Just more reasons why Texas is great

Argh! I am so frustrated with my Texas Rangers that I can hardly stand it. Seriously, how many leads do you have to blow before you realize you need to start working on your defense? I can’t get too upset since it is so early in the season, but really…these are the basics. I will reserve the bulk of my angry Rangers rant for later in the season when the defense gets better and our offense starts falling off (it is inevitable, because we can’t have all parts of our game working properly). But there is something going right in Texas pretty much all the time…being great. Yes, the former independent nation now great state of Texas has been superior in many ways over the years. From our simply better than everyone else’s micro-brewed beers to our extremely more attractive than everyone else’s women, we are the last bastion of the American dream. Here we are, seemingly skirting the economic downturn while the rest of the country wallows in their own stupidity (and the result of it). Now now…I am not saying we are smarter or better than the rest of the country. I am just saying that we’re smarter and better than every other state.

Once a separate nation, Texas has recently been behaving more like an independent economic republic than a regular state. While it hasn't been immune to the problems plaguing the nation, the Texas housing market, employment rate, and overall economic growth are relatively strong. This can be attributed to our excellent geology and stunning geography. But Texan prosperity also reflects the conscious efforts of a once-parochial place to embrace globalization. If you took a business class in the last twenty years then you have heard this buzz word of economic growth. Globalization describes a process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and trade. And if you paid any attention in those business classes you know that countries that have embraced globalization have grown by leaps and bounds compared to countries with relatively closed economic/social policies. This is true of Texas and is indicated by several measures of economic stress. The state unemployment rate is 8.2 percent…high, but still one many states would envy (California's is 12.5 percent; Michigan's is 14.1 percent). It entered recession later than the rest of the country (Texas was adding jobs through August 2008) and started slowly adding jobs again last fall, thanks mostly to its great position in the largely recession-proof energy industry.

Are there any distressed homeowners in my readership? By far the housing slump and mortgage crisis hit many Americans pretty hard. My theory about all that is…if you couldn’t afford it, then why the hell did you buy it. Take a second to think about this. Did you read your mortgage agreement? Did you seriously think that magically, all of the sudden; you could afford a home when you hadn’t been able to up until that point? Come on, quit begging the government to bail you out and think for a minute who really put you in the place that you’re in. Then, wish and hope and pray that you had only lived in Texas when this all happened. The Texas housing market has fared better than many. The mortgage delinquency rate (the portion of borrowers three months behind on payments) is 5.78 percent, compared with 8.78 nationwide, according to First American CoreLogic. That's partly because relaxed zoning codes and abundant land kept both price appreciation and speculation down. "House prices didn't experience a bubble in the same way as the rest of the nation," said Anil Kumar, senior economist at the Federal Reserve Bank of Dallas (who I met while pursuing my Economics degree at SMU). But it's also because of two attributes not commonly associated with the Longhorn State: financial restraint and comparatively strong regulation. Unlike many of its neighbors, Texas has state laws that prohibited consumers from using home-equity lines of credit to increase borrowing to more than 80 percent of the value of their homes. The upshot: Dallas housing prices have fallen only 7 percent from their 2007 peak, according to the Case-Shiller index.

As it has for decades, energy is driving Texas' economy. But it's not because the state's wells are gushing crude. Though it doesn’t seem right that the state that gained its fame through a television show about a modern oil dynasty (Dallas), Texas is leading the way in alternative energy sources. Sure, we’re still pumping the black gold out of the fields of West Texas. In November 2009, Texas wells produced 1.08 million barrels per day, about half as much as they did in the late 1980s. In recent years, natural gas has been undergoing a renaissance. That renaissance happened right in my backyard…or I guess you would say it’s my neighbor’s backyard. The Barnett Shale is a geological formation underlies the city of Fort Worth and underlies 5,000 square miles and at least 17 counties. Some experts have suggested the Barnett Shale may have the largest producible reserves of any onshore natural gas field in the United States. The state's production rose about 35 percent between 2004 and 2008, partly due to this find and the resulting wells that sprang up from it. While traveling out to the ballpark last year to see the Rangers play you could make out the crowns of the wells behind sound-dampening walls along the highway. And Texas has received a big boost from a different, renewable source of energy: wind.

