First, the story of how 37% of all new net jobs since the recession started:
Using Bureau of Labor Statistics (BLS) data, Dallas Fed economists looked at state-by-state employment changes since June 2009, when the recession ended. Texas added 265,300 net jobs, out of the 722,200 nationwide, and by far outpaced every other state. New York was second with 98,200, Pennsylvania added 93,000, and it falls off from there. Nine states created fewer than 10,000 jobs, while Maine, Hawaii, Delaware and Wyoming created fewer than 1,000. Eighteen states have lost jobs since the recovery began.So why has Texas been so successful at keeping and growing jobs?
Capital—both human and investment—is highly mobile, and it migrates all the time to the places where the opportunities are larger and the burdens are lower. Texas has no state income tax. Its regulatory conditions are contained and flexible. It is fiscally responsible and government is small. Its right-to-work law doesn't impose unions on businesses or employees. It is open to global trade and competition: Houston, San Antonio and El Paso are entrepôts for commerce, especially in the wake of the North American Free Trade Agreement.But, unwanted success is even worse than failure, so the EPA is going after Texas in a way vitually guaranteed to destroy jobs:
Based on his conversations with CEOs and other business leaders, Mr. Fisher says one of Texas's huge competitive advantages is its ongoing reform of the tort system, which has driven litigation costs to record lows. He also cited a rule in place since 1998 in the backwash of the S&L debacle that limits mortgage borrowing to 80% of the appraised value of a home. Like a minimum down payment, this reduces overleveraging and means Texas wasn't hurt as badly by the housing crash as other states.
The U.S. Environmental Protection Agency on Wednesday rejected air-quality permits for refiners and other industrial plants issued by Texas, saying they didn't meet federal environmental standards.So, will the new regulations result in better air quality? Well, no...
The federal agency proposed striking down the so-called flexible air permits issued by the Texas Commission on Environmental Quality, or TCEQ, last September, saying they violate the Clean Air Act. Under the act, all states have to develop a state implementation plan to meet federal requirements to protect public health. The move won't require oil refiners, chemical and plastics makers, and others to shut their plants immediately, but will force companies to meet stricter regulations in order to earn new, more detailed permits.
TCEQ Chairman Bryan W. Shaw said in a press release that the flexible-permit program complies with federal regulations and that "air quality could actually suffer" if the program is cut. The Texas Oil & Gas Association also criticized EPA's decision.So, more time and money will be spent, but no more will be achieved. The industries will spend more money to achieve the same, or even less. Profits will decline (or prices will go up, take your pick). Government will grow a little, with more regulations to enforce. And their hunger for control will not be sated.
The state's flexible air-permit program, launched 16 years ago, caps emissions of air pollutants from an entire facility, but the EPA wants to scrutinize and restrict emissions from every polluting unit of a plant. Stricter rules are expected to add costs for companies holding flex permits and limit operational flexibility.
"I don't think anybody is going to shut down; it's just more of an environment-permitting nightmare," said Richard Alonso, counsel for Bracewell & Guiliani LLP, a law firm representing manufacturing, refining and electric utility companies.
It's probably not true that the EPA actively wants to stop the job growth. It's just that they don't care whether or not it occurs.
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