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The Texas Miracle Is No Myth
It’s worth looking under the surface.


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Just hours after Rick Perry officially entered the presidential race last Saturday, liberals started to attack Texas’s economic record. Paul Krugman got the ball rolling in Sunday’s New York Times: “So what you need to know,” Krugman claimed, “is that the Texas miracle is a myth, and more broadly that Texan experience offers no useful lessons on how to restore national full employment.” With the latest Gallup poll showing that just 26 percent of Americans approve of President Obama’s performance on the economy, liberals have little choice but to try to distort what is happening in Texas. To do so, they will have to rely on sleight of hand. Krugman continued: 

In June 2011, the Texas unemployment rate was 8.2 percent. That was less than unemployment in collapsed-bubble states like California and Florida, but it was slightly higher than the unemployment rate in New York, and significantly higher than the rate in Massachusetts. . . .

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The Texas unemployment rate is indeed about one percentage point lower than the national average, and it is true that other states such as New York and Massachusetts have very similar rates.

But things in America are a lot worse than the unemployment numbers indicate, for the simple reason that many people have given up looking for work altogether, thus completely removing themselves from the labor force. This complicates the numbers, as people do not fall out of the “unemployed” column only when they get a job, but also when they stop looking for one. If we are to see a recovery, we will need to lower the unemployment rate by returning Americans to work. Unfortunately, job seekers’ simply giving up has been a hallmark of the Obama administration. During the Obama “recovery,” about 2.8 million Americans have given up and completely stopped looking for work.

This is why, even though Texas has created lots of jobs, its official unemployment rate is similar to those in “blue states” like New York and Massachusetts. It is a superficial similarity. While Texas’s labor force has grown by 350,000 since the recession ended in June 2009, Massachusetts’s has remained virtually unchanged, and New York’s has fallen by 140,000. 

Keeping a similar unemployment rate to Texas’s isn’t quite the wonderful accomplishment it seems to be when so many people have given up looking for work. Eventually, the rest of the states will suffer a long-term unemployment problem that Texas won’t because, when the economy does recover, those who have given up looking for work will start looking again. When they do, they will quietly add themselves to the numbers and the disparity will become apparent.



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