Delay Claims Poorer-than-Average Texas is “Wealthy” Because Texans “Work Hard”
A few bloggers have noted that Tom DeLay went on a strange neo-secessionist binge yesterday on Hardball with Chris Matthews. This segment of the interview in which he lays out his substantive rationale has gotten less attention. But DeLay’s conceit is that Texas is a “wealthy state” because of it’s right-wing business-friendly policies, a situation that he specifically contrasts with the environment in California, New York, and New Jersey which have allegedly impoverished themselves with high taxes and overregulation:
One problem here is that Texas isn’t a wealthy state. Its median household income of $47,548 made it 28th in the country. Below average, in other words. New Jersey is second, California is eighth, and New York is nineteenth. Indeed, of the top ten states in per capita income nine are “blue” states.
The exception is Alaska, whose wealthy is due not to “hard work” on the part of the population or a business-friendly policy environment but to the combination of substantial natural resource wealth and a small population. Texas is like a poor man’s Alaska, with the substantial natural resource wealth but with the wealth spread across a much greater population. Absent oil, Texas would probably look more like its even poorer neighbors Louisiana (46), Oklahoma (44), Arkansas (49), and New Mexico (45). To some extent, I think the relative poverty of the South can really be attributable to the harmful consequences of Dixie-style conservative policies. But beyond that, it’s generally the case that state wealth is highly path-dependent—economic vibrancy attracts high-skilled workers which in turn leads to more economic vibrancy. But however you weigh that balance, the idea that Texas points us forward to a wealth-generating policy environment is absurd.
92 Responses to “Delay Claims Poorer-than-Average Texas is “Wealthy” Because Texans “Work Hard””
Register
RSSLogin
Topic Cloud
ArchivesBlog RollAbout Matt YglesiasContact Me
Donate
April 17th, 2009 at 10:23 am
On the whole I’m sure you’re correct, but isn’t the obvious counter that the cost of living in those non-Southern states are also much higher than in Texas, so while the median is lower it gets you further?
April 17th, 2009 at 10:23 am
Why does this indicted criminal continue to appear on my teevee?
Who cares what this troglodyte thinks?
April 17th, 2009 at 10:25 am
Texas’ poverty rate is 16.4%. That puts it ahead of Louisiana, Mississippi, and the District of Columbia. And that’s it.
April 17th, 2009 at 10:27 am
Texas is rich…in irony.
April 17th, 2009 at 10:27 am
“On the whole I’m sure you’re correct, but isn’t the obvious counter that the cost of living in those non-Southern states are also much higher than in Texas, so while the median is lower it gets you further?”
Yeah, I wonder how much those that stats take into consideration cost of living.
April 17th, 2009 at 10:28 am
Just clicked the link and saw that cost of living is not factored in, which makes this post a little misleading.
April 17th, 2009 at 10:31 am
DeLay means that wealthy people in Texas are quite wealthy.
April 17th, 2009 at 10:37 am
I like the “hundreds..if..if not millions of people…”
Way to understand orders of magnitude.
April 17th, 2009 at 10:39 am
Well, Josh and Hova, if we’re going to go down that road, you may as well go all the way down that road.
Cost of living is not factored in, true.
And its possible that taxes may or may not be higher. But the tax situation is a little more complicated than you assume. People generally just factor in state income taxes. But things like sales taxes, sin taxes and other forms of state levy may mean that the tax burden is equal or greater. Or that the tax burden is reallocated disproportionately to lower incomes. I’m not seeing any particularly nuanced analysis of that from you.
On the other hand, cost of living and higher taxes may be measured in qualitative terms as in higher quality of life. Assuming that there were no schools, roads, courts, judges, meat inspectors, parks etc., people would pay have to pay directly for all of these.
So if slightly higher taxes mean better roads, better police, better schools, and far more amenities and opportunities for the average citizen… well, I’d say its worth it. In which case, Texas deserves its place below average and all the rankings are meaningfully valid.
I really don’t think you’re going to get very far trying to parse numbers to prove that Texas isn’t a second rate state.
April 17th, 2009 at 10:44 am
Texas is the Quebec of the U.S. Pretty ordinary except that they like to think they are somehow special.
April 17th, 2009 at 10:44 am
This seems unfair considering how many immigrants Texas has. And it’s likely that Texas immigrants are poorer than the immigrants of most other states, since immigrants in NY, for example, have at least proved they could afford a plane ticket. Texas is a magnet for people so poor that walking to another country is their best option. I’m not saying immigrants don’t “count” in terms of poverty measurement, just that it’s unfair to compare TX to states that aren’t in TX’s unique situation with respect to poor immigrants.
April 17th, 2009 at 10:45 am
But the cowgirls are kinda special.
April 17th, 2009 at 10:48 am
Texas levies its state revenue by charging fees for everything.
Texans think they live in a great state because they only ever go to Louisiana, Arkansas, and Oklahoma, which are indeed much crappier states.
Also, Texas is a lot more environmentally habitable than the Deep South, as long as cheap corn is provided by the Plains states. In an independence scenario, the cost of maintaining the oil outposts increases tremendously.
April 17th, 2009 at 10:53 am
I’m not saying immigrants don’t “count” in terms of poverty measurement, just that it’s unfair to compare TX to states that aren’t in TX’s unique situation with respect to poor immigrants.
And if the other “business-friendly” freedom-loving states weren’t in the same boat as Texas, if Texas somehow stood out in that group, it might make sense to take Texas’ “unique situation”.
As things stand, however, there is no particular reason to do that.
