Paul Krugman has a few choice observations to make about Rick Perry's heavily hyped "Texas Miracle".
The Texas Unmiracle
By PAUL KRUGMAN
Published: August 14, 2011
So what you need to know is that the Texas miracle is a myth, and more broadly that Texan experience offers no useful lessons on how to restore national full employment.
It’s true that Texas entered recession a bit later than the rest of America, mainly because the state’s still energy-heavy economy was buoyed by high oil prices through the first half of 2008. Also, Texas was spared the worst of the housing crisis, partly because it turns out to have surprisingly strict regulation of mortgage lending.
So strict regulations on mortgages helped create the free market miracle Perry is touting!
Krugman points out that the Unemployment Rate in Texas eventually rose like elsewhere. The Unemployment Rate in Texas was 8.2% in June of 2011.
What Texas shows is that a state offering cheap labor and, less important, weak regulation can attract jobs from other states. I believe that the appropriate response to this insight is “Well, duh.” The point is that arguing from this experience that depressing wages and dismantling regulation in America as a whole would create more jobs — which is, whatever Mr. Perry may say, what Perrynomics amounts to in practice — involves a fallacy of composition: every state can’t lure jobs away from every other state.
Perry wants the whole country to to join in Texas' race to the bottom. This race to the bottom's only winners would be oligarchs.
Does America really want another bonehead Governor from Texas in the White House, One who also sees himself as carrying out God's divine will (just like George Bush did)?