Rain, Rain, Go Away

If ever there were downpour conditions in the economy, it’s now: job losses, a soft housing market, a severe credit crunch. And yet Texas seems to be in far better shape than most every place else. How did we get here? Where do we go from here? 
Rain, Rain, Go Away
FROM LEFT: Ernesto Cortés, James Huffines, Rodney Ellis, Evan Smith, Susan Combs, Bernard Weinstein
Illustration by Barry Blitt

The PARTICIPANTS

Susan Combs is the comptroller of public accounts. She previously served two terms as agriculture commissioner and two terms in the Texas House.

Ernesto Cortés is the Southwest regional director of the Industrial Areas Foundation, the largest community- organizing group in the United States.

Rodney Ellis is a seven-term Democratic state senator from Houston. He is a partner at Rice Financial Products Company, a financial services firm.

James Huffines is the chairman of PlainsCapital Bank for the Central and South Texas region and the chairman of the University of Texas System Board of Regents.

Bernard Weinstein is the director of the Center for Economic Development and Research and a professor of applied economics at the University of North Texas.


Evan Smith, Texas Monthly president and editor in chief: Let’s begin with a satellite view of the Texas economy—from your particular perspective and that of the constituencies you serve. Comptroller, as the state’s chief financial officer, how do you think we’re doing?

Combs: The state has enjoyed tremendous growth—incredible sales tax growth of 12 percent three years ago, then 10-plus percent, then 6.6 percent. It has been rockin’ and rollin’. In 2008 the state brought in about 71 percent of all new jobs in the country. Certainly the wheels have come off some wagons, but you have foreclosure numbers that I think are still remarkably good for Texas. Our numbers for the last month are actually down about 90. We’re running about 1 foreclosure out of about 896 [mortgages] in Texas, versus 1 out of 70 in Nevada, 1 out of about 165 in California, 1 out of 186 in Florida, and 1 out of 147 in Arizona. We’re not sleeping in our cars. We’re still largely employed. We’re actually fairly lucky. We got hit late, but I expect us to see some light in October, November, December. I’m actually expecting to see our gross state product up 1.5, 1.7, 1.9 percent for 2009. So the state is so much better off than anyplace else. I really attribute that to how badly damaged we were in the mid-eighties. We lost 368 banks and 200,000 to 300,000 jobs, and we said, “Never again; let’s diversify.” Which we’ve done. Also, we put together the Rainy Day Fund, which will have $6.7 billion in it by the end of August. Only six times in its nineteen-year history has a dispersal been made from it exceeding $100 million.

Smith: Ernie, you speak for the

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