Wind power in Texas consists of many wind farms with a total installed nameplate capacity of 9,410 MW from over 40 different projects. Texas produces the most wind power of any U.S. state, followed by Iowa with 3,670 MW. Several forces are working to the advantage of wind power in Texas: the wind resource in many areas of the state is very large, large projects are relatively easy to site and the market price for electricity is relatively high because it is set by natural gas prices. In this area, Texas' size and history of independence has enabled it to jump-start a new industry. The state has its own electricity grid, which is not connected to neighboring states. That has allowed it to move swiftly and decisively in deregulating power markets, building new transmission lines, and pursuing alternative sources. "We can build transmission lines without federal jurisdiction and without consulting other states," said Paul Sadler, executive director of the Austin-based Wind Coalition. Ramping up wind power nationally would require connecting energy fields—the windswept, sparsely populated plains—to population centers on the coasts and in the Midwest. Texas' grid already connects the plains of West Texas with consumers in Dallas, Austin, San Antonio, and Houston. Texas recently surpassed 10,000 megawatts of capacity, the most by far of any state and enough to power 3 million homes, Sadler says. Wind energy is also powering employment—creating more than 10,000 jobs so far. And it and has attracted foreign companies, including Danish turbine maker Vestas, Spanish renewable-energy giant Iberdrola, and Shell.

Texas today is more suburban engineer than urban cowboy, more Michael Dell than J.R. Ewing. Austin, home to the University of Texas, the state government, and Dell Computer, has a 7 percent unemployment rate. Yes, ExxonMobil is based in Irving. But the state's energy complex is increasingly focused more on services and technology than on intuition and wildcatting. And it is selling those services into the global oil patch. Russian, Persian Gulf, and African oil developers now come to Houston for equipment, engineering, and software. Ever since the discovery of oil at Spindletop, energy has been a dominant force politically and economically within the state. According to the Energy Information Administration, Texans consume the most energy in the nation per capita and as a whole. Unlike the rest of the nation, most of Texas is on its own alternating current power grid, the Texas Interconnection. Despite the California electricity crisis, Texas still has a deregulated electric service. Along with rich petroleum and natural gas reserves the Energy Information Administration states that the Texas' large agriculture and forestry industries could give Texas an enormous amount biomass for use in biofuels. The state also has the highest solar power potential for development in the nation. The oilman and the alternative fuel hippie can sit down for a frank discussion about the future of energy in Houston while the rest of the United States squabbles over heating oil.

While its political leaders may occasionally flirt with secession, Texas thrives on connection. It surpassed California several years ago as the nation's largest exporting state. Manufactured goods like electronics, chemicals, and machinery account for a bigger chunk of Texas' exports than petroleum does. In the first two months of 2010, exports of stuff made in Texas rose 24.3 percent, to $29 billion, from 2009. That's about 10 percent of the nation's total exports. There are more than 700,000 Texan jobs geared to manufacturing goods for export, according to Patrick Jankowski, vice president of research at the Greater Houston Partnership. "A lot of it is capital goods that the Asian, Latin American, and African [countries] are using to build their economies." As of 2008, Texas had a gross state product (GSP) of $1.224 trillion, the second highest in the U.S. Its GSP is comparable to the GDP of India or Canada which are ranked 12th and 11th worldwide. Texas's economy is the third largest in the world of country subdivisions. Texas's large population, abundance of natural resources, and diverse population and geography have led to a large and diverse economy. According to the Tax Foundation, Texans' state and local tax burdens rank among the lowest in the nation, 7th lowest nationally; state and local taxes cost $3,580 per capita, or 8.7% of resident incomes. Texas is one of six states that lack a state income tax. Texas has the most farms and the highest acreage in the United States. Texas leads the nation livestock production. Cattle is the state's most valuable agricultural product, and the state leads nationally in production of sheep and goat products. Texas leads the nation in production of cotton. The state grows significant amounts of cereal crops and produce. Texas has a large commercial fishing industry. With large universities systems coupled with initiatives like the Texas Enterprise Fund and the Texas Emerging Technology Fund, a wide array of different high tech industries have developed in Texas. The Austin area is nicknamed the "Silicon Hills" and the north Dallas area the "Silicon Prairie".

Thanks to that embrace of globalization, the Texas turnaround may help lead the nation in its economic turnaround. Texans have always had the ability to think big. Now that their state has become a player in the global economy, we can expect a new kind of swagger.