Oil money doesn’t just create bad governance outside the country. It also creates it inside the country. You’ve probably heard of Rick Perry’s supposed Texas Miracle. For years, Governor Who’s Smart Now That He Wears Glasses has been claiming that companies all over the nation are relocating to Texas because of its low taxes and regulations. Personally, I never liked the implied slogan, “Bring your employees to Texas so they can die in a workplace explosion!” But there you are.
The truth was always that Texas looked good to outsiders from California and New York for one reason: housing prices were low. There was the downside that, you know, the houses were in Texas. But people will put up with almost anything to find cheap housing. There is no doubt, however, that rich people liked the idea of moving to Texas because of its lack of an income tax. And regulation is lax, which is yet another reason why we really can’t leave such matters to the states because they do a shockingly bad job.
But a big part of the “Texas Miracle” was always the $100+ per barrel oil prices. And now that they are gone, it doesn’t look so good. On Monday, Michael Hiltzik wrote, Is the Oil Crash About to Snuff Out the “Texas Miracle”? That is certainly what happened in the 1980s. The Texas economy isn’t quite as dependent on oil as it was then, but it is still a very big deal. But what’s remarkable is that with all of the oil boom money that was coming into the Texas economy, none of it was used to build and repair public infrastructure.
That shows how little pressure has been placed on the oil industry to carry its fair share of the public cost of the boom or contribute adequately to public investment. When the boom becomes a bust, there will be even less money, and you can bet that the oil industry will be pleading poverty.
Check out this amazing graph from the article that shows just how regressive the tax situation is in Texas:
Texas taxes people in the lowest three quintiles more than California. But even in California, the lowest two quintiles pay the highest percentage of their incomes in taxes. It’s an outrage — but not one that is of any interest to Fox News. Of course, I don’t ever recall seeing such information discussed on CNN or “liberal” MSNBC. But the main thing is that Texas soaks the poor. And now that they are headed for bad times, what they are going to get back for all those taxes they paid is nothing. As Hiltzik noted, “They’ll be searching for miracles, and they won’t find them in the Texas economy.”
Of course, Hiltzik thinks the coming difficulties will hurt Rick Perry’s presidential aspirations. I doubt that. He’ll be out of office. Perry will pretend that the only reason things have gone to hell is that his successor, Greg Abbott, doesn’t have his magic touch. I mean, really: he doesn’t even wear glasses!