Texas, the jobs engine? Or Texas, the jobs-laundering engine?
by Beverly Mann
Update: Business journalist Merrill Goozner has a terrific in-depth deconstruction of the so-called Texas Miracle at TheFiscalTimes, at Perry’s Texas Miracle less than meets the eye, published last Friday.
Texas, the jobs engine? Or Texas, the jobs-laundering engine?
An op-ed piece mentioned by a reader two weekends ago in the LA Times, called Texas, the jobs engine? by Rick Wartzman, executive director of the Drucker Institute at Claremont Graduate University, begins:
For the last few weeks, I’ve been unable to get a startling statistic out of my head: Since the recession officially ended, Texas has created more than 4 of every 10 new jobs in America.
That’s right, Texas: the reddest of red states, home to gun lovers and school textbooks that openly question whether the Founding Fathers intended for the separation of church and state. I am no ideologue. Still, whenever I get political, I tend to tilt reflexively to the left, making the jobs figure a bit disconcerting at first.
But there’s no escaping it. The number is real. Which means that if you care about putting people back to work at a time when nearly 14 million in this country are unemployed, maybe Texas has something to teach us.
Wartzman goes on to say that according to the Dallas Fed, Texas, which he says accounts for about 8% of the nation’s economy, generated 43% of the net new jobs in the U.S. from June 2009 through May 2011. He then notes that aspects of Texas’s boom cannot be optionally replicated in other states. The booming energy industry and the high export demand for commodities such as beef and cotton.
He then cites some longstanding government policies—both conservative and liberal ones. Conservative: Low tax rates, the downside of which, he notes, is a smaller safety net, and “right-to-work” laws, resulting in Texas’s tying Mississippi as the states with the biggest percentage of workers paid at or below the minimum wage. Liberal: Strict lending guidelines enacted in the wake of the S&L crisis of the 1980s that require Texas financial institutions “to keep larger capital reserves and take on fewer problem mortgages than were seen elsewhere in the country,” and which spared the state from the real estate boom and bust that hit most of the rest of the country. And beginning 25 years ago, the state began significantly increasing its education funding and therefore the quality of its workforce.
Then the pay-off paragraph, so to speak:
At the same time — and this, of course, is the tough part for those on the left to swallow — it is clear that the state’s limits on taxes, regulations and lawsuits are contributing to the job machine. “The most important thing I think that’s happened to us is tort reform,” Fisher, the Dallas Fed president, has said. He added that when John Deere and other companies have decided to hire in Texas, they’ve been largely driven by steps the state has taken to cap non-economic damages in medical malpractice suits and to make it harder to bring product liability and class-action cases.
Okay. Are these folks claiming that the companies that are hiring in Texas decided to hire because of Texas’s low tax rates and its “tort reform” law? Or are they saying that these companies needed to hire more workers, and chose to expand in Texas rather than in, say, California or Michigan or Ohio, because of Texas’s low taxes and tort reform?
Setting aside for a moment the fact that Texas’s tort laws have little effect on lawsuits for injuries from their products in other states—injured plaintiffs can sue in the state where they purchased and used the product and were injured by it, and it’s that state’s tort laws that apply—and that physicians apparently aren’t flooding the Texas landscape by moving there from other states, what these people actually are saying is that Texas , as the lowest-common-denominator state for pro-business laws, is attracting businesses from other states and is spurring hiring there that otherwise would occur in another state.
Fine. But if the issue regarding job losses and job growth is an aggregate one for the country as a whole, rather than which states lost the most jobs to lower-common-denominator states, then why praise Texas as a national jobs creator? It’s not, at least not as a result of its government policies. The claim to the contrary is like saying that South Dakota and North Carolina “created” all those credit-card-company jobs in recent decades, as if those jobs wouldn’t have been created, albeit disbursed more throughout the country, if those two states hadn’t enacted such credit-card-company-friendly laws.
So when Rick Perry rolls out his presidential primary campaign and starts lauding all those Texas job gains, remember to ask what states those jobs otherwise would be in were it not for Texas’s chamber-of-commerce legislature’s largesse of recent years. I’m sure y’all will.
Perry wants the US to poach jobs from other countries the same way Texas poaches jobs from other states: low taxes, low regulation, right-to-work, tort reform.
There is also an economic concept called “Dead Weight Loss.” This is where the aformentioned factors push up the cost of business, but not enough to outweigh the inefficiencies associated with moving to a lower cost location. The result is no jobs created.