April 17th, 2009 at 10:58 am
That income by state chart is pretty interesting, especially when you compare it to this map:
http://www.npr.org/news/specials/election2008/2008-election-map.html#/president?view=race08
You’d think there would be someone to point out the convergence of these two maps come election time…
April 17th, 2009 at 11:00 am
Matt: why do you hate the real America?
April 17th, 2009 at 11:18 am
This is coming from a recent report released by ALEC which ranks states’ economic productivity based on tax rates, regulations etc. Rich States, Poor States – Texas ranks 10 while NY ranks dead last.
April 17th, 2009 at 11:22 am
Yes, B, if you invent a metric of your own devising, claim it is important and measures something good, I’m sure you could create something that explains that Texas is wealthier than NY.
Luke nails it: when your neighbors of OK, LA, and AR, of course you’re going to conceive yourself to be one of the wealthiest states in the nation.
April 17th, 2009 at 11:25 am
Chris Matthews with the Congo reference.
Delay either didn’t know what he was talking about, or was distinctly uncomfortable discussing the mineral-wealth subject.
April 17th, 2009 at 11:34 am
So, B, a small conservative think tank ranks Texas tenth and my state last?
Oh, will the wonders never cease!
April 17th, 2009 at 11:38 am
Texas sends more money out than it gets in, MY.
April 17th, 2009 at 11:38 am
Delay’s the one that said Texas was wealthy. That statement includes the immigrants.
April 17th, 2009 at 11:45 am
Well, it isn’t easy to find real median household or per capita income by state. However, we do have data on real state GDP from the BEA. Mean per capita real GDP is highest in the places you’d expect from looking at nominal income data, even after accounting for price differences, but Texas is slightly below the US average GDP per capita, at rank 19 for all states in 2007.
Texas is also in the top fifth for income inequality, but so is NY or CA. (see table 2 here)
April 17th, 2009 at 11:58 am
In defense of my home state, you really have to adjust that median household income figure for local prices. Stuff is really cheap in Texas – food, gas, and especially housing.
April 17th, 2009 at 11:58 am
Matt finds an acorn in an otherwise very dumb post.
“it’s generally the case that state wealth is highly path-dependent—economic vibrancy attracts high-skilled workers which in turn leads to more economic vibrancy.”
So look at the trends. For the past 10+ years people have been leaving those blue states and heading south, mostly to Texas. And as Jason said, Texas looks a lot poorer that it would be otherwise because of the influx of dirt poor illegal immigrants year after year. Median income, though not meaningless, is hardly the whole story. Factor in a cheaper cost of living and the metrics improve. But you know, by all means, keep your blinders on.
Skeptic’s comment is just stupid. There aren’t good roads, or police or teachers (or whatever crap liberals throw out when they want to justify confiscatory taxation) in Texas? I’ve been to many blue states and the roads are the same as in Texas.
“But the tax situation is a little more complicated than you assume. People generally just factor in state income taxes. But things like sales taxes, sin taxes and other forms of state levy may mean that the tax burden is equal or greater.”
Not complicated at all, if you look at data instead of speculating.
http://www.taxfoundation.org/taxdata/show/335.html
Texas ranks 43 overall. Could be one reason people are flocking here.
April 17th, 2009 at 11:59 am
Texas is a drain on the federal treasury, it’s in third place for amount of direct payments received from Washington.
April 17th, 2009 at 12:28 pm
it’s in third place for amount of direct payments received from Washington.
In fairness, it’s one of the few southern states that generates a lot of revenue for Washington, too (more than it gets back, in fact).
April 17th, 2009 at 12:34 pm
Could be one reason people are flocking here.
I think people are flocking there because certain businesses are heading there, based on the availability of cheap, non-union labor. If your company moves there, and you follow, I don’t think that says anything about the attractiveness of the place to ordinary people.
I’ve had the opportunity to spend a lot of time down in San Antonio over the past 6 months, and while I enjoy many things about the area and find the people to be very friendly and pleasant, I don’t think I’d ever want to move there, even as a snowbird retiree. Basically, Texan city planning is horrible, getting around is frustrating, and, with the exception of the older part of the city and the older suburbs, it’s all ugly sprawl. I never though any place could be worse than Montgomery County, Maryland, or Northern Virginia, or Schaumberg, Illinois, but then I’ve had the opportunity to spend a lot of time around the 410 and 1604 loops.
The whole place is unsustainable, it’s really on the edge of the desert, and every couple of years they have a drought. And, of course, when we start seeing spot shortages of gasoline, I’ll be happier that I live in a place where I don’t have to drive as much to do my daily business. And when we start seeing spot shortages of gasoline, maybe people won’t be “flocking” down to Texas as much.
April 17th, 2009 at 12:43 pm
Texas, of course, would have died on the vine in the late eighties if the Federal government hadn’t come in, taken over the S and Ls, and restored order.
The S and L crisis would predictably reoccur if Texas ever became independent. Texas has a penchant for electing either dummies (Bush, Perry) or corrupt smart guys (LBJ). I like the corrupt smart guys when they are liberal, but still – this is a state run by a set of frat boys. It is a consequence of the state’s one party doctrine – Dem until 1970, republican until now. One of the reason I wish liberal Texans would join the republican, rather than the Democratic party is that this would lend them much more power. As it is, given the one party system and the existence of incredible rightwing fanatics, the whole government tilts rightward to please a few. In a one party system, the two parties just work to cement the power of the radicals in the dominant party. When it was the dem turn to dominate, after the New Deal, conservative Texans decided to wrest the Democratic party from the FDR supporters, and nearly did. Liberals should take a lesson and penetrate the Republican party and make it, at least, rational.
