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Friday, June 05, 2015

Paul Krugman: Lone Star Stumble

 "Texas is looking a lot less miraculous lately":

Lone Star Stumble, by Paul Krugman, Commentary, NY Times: Remember the Texas economic miracle? In 2012, it was one of the three main arguments from then-Gov. Rick Perry about why he should be president, along with his strong support from the religious right and something else I can’t remember (sorry, couldn’t help myself). More broadly, conservatives have long held Texas up as a supposed demonstration that low taxes on the rich and harsh treatment of the poor are the keys to prosperity.
So it’s interesting to note that Texas is looking a lot less miraculous lately... To be fair, we’re talking about a modest stumble, not a collapse. Still, events in Texas and other states — notably Kansas and California — are providing yet another object demonstration that the tax-cut obsession that dominates the modern Republican Party is all wrong. ...
Now, there’s no mystery about what is happening: It’s all about the hydrocarbons..., one of the ... big drivers of Texas growth has gone into reverse, as low world oil prices are bringing the fracking boom to a screeching halt. Hey, things like that happen to every state now and then. ...
For those who haven’t been following the Kansas story, in 2012, Sam Brownback, the state’s hard-right governor, pushed through large tax cuts that would, he promised, lead to rapid economic growth with little, if any, loss of revenue. But the promised boom never materialized, while big budget deficits did.
And, meanwhile, there’s California, long mocked by the right as an economy doomed by its liberal politics. Not so much, it turns out: The budget is back in surplus in part because the emergence of a Democratic supermajority finally made it possible to enact tax increases, and the state is experiencing a solid recovery. ...
Will anyone on the right take heed? Probably not..., belief that tax cuts are a universal elixir that cures all economic ills is the ultimate zombie idea... Nothing that has happened in the past quarter century has supported tax-cut mania, yet the doctrine’s hold on the Republican Party is stronger than ever. It would be foolish to expect recent events to make much difference.
Still, the spectacle of the Texas economy coming back to earth, and Kansas sliding over the edge should at the very least make right-wing bombast ring hollow, in the general election if not in the primary. And someday, maybe, even conservatives will once again become willing to look at the facts.

    Posted by on Friday, June 5, 2015 at 08:54 AM in Economics | Permalink  Comments (21)


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