On January 26th, Ted Cruz gave a speech at the National Review Institute’s post-election summit in Washington, D.C. Republicans lost big in the 2012 elections because of “the 47 percent.” Not the 47 percent themselves, that is, but the fact that millions of Americans are convinced that Republicans don’t care about working- and middle-class people. If the party wants to recover, he continued, it will have to explain that its policies really amount to “opportunity conservatism”—that limited government creates more opportunities for Americans, 100 percent of them, to pursue and achieve economic mobility.
This, in a nutshell, is what Cruz has been saying since he was elected in November, including at his appearance at the Texas Public Policy Foundation’s annual conference, in Austin . It’s an argument that has attracted a fair amount of attention, in Texas and around the country. Many pundits, at least on the right, have had a positive response. Others have been skeptical, even offended; there’s no way Cruz believes this, they seemed to be saying, and even if he does, he’s wrong. Let’s set aside the first charge for a moment, and look at the second. Is Cruz right to say that a smaller government is better for the 47 percent than a bigger one?
This is, spoiler alert, a notoriously difficult question, partly because there’s no consensus about what “better” looks like. As Texans, however, we can add a few considerations. Historically, that is, Americans have tended to favor smaller government than their peers in other wealthy, industrialized democracies, and Texas is, famously, closer to the Cruz side of the spectrum than the United States as a whole. The state has one of the country’s lowest tax burdens per capita and, relatedly, spends less per capita than most. That’s the Texas model—low taxes, low services—and if you look at the jobs numbers, the Texas model is indeed working.
Texas has, that is, outpaced every other state in terms of job creation in recent years. Rick Perry got a lot of incredulous looks during his ill-starred presidential campaign when he said that Texas created 40 percent of America’s new jobs between June 2009 and June 2011, but that figure, which came from the Federal Reserve Bank of Dallas, was correct. Research from the Dallas Fed also shows that the job growth is broad-based, meaning that these aren’t all oil and gas jobs, as people might have suspected. In 2012 Texas created 305,000 new jobs ; about 50,000 were in the leisure and hospitality industry, but nearly as many were in education and health, and almost 70,000 were in professional and business services. Similarly, Texas isn’t just creating minimum-wage “McJobs.” Between 2001 and 2011, 28 percent of Texas’s new jobs were in the lowest wage quartile, but 21 percent were in the highest wage quartile, 24 percent were upper-middle, and 28 percent were lower-middle (PDF).
The result is that in terms of employment, Texans have, similarly, been better off than many Americans. The state’s unemployment rate was 6.1 percent in December 2012, according to the federal Bureau of Labor Statistics , compared to 7.8 percent in the country as a whole. In fact, Texas’s unemployment has been lower than the national average since early 2007 . In terms of wealth, Texas seems to lag the nation; the median household income is about $51,000 a year, compared to a national average of nearly $53,000, but the cost of living in Texas is lower than average, so the money goes a bit further.
Texans themselves are relatively confident about their opportunities. In an October 2012 poll from the Texas Lyceum (PDF), a bipartisan civic group, 72 percent of respondents said that Texas is doing better than the country as a whole. Business leaders, similarly, routinely rank Texas among the best states in the country to do business. Texas’ small business owners, in surveys, also say that the state is a great place to do business. That brings us to an odd and often-overlooked shadow on the scene, which national Democrats should feel free to use in their op-eds: although Texas’s leaders love to talk about supporting entrepreneurs, and Texas’s entrepreneurs say they feel happy here, Texas actually ranks quite low in terms of small business ownership per capita.
With all of that data in mind (and there is, by the way, a lot more where that came from), it’s safe to say that with regard to economic outcomes, at least, Cruz and the conservatives might be right when they point to Texas as an exemplar. Texas is creating jobs, and opportunity, for the 47 percent.
That doesn’t mean we have definitive proof that smaller government is better for everyone. The primary critique of Texas would be simply that jobs aren’t everything; maybe people are better off in a state with higher unemployment but better educational outcomes. Even if we’re sticking to the workforce data, critics might argue, reasonably, that Texas entered the twenty-first century with more room for improvement than most states, or that Texas can’t continue to improve without making necessary investments in infrastructure, which will necessarily require more government spending. They could even argue that the connection between the Texas model and the “Texas miracle” is spurious; maybe Texans are just so determined and bootstrapped that they would create jobs no matter what the government was doing.
However, Texas’s outsized economic performance should help us settle the question of whether Cruz is being sincere in calling for opportunity conservatism. He probably is, but even if he isn’t, this isn’t a ludicrous line of argument; it shouldn’t be dismissed out of hand.
If it is, conservatives will partly have themselves to blame. Cruz himself has been struggling to maintain the laser focus on opportunity that he’s counseling his party to adopt. In the days after the D.C. summit, he was all over the headlines for different reasons. He came out swinging against gun control and the Democrats who are calling for gun control . He was