Learning from the Lone Star State

If anyone thought the Sun Belt was in danger from the Great Disruption, they can find swaggering solace in The Economist's panting, sheet-clawing passion over Texas, in an article headlined Lone Star Rising. The teaser says, "Thanks to low taxes and light regulation, Texas is booming. But demography will bring profound changes."

The Economist's journalism is often some of the best around, and even its editorials can challenge the psychotic screamathon that has become American "conservatism." But it can't completely escape its Tory establishment roots, or its intellectual grounding in the conventional wisdom, BGD -- Before the Great Disruption. I don't doubt that America, and probably Britain, will exhaust themselves trying to resuscitate the old order. That will render it no less dead than the ubiquitous armadillos decorating the highways of Texas.

American right-wingers are no doubt sending the article to the faithful -- and using it to further cow the Democrats, if such a thing is possible. But a close reading of even this article -- and a better understanding of Texas -- shows that the Lone Star State's success has relatively little to do with "low taxes and light regulation." I speak as one who covered organized crime and the oil industry there, and whose family roots go back to the bloody pre-Civil War Texas frontier.

In reality, Texas consists of several states and several economies. It is foremost what is left of America as the Saudi Arabia of the early- and mid-Twentieth Century: a petro-state. Oil revenues will cover a host of sins and ideological pretensions, including the state's long reactionary history. While Texas lacks the production it once had, it still produces more oil than any state except Alaska (which, if you divided it in half, would make Texas the third largest state -- fun fact to start a brawl in Baja Oklahoma). As importantly, it has retained its power as a corporate center for oil, in Dallas and especially Houston. That means great-paying jobs, talent and international capital. It is the America's premier petro-chemical complex, creating some of our last large concentrations of good-paying blue-collar jobs. And generations of oil wealth have built some of the nation's finest museums, theaters and musical organizations.

Texas is very much a creation of the federal government, especially thanks to Lyndon Johnson, both George Bushes and a congressional delegation that for decades had one prime directive: Bring Home the Bacon. Houston, for example, would be landlocked without the huge taxpayer undertaking to dredge Buffalo Bayou, making the city a deep-water port. You can thank LBJ for much of that, as a mere congressman in the pay of what became Brown & Root. Texas received disproportionately large sums under both Bush presidencies, too. A ring of Air Force bases help keep San Antonio prosperous, and they are only a few of the major military installations in the state. Dallas has one of the most successful, and soon to be one of the largest, light-rail systems in the nation, with great help from Washington. Federal research dollars have been lavished on the University of Texas and Texas A&M

Speaking of universities, Texas has some of the best in the world, private and public, as well as a large number of regional state universities. The emergence of the University of Texas as a world-class institution in 1980s was particularly striking, and came with a vast state investment sustained year after year. Many of these universities are represented at Houston's Texas Medical Center, an internationally renowned cluster of research, teaching and care (which should have been the model in downtown Phoenix).

Dallas and Houston were major corporate centers for decades. Unlike most American cities, they haven't lost many of their Fortune 500s and have even added to them. This is less about "low taxes and light regulation" than the long tradition of big business getting everything it wants in Austin, along with a sophisticated economic-development strategy. Keeping its headquarters assets has allowed the major Texas cities to build on them -- and spotlights the difficulty of rebuilding once they are lost. Yet another economic boon for Texas has been trade with Mexico; it was the biggest winner from NAFTA, and public and private money built the infrastructure to exploit the border -- rather than shutting it down. Finally, air-conditioning -- with lots of help from federal electrification projects -- made Texas attractive for the vast Sun Belt migration of the past half century.

In other words, Texas' economic success has had little to do with the comic-book right-wing economics and libertarian nihilism that mark the rhetoric of today's Republican Party, most especially its practitioners who come from Texas.

These tropes leave Texas particularly vulnerable to dealing with the complex economic, social, environmental and highly urbanized environment in which it operates today. For example, the city of Dallas, once a proud, if reactionary, center of wealth, style and business, seems in a long decline, having lost out to the enormous suburban sprawl of the "Metroplex." Texas has always been a harsh state, with stark class differences and a disregard for the poor that long predates the great Hispanic influx of recent years. Its roots are in frontier self-sufficiency, independence and taking care of one's own -- hardly enough in today's Texas -- which have been taken to extremes by today's "conservatives." Even the Economist's reporter notes:

Texas has the highest proportion of people lacking health insurance of all 50 states; the third-highest poverty rate; the second-highest imprisonment rate; the highest teenage-birth rate; the lowest voter turnout; and the lowest proportion of high-school graduates....Texas spends less on each of its citizens than does any other state. Being a low-tax, low-spend state has not made Texans rich, though they are not dirt-poor either; their median income ranks 37th among the 50 states.