And of course, Delay should be in prison.
April 17th, 2009 at 12:47 pm
Sorry, Hova, I didn’t notice that you had already mentioned cost-of-living differences. Good call.
Also, Texas is much less of a petrostate than it used to be. State unemployment used to track the oil price, but since the 90s the two have completely diverged. Also, Texas oil production is about a quarter of its 1981 peak, yet the state’s economy has grown strongly and diversified strongly since then.
(Source: Dallas Fed)
April 17th, 2009 at 12:58 pm
“Texas is a drain on the federal treasury, it’s in third place for amount of direct payments received from Washington.”
Because it’s in second place for population. Tom Delay even said it in the interview. Texans receive .70 for every dollar taxed by the federal government.
Matt doesn’t adjust for effects of recent immigration (Texas is one of the youngest and fastest growing states in the union), doesn’t account for cost of living (Texas housing is cheap), and he assumes that oil is the only thing Texas excels at (we’re also leaders in health care and information technology). A very poor post.
April 17th, 2009 at 12:59 pm
Does Texas really have a bigger immigration problem than California, Arizona, and New Mexico?
April 17th, 2009 at 1:01 pm
And incidentally third in tax receipts too. So what exactly is your point.
April 17th, 2009 at 1:09 pm
I really don’t think you’re going to get very far trying to parse numbers to prove that Texas isn’t a second rate state.
Not at all what I was trying to do (as the “on the whole” bit should have tipped off). Rather, I was arguing for a better original post that might have included a defense against a quite obvious counter argument, one which was easily raised, and in fact explicitly mentioned, in the link offered (the Wiki link for instances talks about median home prices in California and West Virginia).
April 17th, 2009 at 1:09 pm
In defense of my home state, you really have to adjust that median household income figure for local prices. Stuff is really cheap in Texas – food, gas, and especially housing.
Also, cheap in Texas – live, women, justice, ammo.
Skeptic’s comment is just stupid. There aren’t good roads, or police or teachers (or whatever crap liberals throw out when they want to justify confiscatory taxation) in Texas? I’ve been to many blue states and the roads are the same as in Texas.
Really? That’s pretty interesting. I’ve known a lot of people from all over who have been to Texas and claimed it was an unbelievable hole.
I really don’t think that there’s any comparison between Texas and any number of blue states. It would be like comparing a leprosy victim to a group of supermodels.
Not that there’s anything wrong with the place. Texas is probably a nice enough place to live, provided that you don’t have any other choice and your standards aren’t all that high.
I think that there was an American General who once opined that if he owned Texas and Hell, he’d prefer to live in hell and rent out Texas. Obviously, this is a compliment since it acknowledges that there are obviously some people who might be induced to pay money to live in Texas.
Personally, I have no problem with Texas. For instance, if it was a choice between catching gonorhea or aids from a violent prison anal rape, or having both my legs chain sawed off above the knee by a maniac, or living to Texas, I’d say pack up my bags, buckaroo, we are going to cowboy land.
Or, for instance, supposing the choice was going to Texas or being dragged by chains for a few miles by drunken rednecks from their pickup truck… oh wait, that is Texas. Skip that one.
The point is that Texas is OK in my books.
April 17th, 2009 at 1:15 pm
“Alaska, whose wealthy is due not to “hard work” on the part of the population or a business-friendly policy environment but to the combination of substantial natural resource wealth and a small population.”
Alaska has another advantage: huge federal subsidies. They are the third most subsidized state in the union. So when you look at their income, keep in mind that you are paying for some of that. As always, the wealthy need to be subsidized by the poor.
As for the claim that Texas only gets $.70 on the dollar, that’s just not true. It’s actually about $.95 on the dollar. It was as low as $.72 in 1983, but it’s risen since then. My state, Colorado, gets $.81 on the dollar. So you Texans can whine all you want, but we Coloradans get screwed even more. And we have to send it to Alaska so Sarah Palin can buy those pretty clothes.
April 17th, 2009 at 1:25 pm
Like most right wing conservatives, Tom DeLay sees the world entirely from within his own perspective. So, when he called Texas a wealthy state he did not mean all Texans, or even the average Texan, just those Texans who were just like DeLay — the wealthy resource-owning oligarchy that benefits from Texas’ low tax, low wage, low social service regime.
April 17th, 2009 at 1:29 pm
That said, Texas is a cool state. I lived in Austin for three years and loved it. Great music and great BBQ. Interestingly, Texas public schools have very good funding for music education. That probably explains why so many great musicians come from Texas. But music isn’t just about music. People who are trained in music do better in math and science. If you want to teach someone physics, don’t buy them a computer, buy them a violin. Texas understands that concept. Texas is nice, but it’s not as nice as Colorado (no other state is). It’s why I moved back here.
April 17th, 2009 at 1:40 pm
Tom DeLay sees the world entirely from within his own perspective.
But he also claimed that Texans “work hard.” I thought the example of George W. Bush demonstrated that “authentic Texanness” is about being lazy.
For those getting annoyed by Skeptic’s ribbing of Texas, keep in mind that DeLay had pretty obnoxious things to say about Boston when the Dems chose it as the site of their 2004 convention. Texas is due for some regular abuse.
April 17th, 2009 at 1:52 pm
I think Ted @ 37 is right, “he did not mean all Texans, or even the average Texan, just those Texans who were just like DeLay — the wealthy resource-owning oligarchy that benefits from Texas’ low tax, low wage, low social service regime.”