It really depends on the city. In Houston, zoning remains flexible for, say, finding a lot where one might be able to set up a barbecue operation. But in many towns, commercial zoning is limited to the primary commercial locations only, making it difficult to people with little money to get a small business started. In Austin, ten years ago, I saw the city purposely allow a restauranter pour thousands into a new restaurant, only to deny zoning rights and break the restauranter financially.
Please explain, Sammy, how “tort reform” will help poach jobs from other countries, given that, for products liability, it is the tort law of the state in which the product was sold, or the state in which the injury occurred, that applies, not the state or the country in which the product was manufactured. And while you’re at it, please explain how statutes that cap medical malpractice awards creates jobs? Are doctors moving in droves from China and Bangladesh to Texas and hiring a lot of staffers?
And as for the low taxes, low regulation, right-to-work, argument, it’s certainly true that we could reduce federal, state and local governments to the size of Bangladesh’s. But then, we’d quickly have a society that resembles Bangladesh’s. Which, as New York Times columnist Nicholas Kristof pointed out in a column recently, is where the Tea Baggers and their political candidates, of which Perry is one, want to take us. (Kristof used Pakistan, not Bangladesh, as his example.)
Beverly,
Please explain, Sammy, how “tort reform” will help poach jobs from other countries,
National tort reform.
But then, we’d quickly have a society that resembles Bangladesh’s.
The Texas solution doesn’t require government or safety net to shrink. Do you know what % of Federal tax revenues come from the corporate tax? A: 10%. So you could halve the corporate tax rate and lose only 5% of revenues in a static analyis. In a dynamic analyis, Federal corporate tax collections would probably increase much more than 5% due to companies shifting profits from higher tax countries to the US’s lower corporate rate, as well as locating plant and equipment here. And reducing burdensome regulation is virtually free.
Oh, and saying “the US will turn into Bangledesh” is far beneath you usual excellent level of discourse.
This article seems flawed for a couple of reasons, but foremost amongst them is the supposition that companies would be creating jobs within their own states at a higher rate if Texas was not so business friendly. While it is possible that this is true in some circumstances, it is likely that many companies would not expand as much or at all without the profitability promised by Texas’ pro-business mindset. If anything, this reinforces Rick Wartzman’s argument, if other states want this increased expansion and job growth they should emulate more of Texas’ techniques.
I agree that tort reform is not the issue, but the cost of creating jobs is important. This article assumes a zero sum employment environment. In fact the total number of jobs will be affected by the cost of labor and the cost of doing business in general. If hiring people becomes more expensive, businesses will look to automation, or reducing services, or even shutting down. Businesses won’t create jobs that aren’t profitable, for that you need government.
Even if the article is correct and Texas is “poaching” jobs, what is the proposed solution? Make companies in Texas pay the same wages as Massachusettes? Seal the borders and forbid outsourcing to Mexico, China, or Poland? Nationalize the economy to ensure maximum employment?
OK, Sammy, look. Maybe I shouldn’t have asked YOU to explain how tort reform will help poach jobs from other countries. I should have asked Federal Reserve Bank of Dallas President Richard Fisher to explain why, given that it is the products-liability tort laws of the state in which the product is bought or where it is used (i.e., where the injury occurred) that apply, irrespective of where—in what state, what country, the product the product was manufactured—he claims, according to the Wartzman article, that “[t]he most important thing I think that’s happened to us is tort reform,” and that John Deere and other companies that have decided to hire in Texas were largely driven by Texas statutes capping non-economic damages in medical malpractice suits and making it harder to bring product liability and class-action cases.
Then again, Fisher probably doesn’t read AB. So you’ll have to stand in for him.
Fisher obviously has no background in tort law; he’s an economist (I assume), not a lawyer. And he’s been sold a bill of goods by corporate CEOs. But let me repeat, as clearly as I can: Since what matters for products liability is where the product was bought and used, or where the injury occurred, NOT where the product was manufactured. So if a product is made in Texas or in China, but the product was sold in Michigan to someone who then was injured by in Michigan, it is Michigan’s law tort law that applies. The claim that Texas’s tort laws have created jobs in Texas, and that national tort reform would bring back jobs from overseas, is preposterous. And I’m still at a loss to understand the supposed basis for the claim about medical malpractice caps. Are these folks claiming that that statute has lowered medical insurance costs? Has it?
