A lot of great discussion generated from this post. A reader writes:
Yes, strong military presence helps San Antonio, but the city is proving a magnet for foreign investors. The new Toyota plant was a huge boon to local commerce. The city is embracing Mexican investment much as California welcomed Asian commerce in the 70s and 80s. It's a real win-win for everyone.
South-central Wisconsin, though, has struggled for years. Long before GM, the area had been plagued with plant closures. Local farmers have also found it hard to compete with corporate agribusiness.
It is a common error - even among natives - to assume agriculture and energy are the main drivers of the Texas economy. While energy is still important, ag is not (as you can see in this chart). After a major energy bust in the late 80's, the state has diversified a lot, particularly in technology, finance, etc.
I personally do not know all the reasons why we are weathering the recession a bit better than other states, but at least part of it is that Texas is a low-tax, low-service state. While this is not good for some of our livability indicators (poverty rates, etc.), it does mean that when the economy goes south we have a lot fewer government commitments to cut back on. And of course, places like California appear to have gone completely crazy in spending over the past decade; it's not hard to appear a paragon of fiscal sanity compared to the goings-on in Sacramento.
Your correspondent was incorrect to say, "Texas years ago enacted strict laws governing exotic and aggressive mortgages (e.g. no IO loans, no 10% down, maybe no liar loans either)." I own two houses and put 5% down on the first on, 10% down on the second (all within the last 4 years). I agree with the thrust of the post - I haven't felt the recession too severely here in Austin, aside from the lighter commuting traffic - but I don't think we can thank Texas banking laws for that.
I have to agree with your readers about Texas. I sometimes find myself reading news about the economy with the same detached curiosity as I would a coup in a foreign country.
What it all boils down to is the diversity within the state. We have a large immigrant and native population. We have an ecology that ranges from deserts to forests to prairies to coastal towns. With regard to industry, we have a strong presence in agriculture, energy, finance, technology, medicine, manufacturing, and transportation. We have solid communities that span between bohemian liberal and evangelical conservative.
The state has throughout recent years weathered the oil bust, the S&L crisis, and the dotcom bust - and came out the other side of each as strong as ever. We do have our fair shar of problems, but they're mostly self-inflicted. Texas really does have it's own economy, and while the recession is certainly having an effect, we're doing quite well in the grand scheme of things.
It's not a bad place to live. Though it's hotter than hell in the summer...
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