Tuesday, August 16, 2011

Rick Perry: Bush 2.0

      As you can see if you have been plugged in to the mainstream and conservative media since Friday they love Rick Perry and are trying mightily to convince America that it should love Rick Perry. For this reason liberals have to stand ready with facts to refute his Texas Miracle.

      While he is very socially conservative-he is Bachman's rival in picking up religious Right votes-he is gonna be packaged mainly as a job creator, as someone whose state of Texas has a lower unemployment rate than the national average and who created over half of the jobs created nationally since the March 2009 bottom.

       For this reason we need to refute him economically. Don't get me wrong his views on abortion, gay rights, and his fundamentalist religious stance are more than enough reason not to vote for him.On abortion in particular he is horrible, demanding that women who want abortions have to first be show nsonogram of their unborn child. But in a time of such economic hardship the hope of the conservatives is that the mainstream and the independents will be more concerned with economics and as he is promoted as a job creator he may be able to connect with the mainstream electorate.

       So let's take a look at his Texas Miracle. First of all Krugman does a great job in refuting it with an apt piece in yesterday's NYT called "The Texas Unmiracle."

       The pitch for Perry is obvious enough: if jobs have been created in Texas and unemployment is down then why not try what he does nationally?

        The fact is we have tried Perry nationally. First and foremost understand this about Rick Perry" Rick Perry is George W. Bush only more so. He is Bush squared: Bush*Bush.

        So we already have an idea of how many jobs Perry would create nationally: just check the Bush years where the fewest jobs were created since WWII

        So how come so many jobs were created in Texas then? First of all we have to remember that because of it's high population growth, Texas needs more jobs just to keep up. For this reason though it has created 298,000 jobs since June 2009-the official end of the recession-it has seen it's unemployment level spike just like the rest of the country.

        It hasn't created enough jobs to cut down an 8.2% unemployment rate that while somewhat lower than the national average (9.1%) is still far too high. Then too there's the fallacy of comparing the national employment rate to a state's unemployment rate.

        In reality there is no national employment rate, it is merely the mean of 50 different state employment rates. Comparing 8.2 to 9.1 and declaring "Aha! Perry wins!" is way too simplistic. Because comparing a state unemployment rate to the national rate is a apples to oranges comparison.

       An orange to orange comparison would be Texas to other states. Now the comparison conservatives always prefer is Texas to California  as they will claim that the state is a bastion of liberalism which explains it's sky high unemployment.

        Yet they are not so interested in comparing Texas to two other states renown for their liberalism: Massachusetts and New York. In fact both states have lower employment than Texas. Overall on a state by state comparison the Texas unemployment rate is nothing terribly exciting-24th out of 50. Not an outlier either positive or negative.

       While it has created many jobs 37% of them are minimum wage and income inequality is high as is the poverty rate. Texas also ranks poorly in education.

         Overall what is clear is that Texas has consistently been an outlier in job creation well before Perry. Much of this is simply structural advantages for the state of Texas in geology and geography.

         "Texas’ performance, in part, can be attributed to structural advantages: geology, which includes oil and gas deposits, and geography, which provides Gulf of Mexico ports and proximity to Mexico. These benefits have played a disproportionate role during times of booming world trade and high oil prices."

        As we have seen the Texas unemployment rate is currently high but slightly lower than the national average. Yet if you examine their employment rate on a graph as Krugman did, you see that it has basically performed the same as other states and the national average, and has not been an outlier.

        Krugman bears quoting in this 2nd updated link.

       "this graph should put paid to the notion that Texas somehow escaped the recession, or that there was something miraculous about its job creation. Once you take account of population growth, nothing special happened."

      Itsunemployment rate was at the start of the crisis lower as Texas suffered less from the mortgage meltdown than states like Florida and California due to better regulations in the mortgage market-which certainly can't be credited to Perry as his whole spiel is against regulation- but is due more to the organic history of Texas.

     As noted above, comparing Texas unemployment to the national average or the jobs created to the national jobs created is an apples to oranges comparison. The most important orange to orange comparison for Perry which tells us how well his low tax, low public service, low wage policies would benefit if applied to the US as a whole is to look at what George W. Bush did in 8 years.

     Here it is clear: the fewest jobs were created under Bush since WW11.

      If you loved the Bush economy, you will double love the Perry economy.

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