I’m Still Catching Up

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I want to send out this apology. Policy analysis is not my job… I just do this for fun. That last post was meant to explain things I couldn’t explain over Twitter (to an audience of about 15 people who already discussing it).

Instead, I got almost as many comments and hits as I’ve gotten on everything else I’ve done here over the past 2 years. I’m trying to digest it all, but it’s crunch time at my “normal job”.

Thank you to everyone who has commented and engaged the topic. I am going to try to do a follow-up in the coming week that addresses more of the data.

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5 responses to “I’m Still Catching Up”

August 24, 2011

Steve D

Reality? Real Job? How dare you! LOL…

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August 24, 2011

Charlie Martin

That’ll teach you to be useful.

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August 24, 2011

patricius

God bless you, Matthias! I’ve had to completely forego blogging over the last few years due to real work.

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August 25, 2011

Len Deamer

I’m looking forward to it, as I do all of your analyses.

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September 18, 2011

Ryan Larsen

I thought your post was really good. I realize there’s a lot to sort through, but here are a couple thoughts I hope you’ll consider in your follow-up piece that we’re all looking forward to.

You said, “One can argue that Perry had very little to do with the job situation in Texas, but such a person should be probably prepare themselves for the consequences of that line of reasoning. If Rick Perry had nothing to do with creating jobs in Texas, than why does Obama have something to do with creating jobs anywhere?”

The difference: laws do matter, but the question is who get the credit. Obama has altered law to negatively impact employers and businesses, both in terms of their ability to function and their willingness to function. In contrast, Perry has inherited (rather than “created”) a climate of laws favorable for business. Perry inherited a legacy of job growth, and has let it ride uninterrupted. For that he gets some credit, but it hardly makes him a masterminding risk-taker (although I do give him credit for tort reform).

Although your focus was on Texas, not Perry, the underlying drama here is Perry v Romney. So I’d like to address the rest of my comment to that.

Perry compares Romney with Dukakis, who was governor during the booming Reagan 80s and a period where women entered the workforce in droves. MA also had a “minicomputer” tech bubble. Meanwhile, Romney inherited a massive budget crisis (which he solved), that hurt job growth. Yet some Perry supporters are now saying Romney’s response was unfair because he compared Perry with Bush and Richards. Apparently, consistency is not their strong point.

Since MA had a healthy unemployment rate when Romney left, the only way MA could have “created more jobs” is by increasing the population. But the MA population has remained essentially unchanged for 20 years, because it’s saturated. MA is the third most densely populated state in the U.S. Therefore, Perry is attacking Romney for not meeting a useless quota. Quotas are a misleading liberal tactic. Perry is dishonestly using the MA job growth rate to claim Romney is bad on jobs.

Quotas are not conservative. They are an inept or intellectually lazy means of assessment. If people are not committing crimes, we shouldn’t arrest folks just to meet a quota. And when everyone has a job, we don’t need to prioritize job creation or criticize the leader for “failing to create jobs.”

At the end of Mitt Romney’s term as Governor, MA had a healthy unemployment rate of 4.7 (below 4 becomes unhealthy). There was no job problem, and no need for an artificial “fix.” When Romney took office, the state faced a massive budget problem, which Romney successfully solved.

So why does Rick Perry point out that Romney didn’t create many jobs? Because many people are confused. We are now in a jobs crisis, nationally, and people are thinking in terms of the need to create jobs.

The only way MA could have created more jobs under Romney is if the population in MA had increased. But MA is the third most densely populated state, right behind RI and NJ. Texas has 26 times the area of MA. That means, unlike MA, Texas has room for sprawl (which it has seen in excess) – meaning cheap land for people as well as businesses building stores and factories, equaling jobs.

Logistically, TX is a frontier. And because of its central placement, temperate climate and sophisticated urban variety, it is a hub. Combine this with its conservative laws (pre-dating Rick Perry) and built-in natural resources, and Texas is an obvious place for people to move.

Still, as Mitt Romney pointed out, a much higher percentage of jobs were created in TX under both Richards and Bush than under Perry. This may indicate that suburban TX is finally beginning to see some saturation after the massive population increase of the last 20 years.

The bottom line is that Texas has had room for bringing in new people. MA population has seen little change in 20 years, while TX has had a 40% increase in population over that same period. While Perry would like to take credit for job growth, especially since the recession, recent growth has been demonstrably chaotic rather than ordered. Just as Babe Ruth hit more home runs than anyone else but also struck out more than anyone else, when people have taken their savings and moved to Texas in the last 3 years, they have naturally generated some jobs but also been left with a lot of unemployment.

To illustrate the chaos which Perry takes credit for, consider that a year ago MA and TX had the same unemployment rate, 8.2% (Sept. ’10). Now, MA is down to 7.6 and TX is up to 8.4. Is this the result of Perry’s careful planning and micromanagement? If so, he has failed. If not, he should stop assuming credit for the jobs situation in Texas.

-Ryan

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