Is Texas Our Future?

In last week's TIME cover story, the prolific Tyler Cowen argues that "Texas Is Our Future":

So why are more Americans moving to Texas than to any other state? Texas is America's fastest-growing large state, with three of the top five fastest-growing cities in the country: Austin, Dallas and Houston. In 2012 alone, total migration to Texas from the other 49 states in the Union was 106,000, according to the U.S. Census Bureau. Since 2000, 1 million more people have moved to Texas from other states than have left.

As an economist and a libertarian, I have become convinced that whether they know it or not, these migrants are being pushed (and pulled) by the major economic forces that are reshaping the American economy as a whole: the hollowing out of the middle class, the increased costs of living in the U.S.'s established population centers and the resulting search by many Americans for a radically cheaper way to live and do business.

The full article is gated, but here's a good summary of Cowen's arguments. 

It's Good to Have Friends in Texas

The University of Texas System regents have chosen to invest $10 million in a start-up company that provides web-based advising services to university students. Perhaps a good idea, although unlike nearly all other investments of the System’s endowment, this one was made by fiat of the Board of Regents with no consultation of its investment advisors. Interestingly, the start-up is run by a man who was on Gov. Rick Perry’s re-election finance committee and by another whose father was a previous chancellor of the System (with the former chancellor being part-owner of the company).

This is one of the best examples I’ve ever seen of successful rent-seeking in the public sector (although laypeople might use a less felicitous term than rent-seeking). This blog needs a contest for the most outrageous example of this behavior, and this is my entry into that contest. So, dear readers, please share your examples in the comments section.

[HT to AC]

Paging Rick Perry's Texas Doctors

Texas Gov. Rick Perry claims to have lured many doctors to Texas, some of the many jobs he claims to have created. (The media's treatment of which we've touched on here.) At the same time, a friend on the board of a local community health center says they cannot find doctors to staff it—there is an insufficient supply at the wage they have always been paying. How can this be consistent with Perry’s claim?

One possibility is that the reduction in malpractice insurance costs raised the net wage in the private sector relative to the public sector. Even if Perry’s claim is correct, there may be more doctors than before, but relative supply may have shifted to the private sector, leading to a shortage in the public sector.

Reason No. 1,382,992 to Hate Politics

Is there any question that if Governor Rick Perry of Texas were a Democrat that all the left-leaning editorialists, economists, bloggers, etc., would be bending over backward to praise the Texas employment picture rather than bending over backward to belittle it?

The Texas Tax Holiday: A Business Subsidy Even a Kid Can See Through

The 13-year-old grandson and his 11-year-old sister are discussing the Texas tax holiday—for one weekend in August there will be no sales tax on school-related items. The grandson says stores will cut prices to compete for customers. The granddaughter, already an inveterate shopper, says no: With the tax holiday there will be so many customers that the stores will be able raise prices.

While prices won’t rise compared to the previous weekend, the granddaughter seems to understand that an inelastic demand means the incidence of (gain from) the tax cut will be on the sellers—the customers are unlikely to get much of a bargain. A subtle, Texas-style subsidy to business; but one that even an 11-year-old can see through!