As for the rest of your post, I appreciate the compliment about my usual level of discourse, but I do suggest that you read Nicholas Kristof’s NYT June 4 column titled “Our Fantasy Nation? at http://www.nytimes.com/2011/06/05/opinion/05kristof.html. My stooping to Kristof’s level of discourse shouldn’t […]
No, the article does NOT assume that creating jobs is a zero-sum game. The article takes the claims made in the quotes in the Wartzman article and says that the arguments Wartzman buys seem to suggest that Texas’s jobs growth, to the extent that it’s the result of Texas’s pro-business laws, is a zero-sum game. Creating jobs nationally should be the goal of the federal government. If Texas’s jobs growth has done that, it certainly isn’t evident from the Wartzman article or, for that matter, anything else I’ve read on the subject.
This article seems flawed for a couple of reasons, but foremost amongst them is the supposition that companies would be creating jobs within their own states at a higher rate if Texas was not so business friendly. While it is possible that this is true in some circumstances, it is likely that many companies would not expand as much or at all without the profitability promised by Texas’ pro-business mindset. If anything, this reinforces Rick Wartzman’s argument, if other states want this increased expansion and job growth they should emulate more of Texas’ techniques.
I’m at a loss to ferret out how, exactly, Texas’s pro-business mindset has created net job growth for the country. Best as I can tell, it amounts to: Texas pays lower wages because it’s a non-union-friendly state, so companies that have unionized employees elsewhere or non-unionized employees in other countries are expanding their workforces in Texas. Which for a few reasons is an interesting claim—not least among them that (at least from what I’ve read) other so-called right-to-work states have no comparable per capita jobs increases. Oh, and that the state has lower corporate taxes.
As for the lower corporate taxes, energy-industry tax revenues have allowed it; Texas spends more than most states per capita on education, and the state has added rather than laid off state and local government employees, according to business journalist Merrill Goozner’s in-depth deconstruction of the so-called Texas Miracle at TheFiscalTimes, at http://www.thefiscaltimes.com/Articles/2011/07/08/Perrys-Texas-Miracle-Less-Than-Meets-the-Eye.aspx?p=1.
OK then, let me rephrase, your analysis seems to assume a zero sum situation. You say you are at a loss for how TX has created net job growth for the country. There are two ways, one is by reducing pressure to outsource jobs. The US has many advantages in the world marketplace and if there are a few states that strive to remain competitive, that will decrease pressure to outsource to Mexico, etc. The second way is by encouraging the creation of new jobs. Suppose that a low skill worker can produce 10 units of value for an employer. If the cost of employing that worker is 9 units in TX and 11 units in CA, TX will employ that person and CA will not. Is it so hard to understand that heavy burdens on employers discourage employment? If it is not a zero sum game, what sort of policy do you suppose will improve the job market?
Would this article have been written if Governor Rick Perry was not considering a run for president?
I am not a fan of Perry nor are many citizens in Texas, but this article doesn’t demonstrate much understanding of how the State of Texas has achieved economic success and growth since 1990.
It might help to start with some quick facts about Texas followed by a review of business statistics in Texas.
There is plenty of information available on economic development initiatives, site selection, and employment growth in Texas. The results speak for themselves. It’s obvious that Texas is serious about economic development.
This article, in my opinion, raises the issues of whether one believes in capitalism, entrepreneurship, and success in competition. It’s obvious that the State of Texas believes in such principles. There are many writers and others in our society who do not really share such beliefs based on their various statements including polling results. That is becoming more clear in some of the writings observed during the past two years. In my opinion, they’re not going to topple the existing U.S. economic system nor eliminate economic growth in Texas with socialist or command economy alternatives to capitalism, entrepreneurship, and success in competition. But they will try.
I expect that we would be having a different type of discussion about the economic successes in Texas if this was an economic development blog monitored by professionals in that field.
ATRA has identified Texas initiatives on tort reform, and outlined some of the benefits of the tort reform actions that Texas has undertaken. Those who want to dispute the benefits of tort reform in Texas are welcome to tackle this summary.
TEXAS: Tort Reform Spurs Economic Growth; Aids Access to Healthcare
In 2003, the Texas state Legislature passed H.B. 4 to further reform the state’s civil justice system. The bill addressed issues such as: limits on noneconomic damages; product liability reform; punitive damages; medical liability reform joint and several liability; and class action reform. Voters also approved a constitutional amendment, Proposition 12, in 2003, which eliminates potential court challenges to the law that limited noneconomic damages to $750,000. Since the enactment of H.B. 4 and the subsequent passage of Proposition 12, Texas has made great strides in growing its economy and providing jobs and accessible healthcare to its citizens.
