CALIFORNIA REPUBLICAN ASSEMBLYPERSON DAN LOGUE HAS BEEN PUSHING "THE WAYS OF TEXAS MIRACLE" ON CALIFORNIA this year. He even took a group of State Legislators to Texas to get some of their "good ideas" about how to help Business flourish (like Texas) first hand. Hopefully someone will read this and help Dan "get it" so we don't have someone representing California look like a complete fool to the entire world. Facts are facts. Logue has been bamboozled by his own party and his efforts to make the CA BIZ community more like Texas has to stop. The CA corporate press must quit giving 1/2 the story. Dan Logue may wanna reconsider his petition to have the Texas Governor run for President, which he started with typical fanfare a few weeks back.
Good Grief!
Dan: This One Is For You
Quoting:
James Galbraith, an economist at the University of Texas, scoffed at the whole narrative, telling AlterNet, “the notion that our state government is a model is almost enough to beckon the spirit of Molly Ivins back from the shades.” Galbraith said “Texas has been a low-tax, low-service state since the time of the Republic,” and noted that it's “therefore impossible that this fact suddenly accounts for its better job performance over the past few years.” (Texas' record of job creation under Perry is the same as it was under former governor Ann Richards, a Democrat.)
“Texas is an energy state benefiting from high oil prices and the incipient boom in natural gas,” explained Galbraith. “That's an accident of nature.” He added that the state “went through the S&L crisis, had major criminal prosecutions and more restrictive housing finance regulations this time around; hence it was not an epicenter of the subprime housing disaster. That's called a learning experience.” Tighter regulation of the lending industry is also anathema to today's GOP.
Arguably the biggest sleight-of-hand in the Texas Miracle storyline, however, is that many of those jobs were a result of a huge surge in the state's population, much of it fueled by immigration from Latin America (rather than liberal hell-holes like California).
Texas' population grew by 20 percent over the past decade, and Hispanics accounted for almost two-thirds of that growth. A surge in people created greater demand for goods and services, which leads to more jobs. But the jobs being created in Texas aren't keeping up with the state's expanding workforce – the Wall Street Journal somehow failed to mention that during the exact same period in which it was adding all those new jobs, Texas' unemployment rate actually increased from 7.7 to 8 percent (it also failed to note that 23 states -- including such deep blue ones as Vermont, New York and Massachusetts -- enjoy lower unemployment rates than Texas).
But perhaps the most laughable claim in this whole narrative is that Texas has been “fiscally responsible.” Perry certainly adhered to the conservative playbook, offering massive tax breaks without the deep cuts in services that might inspire a voter backlash. As a result – an entirely predictable one – the Austin American-Statesman reported that “state lawmakers have spent much of the year grappling with a budget shortfall that left them $27 billion short of the money needed to continue current state services.”
CNN adds that while Perry was railing against the Democratic stimulus package passed over the fierce resistance of conservatives, the state “was facing a $6.6 billion shortfall for its 2010-2011 fiscal years,” and “it plugged nearly all of that deficit with $6.4 billion in Recovery Act money.” The stimulus package created or saved 205,000 jobs in Texas, second only to California. But as James Galbraith told AlterNet, while “the state budget has not yet been cut drastically” due to the stimulus boost, “the key phrase is 'not yet.'” Now that the stimulus has run its course, “if projections for the current budget cycle are correct, things will get much worse in the next year.”
Indeed, those cuts are now on their way. The Texas legislature imposed draconian cuts to Medicaid, cut tuition aid to 43,000 low-income studentsand is weighing $10 billion in cuts to the state's education system. According to Texas state senator Rodney Ellis, D-Fort Bend, the 2012-2013 budget will underfund “health and human services in Texas by $23 billion, 29.8 percent below what is needed to maintain current services.”
But Perry's tax breaks are indeed part of the state's jobs picture; as Time magazine's Massimo Calabresi noted, Perry established several massive business tax breaks “designed to lure companies from other states.”
[But] the funds have been controversial. They have channeled millions of dollars to companies whose officers or investors are major Perry campaign donors and Perry has allowed them to keep their subsidies in many cases even when they fail to deliver promised jobs. More important for the purposes of judging Perry’s job-creating record, even those that do produce jobs don’t necessarily create long-lasting ones, or increase the state’s overall prosperity.
In a report written for Perry last spring, Michael Porter of Harvard Business School noted that such tax breaks “ultimately don’t support long-term prosperity,” because companies that can move easily “are looking for the best deal and when the deal runs out they move” again, taking their jobs with them.
He also found that Texas’ per capita income growth was the eighth slowest of any state in the country between 1998 and 2008. That's because, as the American Independent's Patrick Brendel noted, “Texas has by far the largest number of employees working at or below the federal minimum wage,” and the number of crappy jobs has exploded while this supposed Texas Miracle was taking place. “From 2007 to 2010, the number of minimum wage workers in Texas rose from 221,000 to 550,000, an increase of nearly 150 percent,” wrote Brendel. As a result, Texas is now “tied with Mississippi for the greatest percentage of minimum wage workers, while California had among the fewest (less than 2 percent).”*
The complete story with more FACTS for Assemblyperson Logue is at the link below.
A Big, Texas Sized, Hat Tip To Alternet For The TRUTH.