

  • liz

    Sour grapes. Some people just can’t be good sports about someone else’s success, especially leftists confronted with the success of capitalism.
    Which proves they don’t approach their ideology rationally- it’s all about conceit, envy, resentment, and hate with them. The fact that it’s an utter failure doesn’t matter – it makes them morally superior to the rest of the world in their twisted minds.


      Of course they cannot admit the success of Capitalism…..even though Socialism must depend on a major tenet of Capitalism in order to exist….a monetary system.

      In it’s pure form, Socialist leaders must provide a monetary system and then pervert it in order to control the peons, “leveling” the playing field for the lazy, as well as the industrious. It’s major “product” is the creation of victims trained to expect a handout.

      Thus no one, regardless of their energies, rises above the dictates of the leaders. The leaders have control.

      In it’s pure form, Capitalism rewards the energies of the hardest working, the smartest, the most ingenious entrepreneurs at an appropriate level equal to the value of their efforts.

      This important tenet of Capitalism benefits every person who would exert himself. The system of value generated by the entrepreneur’s product or service holds sway.

      This reward system is the driving force which creates every new generation of producers.
      With a Capitalist system, the people hold control over their own destiny, not the leaders.

      IMHO, people like Krugman are led by their indoctrination and not by their good sense.

      • donl

        Sorry, a bit of a tweak, if I might. What you are describing is not the monetary system per se, but rather the price & profit system. In America, today, the monetary system controlled by the FED is killing us. And, the soviets had a monetary system. They did not have a price and profit system.

        Ludwig von Mises’s book “Economic Calculation in the Socialist Commonwealth” revealed why and how socialist states would collapse. And, importantly, why and how free-market capitalistic societies can achieve so much. It is the price and profit system. Maximizing each person’s potential, sustainable and equitable allocation of scarce resources, mirroring the principles of unalienable rights and “…consent of the governed”, motivating innovation and rewarding success can only be achieved because of the price & profit system. It is a system controlled wholly by the consumer; where every dollar is a democratic vote. The consumer is king.

        Mises’s book is available for free in PDF format here:

        • REALBEING

          I fully agree, donl….as I stated in the message that you’ve replied to, “Socialist leaders must provide a monetary system and then pervert it (The Fed) in order to control the peons.”

          The “price and profit” system is a value system, as pointed out in my post above, and also in the Ayn Rand book “Atlas Shrugged.”


    so, as Krugman put it, Texas “offers no useful lessons”.( For the structure of his personal economics agenda!)

    Translation: So what if what is happpening in Texas works flawlessly…I have degrees from Yale and M.I.T.!

    • donl

      I believe it is Peter Schiff who has a standing offer to debate Krugman: Keynesianism vs Austrian economics. Winner gets $100K for their charity of choice. Krugman has refused.

      Krugman has never been right on any topic or with any projection or prediction. Yet he is trotted out constantly as the economics authority. Other than Austrian economics adhering economists, I think the profession is a scam. His exists merely to promote the lie of central planning.

      I refer to the economist/politician alliance as the 3rd-Party “Leading Economists” Deception-Tactic. Economists are used as the authority backing a program; when it fails they are the deflection. Nearly 60% of all pro economists are directly employed or supported by government. The predominance of the remainder are still in one way or another dependent on government. Upton Sinclair: “It is hard to get a man to understand a thing when understanding it will cost him his job”.

  • donl

    Incredibly, somewhere along the line, I suspect former TX Congressman Ron Paul got to him, TX Gov Perry became a devotee of Austrian economics. He actually gave a speech a year ago wherein he recognized Ludwig von Mises as the greatest economist that has ever lived.

    The other horrid side of the coin…Perry is a born again who trashes unalienable rights/ the Constitution if it conflicts with his sense of christian morality. Notwithstanding, he gave a great speech at CPAC: Jeffersonian-Austrian economics and States’ Rights advocacy…I like it!