For the past decade, Texas (along with Florida) has been a top two states when it comes to attracting migrants from other parts of the country. There has also been an unusually large influx of immigrants from abroad. Both groups have contributed significantly to the impressive economic growth of the states. Washington Post analyst David Byler has a good article that sums up the top reasons Texas has been such a magnet for people voting with their feet:
The Texas growth machine has a few key components, each of which contributes to the expansion of the state economy.
There is the obvious: oil. Any good economy needs something valuable to trade – and Texas has more oil than any other state….
But the Texas miracle isn’t all based on oil, trade, and transportation. The state has no individual income tax, has pursued business-friendly policies and the overall tax burden on companies is low. Equally important, land use laws are lax – businesses can erect and build facilities quickly, and developers can easily place large, cheap homes on areas of empty land.
And as cities have grown, new industries have gained strength….
Pia Orrenius of the Federal Reserve Bank of Dallas said, “We were basically oil, cotton and cattle in the 1980s, or I would say in the 70s. We will be from oil, cotton and cattle to oil in 20 years A sizeable high tech industry, a sizeable telecommunications industry, a sizeable manufacturing industry, a downstream energy industry. We’ve been able to diversify into a very wide range of industries. As those industries grow, we grow with them … “
As a result, Texas has become a magnet for migrants from America. The Lone Star State connects 100,000 people from other states almost every year.
Many move from large, blue states where houses are more expensive and taxes are higher.
As Byler points out, although it matters, the oil industry alone cannot explain Texas’s success. Relatively low taxes, regulations and land use restrictions were also crucial. The comparatively low zoning restrictions for residential construction are particularly important. In many other states, the exclusion zone is one of the main factors preventing people from migrating to places with greater employment opportunities. Byler rightly points out that low taxes, regulations, and housing costs allowed Texas to expand a wide variety of industries, which over time resulted in a gradual decline in the relative importance of oil. Most other states with abundant extraction industries have not had the same success.
The Washington Post is not widely known for its love of the GOP-dominated Texas government. But in this case they got a good grasp of the sources of success.
Texas politics is by no means perfect. The state is not a libertarian utopia (or any kind of utopia). However, its relative success has drawn important lessons for both major political parties.
Democrats can obviously learn from the value of low taxes, regulations, and land use restrictions. This is one of the main reasons Texas offers greater opportunities to the poor and lower middle class than many blue states.
In the Trump era, many national Republicans turned away from supporting a relatively free market in housing and instead embraced NIMBYism – the exact opposite of the approach that worked for Texas. While the GOP still supports keeping taxes down, they have forgotten the fact that Texas’s low taxation is largely made possible by relatively low spending. Under Trump, the GOP no longer even pretended to care about spending restraint, even though spending restraint was the key factor behind long-term tax capping.
It’s also ironic that Republicans are cheering Texas’s success in attracting migrants from blue states, but trying to severely restrict the entry of immigrants from abroad, even though the latter are, in large part, drawn to the same differences in economic freedom like the former. Both internal and international migrants make important contributions to economic growth in their new homes. Many Conservative Republicans easily grasp this effect in the case of the former, but tend to ignore it when it comes to the latter.
Many Liberal Democrats have the opposite tendency. They welcome international migrants seeking freedom in the US and welcome their contributions to our economy. However, they view internal coordination with suspicion and often reject measures that make states attractive to internal migrants (and often also to international migrants). The success of Texas should cause both parties to reconsider some of their positions.
To say that Texas has a lot of good guidelines doesn’t mean to welcome everything the state government does. In recent years, many of his interventions in national politics have been problematic at best. To take the most striking example, the Texas Republicans cited the lawsuit named “Texas Turkey” by Walter Olson of the Cato Institute, which used ridiculously flimsy reasons for reversing the results of the 2020 presidential election (the lawsuit was brought by the Supreme Court rejected unanimously). .
But whatever can be said of the Texas government, they got some important things right. The rest of the nation should learn from this.