Rick Perry likes to brag about the Texas economy. Indeed, one of the biggest selling points in his race for the presidency is that Americans should send him to the White House because he has a track record of creating jobs.
All of which raises two questions: First, has the state really produced what Perry likes to call a “Texas miracle” of job creation? And does the governor of Texas really deserve the credit—or blame—for the economy of Texas?
Exhibit A for proponents of the “Texas miracle” is a stunning statistic on Texas employment. Richard Fisher, the president of the Federal Reserve Bank of Dallas, recently told The Wall Street Journal that 37 percent of all new American jobs since the economic recovery began were created in Texas.
Fisher credited a business-friendly climate, tort reform and limits on mortgage borrowing. Texas homeowners can borrow no more than 80 percent of the value of their property, a restriction that helped prevent the housing bubble that devastated other states.
But other economists point out that the state’s financial health depends largely on the energy industry, which has been enjoying high oil and gas prices. And then there’s fracking - the process of injecting water into shale to force natural gas out of underground formations - which has made Texas home to some of the most prosperous new fields in the nation.
Despite all those new jobs, the Texas unemployment rate remains stubbornly high at 8.2 percent, one point lower than the national average. But it still indicates that roughly one of out of every dozen Texans is looking for work.
Again, there’s debate over how much responsibility Perry bears for the Texas economy.
“The broad-brush stroke is that it’s sort of like parenting, right?” says Steven Craig, an economist at the University of Houston. “Can you actually affect your children or can you just screw ‘em up? And so, if you avoid screwing ‘em up, call that success.”
Perry has generally maintained the business-friendly climate that’s been touted by generations of Texas governors. And he pushed for tort reform, a cause touted by business interests and cited by Fisher as a leading reason for the relative health of the Texas economy.
Texas is one of nine states without a personal income tax, but the state’s education system is supported by relatively high property taxes. Perry riled business interests a few years ago by establishing a franchise tax—which critics say is equivalent to a corporate income tax—to shift some of the tax burden away from homeowners
“I am going to have to give some credit back to the state leadership, who’s got us where we are,” says Ted Jones, an economist with Stewart Title Guaranty Co. “He’s been governor for a long period of time now. And obviously, we have set up a job creating machine and it’s working.”