The Texas Economy Makes Rick Perry a Lefty Target

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Anyone trying to harm the governor of one of the most successful states in America might take guidance from one of Saul Alinsky's Rules for Radicals. One of the rules was "Pick the target, freeze it, personalize it, polarize it." Go after people, not institutions. Alinsky may be the best explanation for the indictment of Texas Governor Rick Perry.

Why go after Rick Perry? Perry, governor since 2000, might run for president in 2016, and Texas has been one of the most economically successful states. As a laboratory for democracy, Texas has created every liberal's worst nightmare: a prosperous economy with less, not more, government. To stop the triumph of market-oriented principles, and obstruct Perry's potential candidacy, the left is employing Saul Alinsky's tactics.

Perry was indicted for threatening to veto funding for the Public Integrity Unit in Travis County in order to force the resignation of District Attorney Rosemary Lehmberg. Lehmberg served jail time for drunk driving and her arrest, captured on video, makes mockery of her position.

Just how good has Texas's economy been under the leadership of Rick Perry compared to the United States as a whole and to neighboring California? Here are seven indicators.

Unemployment Rate. The unemployment rate in Texas in June, the latest data available, was 5.1 percent. True, it is seven tenths of a percentage point higher than at the start of the recession, in December 2007, but compares favorably to the United States as a whole (6.3 percent) and California (7.4 percent). California's unemployment rate is 1.6 percentage points higher now than at the start of the recession and America's unemployment rate is 1.2 percentage points higher.

Labor Force Participation Rate. Since the beginning of the recession, discouraged workers have left America's labor force, leaving it three percentage points lower than in 2007. The labor force participation rate-the percentage of people who say they are working or looking for work-is at 1978 levels, before the decade when millions of women marched into the labor force. But Texas with its stronger economy is faring better, with labor force participation rates only half a percentage point below 2007 levels. In California, the rate is four percentage points lower.

Real Gross Domestic Product. Texas has seen a 19 percent growth in real gross domestic product since 2007, compared with 3 percent for California and 5 percent for the United States. Some say that this is because Texas is fortunate to sit on oil and gas reserves. California also has extensive oil and gas in the Monterey Shale, but it has not been as aggressive about exploring and developing these reserves.

Migration. Over the 5-year period from 2005 to 2010, Texas gained, on net, 636,639 residents from other states, according to the Tax Foundation. These new residents brought, on net, $14.4 billion in adjusted gross income. California was by far the biggest loser-the state lost 161,852 net residents to Texas and $3.2 billion in net AGI. This made up a substantial amount of the net loss of 664,294 Californians (nearly the same as residents gained by Texas) and $15.8 billion in AGI.

Debt Per Capita. According to State Budget Solutions' Fourth Annual State Debt Report, Texas has total debt of $341 billion ($13,000 per capita), $244 billion of which is from unfunded public pension liabilities. In contrast, California has total debt of $778 billion ($20,500 per capita), $584 billion of which is from unfunded public pension liabilities. The U.S. average per capita state debt is $16,000.

Credit Rating. Standard and Poor's gives Texas has a AAA rating, the highest available. Its ranking increased from AA to AA+ in 2009, and reached AAA level in 2013. In contrast, California earns an A credit rating, the second-lowest among U.S. states. This remains the case even though California's finances are slightly improved compared to the last decade.

Business Climate. One reason that Texas is ahead is that its business climate is unusually favorable. It has encouraged the development of its energy sector, as has North Dakota, another success story. It is one of nine states that do not tax earned income. California has an income tax rate of 13.3 percent of income over $1,000,000, for both singles and couples. Its income tax rates do not just soak the rich: singles earning $40,000 and couples earning $58,000 are already in the 8 percent tax bracket.

Economists Art Laffer and Stephen Moore, in their latest annual publication Rich States, Poor States, ranked California 47th in economic outlook and Texas 13th. Similarly, the Tax Foundation ranked California 48th in business tax climate and Texas 11th.

The economy of Texas under Perry is not perfect. Some say that too many of the jobs created pay low wages, and that Perry uses regulations to reward his friends and punish his enemies. But in comparison to other states, and to America as a whole, Texas offers growth, jobs, opportunity, and upward mobility.

The left knows that it cannot destroy the economy of Texas, but it can try to demonize the governor of Texas and prevent him from implementing his growth recipe on a national scale.

Perry has demonstrated that states grow with less, not more, government. That outcome by itself suggests that the left's efforts to destroy Rick Perry will not carry over to destroying the state itself. Texas is growing faster than the rest of the country not because it has an irreplaceable governor to manage the state, but precisely because in Texas private individuals rather than government make decisions that affect economic growth. For Democrats, that's a scary track record that requires an Alinsky solution.

Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is senior fellow and director of Economics21 at the Manhattan Institute. Follow her on Twitter: @FurchtgottRoth.   

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