Delay will just pretend that things like the Colonias in South Texas don’t exist.
April 17th, 2009 at 2:06 pm
Texas is like a poor man’s Alaska, with the substantial natural resource wealth but with the wealth spread across a much greater population.
This is pretty ignorant. The GDP of Texas, in 2007, was 1.14 trillion dollars, close to nine percent of the national GDP (13.7 trillion). In this Texas stood just below California (1.8 trillion) and above New York (1.10 trillion). Taking the median income may say a lot about wealth distribution in Texas, but it’s a stupid measure of how “wealthy” the state is. Tell me again how Texas is a “poor man’s” Alaska (GDP 44 billion).
April 17th, 2009 at 2:07 pm
Fostert, Austin is a little island of New Mexico in a sea of Texans.
I went to Dallas recently. I didn’t see a single minority that wasn’t working a service industry job, or a single white person that wasn’t shopping or eating at a restaurant. I commented that slavery must have looked almost the same.
UNT’s jazz department is a big reason that bands come from Texas. Also, recording studios exist in Austin, so bands go to Austin to record and are more marketable as Texan bands than as midwestern bands. Also, there are a shit ton of Texans.
Music education in Texas also varies drastically from district to district, as it does everywhere else. Maybe federal money should go to music ed on a per capita basis. Maybe that would improve performance for all American students.
Texas is indeed a better place than its neighbors. It’s just that all its neighbors are jaw-droppingly awful places to live.
April 17th, 2009 at 2:09 pm
As a native resident of Austin let me just say that Texas is 10 times worse than your most fevered imaginings. Whatever you do, do not come here! It’s hellish and no one suffers like those of us who live in Central Texas. Stay away!
April 17th, 2009 at 2:11 pm
By the way — this means Texas’ economy would make it the fourteenth-largest in the world, larger than Australia, Ireland, Italy, etc.
Note: I think the secession talk is stupid grandstanding (albeit, grandstanding drilled into us by the mandatory Texas history course we public schoolers take). But it shouldn’t be dismissed as an operationally insignificant possibility.
April 17th, 2009 at 2:25 pm
This is pretty ignorant.
All large states have large economies. China’s one of the largest economies in the world, too, but no one calls it “wealthy.”
One could claim that Italy is wealthier than Sweden because Italy’s a member of the G7 and Sweden isn’t, but I don’t think anyone would take you seriously…. median household income, for all its flaws, is a better indicator.
April 17th, 2009 at 2:29 pm
To get to Matt’s original post and his question of why the disparity between generally rich, blue states and poorer red ones (gross generalization), doesn’t a lot of this have to do with historical patterns of economic development? States like New Jersey, Massachusetts, Connecticut, etc., passed through the stage of being resource colonies for Europe (Britain) quite quickly, developing robust commercial and financial infrastructure at a relatively early date — certainly by the mid-nineteenth century.
States like Texas, and even more so for Mississippi, Arkansas, Louisiana, etc., remained agricultural (and later petro-) resource colonies for places like Boston and Bristol quite a lot longer — up through the end of World War II, or even later. The infrastructure of capitalist accumulation — banking systems, universities, dense transportation networks — was and is comparatively underdeveloped.
To put it in Immanuel Wallerstein’s terms, blue states like NJ, MA, CT, etc. have been part of the “core” areas of the global economic system for a century or more longer than MS, AL, TX, etc, which were, until quite recently, part of “the periphery.”
April 17th, 2009 at 2:41 pm
“median household income, for all its flaws, is a better indicator.”
The central question, as I understand it, is how wealthy the state is, not what is the centerpoint value of the wealth distribution. Using the median confuses wealth with income equality. California’s median income was $56,000 for 2006-7, Texas’s $45,000 for the same period. But if you divide GDP by population, California’s GDP per person was $49,000, Texas’ 48,000 (rounded up from 47,581). What this suggests is that the *wealth* on a population basis for Texas is roughly equivalent, but distributed much less broadly than in California. If we’re talking about just policy, then California looks a hell of a lot better. But in terms of whose policy is better at generating wealth, it’s six of one, half a dozen of the other. THAT’s why the “flaws” of median income make its use in this context misleading (if not ignorant).
April 17th, 2009 at 3:05 pm
“I went to Dallas recently. I didn’t see a single minority that wasn’t working a service industry job, or a single white person that wasn’t shopping or eating at a restaurant. I commented that slavery must have looked almost the same.”
Are you trying to win an Oscar with that melodramatic crap? Seriously? You’re right, all us white Texans just sit on our autocratic asses forcing our sub-minimum wage slaves to bring us platters of roasted pig heads garnished with fresh fruit.
Sounds like a bunch of northern liberals who don’t know thing one about Texas talking about Texas, but what’s new.
April 17th, 2009 at 3:39 pm
Are you trying to win an Oscar with that melodramatic crap? Seriously? You’re right, all us white Texans just sit on our autocratic asses forcing our sub-minimum wage slaves to bring us platters of roasted pig heads garnished with fresh fruit.
In fairness, I grew up in Texas and if you went to the malls or restaurants you frequently would see a room full of white people being served by a bunch of minorities. (Which ones depend on the cuisine.) The same cannot be said about the other two places I’ve lived in my adult life, Chicago (where both the servers and the patrons would be pretty mixed) and Colorado (where everyone would be white).
April 17th, 2009 at 3:46 pm
Sounds like a bunch of northern liberals who don’t know thing one about Texas talking about Texas, but what’s new.
