Free-Market Texas Continues to Kick Economic Ass

Texas is creating jobs and reducing
unemployment faster than the nation as a whole, reports the Federal
Reserve Bank of Dallas. The Lone Star State also outstrips the
country in terms of exports. Could it be that this dynamic economy
is the result of the state’s healthy business environment and
generally strong regard for economic freedom? If so, state
officials better take care, because Texas has slid a bit in the
rankings, and may risk losing its advantage.

In the
latest monthly survey, the Dallas Fed reports that “employment
rose at a 3.2 percent annualized pace in September, faster than the
nation’s 2.2 percent increase.” Notably, the
strongest job growth sector is private non-farm employment.
That brings the unemployment rate down to 5.2 percent, lower than
the national 5.9 percent jobless rate.

Separately, the Dallas Fed also reports that
export growth from the state outstrips that in the United
States as a whole.

If you’re a believer that prosperity has a little something to
do with leaving people the hell alone to make (and keep) their
payday, it’s no surprise that Texas gets kudos for generally
restraining politicians’ temptation to screw things up. Chief
Executive magazine has ranked the state as having the
strongest business environment in the country for ten
years running. Texas rates a solid
10 out of 50 states in the Tax Foundation’s ratings of business
tax environments. In overall taxes, WalletHub ranks Texas as the

7th least burdensome. Canada’s Fraser Institute puts
the state in fourth place in terms of economic freedom among
states and provinces in Canada and the United States—and second
among U.S. states.

That’s all good, and isn’t just to state residents’ credit, but
their profit, too.

But there’s a warning in there. In
the Mercatus Center’s combined rankings of social and economic
freedom, Texas has dropped six places
since 2009, to 14. “Like many southern states, Texas performs
better on economic freedom than personal freedom,” Mercatus notes,
“Yet despite its reputation as a low-regulation state, it is only
average for regulatory policy.” The state also has a debt problem
at the local level that may make low tax rates a challenge to
maintain.

If politicians are going to be meh in terms of their respect for
personal freedom, they really need to emphasize that commitment to
not getting handsy with people’s wallets.

The Fraser Institute also notes that the top-scorers in their
ratings hold their place largely due to relative advantage—not
because things are getting better. In fact, Canadian provinces, on
average, are ranked better than their American counterparts, but
only because “their economic freedom is declining more slowly than
in the US states.”

The signs aren’t all ominous. Texas implemented
strong eminent domain reform just three years ago. That’s an
indicator that state officials retain at least some
respect for the conditions that keep the place from turning into
Bulgaria by the
Sea California.

If they want the prosperity to keep coming, they’ll continue to
stay out of the way of the people and businesses that create
it.