Brainiac of the Left, New York Times’ Paul Krugman, searches frantically with an Aug. 14 column to prove “The Texas Unmiracle” in job creation. His obvious reason for devoting his column to jobs is because Texas Governor Rick Perry has announced he is running for president—a strong, conservative, frightening opponent for Campaigner-in Chief Barack Obama.
But, in attempting to prove that Texas job success “offers no useful lessons on how to restore national full employment,” Krugman trips over the Texas economic facts. He even reluctantly gives credit where it is due.
Krugman is the economic darling of the Left, because there is such a mystery as to how the economy actually works throughout the administration bureaucracy. The Democrats are yelling that Texas has no jobs miracle—that all the jobs in Texas are dirt-bag jobs, minimum-wage labor. The Texas Democrat Party Aug. 11 blasted Perry claiming that he demanded a state budget that will “lay off tens of thousands of our teachers and kill hundreds of thousands of jobs.” And “more than half a million workers in Texas earn no more than the minimum wage.”
According to the Federal Reserve Bank of Dallas, Texas added 262,000 jobs in the state between 2009 and 2011.
This fact stands out like a mountain peak compared with the depressingly flat plain of joblessness created by Obama administration Keynesian economic spendthrift policies.
As Krugman writes in his Aug. 14 column, if Perry wins the Republican nomination for president he will assert that his state “sailed through the Great Recession almost unscathed thanks to conservative economic policies. And Mr. Perry will claim that he can restore prosperity to America by applying the same policies at a national level.” But then Krugman says the “Texas experience offers no useful lessons on how to restore national full employment.”
“It’s true,” wrote Krugman, “that Texas entered recession a bit later than the rest of America, mainly because the state’s still heavy-energy economy was buoyed by high oil prices….Also, Texas was spared the worst of the housing crisis, partly because it turns out to have surprisingly strict regulation of mortgage lending.” How unfortunate Fannie Mae and Freddie Mac and their sponsors Barney Frank (D-MA) an Chris Dodd (D-CT) instead had unforgivably loose standards.
“In June 2011,” wrote Krugman, Texas unemployment stood at “8.2 percent…That was less than unemployment in…California and Florida, but it was slightly higher than the unemployment rate in New York” and higher than in Massachusetts. “Where does the notion of a Texas miracle come from?” Krugman asks rhetorically. “Mainly from widespread misunderstanding of the economic effects of population growth,” he tries to answer himself. Then he writes:
“For this much is true of Texas: It has for many decades had much faster population growth than the rest of America—about twice as fast since 1990. Several factors underlie this rapid population growth: a high birth rate, immigration from Mexico, and inward migration of Americans from other states who are attracted to Texas by its warm weather and low cost of living, low housing costs in particular. And just to be clear,” he adds, “there’s nothing wrong with low cost of living. In particular, there’s a good case to be made that zoning policies in many states unnecessarily restrict the supply of housing, and that this is one area where Texas does in fact do something right.” He neglects mentioning that Texas is a right-to-work state, which protects both employees and employers.
The high rate of population growth, Krugman explains, “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.” But Krugman complains, “the rapid growth in the Texas workforce 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.”
Krugman didn’t mention that Texas provides the headquarters for 51 Fortune 500 companies, slightly fewer than New York, with the highest number. Texas is the ultimate gateway of the job seekers for a variety of jobs, certainly not just low-wage employment. The state, for example has many computer jobs as well as jobs in banking, management, sales, health and tourism. The salary for a computer data information analyst is $25,000 to 50,000 a month, according to an Austin jobs report.
High energy prices are a main reason for the rapid job growth in Texas. State officials say the cost of doing business is much less in Texas than in most other states, recent reports have noted. Figures show jobs in natural gas, oil, and other mining industries rose by 45,000 or 23 percent. Education and health care grew by 91,000. The state’s payrolls have risen by 2.9 percent, since the official end of the recession (as determined by the National Bureau of Economic Research in June 2009). Texas is one of five states with no state income tax, another reason for its growth.
Krugman must end on a dark note, or his liberal adorers would have tummy aches. He wrote: “What Texas shows is that a state offering cheap labor and, less important, weak regulation [regulation is consistently fought as the bugaboo of all businesses], can attract jobs from other states….So when Mr. Perry presents himself as the candidate who knows how to create jobs, don’t believe him….”
In the Krugman mindset, success somehow breeds failure.