You’ve got to admit, it’s better than listening to a bunch of Texans who don’t know thing one about anything talking about, northern liberals.
Frankly, we’ve had so much of that the last eight years, I’m full up.
April 17th, 2009 at 3:54 pm
What about us Southern liberals? The more apposite point here is that there’s a basic blue state/red state divide in these posts in terms of opinion. We can debate the economic point with numbers, but the larger issue is whether or not people *like* Texas, and this largely resolves to whether you’ve been there or not (and if you haven’t, Texas is currently a synechdoche for the Bush administration, apparently). As someone who was forced to move back to Texas, and found out I liked it, all I can say is, you need to visit, and to recognize that Austin, while it rocks, isn’t much better than parts of Houston or San Antonio (which is to say there are great and liberal places to live there, too. Check out the aptly named “Houston, it’s worth it” campaign). Austinite exceptionalism is over-played, as is the “Texas is a redneck state” b.s.
April 17th, 2009 at 4:16 pm
Coming late to the party, but this statement must be addressed: “Absent oil, Texas would probably look more like its even poorer neighbors Louisiana (46), Oklahoma (44), Arkansas (49), and New Mexico (45).”
Matt, do you think it’s 1925? The oil industry is big in Texas, but oil isn’t. All the big fields are gone. There is one last really big gas field (the Barnett Shale) and lots of old fields where oil and gas continue to trickle out.
Your comparison of Texas to Louisiana shows particular ignorance. Louisiana actually derives more per capita income from its oil and gas production–$3400 per person in 2007 compared to $3200 per person in Texas (data from the EIA and the Census).
This doesn’t excuse Tom Delay from being an ignorant fool, but cliches about Texas floating on an ocean of oil need to be retired along with cowboys and indians. Texas has a big oil and gas industry–but most of the oil and gas is elsewhere. The industry is sustained, contra Delay, not so much by hard work but by a well-educated workforce. This (the presence of nerds) is what builds wealth anywhere. Texas has dreadful poverty and its terrible schools help insure that the poverty is a multi-generational trap. That said, its urban areas have lots of opportunity for well-educated people, particularly in the oil & gas industry.
April 17th, 2009 at 4:26 pm
My experience with Texas was a week long trade fair in San Antonio. As we are want to do, my wife and I hit most of the major neighborhoods to check the real estate. All in all, a down market town, from Anglo-ish north to Latino-ish south. This, coming from someone who spent five years in Tucson.
Although the homes seemed cheap, we weren’t factoring in the property taxes… whoa.
April 17th, 2009 at 4:47 pm
Matt,
You really, truly need to learn more about the different costs of living in different parts of the country. You say, “California is eighth” in the country in per capita income, but it’s actually down at the bottom in standard of living, above only Hawaii and DC, due to the horrific cost of living.
In 2005, I made up this table of standard of living based on the median income for a family of four divided by the cost of living from the ACCRA organization that measures cost of livings adjustments required by corporations transferring employees. The first column is the median income for a family of four in $000’s, the second is the cost of living with the national average at 100, and the third is the standard of living.
http://isteve.blogspot.com/2005/05/standard-of-living-by-state.html
Minnesota $77 100 $76
Illinois $72 99 $73
Wisconsin $69 95 $73
Colorado $72 101 $71
Delaware $73 103 $71
Missouri $64 91 $70
Kansas $64 92 $70
Virginia $72 103 $69
Ohio $66 95 $69
Indiana $65 94 $69
Iowa $64 94 $69
Pennsylvania $69 101 $68
Georgia $62 91 $68
Nebraska $64 93 $68
Connecticut $86 127 $68
Michigan $69 101 $68
Utah $62 92 $67
Washington $69 104 $67
Massachusetts $83 126 $66
Maryland $82 126 $65
New Jersey $87 134 $65
North Dakota $57 92 $62
South Dakota $59 95 $62
Tennessee $55 90 $62
Texas $55 89 $61
Alabama $55 93 $60
North Carolina $57 96 $59
South Carolina $56 95 $59
Florida $59 100 $58
Kentucky $53 91 $58
Oregon $62 107 $58
Vermont $66 114 $58
Idaho $53 94 $57
Arizona $58 103 $57
Oklahoma $50 89 $56
Nevada $63 112 $56
New York $69 124 $56
Alaska $72 129 $56
Arkansas $48 87 $56
Rhode Island $71 128 $56
Wyoming $56 102 $55
Louisiana $51 97 $52
Mississippi $47 91 $51
West Virginia $46 92 $50
Montana $49 98 $50
New Mexico $46 101 $45
California $68 151 $45
Hawaii $71 162 $44
DC $56 145 $39
Maine $60 NA
New Hampshire $79 NA
***
April 17th, 2009 at 4:52 pm
So, the standard of living in Texas was about 10% higher than in California.
Indeed, events since then show that the Texas model of few regulations and low government spending works better at dealing with a massive influx of Latin American immigrants than the California model of complex regulations and high government spending.
In Texas, there wasn’t a Housing Bubble because supply of houses doesn’t lag behind demand because there are so few regulations that slow now new construction. In California, in contrast, developers go through a multi-year ordeal to get all the permits, so home prices spike in the meantime.
April 17th, 2009 at 4:55 pm
Excuse me, I misread my own chart:
Cost of living adjusted standard of living in Texas for the median-earning family of four is equivalent to $61k per year, while in California it’s only $45k. So, Texans were about 35% better off than Californians.
