# What Texas Got Right **URL:** \ **Category:** Great Debates\ **Created:** [August 21, 2011, 3:16pm UTC](https://boards.straightdope.com/t/what-texas-got-right/593527 "2011-08-21T15:16:19Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 21, 2011, 6:52pm UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/21 "2011-08-21T18:52:21Z")
> [@John\_Mace](#): > > That’s a false dichotomy. There is plenty of stupidity to go around, both in individuals and banks. No, not false, simply a dichotomy. Both players were plenty stupid. The simple rules above highlight the stupidity of borrowers in regions without the rules. And it’s the stupidity of the borrower that is so often overlooked. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [August 21, 2011, 7:16pm UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/22 "2011-08-21T19:16:33Z")
> [@Grumman](#): > > You _do_ realise that there are two sides to a loan, don’t you? You’ve got the person borrowing the money and the person lending the money. Forbidding mortgage holders from taking out home equity lines of credit exceeding 80% of the value of the mortgage is the same thing as forbidding the bank from offering a home equity line of credit exceeding 80% of the value of the mortgage. And the reason for such a rule is to prevent the bank from putting its clients’ money into a loan where the receiver of the loan is considered likely to choose foreclosure over the continued repayment of the loan. I’d ask you the same question: do you realize that there are two sides to a loan? Suppose a borrower has a hundred different people he can borrow money from. And a lender has a hundred different people he can lend money to. Now if you enact a law that regulates the borrower and makes sure he doesn’t make any bad decisions about who he borrows from, you’ve eliminated his end of the problem. But as far as the lender is concerned, you’ve only eliminated one potential borrower and left him with the other ninety-nine. He still has plenty of potential to make a bad decision. The OP’s point was that regulation stopped some people from bad borrowing. Good, that’s exactly the kind of thing regulations are supposed to be doing. Now learn from it and apply this example. If it’s a good idea to regulate bad borrowing, it’s probably also a good idea to regulate bad lending. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [August 21, 2011, 7:54pm UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/23 "2011-08-21T19:54:53Z")
> [@emacknight](#): > > No, not false, simply a dichotomy. Both players were plenty stupid. The simple rules above highlight the stupidity of borrowers in regions without the rules. And it’s the stupidity of the borrower that is so often overlooked. What, exactly, is the debate here? I’m not seeing this vast blindness to the “stupid” decisions made by consumers. They got in over their heads, and now they’re paying for it. What I do see is a lot of people complaining that the government bailed out the banks, and left the average guy high and dry. Or, more precisely, under water. ---
**Author:** ![colonial](https://avatars.discourse-cdn.com/v4/letter/c/34f0e0/32.png) [@colonial](https://boards.straightdope.com/u/colonial)\ **Post date:** [August 21, 2011, 11:45pm UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/24 "2011-08-21T23:45:05Z")
This is a thread I wouild like to see remain on-topic. I will report reply #s 3 and 11-23. ---
**Author:** ![colonial](https://avatars.discourse-cdn.com/v4/letter/c/34f0e0/32.png) [@colonial](https://boards.straightdope.com/u/colonial)\ **Post date:** [August 21, 2011, 11:57pm UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/25 "2011-08-21T23:57:52Z")
Getting this thread back on track: Are the cited jobs created in Texas net, after accounting for jobs lost? The reason I ask is that Texas’ unemployment rate is an unimpressive 8.4%, compared to the national average 9.1% New York at 8.0% has a lower unemployment rate than Texas! Can someone help me out here with some authoritative sourced data and commentary? ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [August 22, 2011, 12:14am UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/26 "2011-08-22T00:14:09Z")
