The Lone Star is on the Rise Again
Traditionally, The Economist is known for its "Liberal Internationalist" view on economic and political matters; hardly the type of magazine that one would think to embrace conservative values. However, as any student of economics will tell you, one of the prime assumptions in any economic model is "rationality" - reason, logic, whatever you want to call it, Texans have got it!
And in so recognizing this, The Economist has issued a Special Report on the great state of Texas. Giving praise to the Lone Star State's "low taxes and light Regulation," The Economist reports that the Texas economy is booming despite the down turn that has brought GDP growth to a standstill across the rest of the nation. According to an article in this week's issue
Texas now hosts more Fortune 500 companies than any other American state. They include AT&T, Dell, and Texas Instruments; oil giants such as Exxon Mobil, ConocoPhillips and Valero; American, Continental and Southwest Airlines; Fluor, a huge construction firm (recently lured from California); J.C. Penney; Halliburton; and 52 others.
While this may seem extraordinary to the rest of the world, none of this comes as a surprise to Texans. Led by officials with conservative values that WE THE PEOPLE have put into office, Texas has some of the lowest unemployment and forclosure rates in the country. Not to mention the fact that The State Legislature and Governor Perry helped ensure Texas has a budget surplus while "California and New York teeter on the edge of bancruptcy. Unlike those fellow states with large populations, Texas levies no personal income tax, and with almost unlimited space on which to build, its houses are big and affordable."
However there is a downside to this prosperity; the report from The Economist is not all rosy. There are some issues presented that will need to be addressed by Texans in the near future: Texas has the highest proportion of people lacking health insurance of all 50 states; the third-highest poverty rate; the second-highest imprisonment rate; the highest teenage-birth rate; the lowest voter turnout; and the lowest proportion of high-school graduates.
This may the curse to being a "low-tax and low spending" state. But judging by the situation that high tax-high spending states, such as California, now find themselves in, Texas is well postioned to lead the recovery of the United States economy. With a rebounding economy comes an increase in wages which can allow Texans to purchase health insurance and fund education privately, not through a government mandated policy. The answer to solving these problems lies on the route of lower taxes and less regulation, as the article concludes
How Texas responds to these [economic] forces will determine its future. Get it right, and the state will remain business-friendly and globally competitive, with high employment and a rising standard of living. Get it wrong, and Texas could follow California...