The recession hasn't messed with Texas like it's messed with most large and prosperous states, but recent economic events are giving the Lone Star State some jitters. The energy and aviation manufacturing powerhouse is getting slammed with wave after wave of bad news.
First, as BP's biggest U.S. employment center, Houston landlords are sweating the company's long-term plans. Second, Continental Airline's merger with United will move many office jobs to Chicago. Third, Chevron, which keeps offices in the same skyscraper as Continental, has announced plans to downsize. Suddenly the largest city in the healthiest large state in the country has an iffy two-year prognosis in the office market, and the larger economy in general. WSJ reports and expands on the story.
It's impossible to say how these developments will cut into the larger metro economy. But this news is an important reminder that while it's important for cities to be financially prudent and create a competitive system of taxes and regulations and so forth, sometimes cities do well because they're just flat-out lucky. Houston is getting unlucky with the oil spill and the airline merger.
A few hundred miles west, San Antonio, perhaps the most recession-resilient city outside D.C., is getting lucky. Like Houston, the Alamo City benefits from a low-tax/low-regulation business environment in Texas. Like Houston, it's avoided the residential real estate undertow that dragged California and Florida out to sea. But unlike Houston's recent woes, San Antonio got lucky at the start of the recession. Just as corporate conventions sagged, the city landed a 70,000-person Alcoholics Anonymous event that was years in the works, awarding the city with its largest convention ever. And just as commercial real estate was about to belly-up, the city got a $2.2 billion project from the federal government under a military realignment program to expand its Army medical center.
Good policies make a difference, but providence matters, too.
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