> [@colonial](#): > > This is a thread I wouild like to see remain on-topic. > > I will report reply #s 3 and 11-23. The OP said that financial regulations helped mitigate an economic problem. The posts you are unhappy with are a discussion on the effectiveness of financial regulations in mitigating economic problems. How is that off-topic? You might consider that if, as by your count, fourteen out of twenty-two responses to the original post were “off-topic” (including several by the original poster), then maybe you just misread what topic we’re discussing. ---
**Author:** ![colonial](https://avatars.discourse-cdn.com/v4/letter/c/34f0e0/32.png) [@colonial](https://boards.straightdope.com/u/colonial)\ **Post date:** [August 22, 2011, 12:21am UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/27 "2011-08-22T00:21:55Z")
> [@Little\_Nemo](#): > > The OP said that financial regulations helped mitigate an economic problem. The posts you are unhappy with are a discussion on the effectiveness of financial regulations in mitigating economic problems. How is that off-topic? > > You might consider that if, as by your count, fourteen out of twenty-two responses to the original post were “off-topic” (including several by the original poster), then maybe you just misread what topic we’re discussing. I almost never print retractions but in this case I must admit that I only read the first few sentences of the OP, and that was a mistake on my part. ---
**Author:** ![Great\_Antibob](https://avatars.discourse-cdn.com/v4/letter/g/e47c2d/32.png) [@Great\_Antibob](https://boards.straightdope.com/u/Great_Antibob)\ **Post date:** [August 22, 2011, 12:31am UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/28 "2011-08-22T00:31:52Z")
FYI: there’s some debate inside Texas why we have those strong regulations on mortgages. One of the more cynical (but still extremely plausible) explanations was a turf war between mortgage companies and home insurance companies. Texas is considered business friendly, but sometimes two different business groups might disagree about the best course of action. Both had serious lobbyists in Austin but the home insurance guys won out. It would naturally be better for them if people were able to pay for their loans, while mortgage companies, of course, would prefer looser lending requirements. The explanation goes that in Texas, even this particular bit of good consumer protection came about due to protection of business interests. So, it’s not so much that Texas did something deliberately right as got lucky. Better lucky than good, I guess. ---
**Author:** ![colonial](https://avatars.discourse-cdn.com/v4/letter/c/34f0e0/32.png) [@colonial](https://boards.straightdope.com/u/colonial)\ **Post date:** [August 22, 2011, 12:32am UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/29 "2011-08-22T00:32:52Z")
I do think the points I raise below are in conformance with a critical issue raised in the first sentence of the OP, and I think they bear repeating: > [@colonial](#): > > Are the cited jobs created in Texas net, after accounting for jobs lost? > > The reason I ask is that Texas’ unemployment rate is an unimpressive > 8.4%, compared to the national average 9.1% > > New York at 8.0% has a lower unemployment rate than Texas! > > Can someone help me out here with some authoritative sourced data > and commentary? I hope to obtain some information as a result of posting. ---
**Author:** ![gatorslap](https://avatars.discourse-cdn.com/v4/letter/g/bb73d2/32.png) [@gatorslap](https://boards.straightdope.com/u/gatorslap)\ **Post date:** [August 23, 2011, 12:44am UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/30 "2011-08-23T00:44:15Z")
I’m sure it is net, accounting for jobs lost. What makes it less impressive in the context of unemployment is that Texas has had a huge population growth in the past decade. Population growth will always create jobs. “Net jobs created” is not a useful statistic, IMO. You need to put that in proportion to population growth. However, Texas does have lower unemployment than the national average, so that’s something. And I agree with the OP that their financial regulation has helped. ---
**Author:** ![markdash](https://avatars.discourse-cdn.com/v4/letter/m/ba8739/32.png) [@markdash](https://boards.straightdope.com/u/markdash)\ **Post date:** [August 23, 2011, 3:37am UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/31 "2011-08-23T03:37:25Z")
Wouldn’t elimination or severe restriction of mortgage securitization have accomplished the same goals as restricting homeowner freedom? Banks made bad loans because they knew they could package them and sell them, avoiding responsibility. If they couldn’t sell the loan, they would have to make more sound decisions. The only problem I can see with this is banks could have still counted on continued increase in home prices to allow holders of bad loans to meet their mortgages. ---
