Recession, Texas Style
We Texans pride ourselves on everything being bigger and better, but the definition of a “better” depression is a smaller, lighter one. I wrote months ago about how Texas was last into the Depression and has been hit less hard than most areas. At that time, only Brownsville, on the Mexican border, had an unemployment rate that matched the national average, which was in the mid-seven range then. At present we’re running 8.2 per cent., here in Texas, using government figures, with the national rate holding stubbornly at “9.7%.” I put that in quotation marks because I consider it a fairy tale, over and above that using traditional accounting methods would yield results almost exactly twice the official version. That half a point drop from 10.2% not long ago came too suddenly for me to find it believable.
I’m just a simple arithmetician but I understand the sort of figures we’re talking here and it is no use for the government to tell me there is no inflation — it has been at least 3% by the most stringent definition for the last three years — and that national unemployment averages 9.7% if we just don’t count everyone without a job. Laughter…my husband was a genuine mathematical genius who had a passion for statistics and understood numbers the way I understand words. I would love to hear John’s answer on what the unemployment rate is.
One reason we’re doing better in Texas is in the diversification of interests and in the tightly closed systems in our many small towns. Those are not totally immune, and in Hamilton the little, more expensive grocery store “down town” (that being the four blocks which surround the Courthouse square) has gone out of business. David’s, a small local chain, no doubt smiled, and stopped running so many loss leaders. What else? When it is twenty-five to forty miles to the next grocery store of any sort, pretty much you have a captaive audience. I imagine the newest restaurant in town will go under, but pretty much nothing much will change. It can be frustrating that kids who aren’t going to inherit a family business have to go elsewhere to find jobs in “normal” times, but it is quite comforting to know not many jobs will be shed in your town because there weren’t any superfluous jobs in the first place. Each business has a place in the local economy that isn’t going to go away, from the two drug store (neither chain) to Ace is the Place, to the feed stores. In the cities and industrial parks many areas are humming along nicely turning out machinery, computers, chemicals, and electronic devices. No, we’re not just about beef and oil. We’re making things they want in BRIC. The first quarter — first two months, actually — exports rose 24.3% over 2009, close to thirty billion dollars’ worth. Patrick Jankowski, Vice President of research for the Greater Houston Partnership, commented that there are over 700,000 jobs in Texas geared to manufacturing goods for export, probably not counting mounted steer horns and armadillo ashtrays. We account for about ten per cent. of the entire export output of the USA, a scary thought, in some ways. Bell Helicopter is gearing up for a big, new project in Amarillo, hiring now, starting at over twenty dollars an hour to assemble widgety things.
Sure unemployment is high in the barrio. When isn’t it? Teens in general are having a harder time finding summer jobs because there are those with more work experience and better motivation willing to take what they can find. Life is tough in some sectors of the oil business, thanks to the power of the Greenies and Mr. Obama outlawing the most promising drilling areas under the guise of expanding exploration. One of the articles I read posited that Texas began adding jobs again last fall, “thanks mostly to its great position in the largely recesion-proof energy industry.” Well…sort of. Maybe. Out in Odessa and Midland things are stalled because there is no way to get that sweet, light Texas crude over to the refineries, and for sure it’s too far to build a pipeline. Mr. Obama has decreed that no new refineries may be built (just which section of the Constitution would that be?) and if you can’t refine oil and can’t move it, once your storage facilities are full the best you can do is hope for a better future. One landman I know has cut her price from $450 to $200 a day because there isn’t a whole lot of leasing going on. Last November Texas crude production was down to 1.08 million barrels per day, on the order of half the amount pumped in the Reagan years. Natural gas is doing well — up about a third between 2004 and 2008 — which is cheering both because I expect the coal industry to be destroyed by fake science and a great deal of money put into that campaign by the LNG folks who stand to take over coal-fired plants. Seems to me, as a long-time Texan that we’ve got a bunch of capped wells that were shut down over the years because they produced “too much” gas and not enough oil to suit demands of the time.
