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The Texas Miracle that wasn’t

Washington Monthly’s Phillip Longman takes a closer look at the claims made by the likes of Rick Perry about Texas’ economic success, and finds them largely wanting. Here’s a taste:

It’s hard to think of any two states more different than Texas and Vermont. For one, Texas has gushers of oil and gas, while Vermont has, well, maple syrup. As early as the 1940s, Texas surpassed Vermont in per capita income. Vermont had virtually nothing going for it—no energy resources except firewood, no industry except some struggling paper mills and failing dairies. By 1981, per capita income in Vermont had fallen to 17 percent below that of Texas. That year, the state’s largest city elected a self-described “democratic socialist,” Bernie Sanders, to be its mayor. Vermont, it might seem, was on the road to serfdom and inevitable failure.

But then a great reversal in the relative prosperity of the two states happened, as little Vermont started getting richer faster than big Texas. By 2001, Texas lost its lead over Vermont in per capita income. By 2012, despite its oil and gas boom and impressive job creation numbers, Texas was 4.3 percent poorer than Vermont in per capita income.

This is not an isolated example. Since the early 1980s, Texas has also been falling behind many other states in its income per person. In 1981, per capita income in Texas came to within 92 percent of that of Maryland; now Texans earn only 79 percent as much as Marylanders. In 1981, per capita income in Texas almost equaled that of Massachusetts; now Texans on average earn only about three-quarters of what residents of Massachusetts do. Relative to Connecticut, Texans have seen their per capita income slip from 82 percent to 71 percent.

I’ve noted the per-capita income disparity before, back when Perry was on his little job-stealing sideshow in Maryland. Have you noticed that there’s been zero announcements about businesses actually relocating here as a result of that? Turns out the net population increase in Texas from people moving here from other states is a lot smaller than you think, and that despite a more diversified economy Texas is still heavily dependent on oil and gas, which has been a huge driver of our recent boom. Good times like those last forever, as we all know. Anyway, there’s a lot more to the story so go check it out, then go read Paul Krugman and Forrest Wilder for more.

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