Texas economy not proxy for whole of America’s

June 22, 2011

By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Texas isn’t a proxy for the broader U.S. economy. Rick Perry, the Lone Star State’s governor, may run for president in 2012. And Texas boasts below-average unemployment and decent growth. But it also has no state income tax, a large energy sector and not too much housing trouble. Washington’s bigger problems may not yield to Texan solutions.

Perry, who has been in charge of the United States’ second-largest state for over a decade, cannot reasonably be called unqualified for the presidency, even though the Texan governorship is fairly weak. But the attempts of his supporters to use his economic record to boost his candidacy are only partially convincing.

The state’s economic record is better than that of the United States as a whole, but only moderately so. Its unemployment rate of 8 percent is more than a percentage point lower than the national average, but has declined only modestly from its peak in March 2010. Growth has also been only a little higher than the national rate.

And Texas started the recent recession with advantages. It had a huge housing and banking crisis in the 1980s, one reason home prices didn’t skyrocket in 2006 as they did in some parts of America. Having avoided a massive bubble, the decline since then has been moderate in Texas. The state’s economy also benefits from its energy sector, spurred along by high commodity prices. The lack of a state income tax — which predates Perry — has also helped economically, particularly as other states have increased taxes during the recession.

That has all made the Texas governor’s fiscal path considerably easier than those of other large states such as Illinois and California, while his economic policies have not produced obvious direct benefits. Perry’s decent record is mostly a product of structural differences and long-standing policies rather than anything he has introduced. Doing no harm is a good start, but the United States needs more than that. If elected, Perry would find the nation’s problems considerably less tractable than he is used to.


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Martin, Rick Perry knows what pundits don’t. All you need to have a strong economy is to get the government out of the way including reducing regulation, frivolous litigation (over 90% is) and taxation. Simply reduce these albatrosses around the necks of citizens and the private sector will find a way that is far more efficient and fair than feckless government. The miracle is that a majority of voters here understand that.

Posted by Truth_Teller | Report as abusive

All fhat has made the Texas governor’s fiscal path easier are attributes that the nation once had access to (and still has) and the idea is to develop those attributes nationally once more. Who could be better at developing that energy and free spirit than someome who has been been born, raised and nurtured in the things that make Texas great and historicaly promote it’s well being. This article confirms Perry’s qualifications and Texas’ proxy for America.

Posted by gentileben | Report as abusive