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The Rick Perry Report Card

Economic Development

Grade: A

Perry at the GM assembly plant in Arlington in 2014. (AP/LM Otero)

Texas’s economy was already performing relatively well at the time Rick Perry became governor. Exports, for example, were flourishing as a result of NAFTA. He would also, as it turned out, have the good fortune to govern during the period of technological innovation that enabled the shale boom. And the heart of the Texas model, which he invokes in promoting the state’s business-friendly climate—limited government and low taxes—predates him by more than a century.

In terms of economic development, then, the governor hit the ground running. In retrospect, though, the fact that Perry has presided over the “Texas miracle” has to be more than a coincidence. Jobs and the economy have been his long-standing preoccupations. As ag commissioner, he called for the state to support agriculture processing businesses by issuing loans from a dedicated fund. “We’re exporting dollars,” he said in 1991. “We’re exporting the ability for a young person in Texas to have a good job.” Then as now, no industry was too tiny, or too unpromising, to win his support. In 1992 he penned a letter to the Houston Chronicle explaining how the Department of Agriculture was trying to support the state’s wine industry. “It’s not a novelty anymore,” he said—a wildly optimistic comment at the time. 

As governor, Perry’s focus on business has led him to make sweeping concessions to the private sector. He has kept taxes and spending low, and he signed tort reform laws in 2003 and 2005. But he has also supported  investments in public goods like roads and water—the types of investments in infrastructure that benefit the people of Texas as well as its businesses and should not be controversial in a rapidly growing state, even among fiscal conservatives. And at times Perry has taken a more direct role in job creation. In 2003 and 2005 he also signed legislation creating the Texas Enterprise Fund and the Texas Emerging Technology Fund, respectively. These “deal-closing funds,” as the governor’s office calls them, have put billions of dollars at Perry’s disposal, which he has used to woo businesses to Texas, specifically in clusters tipped for growth, like manufacturing and biotech. 

Critics argue that Perry has been corrupt in his practices, happily dipping into the state “slush funds” to support his cronies and effectively auctioning off Texas’s resources at fire-sale prices. It is certainly the case that he has offered incentives that didn’t pan out and that some of the industries that have flowered in Texas are weeds. Such criticisms, though, slightly misread his motives. Perry has supported renewable energy as well as oil and gas; he’s offered plenty of incentives to companies run by perfect strangers. A more apt analysis is that he’s been somewhat indiscriminate in his efforts, like a Hungry Hungry Hippo. Although he’s highlighted certain industries, he’s been open to almost all of them. If there were a job stuck in a tree outside Texarkana, he would probably mobilize the National Guard to coax it back to safety. 

The results have been conclusive. Since 2000, Texas has grown by about six million people, and the workforce has grown by about two million. The state’s economy has largely kept up. Almost two million jobs have been added in the same span, and total economic output has grown. The Texas miracle of economic growth and job creation has rightly attracted national acclaim, but the awards and honors matter less than what this has meant for the people who live here. The state’s unemployment rate has been lower than the national average every month since February 2007. There has been job growth in every major industry, in every income quartile, and in every region of the state. And this has happened during a time when the national economy has been flailing. Texas is the only large state where the middle class is still growing. 

There is, however, little room for complacency going forward. Texas’s poverty rate is still too high, although it is not much worse than the national average. The wealth of the people, as measured by things like median household savings and access to banks, is well below the national norm, even though Texas has largely caught up to the nation in terms of most income indicators. And growth has exacerbated some old challenges. Our newly diversified economy will require a more educated workforce than we currently have, and Texas will not sustain its prosperity without better roads and reliable water supplies. But a diversified and thriving Texas has the capacity to address those challenges. Perry deserves real praise for that.  

Quick stats:
Texas unemployment rate in March 2010: 8.2%
National unemployment rate in March 2010: 9.9%
Texas unemployment rate in March 2014: 5.5%
National unemployment rate in March 2014: 6.7%

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