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8 May 2013

Texas shows that fiscal conservatism is a (lone star) state of mind

Back in February, the Deep End featured a post entitled Sweden: Beacon of the right. Today, we look to a rather more obvious source of inspiration: the Lone Star State of Texas.

Writing for the Dallas Morning News, Erica Grieder contends that talk of a ‘Texas miracle’ is no exaggeration:

  • “Between 2001 and 2011, according to the federal Bureau of Economic Analysis, Texas’ GDP grew from about $763 billion (in current dollars) to about $1.3 trillion. Per capita personal income has grown, too, from about $29,000 in 2002 (in current dollars) to about $41,500 in 2012. Meanwhile, the Bureau of Labor Statistics documents a similar trajectory. The population is growing steadily and so is the workforce. Texas’ unemployment rate has been lower than the national average every month for more than six years.”

Furthermore, this isn’t just due to the geological accident of rich resource endowment. In the past, one could have dismissed Texas as “a resource colony — America’s leading provider of cotton and cattle, soldiers and oil”, but no longer. 21st century Texas is a dynamic knowledge-based economy, capable of creating large numbers of well-paid jobs.

All of which is bit embarrassing for American liberals. After all, how can a state that elects governors like George W Bush and Rick Perry, be doing so well? Surely, there’s much less to the Texas miracle than meets the eye. 

Erica Grieder decided to find out for herself, and has a book out on the subject Big, Hot, Cheap, and Right: What America Can Learn From the Strange Genius of Texas. This is what she concluded:

  • “With the humility common to most Texans I decided to write a book about why Texas is the way it is and whether it’s working. Here’s what I came to think: Republicans are right to defend the Texas model. The data is pretty hard to deny; either the model’s been working, or it’s a hell of a coincidence. Democrats, however, are right to say that the Texas model could use some tweaks.”

We’ll come on to these tweaks in a bit; but, first, what is the Texas model?

  • “...low taxes, low services... 
  • “Today’s Texas has the nation’s fourth-lowest tax burden per capita. It also has the third-lowest rate of government spending per capita. When Texans want to get something done, they often turn to the private sector for an assist. Dallas’ new Klyde Warren Park is a good example; the majority of funding came from private donors, although the city, state and federal governments chipped in nearly $50 million among them.”

That’s all pretty straightforward, but success – a young and growing population in a skills-hungry economy – is presenting new demands:

  • “...we have 26 million people living in a state built for fewer, and jostling with more and more truck traffic on the increasingly congested highways.
  • “The Texas Miracle is real. The result is that Texas is evolving. So if we want to keep this man-made miracle going, Texas needs to invest in what Joaquín Castro, the freshman U.S. representative from San Antonio, has summarized as the ‘infrastructure of opportunity’: schools, water, roads and — well, let’s start with those.”

But there’s a big difference between state-led investment in the ‘infrastructure of opportunity’ and the public sector feather-bedding that is bankrupting other parts of the United States. Even if up-and-coming Democrats like Joaquín Castro succeed in winning Texas back from Republican rule, Grieder is convinced that the state will “remain on the fiscally conservative side of the spectrum”:

  • “Texas has really never had a problem with wanton spending, and no one, on either side of the aisle, seriously questions the value of fiscal discipline. As long as we have to have a government, and we do, it might as well be a mature and responsible one: responsive to current events, but with one eye on a far-off horizon.”

Fiscal conservatism is sometimes dismissed as a hard-hearted ideology of the hard right, but actually it is something much wider and deeper than that. Texas shows that it is a state of mind, embracing values of self-reliance, but also a shared and selfless loyalty to a culture conscious not only of its past and present, but its future too. 

To borrow and spend without thought of repayment represents the opposite state of mind, one which, implicitly or explicitly, gives up on the future. More than a matter of fiscal irresponsibility, it is an act of cultural suicide.


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