In the early days, these bold newcomers who carved out a future in a wild-and-woolly land called themselves by various names — Texians, Texasians, Texicans, and Texonians, before finally settling on Texans.
In his book “Lone Star,” T.R. Fehrenbach distills the Texas spirit into one simple sentence: “Men who exist get overrun by men who act.”
That may not seem fair or just by today’s standards, but it was the way it was.
A “cult of courage” was developed, where work and risk taking was encouraged and celebrated. “We chose this land; we took it; we made it bear fruit,” Fehrenbach wrote.
Now this might sound a bit crazy, but I still detect that cult of entrepreneurial courage. I moved to Texas less than a year ago, for essentially the same reasons as the early settlers – to fashion a better life, a new start in a place where more opportunities presented themselves.
An Epic Adventure
The chances of me meeting a violent death here are quite remote when compared to the early frontiersmen. But the desire to scratch and claw and build upon a future – I started my national site selection consulting business in Texas – is a tradition here.
And while I might not have the long pedigree, I truly feel like I am a part of a continuing saga, an epic adventure.
This past week, I attended the annual meeting of the Texas Economic Development Council in Fort Worth. There I had the unexpected pleasure of listening to Richard Fisher, president and CEO of the Federal Reserve Bank of Dallas. I say unexpected because I was fully prepared to listen to another arrogant banker. Instead, I heard what I thought was wisdom and truth mixed with a touch of humility. I was touched.
I knew that I liked Fisher when he said he was neither an “R” or a “D”, but politically indifferent. Indeed, you get the distinct impression that he is disdainful of both parties for engaging in partisan politics instead of putting the interests of the country first.
Said Fisher about Congress: “It’s time for them to get their act together and figure out a way to fill up the sinkholes.”
This from the same man who said: “My generation and the people we put in office, for whom we all voted, have basically stolen from our children, our grandchildren, and our great-grandchildren, and something has to be done about it.”
A Real Maverick
Fisher has a history of speaking “the straight skinny” and frequently casts dissenting votes as one of the 17 people who currently make up the Federal Open Market Committee, which is chaired by Ben Bernanke. The FOMC makes decisions regarding interest rates and the nation’s money supply. Fisher dissented at the FOMC’s Sept. 20-21 meeting against the group’s decision to push down longer-term interest rates.
But I really straightened up in my chair when Fisher said during a question and answer session that he sympathized with the protestors of the Occupy Wall Street movement. It would have been so easy for him to dismiss the protestors as clueless, leftist kooks. Instead, he saw validity to their purposes.
“I’m somewhat sympathetic” to the demonstrations, Fisher said. “We have too many people out of work. We have very uneven distribution of income.”
Yes, he really said that.
But Fisher was at the TEDC conference to speak about Texas and so I am here to report.
“The Texas economy has a long tradition of outperforming the nation—a tradition matched only by our long-standing reputation for modesty,” Fisher told the gathering of economic developers.
Even during the past three gut-wrenching years, Texas has fared better.
“Texas was last into the recent frightful recession and one of the strongest coming out. In 2008, the nadir of the downturn, we were still creating jobs here. In fact, while the U.S. lost 3.1 million jobs, Texas added 45,000 private-sector jobs in 2008,” he said.
Texas finally got walloped by the recession in the fall of 2008, losing 362,000 jobs in 2009, but didn’t stay down long.
“We recovered quickly and at a faster pace than the rest of the nation. We added jobs in 2010, and we have continued to add jobs in 2011,” Fisher said. “So far this year, we have added 171,200 jobs (including 13,700 jobs in August) and grown at an annual pace of 2.5 percent―more than twice the national average of 1 percent.”
Fisher predicts moderate job growth in the Lone Star State, “but only if we can preserve the image and reality of Texas’ uniqueness as a place to do business and grow profits.” He said far too many Texans still remained out of work, with a state unemployment rate of 8.5 percent.
From Boots to Suits
So what makes Texas different? According to Fisher, Texans “don’t linger long on the old and we are quick to usher in the new.”
“As I see it, the key to Texas’ success lies in our ability to change to a rapidly globalized and competitive economic landscape. Texas’ transition from a resource-based economy built on cattle, cotton and oil to a knowledge-based economy built on human capital and innovation is our greatest success. We have made a fine transition from cow chips to computer chips and from boots to suits.”
But as Mr. Fisher knows fully well, many of us do wear dress boots with our suits. His point, however, that change comes quickly in Texas is reinforced by the facts.
In the 1930 census, agriculture represented 39 percent of all jobs in the state. Today, it is less than 2 percent. Despite this decrease, Texas is currently No. 1 in ranching and No. 2 in crop production.
In 1981, oil and gas extraction made up 18 percent of the state’s output, Fisher said. Today, oil and gas extraction contributes about 9.5 percent to state output and employs only about 2 percent of the jobs. So it is a myth that the Texas economy has been buoyed largely by the oil and gas industry.
As in most parts of the country, manufacturing jobs have eroded in Texas. In 1970, 15 percent of Texas jobs were in manufacturing. Presently, manufacturing accounts for only 7 percent, although output has fallen from 18 percent to 15 percent. So it is principally the increased efficiency of manufacturing due to technological advances that has created an environment where fewer people are needed on factory floors.
“This has allowed labor to shift to other areas of the economy that are in high demand as our population has become wealthier. These include health care, education, finance, professional business services and leisure services,” Fisher said.
Why We Came
Fisher provides a laundry list of reason why Texas works better. They include low tax and regulatory burdens, flexible labor markets, open land availability, tort reform, great seaports, airports and transportation and communication infrastructure, and “the fact that people come here to work and better themselves.”
“A worker can move from the Silicon Valley or Boston to Dallas or Austin or Fort Worth or Houston or San Antonio or El Paso, and both the company and the worker are better off. The company can pay him, say, 15 percent less, and yet the worker, who spends a significantly smaller amount for the same home he had in Silicon Valley or Boston, is taxed at lower rates, finds the cost of living cheaper and sees his real income increase by a significant amount,” Fisher said.
This “pull factor” has been a key component of the net immigration of workers and job-creating businesses. It’s why I’m here.
Storm Clouds on the Horizon
But this is not the land of all peaches and honey. Dark clouds are looming and future prosperity of Texas could be threatened unless action is taken. The issue: Education.
Texas is dead last in the percent of the adult population that graduated from high school, 37th in percent of population enrolled in degree-granting institutions, 35th in academic R&D and 41st in science and engineering degrees awarded.
“The world of today and tomorrow is driven by digits, not widgets. We will continue to move up the value-added ladder and stay ahead of the competition―not just from other states, but from China and the new emerging powers―only if we are able to nurture and harness Texas brains,” Fisher said.
“We must not lose track of this simple, unalterable, indisputable, critical fact: We have done well so far; our economy is mighty. But to stay ahead of the curve and compete in tomorrow’s global marketplace, Texas must better educate its population.”
So there you have it – the straight skinny on Texas. It is a land of opportunity but also a land where things could turn wrong in a hurry. It is populated by risk takers, who have historically been able to adapt and change and make good things happen.
I have a fondness for many places in this great country. But until further notice, I am pursuing the dream of Texas. I am, in fact, a Texan.
Need a partner in results-oriented site selection? Contact me, Dean Barber, at 972-890-3733 or at email@example.com Barber Business Advisors, LLC is a site selection and economic development consulting firm in Plano, Texas. Please visit our website at www.barberadvisors.com