What's the Matter With Texas?


Published: December 5, 2011

If it weren’t for the entertainment value, I’d be pleased that Texas Governor Rick Perry is foundering in the Republican presidential race. After all, Governor Perry, who is in an unprecedented fourth term as chief executive of the nation's second-largest state, still might get the Republican nomination for president. If that happens there’s no telling what the voters might be fooled into doing. Just look at how far George W. Bush got.

Rep. Michele Bachmann of Minnesota, the Queen of the Tea Party, had her day in the sun Aug. 13 with her victory in the Ames, Iowa, straw poll, but Rick Perry deliberately eclipsed her moment as he chose that day to announce his own candidacy for the White House. Bachmann has been on the decline ever since.

But Perry had a rough start when reporters got ahold of his Washington-bashing book, Fed Up!, in which he opined last year that Medicare and Social Security are unconstitutional “Ponzi schemes.” He also made off-the-cuff remarks suggesting that Federal Reserve Chairman Ben Bernanke would be engaging in treason if he increased the money supply in an attempt to improve the economy before the election.

That loose cannon shot got Wall Street’s attention in a week that the stock market was in free fall — adjusting the money supply is part of Bernanke’s job description, after all — and Karl Rove, who brought Perry into the GOP but has since fallen out with Gov. Goodhair, called Perry “un-Presidential.”

But Republican kingmakers are finding that the bench is thin and Perry’s Bernanke bashing may appeal to the teabaggers. Indeed, in September the top four congressional Republican leaders wrote a joint letter to Fed Chairman Bernanke urging him not to engage in any further stimulation of the economy and it became clear even to committed conservatives that their party had taken a turn toward economic sabotage for partisan gain.

Since the bombshell report that Perry's hunting camp in Throckmorton County had an unfortunate racist name and Republicans found that he could barely put two sentences together in the presidential debates, his standing in the polls has dropped. (It makes you think that maybe ducking debates with Democrat Bill White in the last gubernatorial election wasn't such a good idea, after all.) But Perry remains within striking distance of Romney with $17 million in the bank and a lot of Texas politicians have been left in the dust waiting for voters to come to their senses over Rick Perry's qualifications for office.

Despite the talk of a Texas “Economic Miracle,” there is considerable doubt that Perry had much to do with the state’s relatively good health. Almost half of the state’s job growth in the past two years came in education, health care and government sectors. Those same areas took a hit as federal stimulus money ran out and the Legislature cut 8% from state spending. That forced layoffs of thousands of teachers, health professionals and state workers. Indeed, the state’s jobless rate increased to 8.5% in August.

The state’s natural advantages include a thriving energy industry, Gulf ports and proximity to Mexico, as well as a young and rapidly growing population, and the state has long had a reputation as a low-tax, low-service state. As economist James Galbraith, a professor at the Lyndon B. Johnson School of Public Affairs, told the Austin American-Statesman, Governor Perry “has no influence that I’m aware of over geology, the oil price, immigration or capital inflow.”

The state has low tax rates, as the average Texan spends just 7.9% of his income on state and local taxes, compared with 9.8% nationally, according to the Tax Foundation. That 7.9% is up from 7.1% when Perry became governor in 2001. But only five states have lower tax burdens.

Texas has relatively low housing costs, ranking 40th in median home prices. Texas was not hit as hard by the collapse in housing prices as other states where housing prices were inflated by speculators. Texas has stricter regulation of home equity loans. The state limits “cash out” refinancing, where homeowners could take advantage of higher house prices to refinance their homes and pocket the difference.

Much of the Austin boom was due to the state’s investments in the University of Texas and high-tech research centers in the 1980s that fueled the high-tech boom in the 1990s. But this year the state cut $4 billion from public schools and $1 billion from universities, which could make it harder to find qualified workers in the next decade.

The proportion of adults without a high school diploma is projected to increase from 12% today to 30% in 2040, if current trends continue, the state Comptroller’s office reported in 2008. That report also predicted another 30% of the 2040 labor force will have only a high school diploma and no training for high-tech jobs.

Texans used to be proud that university costs were kept low enough that the children of working-class parents could pursue a college education. In 1970, when Rick Perry attended Texas A&M, the state paid 85% of the cost of running the University of Texas and Texas A&M.

Tuition for Texas residents was $50 per semester and fees were $54, for a total of $104 per semester. Since the Republican Legislature deregulated university tuition in 2003, the Legislature has reduced higher education appropriations to cover only about 20% of the universities' budgets. Tuition now costs $4,908 per semester for Texas residents and the total cost for undergraduates, including fees, room and board, is almost $25,000 per year. That puts a college education out of reach for many middle-class high school graduates.

Perry also brags that Texas has generated 37% of the country’s new jobs since 2009, but he is less forthcoming about the 26% of Texas residents who lack health insurance. That ranks Texas dead last among the states. Texas' 26% uninsured compares with a national average of 17% uninsured. Sarah Kliff of WashingtonPost.com noted (Aug. 15) that the 6.3 million uninsured Texans is a population nearly equal to the entire state of Massachusetts.

Nor has Perry done much to make health insurance more affordable for working Texans. He promoted a 2003 law that caps medical malpractice awards, making it harder for injured patients to recover damages from negligent physicians, because now there is little incentive for lawyers to take malpractice cases. But “tort reform” has not controlled health care costs — since 2003, Texas Medicare reimbursements have actually been rising faster than the rest of the country, Public Citizen reported in December 2009.

And Medicaid is relatively limited. The state covers some optional populations — pregnant women and those in long-term care, but otherwise largely sticks with the federally mandated minimums. And Perry would like to do away with those requirements.

Many people confuse the demagoguery of politicians such as Perry, former half-term Alaska Gov. Sarah Palin and the Tea Party movement with populism. These faux populists have turned the definition of populism around and it’s time that progressives reclaim the good name of populism.

The Tea Party movement, whether its members realize it or not, is largely in the service of corporate interests in its campaign against “big government” and health-care reform.

Their hero, Sarah Palin, has embraced the right-wing dogma that big government is bad and that the free market is the best judge. That is the opposite of progressive populism, which believes that the government should protect working people, farmers and small businesses from predatory corporations.

"Occupy Wall Street" and the 99 Percent Movement which is spreading around the country are the populist movements that the Tea Parties claimed to be. And in its third week of confronting the nation’s financial overlords, Occupy Wall Street and the 99 Percent Movement are trying hard not to repeat the mistakes of the Tea Party movement.

The American Recovery and Reinvestment Act, enacted in February 2009 to provide an $800 billion stimulus to the economy, was a good start and helped to stabilize the economy, but going forward Democrats need to put people back to work building or rebuilding highways, bridges, schools and other public works. According to the American Society of Civil Engineers, the US needs to spend $2.2 trillion on infrastructure.

Democrats also should promote development of high-speed railways and a clean energy industry. President Obama's proposal for a $450 billion jobs act is the minimum Congress should approve, but they should also toughen regulations on Wall Street and help small businesses gain financing from the Small Business Administration if private lenders are not up to the task.

Recovery will be expensive, and this is no time to worry about the debt we’re passing onto our children. Those kids are better off if the government ensures that their parents have a good job with a living wage, health care, an affordable home and the kids have access to quality education through college.

See an updated version of this, "How Did Texas Get Into This Mess and Who Will Lead Us Out?"