Texas Beats Out Michigan When It Comes To Jobs

Story first appeared in the Detroit Free Press
In the global contest for jobs and economic growth, Texas has spent the last decade eating Michigan's lunch.
But who deserves the blame -- or, if you're a Lone Star State partisan, the credit?
Is Jennifer Granholm, who served as Michigan governor from 2003-10, the person most responsible for this state's lost decade? Or does Texas' superior economic performance have more to do with the stewardship of Rick Perry, the Republican who succeeded George W. Bush as Texas' governor in 2000, remains in office and recently became the newest entrant in the crowded GOP presidential race?
One possible answer, as we approach the 10th anniversary of 9/11, is that we ought to pay more attention to the pivotal role of Osama bin Laden -- a man whose contributions to both Texas' ascent and Michigan's decline arguably eclipsed that of either state's governor.
You probably thought you'd heard the last of bin Laden earlier this year, when his death in a one-sided firefight with Navy SEALS briefly provided Americans with a welcome distraction from their own deteriorating standard of living.
But the legacy of the 9/11 attacks he masterminded lives on -- and nowhere has the continuing impact of those attacks been more glaring than in Texas and Michigan.
Reversal of fortune
In the years immediately preceding 9/11, American consumers were spending money on all sorts of things, especially cars and trucks. At the end of 2000, nearly three-quarters of U.S. adults expected to make a large purchase within the next 12 months; 23% were specifically in the market for a car or truck.
With gasoline prices hovering around $1.25 a gallon, many of those shoppers coveted one of the shiny new SUVs on which Detroit's domestic automakers had mortgaged their (and Michigan's) future.
Then, on Sept. 11, 2001, bin Laden's minions threw a wrench into everything. The economic turmoil spawned by the attacks rattled Americans' confidence in their immediate economic prospects as well as their nation's security. By year's end, most of the large purchases they'd planned were on hold.
It was the beginning of a more-or-less steady erosion of consumer aspirations; by the end of 2010, only 12% of American adults expected to purchase a new vehicle within the next year.
Michiganders may be less familiar with how the economic trends set in motion by 9/11 affected Texas, but the impact there was equally profound.
The price of crude oil, which hovered around $30 a barrel in 2011 dollars when then Lt. Gov. Perry was promoted to the governor's mansion in December 2000, soared to $150 before leveling off in the $80-$90 range. Besides resuscitating Texas' oil industry, the long-term increase in energy prices incentivized the exploitation of new technologies to extract natural gas. Today, energy industries pump more than $300 billion a year into the Texas economy.
The protracted wars in Iraq and Afghanistan set in motion by the 9/11 attacks were more good news for Texas, which is home to a disproportionate number of large military bases. Though you shouldn't expect to hear much about it from Perry partisans, federal spending in Texas doubled during his first decade in office, exceeding $200 billion a year by 2010.
Post hoc fallacy
OK -- so maybe I've stacked the deck a little here. Plenty of other factors have contributed to Texas' dramatic jobs bonanza -- population growth, and specifically population growth fueled by immigration, is the one economists mention most often -- and the residual impact of 9/11 may be fading even as Texas continues to outperform most other states by many economic metrics.
My point is that we voters have to be very careful about confusing coincidence with causality, whether we are trying to decide which governor provided better economic stewardship or which industries and states have benefitted most from the myriad forces unleashed by 9/11.
The conditions that give rise to prosperity in one state -- or abruptly curtail the economic prospects for residents of another -- are complex, and many of them lie outside the reckoning or control of policymakers.
But if political partisans are serious about understanding how we got where we are today, they may find the trail leads, at least in part, to the watery grave of a madman who wished only the worst for Americans of every political stripe.