Texascendency

This week's Economist has a pretty good article comparing California and Texas. I won't rehash California's budget and governmental woes; those are well-known, and would require a much longer blog post to do justice. But I do take issue a bit with the article's rosier depiction of my home state:

[Texas] has coped well with the recession, with an unemployment rate two points below the national average and one of the lowest rates of housing repossession...Texas...clearly offers a different model, based on small government. It has no state capital-gains or income tax, and a business-friendly and immigrant-tolerant attitude...

American conservatives have seized on this reversal of fortune: Arthur Laffer, a Reaganite economist, hails the Texan model over the Gipper’s now hopelessly leftish home. Despite all this, it still seems too early to cede America’s future to the Lone Star state. To begin with, that lean Texan model has its own problems. It has not invested enough in education, and many experts rightly worry about a “lost generation” of mostly Hispanic Texans with insufficient skills for the demands of the knowledge economy. Now immigration is likely to reconvert Texas from Republican red to Democratic blue; Latinos may justly demand a bigger, more “Californian” state to educate them and provide them with decent health care. But Texas could then end up with the same over-empowered public-sector unions who have helped wreck government in California.

Although I'm pretty bullish on Texas' future, I think the article is missing a few important things. One is the degree to which outside events have played a role in the state's relative performance in recent years. High oil prices have been great for Texas' oil and oil-services companies, even as global recession has clobbered most other states.

Another under-the-radar issue is Texas' development model. A combination of cheap land, (formerly) cheap oil, free parking, and underinvestment in public transit made Texan cities into gigantic sprawls. Wit oil prices historically high and likely to stay that way, Texas is going to pay a heavy price for those 3-hour-a-day commutes. (Much of California, of course, is in similar trouble.)

Education is an issue that the article mentions as being Texas' weak spot, but it's not just Latinos who are suffering. Texas' university system really just ought to be a lot better than it is; UT and Rice are good schools, but not of the same caliber as Berkeley, UCLA, Stanford, and Cal Tech. And a growing anti-public-education attitude among Texas' ruling conservative elite could reverse some of the gains the state made (ironically) under Bush in the 90s.

In general, Texas' model is great at getting government out of the private sector's way. But that's only part of a government's job; the highest-performing states (and nations) combine a business-friendly environment with efficient public services like infrastructure, transportation, and education. That is where Texas needs to make its big improvements, especially if the amount of petroleum reserves owned by Texas-based oil companies continues to dwindle.

In the long run, Texas' success will depend in large part on whether it can replace an ideological conservative governing philosophy with a pragmatic development-oriented approach.