April 17th, 2009 at 5:25 pm
The biggest domestic mistake of the Bush Administration — orchestrating an immigration-driven Housing Bubble — can be understood better by noting that Bush and Rove are Texans. They understood Texas, where massive Latin American immigration hasn’t been an unmitigated disaster. The low tax, low regulation system in Texas combined with vast amounts of habitable land in eastern Texas could accommodate large numbers of immigrants.
Unfortunately, Bush and Rove didn’t understand California, where both the topography (there’s a limited amount of exquisite land and a whole lot of crummy waterless or mountainous land) and the liberalism combined to bring about the Housing Bubble that set off the financial crash of the fall of 2008.
April 17th, 2009 at 6:46 pm
There’s a lot of fiddling in comparing cost of living, and almost invariably the fiddling stops when the numbers come out right for the person hauling them out. Let’s look at one such set of figures for CA and TX:
ST RANK INDEX GROC HOUSING UTIL TRANSPORT HEALTH CARE MISC
CA 49 136.6 118.5 201.3 98.9 112.3 111.3 109.0
TX 6 90.5 90.1 77.6 101.0 98.0 97.0 95.5
Hopefully this doesn’t come out looking too badly formatted; the categories across the top are state, rank, index, grocery, housing, utilities, transportation, health care, and miscellaneous. Now let’s talk about some confounding and contributing factors.
The first point is that you’ve got to compare rural to rural and urban to urban; a mere state-by-state comparison without this sort of weighting figured in is not going to tell you anything significant. Second, do these cost of living adjustments include housing? Yes, I’m pretty sure they do. You can’t include those in a cost of living adjustment unless you specifically acknowledge and correct for the housing bubble. Finally – and perhaps most fundamental over the long run – you’ve got to show those cost of living differences are the result of economic policy.
The first point is a matter of more data reduction. The second point, however, is grossly significant: while all other measurements seem to be within 10 to 20 points on this particular index, housing in TX is 77.6 while housing in CA is 201.3. And, of course, given the nature of the beast, the index that is the most heavily weighted. Taking that column out, I see that the index is then 96 for TX vs 110 for CA (unweighted). Otoh, median income for TX is $45K vs $56K for CA. Looks like California is still a better place to live than Texas by this metric – by far
And finally, while the cost of living is dependent upon economic factors within the state, not all of that cost is dependent upon those economic factors, cf the housing bubble. Of particular interest in this comparison is the fact that TX is in part responsible for the cost of utilities in CA.
April 17th, 2009 at 6:55 pm
For Steve Sailer and all the other people hung up on adjusting Texas’s low average income to account for how cheap it is to live there, I think you’re either missing the original point of the post, or else responding to what you feel is some slight against Texas. A person can decide whether the low cost of living in Texas makes it worth moving there (where the income figures make it look as though a person might have to accept a lower wage). The CoL and wage structures there are one part of “quality of life,” but certainly not all of it. And quality of life may be great in Texas – certainly lots of people seem to like it. But all of this is only tangentially related to whether Texas is a “wealthy” state, or how well it would fare as an independent entity. Steve’s table illustrates part of the fallacy of relying too heavily on CoL to “adjust” income-based wealth. Does anyone think North Dakota is basically just as “wealthy” as New Jersey? QoL may be great in ND – and better than NJ – but it’s actual wealth by measures like GDP or income is much lower.
I’m really finding the whole Texas secession talk bizarre. Texas won’t secede — talking about it seems to be merely a way for Delay, Perry, etc., to rile up the minuteman militia types.
April 17th, 2009 at 7:11 pm
Liar. Texas didn’t have a housing bubble because they have more regulations. Texas laws changed after the S&L scandal that prevented people from doing HELOCs. Better conservatives please!
April 17th, 2009 at 7:50 pm
If Steve Sailor can’t read his own handmade charts, why should the rest of us bother?
Look let’s compromise and all agree that Texas is God’s outhouse and California’s the place we want to be. Haven’t you ever watched Beverly Hillbillies?
April 17th, 2009 at 8:18 pm
Do you think Mr. Sailer believes that immigrants were heavily involved in real estate speculation, or that he just does not understand what a bubble is?
April 17th, 2009 at 11:32 pm
Good points, but I’ve never been a big fan of analysis of the median, especially after having seen how it truly impacts decision-making in regards to the poor. As far as I’m concerned, in the context of most situations, the median is meaningless in the real world.
April 17th, 2009 at 11:37 pm
Of course immigrant ethnicities were heavily involved in real estate speculation, especially in the later years of the Housing Bubble.
Check out the federal Home Mortgage Disclosure Act database for, say, the Riverside-San Bernardino MSA, where something like 8% or 9% of all the defaulted mortgage dollars in the U.S. were lost. Mortgage originations by Hispanics for home purchases in the Inland Empire went up an insane 782% from 1999 to 2006, from $1.5 billion to $13.5 billion, compared to mortgage originations by non-Hispanic whites increasing from about $5 billion to $10 billion over the same seven years.
For the numbers on Riverside-San Bernardino, see:
http://isteve.blogspot.com/2009/04/ground-zero-of-mortgage-meltdown.html
Overall for the state of California, 56% of mortgage dollars in 2006 went to minorities.
April 18th, 2009 at 8:15 am
The comments of Perry and Delay put the loyalty of Texas in doubt. For national security reasons, prudence would demand that all military contracts there be suspended and all military bases closed.
April 18th, 2009 at 11:08 am
As for the housing bubble, or its lack, in Texas… Wasn’t the bubble generally worse in the densely populated, highly urbanized regions, where you couldn’t easily sprawl out more housing?
