Texas

Free-Market Texas Continues to Kick Economic Ass

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Cowboy hat
k?money / Foter / CC BY-NC-SA

Texas is creating jobs and reducing unemployment faster than the nation as a whole, reports the Federal Reserve Bank of Dallas. The Lone Star State also outstrips the country in terms of exports. Could it be that this dynamic economy is the result of the state's healthy business environment and generally strong regard for economic freedom? If so, state officials better take care, because Texas has slid a bit in the rankings, and may risk losing its advantage.

In the latest monthly survey, the Dallas Fed reports that "employment rose at a 3.2 percent annualized pace in September, faster than the nation's 2.2 percent increase." Notably, the strongest job growth sector is private non-farm employment. That brings the unemployment rate down to 5.2 percent, lower than the national 5.9 percent jobless rate.

Separately, the Dallas Fed also reports that export growth from the state outstrips that in the United States as a whole.

If you're a believer that prosperity has a little something to do with leaving people the hell alone to make (and keep) their payday, it's no surprise that Texas gets kudos for generally restraining politicians' temptation to screw things up. Chief Executive magazine has ranked the state as having the strongest business environment in the country for ten years running. Texas rates a solid 10 out of 50 states in the Tax Foundation's ratings of business tax environments. In overall taxes, WalletHub ranks Texas as the 7th least burdensome. Canada's Fraser Institute puts the state in fourth place in terms of economic freedom among states and provinces in Canada and the United States—and second among U.S. states.

That's all good, and isn't just to state residents' credit, but their profit, too.

But there's a warning in there. In the Mercatus Center's combined rankings of social and economic freedom, Texas has dropped six places since 2009, to 14. "Like many southern states, Texas performs better on economic freedom than personal freedom," Mercatus notes, "Yet despite its reputation as a low-regulation state, it is only average for regulatory policy." The state also has a debt problem at the local level that may make low tax rates a challenge to maintain.

If politicians are going to be meh in terms of their respect for personal freedom, they really need to emphasize that commitment to not getting handsy with people's wallets.

The Fraser Institute also notes that the top-scorers in their ratings hold their place largely due to relative advantage—not because things are getting better. In fact, Canadian provinces, on average, are ranked better than their American counterparts, but only because "their economic freedom is declining more slowly than in the US states."

The signs aren't all ominous. Texas implemented strong eminent domain reform just three years ago. That's an indicator that state officials retain at least some respect for the conditions that keep the place from turning into West Bulgaria California.

If they want the prosperity to keep coming, they'll continue to stay out of the way of the people and businesses that create it.

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  1. YEEEE-HAW! We’s from Texas, y’all!

    (fires six-guns into air; oppresses non-whites and women)

    1. are you a queer or a steer?

      1. The only choices are homosexual & neutered?

  2. “Could it be that this dynamic economy is the result of the state’s healthy business environment and generally strong regard for economic freedom?”

    It’s also got the second highest number of undocumented aliens of any state, that could be a factor too.

    1. cheap labor helps.

      1. It doesn’t seem to help California, though.

        1. At any rate, it’s not an economic death sentence, or a good excuse for California’s ills.

      2. I’d rather say efficient labor markets help.

      3. It does but that isn’t the only factor. There are lots a places with even cheaper labor and they are still economic shitholes.

        1. I’d agree it’s not the only factor, it’s one facet of economic freedom.

    2. It also has the longest border with Oklahoma, so that could be a factor too.

      1. cheap labor helps.

        1. It doesn’t seem to help California, though.

          1. And penicillin doesn’t help cancer patients.

            1. Derp. Jesus Christ, that was fucking idiotic even for you.

            2. Bo-Bo, I’m going to ask you a question I frequently have to ask Ken Schultz, do you think through what you are posting before you post it?

              If illegal immigrants were the deciding factor California should be doing better, but it isn’t.

      2. Spurious Correlations = aka Freakonomics

        1. The job growth-economic freedom correlation?

          1. Oh yay, look everybody, Bo-Bo is yet again falsely claiming his stupidity is libertarianism.

            Seriously Bo-Bo, eat shit, fuck off, and die.

  3. Wow, free market, you say? Is this some sort of newfangled economic theory? Who runs this free market then? A free market czar? The Department of Commerce?

