The American economy suffered greatly during the 1970s, with Texas being an exception.
While most of country struggled with unemployment and inflation, Texas struggled with breakneck population growth from people moving in. Drivers experienced overnight traffic jams on Texas freeways, and the classified advertisement section of the Houston Chronicle was an eagerly sought aid to many would-be job seekers nationally.
“Drive fast, freeze a Yankee” bumper-stickers were quite the thing in Texas back in those heady days.
The Texas oil industry didn’t much care for federal price controls on heating oil and natural gas. Milton Friedman famously joked that if you put the federal government in charge of the Sahara Desert in five years there would be a shortage of sand.
Like clockwork, they did the same for oil and gas outside of Texas, whose internal distribution laid beyond the reach of Congressional interstate commerce authority. Recently, however, it was Texans who froze as their Texas-only power grid failed in the grips of a winter storm. Besides the obvious lesson (karma) Floridians should view the Texas power fiasco as an example not to follow (more on that below) and an opportunity.
The COVID-19 pandemic has been an accelerant of pre-existing trends. If you have anything to say to beloved institutions such as shopping malls and print newspapers, best to say it now.
One of the clearly accelerated trends has been the decline of the state of New York and the rise of Florida and Texas. New York had quite the run as the financial and cultural capital of the United States and then the world as a whole. It has bounced back before, but in a column in last week’s Wall Street Journal, Peggy Noonan laid out a case not to assume it will bounce back this time:
The Partnership for New York City reports 300,000 residents of high-income neighborhoods have filed change-of-address forms with the U.S. Postal Service. You know where they are going: to lower-tax and no-income-tax states, those that have a friendlier attitude toward money making and that presumably aren’t going hard-left. Florida has gotten so cheeky that this month its chief financial officer sent a letter inviting the New York Stock Exchange to relocate to Miami.
New York needs to hold on to the wealthy—the top 5% percent in New York pay 62% of state income taxes—and force down crime. If you tax the rich a little higher, most will stay: There’s a lot of loyalty to New York, a lot of psychic and financial investment in it. But if you tax them higher for the privilege of being attacked on the street by a homeless man in a psychotic episode, they will leave. Because, you know, they’re human.
The New York Stock Exchange in Miami? Might as well follow all the former New Yorkers there.
New York produces bad public services at extremely high costs and it’s been losing population to Florida for decades. Despite New York’s former greatness, as a competitor to Florida, it’s yesterday’s news. Florida and Texas, meanwhile, are rising, and Texas makes for a far more formidable opponent moving forward.
As a Texan living abroad (in Arizona) I will tell you the advantages Florida has over Texas in an Alcibiades-advising-the-Spartans type fashion.
Texas has an abundance of strengths: a huge amount of privately held land (unlike the remainder of the American west), abundant natural resources, a wildly innovative private sector and the friendly attitude towards money-making Noonan referenced.
Texas has access to the ocean and has largely succeeded at making diversity a strength of its growing society. It’s no accident that it was a Texan who revolutionized global energy markets. If you are going to compete with Texas, you had better bring your A-game.
Florida also, however, has many of these strengths, and something that Texas (alas) lacks: a willingness to do the hard work of innovation in the public sector. K-12 reform in Texas, as an example, emphasized testing over setting families free, while the Florida model emphasized both improvement strategies.
Additionally, Texas has no equivalent of the Florida Virtual School, no private choice programs, and caps on enrollment for charter schools.
The Texas effort at improving K-12 outcomes through testing collapsed in 2013, and as far as I can tell, nothing approaching a real strategy is under serious discussion. While Florida lawmakers pioneered allowing children with disabilities to choose private schools through the McKay and subsequently the Gardiner Scholarship programs, the Texas Education Agency shamefully created covert caps on public school students receiving special education services at all.
It’s no exaggeration to say that the former came despite the objections of incumbent interests, and the latter with the complicity of incumbents.
You may recall the academic growth chart for Texas charter schools that accompanied last week’s post. Green is high growth, blue is low growth, and only Texas charter schools are in the chart reprinted below. Now, ask yourself: Does this look like something you want to cap?
Well, it does if you are a Texas school board or an education union lobbyist. They want to keep Texas charter schools capped regardless of the value they bring to Texas families and taxpayers. They have routinely prevailed in such efforts.
Now, back to the Texas power grid failure.
It was both predicted in advance and entirely inevitable, the result of bad public policy. A legislative effort was made in 2011 to move toward fortifying the Texas grid and energy production against cold weather, but it was blocked (with sad predictability) by incumbent interests.
Incumbent interests also routinely block efforts at meaningful education reform in Texas. The Texas public sector accordingly lacks the vitality of the Texas private sector- more like New York in this regard than Florida.
In an age where states compete not just for companies but also remote workers, innovation in the public sector can be an important advantage. When it comes to expanding education and other freedoms, Florida should drive fast and freeze out the Texans.
Or, as the new Texas Longhorn Football coach Steve Sarkisian puts it, Florida lawmakers should go #AllGasNoBrakes on expanding freedom.