Success in the business community:
– Texas was awarded the 2004 Governor’s Cup award for the largest number of job creation announcements (Site Selection Magazine, 3/05).
– Texas also was selected as the state with the best business climate in the nation by Site Selection Magazine (Site Selection Magazine, 3/05).
Successes in the medical community:
– The American Medical Association dropped Texas from its list of states in medical liability crisis (Houston Chronicle, 5/17/05).
– Malpractice claims are down and physician recruitment and retention are up, particularly in high risk specialties (Houston Chronicle, 5/17/05).
– The five largest Texas insurers cut rates, which will save doctors about $50 million, according to the AMA (Houston Chronicle, 5/17/05).
– Malpractice lawsuits in Harris County have dropped to about half of what they were in 2001 and 2002. There were 204 cases filed in 2004, compared with 441 in 2001 and 550 in 2002. There were 1,154 lawsuits filed in 2003, attributed to attorneys trying to file before the new law took effect (Houston Chronicle, 5/17/05).
– Harris County has seen a net gain of 689 physicians, an 8.4 percent increase, according to the Texas State Board of Medical Examiners (Houston Chronicle, 5/17/05).
– Texas Medical Liability Trust, the state’s largest liability carrier, reduced its premiums by 17 percent (Houston Chronicle, 5/17/05).
– Fifteen new insurance companies have entered the Texas market (Associated Press, 2/16/05).
– Health Care Indemnity, the state’s largest carrier for hospitals, cut rates by 15 percent in 2004 (Associated Press, 2/16/05).
– American Physicians Insurance Exchange and The Doctor’s Company also reduced premiums (Associated Press, 2/16/05).
– The American Physicians Insurance Exchange saw a $3.5 million reduction in premiums for Texas physicians in 2005. In addition, beginning May 1, 2005, 2,2000 of the 3,500 physicians insured by the company would see an average drop of 5 percent in their premiums (The Heartland Institute, 5/1/05).
In 1995 the Texas Legislature passed a series of bills to reform the state’s civil justice system. These bills addressed: limits on punitive damages, joint and several liability, sanctions for filing frivolous suits, limits on venue shopping and out-of-state filings, modifications to deceptive trade practices and medical malpractice reform.
According to the study, The Impact of Judicial Reforms on Economic Activity in Texas, the total cost of the Texas tort system in 2000 was $15.482 billion. Without reforms, it is estimated that the total cost would have […]
Aren’t you getting a little dramatic with: … with socialist or command economy alternatives to capitalism, entrepreneurship, and success in competition.
DoLB, most conservaives would agree with MG. We hear words and phrases like Workers rights, the tax the rich, government solutions that take ownership (GM, AIG and Citigroup), governement solutions that turn the healthhcare industry into a government command, and the ever growing demands to expand government control via regulation, and we hear communism, or socialism.
When do we hear terms supporting entrepreneurship, and success in competition?
Not to step on Beverly’s post, but to add to it…
So a quick search suggests there are counters to the raw numbers or at least the raw numbers via census need some “*” after them:
Bloomburg Business Weekly http://www.businessweek.com/news/2011-07-08/closer-look-proves-the-texas-path-to-job-growth-isn-t-best-view.html
“Texas is one of the youngest U.S. states, with a median age of 33, almost four years below the national average. That means it is blessed with a consumption-driven economy,…In high-skill professions, such as management and petroleum engineering, Texas salaries often exceed national norms. For unskilled labor and service employees, austerity rules. The Texas Workforce Commission, a state agency, says hourly workers have earned 4 percent to 7 percent less than their counterparts nationwide for most of the last decade…Texas’s wage gap “matters a lot” in fueling job growth, says Mark Dotzour, chief economist at Texas A&M’s Real Estate Center,..companies are leaving higher- cost states and moving to places where they think their expenses will be lower. Texas is working that trend to its advantage, but this is hardly a formula that the other 49 states could, or should, copy.”
Star Tellegram http://www.star-telegram.com/2011/06/14/3152456/story-of-texas-job-growth-not.html
“But the explanation is not that simple.
The state also has immense natural resources, which benefit greatly from rising energy prices and breakthroughs in natural gas production. Exports are exploding.
As for taxes, the state actually raised taxes almost 25 years ago to invest in education. Rather than hurt the state, that set the table for job expansion.
All that was expensive, and a big tax increase was approved under Bill Clements, the late Republican governor. The state also approved a levy on oil and gas to create the rainy-day fund. Those decisions helped Texas stand out and paid off handsomely.
