Independence Plus Globalization – a Formula for Success in Texas
You probably haven’t seen this on the nightly news, but Texas is doing much better economically than the rest of the nation.
Part of this State’s success is, of course, a gift from nature. Texas produces oil and natural gas – and wind. But the independent political atmosphere has played a large part in how those resources fuel the economy.
Texas has its own electricity grid – not connected to the rest of the country. That gave Texas the ability to move swiftly in deregulating power markets, building transmission lines, and pursuing the development of wind energy. They didn’t need to get permission because there was no Federal jurisdiction and their plans did not affect other states.
As a result, Texas now produces more wind energy than any other state – enough to power 3 million homes and provide more than 10,000 jobs. The independent power grid allows that energy to be distributed across the state.
Due to dedication and innovation, Texas is now a leader in the manufacture of equipment, engineering and software needed for oil, gas, and wind energy production. And that’s where globalization comes in. Asian, Latin American and African countries are using products from Texas to build their economies.
As of this year, Texas provides about 10% of the nation’s total exports and provides more than 700,000 jobs geared to manufacturing goods for export.
The variety and number of energy-related jobs have kept Texas unemployment levels low – only 8.2% compared to a reported 10% nationwide and up to 22% in some states. Instead of losing jobs, Texas was adding jobs through August of 2008, and began adding them again in the fall of 2009.
But strong regulation and financial restraint also helped to protect Texas from the mortgage / credit crisis that’s having such a devastating effect on the American economy.
Relaxed zoning codes and abundant land kept speculation down and prevented the kind of “Housing bubble” that has plagued states like Florida, Arizona, and California. While those states and many others have seen home values drop as much as 67%, home values in Texas fell only 7% from their peak in 2007, and are once again rising at a steady but gradual rate.
As might be expected based on those facts, mortgage delinquency rates in Texas are also low – 5.78% compared to 8.78% nationwide. But there was another factor at play – a Texas State Law prohibits consumers from using home-equity lines of credit to borrow more than 80% of the value of their homes. That law alone probably saved thousands of homeowners from putting themselves in the “upside down” position that faces so many distressed homeowners today.
Texas is getting a lot of things right – and that puts them in a position to help lead the U.S. out of the mire and into an economic turnaround.
I think Texas and Texans have a right to be proud.
Mistie Fairchild is a staff writer for Pantex Energy. Pantex Energy provides Texas Electricity Service for the entire deregulated area of the State of Texas.