Texas also has much to lose in the new world that emerges from this first economic shock of the Great Disruption, and all the shifts that follow. Texas has a lot to lose, if for no other reason than it has a lot. It will suffer more if its representatives really start to act as "fiscal conservatives" and the federal money dries up -- which it may do anyway. Peak oil will give certain segments of Texas power for awhile. But this will be offset by the increasing social costs of a growing underclass and working poor. All this wasted human capital -- and the diminishing legacy of what Texas built for itself in the 20th century -- will be a Texas-sized problem in a competitive world. The stresses will be -- will be -- compounded as the century progresses by the costs and consequences of climate change.

Texas is sui generis. It is the only state to have actually been an independent republic. It is neither completely Southern nor Western. It is especially unhelpful as a model for state fiscal and regulatory policy. If low taxes and light regulation really made the difference, Mississippi and Somalia would enjoy the most powerful and prosperous economies in the world. For 'Zonies, Texas offers at most a few best practices (infrastructure investments, UT Austin and Texas Medical Center), but Arizona has all of Texas' problems and none of its strengths. Nor is Texas a useful foil for the troubles of California. But that's a subject for another day.

If you want to begin to understand Texas, I recommend reading the first two installments of Robert Caro's magisterial LBJ biography, particularly Means of Ascent. Caro's rediscovery and true rendering of Coke Stevenson, LBJ's smeared opponent in the stolen 1948 election, is in the best tradition of the historian's calling -- and a portrait of a real conservative.

Comments

[soleri]

Conservatism can be defined as the principle of self-interest. If it helps me, it's good. If it helps you, it's socialism. Texas got very rich from oil and American taxpayers and it's not inclined to return favors.

LBJ was an incredibly complex figure and his "largeness" was an amalgam of every good and vile instinct humans possess. That the ultimate outcome of his policies advanced the Reagan Revolution and the ascendancy of white victimhood is ironic. But maybe it was destiny, his and America's, to overreach in one area in order to consolidate in another.

The meanness of today's Republican Party is little more than a reaction to Great Society policies benefiting those with dark skin. LBJ was a racist himself despite his own policies. Our collective destiny was determined less by conscious intent than this sad but inevitable gap between ideals and fear.

[Emil Pulsifer]

You can't have wealth without accumulation. You can't accumulate without control of the means of production. You can't become a tycoon controlling the means of production (e.g., vast tracts of land for cattle, water rights, natural resources like oil, etc.) without using force and theft, whether privately or with the assistance (financial, legal, or military) of the government.

Nobody ever became an oil magnate by selling lemonade on the corner as a child, then graduating to newspaper delivery and later selling used cars. You accumulate wealth by owning what people need, and paying others far less for their work than the profits their work produce for you; and by using the accumulated profits to expand your ownership of such things and continue the process.

As Mr. Talton has pointed out in his nuanced essay, Texas is more than oil. But without oil and federal largesse and the business and university infrastructure these paid for, what's left is:

"...the highest proportion of people lacking health insurance of all 50 states; the third-highest poverty rate; the second-highest imprisonment rate; the highest teenage-birth rate; the lowest voter turnout; and the lowest proportion of high-school graduates..."

These things often go together, and stem in turn from the other critical fact cited by The Economist: "Texas spends less on each of its citizens than any other state". Poverty and crime, low-education and bastardy: is any modern, educated person really surprised by the correlation?

So, whereas it seems difficult to deny that a major part of "the long tradition of business getting everything it wants" includes low taxes and light regulation, the advantages enjoyed by the state have been provided not by this, but by natural resources and lavish government subsidies and protectionism; and the state's low-spending has produced the long list of human-resource and social debilities quoted above.

This is built into the system. Not everyone can be a skilled, well-paid oil driller or engineer. Not everyone can be a university graduate, because the economy simply doesn't support that many jobs requiring degrees. The bulk of workers MUST be unskilled and semi-skilled. If there is, at times, an unskilled labor surplus, particularly among minorities, all the better: it provides business leaders with a chance to divert white workers' attention from economic to racial issues. Otherwise, they get wise, organized, and their increased wages and benefits eat into those fat profits. Voter apathy is also encouraged among the proles, for similar reasons, which may be why Texas businessmen and the politicians who serve them regard the "tradition" of low-voter turnout equally congenial.

You can't accumulate without control of the means of production and surplus labor. You can't have surplus labor without paying workers far less than the value of what they produce. You can't accomplish and maintain any of this without political control. You can't maintain political control if the majority (whose class interests oppose yours) are politically conscious and active and have solidarity. It all goes together. It's the way the system has evolved. That's capitalism.

[Emil Pulsifer]

P.S. Of course, you can become a tycoon via inherited wealth, but you are then depending indirectly, rather than directly, on the dynamics described above.