We Texans are proud of having our own electric grid — bearing in mind that a hamlet about thirty miles from me went without power for over three weeks after Ike. Their juice came from a different plant in Houston. I’m not a big fan of wind power, myself, between the cost of the enormous three-bladed devices (about a quarter of a million dollars, which doesn’t include shipping and handling and perhaps not even installation) and the difficulty of “storing” electricity; it is commonplace to see a lot of those pricy units turned off when there is ample wind to spin them merrily. There are those who hope to begin exporting electricity to the rest of the US, such as Paul Sadler of Wind Coalition. That might be fine for wind power operators, but it would almost certainly raise prices locally, judging from what happened a decade or so ago when Washington started selling power to Oregon and California, which was in a bind because of foolhardy insistance in flushing away water needed for irrigation and hydroelectric facilities in the name of dear little fishies. There isn’t a person reading this who can’t come up immediately with “Same amount of product sought by more people equals higher prices.” I don’t think anyone has come up with “Keep Texas for Texans,” but it sounds reasonable to me. It may be too late since we have already gotten the attention of Denmark, Spain, and Queen Beatrix. Fortunately, one reason we could construct our grid fairly easily is that we weren’t tied down with federal regulations or coordinating with other states. With luck, trying to connect to Boston, Kansas City, and San Diego (just for examples) would turn out to be as frustrating and time-consuming as attempting to build a nuclear plant. I noted that Texas can now put out 10,000 megawatts which was stated as being sufficient for three million homes, and I thought, immediately not “NIMBY” but “KIIMBY” for Keep It In My Back Yard. Sure, I can handle Vestas and Iberdrola coming over to play, but retaining control of our power strikes me as “prepping” on a national level. T-Bone Pickens considered putting what even he thought was a bundle into wind power and decided there were faster, better ways to make a good ROI.
Our housing market remains far more stable for several reasons. Turnover has always been slow in rural areas, and we had a hefty influx of dazzled Californians early in the century. They may have been buying while the bubble was bursting, but compared to prices in the Golden State our housing was considered ludicrously under-priced. Dallas has been especially fortunate over the years, and prices there are only 7% off the 2007 highs, Case-Shiller indicates. That’s okay, there’s no point in coming to Texas if you’re going to live in Houston, Austin, San Antonio, D/FW, or El Paso. You seen one big city, you seen ’em all. Sure, the River Walk is pretty (if you like tourist attractions), but other than that SAT is five million people, two freeway rings, and traffic that would scare anyone other than a Los Angeles cab driver. We’re doing better in terms of lower delinquency rates on mortgages. In particular, those three or more months behind average 5.78% here and 8.78% nationwide. (Do you suppose someone makes these figures up? With 99 other choices, yet the terminal two digits are the same?) It should also be noted that Texas law limited taking out secondary loans that amounted to more then eighty per cent. of the value of the property. People were protected somewhat from their own greed and the myth that “Real estate will always increase in value!”
I bridled somewhat when I read, ‘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. Chalk some of this up to accidents of geology and geography. But Texan prosperity also reflects the conscious efforts of a once-parochial place to embrace globalization.” and “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…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. While its political leaders may occasionally flirt with secession, Texas thrives on connection… ”
I couldn’t help feeling that this was a little condescending and I was reminded of an ancient expression, “Poor boy, he must be tetched in th’ head.” We may enjoy wheelin’ and dealin’ but at heart we’re still Texans, with our own unique culture that we’ve done a lot better hanging on to than the USA has of agreeing on how to define an American. Businesses come and businesses go, like a li’l ol’ company that had a base here on my stomping grounds long ago, name of Texas Instruments, but cattle and corn fields are forever. We aren’t going to get over feeling that an Aggie ring (signifying graduation from Texas A&M, not 20 minutes from me) is worth two degrees from Harvard and Yale any day. Besides, Dell’s in Roundrock. Laughing at myself. This is like only Aggies being allowed to tell Aggie jokes (non-Aggies can tell ’em if they make the dunce a Polack, a perfectly respectable term ’round here.)
The important part isn’t what I interpreted as a slur on my own, my native land, but that we’re doing some things right here the rest of the country isn’t.
April 28, 2010
P.S.: The new figures on inflation are out, and I relish telling you about them soon. NO inflation? Ho, ho, ho!