April 18th, 2009 at 1:48 pm
[...] with Both Hands. Click here to visit the full article on the original website.Matthew Yglesias:Matthew Yglesias: Delay Claims Poorer-than-Average Texas is “Wealthy” Because Texans &ld…: A few bloggers have noted that Tom DeLay went on a strange neo-secessionist binge yesterday on [...]
April 18th, 2009 at 2:59 pm
It will be interesting to see what Texas is like in another generation, when oil has by and large been replaced, and/or plug-in hybrids get over 1,000 miles/gallon. Republicans (today style) will have much less money to do harm with. And, the Hispanic population will be much greater, so they may actually become a swing state.
April 18th, 2009 at 3:10 pm
It’s like I say all the time, how many wealthy, skilled and educated people are going to move from California or New York to Alabama or Missisippi to get the low taxes? You always have some people who will do almost anything to get a few dollars more, but for the vast majority, it’s well worth paying more for far better schools, infrastructure, parks and recreation, libraries, museums, public health, public safety, etc., etc., and investment in infrastructure, basic scientific research, alternative energy, education, etc. don’t cost money over the long run; they make far more than they cost. They are very high return investments of the kind the free market will grossly underprovide due to well established in Economics free market problems like externalities, asymmetric information, etc., etc.
April 18th, 2009 at 3:13 pm
Fegalund asks:
“Wasn’t the bubble generally worse in the densely populated, highly urbanized regions, where you couldn’t easily sprawl out more housing?”
No, it was worst of all in the exurbs, such as Riverside and San Bernardino counties of Southern California, where about 9% of nationwide defaulted dollars were lost.
California and Texas are both highly urbanized states, but eastern Texas has an abundance of mediocre land to built houses on (flat, well-watered), while California has a narrow strip of superb land (Mediterranean climate zone), under the close control of the California Coastal Commission (that’s why the exquisite Santa Ynez Valley of “Sideways” fame is practically unpopulated), and a huge outback of damn-all where lots of McMansions were put up in the 2000s, with dire results.
April 18th, 2009 at 4:13 pm
[...] Matthew Yglesias: Delay Claims Poorer-than-Average Texas is “Wealthy” Because Texans &ld…: A few bloggers have noted that Tom DeLay went on a strange neo-secessionist binge yesterday on Hardball with Chris Matthews. This segment of the interview in which he lays out his substantive rationale has gotten less attention. But DeLay’s conceit is that Texas is a “wealthy state” because of it’s right-wing business-friendly policies, a situation that he specifically contrasts with the environment in California, New York, and New Jersey which have allegedly impoverished themselves with high taxes and overregulation. [...]
April 18th, 2009 at 7:07 pm
Does anyone in California realize they have one of the highest unemployment rates in the country (10.5 %) ?
Texas has a far lower unemployment rate, which is definite measure of quality of life.
April 18th, 2009 at 8:43 pm
One problem here is that Texas isn’t a wealthy state. Its median household income of $47,548 made it 28th in the country. Below average, in other words.
A couple of fallacies here. One is using rank instead of percentage US; it’s actually possible that the Number 28 state is above average. The second is in using median income; the best measure of relative wealth, I’d argue, is per capita income; it weights wealth by population, but not by distribution. In 2008 Texas’s PCI stood at 97% of US–not as wealthy as CA, NJ, and NY, but scarcely “poor” either. It’s basically average–and as such is considerably better off than any other ex-Confederate state except Florida and Virginia. Distribution, of course, is another matter; Texas’s wealth is horribly unequally distributed, with the southern end of the state as poor as the old southern plantation belt or Central Appalachia.
DeLay doesn’t know what he’s talking about, probably because he thinks Texas is Sugarland. But neither do most of the people on this thread. Basically Texas is a huge and enormously diverse state, with large cities and sophisticated industries as well as agriculture and extraction, and a raft of problems, some peculiar to itself, some common with the rest of America. Matt, I know you have these regional obsessions, but as someone who’s spent his entire adult life studying region, I’m perpetually struck at how ignorant you are of the actual impact of region on American history and society.
April 19th, 2009 at 5:50 am
” The industry is sustained, contra Delay, not so much by hard work but by a well-educated workforce.”
Uh, yes and no. It’s sustained by being there.
Like with Chicago for commodity dealing, or the City of London for finance, or San Jose for computing, a place that has attained a critical mass in an industry remains key because that’s where the other players are and where the workforce is.
April 19th, 2009 at 7:45 am
[...] Matthew Yglesias: Delay Claims Poorer-than-Average Texas is “Wealthy” Because Texans “Work Har… [...]
April 19th, 2009 at 11:46 am
Before Delay went into politics, a close relative-by-marriage of mine, who lived in Houston, hired him as an exterminator. (He was an exterminator before he became a politician, yah.) Whatever he did didn’t work, and when she insisted that he return and actually, you know, exterminate the bugs, he cancelled her contract.
That is all.
April 19th, 2009 at 12:00 pm
Arbiet macht frei, no?
April 19th, 2009 at 1:32 pm
Texas may only get back .95 on every dollar in taxes it sends to washington, but I would guess that those .05 are more than made up for by international workings of the US government, employment at NASA and military bases, protecting of oil supplies and cargo routes around the world, FEMA, etc… Lets see the republic of texas get all that bang for the buck PLUS support an army to ptrotect them (and their “wealth”) from us godless socialist Yankees from the north.
I don’t think we should give Texas the choice, I think we should start an Expel Texas from the Union movement ASAP!
