Increasingly anti-business, Republicans have just about dismantled the Texas Miracle
AUSTIN — The once mighty Texas Miracle is rapidly becoming the Texas Debacle.
After years of leading the nation's job growth, Texas has now sunk near the bottom: 39th, to be exact. The Republican mantra of lower taxes and still-lower regulation has done nothing but disprove itself. Meanwhile, the Republicans that control state government have convened a special session with economic growth nowhere on the agenda — indeed, the opposite is true. The Republican Party has completed an astonishing metamorphosis: It is unabashedly anti-business.
Not all that long ago, Texas was indeed a bit of a miracle, and that went on even after the rest of the country picked up a little economic steam. From 2007 to 2015, Texas created over 1.4 million jobs, more than the next six states combined. Rick Perry and conservatives from Austin to Washington crowed that the Texas juggernaut was the result of low taxes and few regulations.
Enter Greg Abbott, and the juggernaut becomes more of a Lilliput.
Abbott certainly didn't increase taxes or expand regulation, but he has shown scant interest in economics, save for taking credit at a grand opening or two and repeating the mantra about taxes and regulation. Meanwhile, the Legislature has steadily drifted into opposition of business.
Companies like American Airlines, Google and members of the Texas Association of Business are opposed to micro-managing cities -- where the economic growth has been created -- while Republicans want to do precisely that, down to asking people's nationality and policing bathrooms. Abbott calls these "values." And values, of course, are the first refuge of politicians who can't deliver the economic goods.
Under Abbott, the state government has simply stopped crowing about jobs and growth because, well, there isn't much of either. The governor has shown up in Plano and San Antonio to pat himself on the back for the relocation of Toyota's headquarters and a Boeing division, respectively, but he made only a passing reference to the economy when he declared his re-election campaign.
And yet the numbers don't lie. At 4.8 percent, the Texas unemployment rate is higher than the national average for the first time in years. That percentage, by the way, means that 700,000 Texans are out of work. The state's overall economic output, the gross state product, has been flat at $1.6 trillion annually even as the state's population continues to rise. That means that Texas now is just about on par with Alabama, Arkansas and Mississippi, states with small economies that are nearly perpetually stalled for structural reasons. Now in Texas, too, flat is the new up.
The fact is that superficial political bumper stickers don't explain complex business decisions. What about dreaded, liberal California with its regulations, taxes and laws? Unemployment there is actually lower than in Texas. And plenty of high-tax, high-regulation, Democratic states top the list of the best job markets right alongside low-tax, low-regulation Republican states. Colorado, North Dakota, Hawaii, Nebraska and New Hampshire are the top five. This year, Washington ranked as the best state for business in CNBC's annual survey of executives, while Texas tumbled to fourth — out of the top two spots for the first time in 11 years.
The dogma that has been substituted for economic wisdom in the Republican Party is wrong. A business gets started in Texas or moves here for a dozen reasons, the most important of which are availability of capital, quality of workers, costs of production and quality of life. Do taxes and regulations enter into the picture? Sure. But so do workforce readiness, education, infrastructure, quality of life and cost of living.
Abbott and Texas Republicans certainly aren't talking about the debacle over jobs because they don't want to bring up an issue on which they've failed and on which their empty parroting about taxes and regulations has been disproved. Or maybe they're not talking about economic growth because they don't know anything about it — except maybe how to stand in its way.