1.6: Conclusion

In her 2012 book, As Texas Goes…How the Lone Star State Hijacked the American Agenda, Gail Collins argued that Texas has shaped federal policy and the U.S. economy. In her words,

If you look back over the last thirty years or so, most of the major national agenda one way or another, came out of Texas. The savings and loan crisis began with regulations that were based on Texas regulations. Our education policies are based on the No Child Left Behind law, which (President) George W. Bush based on Texas education policy. The same is true for environment, for energy policy. And all the land wars the country has been involved in for my lifetime [Vietnam, the Gulf War, Iraq] have been led by Texas presidents.\(^{70}\)

Although written almost ten years ago, much of what she said is still true today. Texas still has a big impact on the issues, from family planning policies to gun policies and even to environmental policies and this spills over to other states. She argues that what we do within the states impacts the country as a whole. Working for national goals should be more important than being left alone in our respective states. It will be interesting to see if the Texas blizzard of 2021 will change the mindset of Texas having its own electric utility grid. When people are without power for close to a week, that “leave me alone” attitude is not near as important.

When the economy took a downturn at the end of 2007 with the Great Recession, Texas was one of the last states to suffer and one of the first to recover, something often referred to as “The Texas Miracle.”\(^{71}\) The diversification of the Texas economy certainly contributed to its success, as did a strong tourism industry that includes national parks, miles of beaches on the Gulf of Mexico, and the San Antonio Riverwalk, a resurgent oil and gas industry buoyed by the new fracking technologies, and a sturdy housing market that had not experienced the bubble of price. In a 2018 Forbes article titled “6 Reasons Why Texas Trumps All Other U.S. Economies” it explains why Texas was named Best State for Business by CNBC. First, Texas is a manufacturing powerhouse. During 2017, total manufacturing output was $226.16 billion, or about ten percent of total U.S. manufacturing goods. While the global manufacturing expansion was slowing, Texas was growing. Texas was also the largest exporting state, responsible for almost twenty percent of total U.S. exports, mostly because of the oil and gas industry. In addition, Texas was a global oil superpower, accounting for more than forty percent of the national output. And finally, people want to move to Texas. Four of the fastest growing cities in the U.S. were in Texas which included San Antonio, Frisco, New Braunfels and Pflugerville.\(^{72}\)

In 2019, Steven John wrote about the booming economy of Texas for Business Insider. He cited eleven facts about the Texas economy:

1. If Texas were an independent nation, it would have the tenth largest GDP on earth.
2. Texas has more miles of roads and rail than any other state.
3. Texas produces more than thirteen billion worth of wine each year.
4. Texas is the largest producer of wind power in America.
5. The richest city in Texas has a per-capita income six times higher than the poorest (Albany, Texas, at $162,300).
6. Most Texas exports go south to Mexico.
7. There are about twenty-eight times more businesses operating in Texas than in Wyoming.
8. Texas accounts for ten percent of total manufacturing in the U.S.
9. Texas is home to nearly one million women-owned businesses.
10. Texas produces almost forty percent of America’s oil.
11. Texas has enough crude oil reserves to fill more than one million Olympic swimming pools.\(^{73}\)

And then came the COVID-19 pandemic causing major shutdowns of businesses and education beginning in March of 2020. It is difficult to predict how this will affect Texas in the long run. Trillions of dollars have been poured into the U.S. economy through fiscal and monetary stimulus and the Federal Reserve has cut interest rates to near zero. This stimulus was intended to help for a two to three month period and it has now been a year. More than four million people in Texas have applied for jobless relief with 43,000 unemployment applications filed with the Texas Workforce Commission during Christmas and New Year’s. Still, unemployment is inching down from a high of almost fourteen percent when the state shutdown to 7.2 percent at the end of December.\(^{74}\) Texas has continued to open businesses and schools.