**Author:** ![Implicit](https://avatars.discourse-cdn.com/v4/letter/i/6a8cbe/32.png) [@Implicit](https://boards.straightdope.com/u/Implicit)\ **Post date:** [August 23, 2011, 3:49am UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/32 "2011-08-23T03:49:33Z")
> [@Great\_Antibob](#): > > FYI: there’s some debate inside Texas why we have those strong regulations on mortgages. > > One of the more cynical (but still extremely plausible) explanations was a turf war between mortgage companies and home insurance companies. Texas is considered business friendly, but sometimes two different business groups might disagree about the best course of action. > > Both had serious lobbyists in Austin but the home insurance guys won out. It would naturally be better for them if people were able to pay for their loans, while mortgage companies, of course, would prefer looser lending requirements. > > The explanation goes that in Texas, even this particular bit of good consumer protection came about due to protection of business interests. So, it’s not so much that Texas did something deliberately right as got lucky. Better lucky than good, I guess. Were the stricter regulations something that came out of the S&L crisis in the late 80s when hundreds of thrifts and banks in Texas failed following deregulation? ---
**Author:** ![colonial](https://avatars.discourse-cdn.com/v4/letter/c/34f0e0/32.png) [@colonial](https://boards.straightdope.com/u/colonial)\ **Post date:** [August 23, 2011, 7:51am UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/33 "2011-08-23T07:51:51Z")
> [@Implicit](#): > > Were the stricter regulations something that came out of the S&L crisis in the late 80s when hundreds of thrifts and banks in Texas failed following deregulation? No, Texas had a real estate and banking crisis way back in the 1840s before it was even a state of the Union. ---
**Author:** ![Lantern](https://avatars.discourse-cdn.com/v4/letter/l/d26b3c/32.png) [@Lantern](https://boards.straightdope.com/u/Lantern)\ **Post date:** [August 23, 2011, 8:17am UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/34 "2011-08-23T08:17:58Z")
My take on the Texas “miracle”: 1. There is some truth to the idea but less than at first appearance. While Texas has had good job growth, the unemployment rate is 8% and has climbed dramatically in the last few years. Texas has certainly not escaped the recession. 2. The higher job growth is a long-term trend partly caused by factors beyond public policy: such as a warmer climate (which attracts people from colder states) and a large energy sector which has benefited from rising energy prices. 3. To the extent that public policy has played a role it doesn’t fall in clear partisan categories. The tighter housing finance laws have been mentioned but Texas has also benefited from looser zoning regulations which keep housing costs low. While the latter is a free-market policy, it appears that plenty of Republicans who support tight zoning laws. This is a good [post](http://prawfsblawg.blogs.com/prawfsblawg/2011/08/learning-from-texas.html)about the Texas economy and it says: > [@](#): > > Republicans, however, have a love affair with exclusionary zoning. Take the case of Chris Christie, governor of New Jersey, who has been making war on the Mount Laurel doctrine and calling for suburban municipalities in New Jersey to have near-total autonomy to zone out affordable housing like townhouses and apartments. These sorts of regulatory policies appeal to Republicans’ home-owning suburban base, but they directly undermine the basis for the success of states like Texas. Again, it has been the Democrats in Trenton who have fought a stubborn rearguard action to stop Christie from allowing New Jersey suburbs to wall out low-income households. Texas has also benefited from immigration and a fair amount of its job growth comes from the government. The bottom line: There is not much of a Texas miracle and what miracle there is does not have much to do with Rick Perry. ---