Still, there are cheaper places to operate. Eleven states have a smaller per capita tax burden, but that doesn’t necessarily mean faster job growth.
“The notion that Texas’ recent performance is due to some unusually favorable business climate is absurd,” said James K. Galbraith, a professor at the University of Texas at Austin.
First, Texas is an energy state, so it benefits from the run-up in oil prices, he said. Then Texas dodged much of the subprime housing bust, so it never lost as many jobs.
With natural gas so abundant, petrochemical exports have surged 633 percent since 2002, she said. Exports to China grew an average of 24 percent a year since 2000. Exports of cotton and other agriculture products are strong, too.”
This all leads me to my post on Fritz Hollings and his push for the southern non-union labor force against the unionized regions of the nation, namely the north east. Take out Texas’ natural advantages and this is what we are debating. There was a lesson to be learned in pitting one part of the nation against another in a way that declined living standards. We are living it today. Ultimately Hollings fought the outsourcing problem because it was his region that got wacked. He never recognized his roll via anti-union promotion.
http://www.angrybearblog.com/2008/11/line-of-connection-in-experienced.html
In that post I quoted Sir Goldsmith many […]
And yet there is this regarding malpractice reform: http://www.huffingtonpost.com/wendell-potter/lone-star-state-reform-a_b_844376.html
Over the last decade, health care spending and individual out-of-pocket health insurance expenses have actually risen faster in Texas than in the rest of the country, says Alex Winslow, executive director of Texas Watch, a nonpartisan organization that advocates for consumer and patient rights.
At the same time, the number of people without insurance in Texas has continued to climb. In fact, according to the U.S. Census Bureau, Texas leads the country in the number of residents without health insurance. One out of every four Texans is uninsured, compared to about one in six in the nation as a whole.
While some doctors have indeed moved from other states to Texas, the state still ranks 41st in the number of doctors per capita.
Some other stats from Texas Watch: Family health insurance premiums have risen almost five times faster than income, and Medicare spending has risen 16 percent faster than the national average since Texas capped noneconomic damages at $250,000. And four of the country’s 15 most expensive health markets as measured by Medicare spending per enrollee are in Texas.
CoRev
free enterprise and competition are givens in the american economy. that’s how we do business. the government “interferes” only on an emergency basis. capitalism and the business cycle leave large numbers of people in desperate poverty from time to time. the government has the power to intervene to mitigate the suffering. there is no evidence whatsoever that this hurts capitalism.
what you have instead is a lot of short sighted and greedy… in the classical sense… people who spend a lot of money and breath trying to save themselves a few dollars in taxes without regard either to the people who are hurting or to the fact that their own ability to make money depends on the government’s willingness to mitigate the shortcomings of the business cycle or the general failure of “enterprise” to show foresight or manage large, infrastructure, projects.
CoRev
The examples that you give, GM, AIG and Citicorp, were all failing organizations teetering on collapse prior to government intervention n the name of avoiding a more system wide debacle. In the case of health care we have a system that has become a huge burden on the economy because of the private practice structure and for prpofit third party payer mechanism that is used to feed that system. I might agree that it would have been better to let the corpporations sink or swim on their own strength, but you can’t seriously claim that the government was anti corporation in its actions.
CoRev:
Do you know who Peter Drucker is? Hardly a socialist and one of the most successful and prestigous consultants in management and manufacturing. Many of the issues and facts I cite which many on this board disagree with are Drucker findings and utilized at Ingersoll Engineers where I was employed for a number of years.
CA vs TX
Reecent article:
“California is a poster child for tort reform because of its $250,000 cap on noneconomic damages (or pain and suffering) in malpractice cases. Twenty other states have imposed such limits, and many physicians and political conservatives would like to institute a California-style cap on a national scale — after all, it is credited with keeping rates generally affordable in the Golden State. Yet a carrier called Norcal Mutual Insurance charges obstetrician/gynecologists a base rate of $89,953 if they practice in Los Angeles and Orange counties, but only $30,463 if they practice in the more northerly counties of San Mateo, Santa Clara, Santa Cruz, Fresno, and Monterey, according to MLM.