    1. A Blue Ribbon Commission.

      1. A Pabst Blue Ribbon Commission.

        1. So…a Commission of Furriners that make shitty things even shittier?

        2. You keep that Pabst shit away from our equally shitty Lonestar, ya hear.

          (Gets some Zeigenbock from the tap.)

    2. Angie’s list?

    3. One of the key Texan innovations is the prohibition on legislating during even numbered years. I recommend it for the nation as well.

      1. ^So This^

        Also, it helps that we have an actual line item in the budget for a “rainy day fund”. Even if they do raid it from time to time.

      2. Yep, 140 days in odd numbered years, starting in January. Doesn’t give them much time to do anything else except pass the budget, although they do occasionally pass something pretty idiotic. Still, not a bad way t run an economy the size of Russia’s.

    4. Top men…. Top. Men.

  4. Shale is their secret. Ideological twin Tennessee and equally Red Georgia are shitholes. No shale there.

    1. Yeah, except that Chattanooga shale basin that’s named after the city in Tennessee. You were entirely correct except the part where you were wrong, which was 50%

      1. Let me guess. Obama won’t let TN drill there? But Texass? Drill away!

    2. Ideological twin Tennessee and equally Red Georgia are shitholes.

      Chief Executive: GA 10 / TN 3
      Tax Foundation: GA 36 / TN 15
      Wallethub: GA 26 / TN 25
      Fraser: GA 12 / TN 27

      IDEOLOGICAL TWINS, YO

      1. I think he was saying that TN is an ideological twin to TX.

        But who knows since everything out of his mouth is a lie or a misconstrument.

        1. That’s exactly what he was saying. And it’s false, just compare what TX’s rankings are from those same sources.

  5. In overall taxes, WalletHub ranks Texas as the 7th least burdensome.

    NH was far lower on this list than I expected.

    1. NH residents don’t realize what a good thing they have going and are going to fuck it up electing Democrats.

      I visited my college roommate who now lives in NH. He was bitching about his property taxes. Turns out his are about the same as mine in NJ.

      The difference is that he didn’t pay the state 7% of everything he bought (including his Mercedes), and he didn’t send them 7% of his household earnings either. He stopped bitching when I explained the alternative.

      1. Property taxes have long been high in NH. No sales (or income) tax does help.

        As a kid, the first time I bought something out-of-state, it was a shock. I had exactly one dollar, and the item was clearly marked $.99. I was sure the clerk was trying to rip me off for those seven cents.

  6. But…but…McJobs!!!

  7. That brings the unemployment rate down to 5.2 percent, lower than the national 5.9 percent jobless rate

    In blue state Minnesota, the unemployment rate is 4.3% In super-blue Minneapolis, it’s 4.1%.

    Why is that?

    1. Can’t speak for MN, but the Blue-est state of all, Hawaii, is basically tied with MN for unemployment rates — because everyone has shitty, underpaid jobs there to afford the high cost of living.

      And the blue-est city in Texas, Austin, has a vibrant economy because it’s surrounded by a red state and thus has things such as at-will employment, much as the Austin city council would love to rescind that.

      I’m guessing the MN thing might have something to do with a lot of people with a Scandanavian work ethic.

  8. Free-market? As in the kind of free-market that won’t let Tesla sell its EVs directly to customers in its own showrooms? I’m confuzzled.

  9. What’s this about “all hate, no axes”? Instead of a 2-axis Nolan chart, it’s all about a dimension of hatred?

  10. Well, I’ll comment since I live in Texas. We have no state tax, our sales tax is 8%, our property tax is low. I pay 5K for property and school taxes on a 136K house (2100 sq ft).

    They are building like crazy down here in Houston. It’s honestly insane. Our speed limit is 65 to 75 depending on the road. They suck at driving here though.

    So while it’s not perfect, Texas does let you keep most of the money you make and spend it how you want like…stripper clubs (Everywhere)

    I do wish people would stop comparing unemployment numbers. They don’t mean much anymore with the smallest workforce in in forever. So MN has 4.2% compared to Texas 5.2 %. But how many of MNs have given up looking for work compared to how many in Texas.

    Now, where is my 7 shooter. Texas is increasing everything. Uses gun to open beer can.

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