**Author:** ![Lantern](https://avatars.discourse-cdn.com/v4/letter/l/d26b3c/32.png) [@Lantern](https://boards.straightdope.com/u/Lantern)\ **Post date:** [August 23, 2011, 8:32am UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/35 "2011-08-23T08:32:46Z")
An excellent [article](http://www.washingtonpost.com/business/economy/perry-criticizes-government-while-texas-job-growth-benefits-from-it/2011/08/18/gIQAPPZQSJ_story.html)in the WaPo which focuses on the role of government in Texas job growth particularly in recent years: > [@](#): > > With a young and fast-growing population, a large and expanding military presence and an influx of federal stimulus money, the number of government jobs in Texas has grown at more than double the rate of private-sector employment during Perry’s tenure. > > The disparity has grown sharper since the national recession hit. Between December 2007 and last June, private-sector employment in Texas declined by 0.6 percent while public-sector jobs increased by 6.4 percent, according to the federal Bureau of Labor Statistics. Overall, government employees account for about one-sixth of the workforce in Texas. ---
**Author:** ![Great\_Antibob](https://avatars.discourse-cdn.com/v4/letter/g/e47c2d/32.png) [@Great\_Antibob](https://boards.straightdope.com/u/Great_Antibob)\ **Post date:** [August 24, 2011, 2:33pm UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/36 "2011-08-24T14:33:51Z")
> [@gatorslap](#): > > However, Texas does have lower unemployment than the national average, so that’s something. And I agree with the OP that their financial regulation has helped. But even the unemployment rate (not total unemployment, which would be skewed by the large population) is still higher than states like Massachusetts and New York. So, I’m not sure how much it helps to compare against the national average. By that measure, North Dakota is one heck of a state for employment. Texas is “beating” the rust belt and Nevada/California in terms of employment rate, but so is virtually everybody else. ---
**Author:** ![Kearsen](https://avatars.discourse-cdn.com/v4/letter/k/82dd89/32.png) [@Kearsen](https://boards.straightdope.com/u/Kearsen)\ **Post date:** [August 24, 2011, 3:38pm UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/37 "2011-08-24T15:38:12Z")
> [@Ravenman](#): > > Do we also get to talk about what Texas has got wrong? > > It’s got the highest share of minimum wage jobs in the country, basically tripling in the last five years. About one in four Texas do not have health insurance. Texas ranks at the bottom in a whole host of education statistics. Texas and California both have heavy immigration, who is currently doing better (financially)? ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [August 24, 2011, 3:54pm UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/38 "2011-08-24T15:54:00Z")
> [@Kearsen](#): > > Texas and California both have heavy immigration, who is currently doing better (financially)? Financially? About the same. They rank 3 and 4 for projected 2012 budget gaps, for example (cite: [http://www.stateline.org/live/ViewPage.action?siteNodeId=136&languageId=1&contentId=15158](http://www.stateline.org/live/ViewPage.action?siteNodeId=136&languageId=1&contentId=15158)). Texas is solidly ahead of California in unemployment rate (though certainly not tops in the nation). Of course California typically trumps Texas by a wide margin in “quality of life” measures (education, insurance rates, environment). The latest Forbes ranking I could find had Texas at 21 and California at 9 for “best states to live”. Texas does lap the field in executions. ---
**Author:** ![Kearsen](https://avatars.discourse-cdn.com/v4/letter/k/82dd89/32.png) [@Kearsen](https://boards.straightdope.com/u/Kearsen)\ **Post date:** [August 24, 2011, 4:33pm UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/39 "2011-08-24T16:33:27Z")
"Texas does lap the field in executions. " Priorities, sir! ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [August 24, 2011, 4:37pm UTC](https://boards.straightdope.com/t/what-texas-got-right/593527/40 "2011-08-24T16:37:21Z")
> [@Kearsen](#): > > Texas and California both have heavy immigration, who is currently doing better (financially)? We’re not talking about how _Texas_ is doing; we’re talking about how Texans are doing. [Previous page](https://boards.straightdope.com/t/what-texas-got-right/593527.md?page=1) [Next page](https://boards.straightdope.com/t/what-texas-got-right/593527.md?page=3)