April 19th, 2009 at 8:40 pm
#38 Fostert: right on the money with the science/music observation. North Texas State has the best big band jazz study program in the world. I have a degree in music and one in computer science. The world of music and software share an enormous overlap in the way at least my mind works. Texas blues is great. Freddie King, Stevie Ray, Albert King, Albert Collins, etc. Throw in Austin City Limits, NASA and a lot of Microsoft phone tech support centers outside of Dallas. So lets not throw Texas out just because they gave us Tom Delay or that they hosted Glen Beck and the Tea Baggers last stand at the Alamo. Uhhhh. On second thought.
April 19th, 2009 at 9:42 pm
Great comment, David in Nashville.
April 20th, 2009 at 4:15 am
California unemployment rate- 11.2%
Texas unemployment rate- 6.7%
Houston is the energy capital of the world. It’s not just about oil. If cap and trade is made law, where do you think the permits will be traded?
Also, the idea that Texans feel rich because they are surrounded by poor states is laughable. We are capable of jumping on a plane and going to a blue state. I’ve been to Vegas far more often than Louisiana.
April 20th, 2009 at 5:32 am
Adjusting state income by cost of living measures really depends on the measure used. Many people rely on the ACCRA data because it is readily available and purports to be timely. However, its weights spending categories in a way that makes sense only for a family of a mid- to high level executive, assuming you eat out a lot, maintain a certain “Lifestyle”, etc.
(Or as a Canadian friend of mine once said..”Canada is an expensive place to live like an American”)
This is not meant as a criticism of anyone here or of ACCRA. Any cost of living measure will have similar problems.
And speaking as a conservative…Who cares what Ton Delay has to say about anything?
April 20th, 2009 at 9:53 am
On Texas as an oil rich state, you might want to check out “Lessons from Strange Cases: Democracy, Development and the Resource Curse in the US States” in Comparative Political Studies Aprl/May 2008.
April 20th, 2009 at 5:42 pm
#81: Vegas is a blue state? I’ve been back for 10 years and no one told me we’d seceded. Or gotten all liberal: we’re dyin’ here, and *Democrats* in the legislature refuse to consider the idea of levying a business tax. If you think that’s “blue” – oh, you’d be a normal Texan, wouldn’t you?
I was forced to live in TX twice in 20 years. I’ll never set foot there again except to cross on the way to somewhere else. What a hellhole, and I’m not talking about the landscape; I had a coworker who couldn’t publicly admit to being gay. In 1998. I’ve lived out West most of my life – Arizona, Nevada, New Mexico, Alaska, California. “Texas is the West” is b.s., as much as “Texas is unique.” Texas has more illegal immigrants (who can’t buy a plane ticket) than California, Arizona, or Florida? Jeebus. That’s almost as bad as saying that a place riddled with Winn-Dixies is “Western.”
April 20th, 2009 at 10:49 pm
[...] read this month (April edition) By bottomofthe9th From the usually more knowledgeable Yglesias: Texas isn’t a wealthy state. Its median household income of $47,548 made it 28th in the country. [...]
April 21st, 2009 at 11:47 am
On the effect of illegal immigrants on median income:
Illegal immigrants are heavily underrepresented in census counts for a variety of reasons including lack of home phone service, fear of reproach, and undocumented household. As a result of this, the median income numbers for states with higher than average proportions of illegal immigrants are likely inflated – as illegal immigrants statistically earn lower than average incomes. Meaning, if the US Census took into full account the illegal immigrant population of Texas, their median income would be substantially lower. Blaming the immigrants does not hold water in this discourse.
April 21st, 2009 at 12:26 pm
But to the bigger point,
God hear my prayer: Let Texas secede!
The US would be a MUCH better place without Texas.
April 21st, 2009 at 4:10 pm
#84. I never said Vegas was a “blue state.” I was countering the snobbish point that Texans travel to only Oklahoma and Louisiana. Learn how to read.
“I’ll never set foot there again except to cross on the way to somewhere else.” Typical.
April 22nd, 2009 at 11:39 am
The key point — as nearly everyone here has asserted or conceded — is that Tom DeLay is wrong. Not very surprising, because he’s never been right any more often than a stopped clock.
But it’s also true that, whatever its problems, Texas has had one of the highest growth rates in the country. It may be hard to prove, but low taxes and light regulation probably have a lot to do with that.
But the consequences of such policies are not all good. Texas is underschooled and underpoliced for the majority of its citizens, while the upper middle class and rich operate a separate and much better system for themselves.
The deficient New York City school system at least provides wonderful high schools for it’s most talented students (not the richest), while high schools in Texas channel a ridiculous amount of their money and energy into their football programs.
The real question is whether, when Texas becomes richer, will it start to catch up with the blue states. It can’t happen as long as the elites insist on low taxation for themselves and regressive taxes on the lower half of the population.
April 22nd, 2009 at 3:52 pm
[...] Matthew Yglesias One problem here is that Texas isn’t a wealthy state. Its median household income of $47,548 made it 28th in the country. Below average, in other words. New Jersey is second, California is eighth, and New York is nineteenth. Indeed, of the top ten states in per capita income nine are “blue” states. [...]
April 22nd, 2009 at 9:03 pm
Anyone who questions how Texas ranks should download the biennial reports put out every odd year by Sen. Elliot Shapleigh of El Paso that shows dozens of categories in which Texas ranks high on most things bad and low on most things good. It also provides sources for all rankings.
Check see the latest
April 22nd, 2009 at 9:06 pm