The Texas Miracle and Rick Perry

The Texas Miracle and Rick Perry
By Joseph Lawler on 8.15.11 @ 6:27PM

Rick Perry advertisement - Time to Get America Working Again

Much has been made of the fact that Texas can claim 40 percent of the new jobs created over the past two years nationwide. Texas governor Rick Perry makes that statistic the focus of his first ad, and it's sure to come up many more times over the course of the presidential campaign, now that Perry is running.

In fact, a number of liberal commentators have already done their best to discount Texas's job creation record. Kevin Williamson and Conn Carroll have addressed some of those criticisms. Although there are good reasons to think that Texas's record doesn't validate conservative economics once and for all, I think that the evidence suggests that Texas would have been worse off in the recession -- more like California -- if not for its free-market laws. Conversely, it also indicates that states like New York and Illinois would be in better shape now if they were more like Texas.

So Perry would be safe using Texas's new jobs to his advantage in a general election race against Obama.

Does Texas's record suggest that Perry would be an especially effective president, though? After all, Texas was conservative before Perry came along.

One of the factors that Dallas Fed president Richard Fisher specifically cited as a reason for Texas's success is its ongoing tort reform. Perry fought for successful tort reform measures in 2003 and 2005 that may not have passed without his leadership. This year, he signed a broader "loser pays" law that passed with more popular support. Perry deserves credit for that, and it's an issue that he would presumably be good on at the federal level.

As far as Texas's other strengths, though, Perry didn't necessarily play a leading role. Texas's low cost of living and resilience during the housing crash are largely a product of its relatively lassez faire housing policies. Texas has also ridden a boom in oil and gas production.

Furthermore, Perry has been good on spending and taxes, but not great. Given that he governs a red state that has enjoyed a number of idiosyncratic economic advantages over the past decade, he hasn't had to make many of the hard decisions or fought some of the tough battles that blue-state governors have.

The presidential campaign will give Perry a chance to showcase his ideas and defend his record. Texas's record will make him a strong candidate. But it doesn't demonstrate, at the outset, that he would be better positioned than some of the other candidates to turn the economy around if he were elected.