On the campaign trail, governor Rick Perry will claim credit for the so-called Texas miracle. His state weathered the housing and jobs crises better than many others, and he’ll happily tell voters it was the result of his small government conservative approach to running things.
But his state’s relative success has a lot to do with things out of his control — population growth resulting from an influx of immigrants from Mexico and of workers and retirees from other U.S. states, and high oil company profits, to name just a couple. Oh, and also federal stimulus.
What’s that you say?!
Despite being one of the loudest critics of President Obama’s stimulus, Perry used billions of dollars of federal money to patch Texas’ budget shortfalls, and was thus able to create and maintain lots and lots of public sector jobs. In fact, if you look at net job creation between 2007 and 2010, it’s clear the only thing keeping Texas buoyant was government jobs.
Check out the below chart from Jared Bernstein — a fiscal policy expert at the Center on Budget and Policy Priorities, and former chief economist to the stimulus bill’s top cop, Vice President Joe Biden. It shows pretty conclusively that the recession cost Texas 178,000 private sector jobs — a fairly small share for a populous state, when you consider that crisis cost the country many millions. But in the same period, it added 125,000 public sector jobs — nearly half of all government jobs created in this period nationwide. Put together, the Texas has only lost 53,000 jobs total during the downturn.
Source: BLS data.
As Bernstein notes this “shows Texas to be following a traditional Keynesian game plan: as the private sector contracts, turn to the public sector to temporarily make up part of the difference.”
Additionally, Perry’s papered over some looming budget gaps with fancy paperwork, and unless he or the next governor take steps (like raising taxes) to balance the books, he’ll have to cut spending (read: public sector jobs) and many of his gains will have proved illusory.
That’s doesn’t match Perry’s private market, anti-government rhetoric very well, which is why he and his supporters will shout “Texas miracle!” if they’re confronted with these facts, to obscure the underlying reality.
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