When the Eighty-Seventh Texas Legislature convened in January 2021, the first order of business was the budget for the 2022-2023 cycle. Since the legislature only meets in the odd-numbered years for a total of 140 days, they must project into the future. Much has happened since they last met in 2019 with a booming economy. Fortunately, the Texas Comptroller Glenn Hegar announced that the decrease in the upcoming budget would not be as bad as was feared during the summer of 2020 in the middle of the pandemic. He estimated that lawmakers will have $113 billion to spend for that -year period but also warned that the economic future of Texas is still uncertain and could change in coming months. A couple of things happened to soften the blow to the budget. Texans were forced to stay home and spend their money in the state. Also, a 2018 Supreme Court ruling allowed for a new online sales tax collection from retailers to go into effect which added an additional $1.3 billion in income. Additionally, the legislature could choose to dip into the Economic Stabilization Fund, known as the rainy day fund, if necessary which has about $11.6 billion in the fund. It is funded through crude oil and natural gas production taxes and was created after the oil crash in the 1980s. Hegar also reminded the legislature of pending problems in the state. It is estimated that 203 of the 254 counties are at risk for scarce water resources. Hurricanes are always a threat to the state. The number of uninsured people are among the highest in the nation and a high poverty rate present challenges. And more than two million households do not have high-speed internet, which has become a requirement for education and the workforce during the pandemic.\(^{75}\)

There are challenges for the legislature and they will have to look carefully at all of the numbers and problems as they prepare the budget. But as Republican Chair of the Senate Finance Committee State Senator Jane Nelson said, “the revenue estimate highlights the resiliency of our Texas economy. Tough decisions remain, but I am confident we n pass a budget that meets our essential needs, maintains our commitment to education and follows the principle of fiscal responsibility that put us in a stronger position than other states to withstand this unprecedented pandemic.”\(^{76}\) Of course, this was also before the blizzard of 2021!

Critical Thinking Questions

1. Compare and contrast the early industries that shaped Texas with the current industries.

Answer

The early industries in Texas included cotton, ranching, and oil. While all of these industries are still important, newer industries have emerged. Texas realized that being highly dependent on oil was risky, as prices fluctuate based on demand and this continues to be the case. Texas realized that it needed to diversify its economy. High technology, including computers, aerospace, and telecommunications have become important with companies like Dell Computer, AT&T, and NASA. Houston has expanded the medical center and Texas is becoming more known for attracting tourists.

2. Explain how Texas is considered to have a traditional and individualistic culture.

Answer

Texas wants the government to take a minimal role, only maintaining order. Texas has also placed a lot of emphasis on individuals taking the lead in pursuing their own goals with little interference from the government. As such, Texas is known for having a low tax/low service state.

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70. Shannon McGovern, “How Texas Runs America”, US News & World Report, June 21, 2012. https://www.usnews.com/opinion/artic...s-runs-america.
71. Jim Henson and Joshua Blank, “Analysis: A Reality check for the Myth of the Texas Miracle,” Texas Tribune, June 6, 2020, https://www.texastribune.org/2020/06...ty-check-poll/; Olga Garza, TJ Costello, Jessica Donald, Peggy Fikac, David Green, Spencer Grubbs and Shannon Halbrook, “Weathering the Pandemic: Texas Chapter 1: Political Culture and People 73 Industries and Covid-19, Fiscal Notes, Texas Comptroller, https://comptroller.texas.gov/econom...n/pandemic.php.
72. Holmes and Great Speculations, “6 Reasons,” https://www.forbes.com/sites/greatsp...h=431a2e6a58be.
73. Steven John, “11 Mind-Blowing Facts about Texas’ Economy,” Business Insider, Apr. 22. 2019, https://markets.businessinsider.com/...9-4-1028127171
74. “Texas Unemployment Rate Falls to 7.2 Percent,” Texas Workforce Commission, Jan. 22, 2021, https://www.twc.texas.gov/news/texas...te-falls-72-pe
75. Lauren Mulverill, “The State of Broadband in Texas’ Rural Communities,” Fiscal Notes, Texas Comptroller, Oct. 2019, https://comptroller.texas.gov/econom...oct/divide.php
76. . Mitchel Ferman, “Despite Staggering Pandemic Losses, Texas Budget Forecast Better than Expected, State Comptroller Says,” Texas Tribune, Nov. 30, 2020, https://www.texastribune.org/2020/11...t-glenn-hegar/.