Texas Grows on Rust Belt Woes

Thursday, 14 Jul 2011 10:20 AM

By Chris Freind

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In what amounted to a nonsurprise, Pennsylvania was just ranked near the economic bottom of the nation. Why the dismal showing for what was once the major industrial powerhouse, not just of the country, but the world?

Crushing taxes and a hostile business climate.

Shackled with the nation’s second-highest corporate income tax, it is also 15th in personal income tax, 30th in property tax burden, and No. 1 in estate and inheritance tax.

Those figures are bleak enough, but because Pennsylvania rolls over to organized labor and trial lawyers, it comes in dead last last in labor competitiveness.

But Pennsylvania is not alone. Millions in Ohio, Michigan, New Jersey, and Illinois are voting with their feet to escape ever-escalating taxes and an overbearing government.

The result is a mass exodus of businesses, and the people who work for them, fleeing for greener pastures of employer-friendly states.

And as children and grandchildren — the future — leave, so too does their political clout. Every one of those states continues to lose electoral votes: Pennsylvania has seen at least two disappear in every census since 1960; Illinois and Michigan have lost votes after the last four censuses; Ohio just lost two more; and New Jersey one vote.

While some businesses are outsourced overseas, many relocate to states that believe in welcoming rather than hindering. It is no coincidence that the recipients of this brain drain are primarily located in the south and west, states that are free of entrenched, business-as-usual politicians who would rather fall on the sword than make the effort to change the system.

And none more so than Texas exemplifies the fruits of the strategy to attract the best and brightest.

Despite America experiencing one of the worst recessions in its history, the Lone Star state is booming, gaining a whopping four seats in the Electoral College. In stark comparison to its Rust Belt competitors, Texas has experienced a period of nonstop growth, gaining at least one electoral vote in every census since 1930. The numbers tell the story:
  • Texas’ economic output is $1.3 trillion — 13th in the world.
  • It leads the nation in overseas exports; its railroads are ranked at the top; it has more miles of highway than any other state; and has state-of-the-art shipping ports and cargo airports.
  • Nearly 40 percent of all jobs created in the current “recovery” are in Texas, and it is one of only three states to have more jobs now than when the recession began.
  • Texas leads the nation with six cities on the top 20 Overall Strongest-Performing Metro Areas, according to the Brookings Institute.
Texas innately understands that fostering a business-friendly atmosphere pays big dividends. So it has paved the way to that goal: It is a Right-to-Work state, has no state income tax, and ranks 8th best for business-tax climate. And its regulatory environment is not nearly as onerous as in other states.

It has also passed significant legal reform, credited as a major factor in its unparalleled job growth.

Industries in Texas are quite diversified, from energy and mining, to timber, healthcare, biomedical and tourism — industries that parallel those in the northern states.

So why then do the other states continue to stagnate, seemingly content to limp along while their competitors are thriving?

Because the people, through the politicians they keep electing, are satisfied with mediocrity. Rhetoric aside about making their states great again, nothing of significance changes, no matter what party controls the governorships and legislatures.

Tax rates? Among the highest in the nation, especially for businesses. Legal reforms? Few and far between. Regulations? More burdensome than ever. Educational achievement of the future workforce? Well below par on a national scale, let alone internationally.

Perhaps the most telling difference is not statistical, but intangible. When in Texas, there is an unbridled sense of pride, a feeling that the American pioneering spirit is thriving, and that nothing is unattainable.

And you see the symbol of that pride everywhere: The Lone Star is embedded in concrete pillars of the modern infrastructure, in buildings, on car bumpers, and even in airport restaurants. That vibrancy, which is downright palpable, is not just because of Texas’ rich history, but comes from the security that only a booming economy can generate.

Sadly, that feeling has been nonexistent in the Rust Belt for decades. Whether it is ever regained will be decided over the next few years.

To Texans, everything they do is not just bigger, but better. That may seem arrogant to folks in the other 49 states, but as the old adage says, “arrogance ain’t arrogance if you can back it up.”

Looking at the Lone Star State’s success story, it most certainly backs it up.

Chris Friend is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com. He can be reached at CF@FreindlyFireZone.com.




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