The same pattern emerges in Texas, which is also touted as a tort reform success story. Since the state enacted a $250,000 cap on noneconomic damages in 2003, claims and lawsuits in most counties have fallen by half, malpractice premiums have decreased on average by 27.6%, and physicians are moving into the state instead of moving out, according to the Texas Medical Association. At the same time, malpractice premium rates are uneven, to say the least. A carrier called Medical Protective charges a base rate of $25,441 for internists in Hidalgo County on the Mexican border, but more than halves the price to $11,994 in Potter County in the Texas Panhandle to the far north, MLM reports. Likewise, rates for general surgeons are more than twice as high in Hidalgo County ($92,242) as they are in Potter County ($44,434).” http://www.medscape.com/viewarticle/731833
Hi Bev:
This is an article from Medscape, a blog for healthcare and doctors. “Regional Variation in Malpractice Reform Defies Tort Reform.” I would also venture to say insurance companies make money not on premiums; but, they make it on investments. To draw a distinction between California and Texas in Tort Reform between the two states as spurring the economy really has no foundation. There are other factors going on here and the Peter Drucker Foundation at Clairmont certainlt touched up them as well as Daniel. Texas is the worst state in terms of the uninsured and one of the worst in low income. Where Boy-George Bsh promised in 1999 not to balance the federal budget on the backs of the poor, the elderly, and the children of the nation; Texas has done precisely such.
But why Labor? Maybe Direct Labor is not the real cost; but, Burden or Overhead has a bigger part? The other issue here is illegal and legal aliens.
Along similar lines of what I have written, Maggie Mahar proposes that MalPractice is NOT a big factor in healthcare costs. Attorneys will not take cases they cn not win as they pay the price.
“Plaintiffs were paid in cases where the reviewers found no error only 10 percent of the time. Plaintiffs were NOT PAID in cases where the reviewer found that there Was error 16 percent of the time. Thus, nonpayment of claims with merit occurred more frequently than did payment of claims that were not associated with errors or injuries.” Myths About Medical Malpractice Part 1” http://www.healthbeatblog.com/2011/06/myths-about-medical-malpractice-part-1.html
In Part 2 of “Myths About Medical Malpractice” Maggie cites Public Citizen’s “The Great Medical Malpractice Hoax” and also the American Enterprise Institute (a not so liberal group).
“The number of payments for judgments of $1 million or more is tiny — never exceeding one-half of one percent of the annual total number of malpractice payments from 1991 through 2005. In 2005, the average award for a ‘significant permanent injury’ was just $215,000, while the compensation for a ‘major permanent injury’ was $315,000.” (These are the categories used by the National Practitioner Data Bank, or NPDB.) In cases where “the patient became a ‘quadriplegic, brain damaged, or in need of lifelong care,’” the median award hit $635,000—and this was the category where compensation was highest. When the patient died as a result of a medical mistake, awards averaged only $195,000.” http://www.healthbeatblog.com/2011/06/myths-about-medical-malpractice-part-2-crisis-or-hoax-.html
Daniel Becker – “Aren’t you getting a little dramatic with: … with socialist or command economy alternatives to capitalism, entrepreneurship, and success in competition.”
Apparently, you are unaware of what is unfolding. In an April 2009 poll, only 39% of Democrats polled preferred capitalism while 30% supported socialism. Among unaffiliated persons, 48% preferred capitalism while 21% opted for socialism. Republicans favored capitalism by an 11-to-1 margin. In a March 2011 poll, 11% supported communism over the U.S. system of politics and economics.
More details from the 2009 poll:
Only 53% of American adults believe capitalism is better than socialism.
April 9, 2009 – Rasmussen Reports (or here for locating the full text w/o subscription)
The latest Rasmussen Reports national telephone survey found that 20% disagree and say socialism is better. Twenty-seven percent (27%) are not sure which is better.
Adults under 30 are essentially evenly divided: 37% prefer capitalism, 33% socialism, and 30% are undecided. Thirty-somethings are a bit more supportive of the free-enterprise approach with 49% for capitalism and 26% for socialism. Adults over 40 strongly favor capitalism, and just 13% of those older Americans believe socialism is better.
Investors by a 5-to-1 margin choose capitalism. As for those who do not invest, 40% say capitalism is better while 25% prefer socialism.
There is a partisan gap as well. Republicans – by an 11-to-1 margin – favor capitalism. Democrats are much more closely divided: Just 39% say capitalism is better while 30% prefer socialism. As for those not affiliated with either major political party, 48% say capitalism is best, and 21% opt for socialism.
The question posed by Rasmussen Reports did not define either capitalism or socialism
It is interesting to compare the new results to an earlier survey in which 70% of Americans prefer a free-market economy. The fact that a “free-market economy” attracts substantially more support than “capitalism” may suggest some skepticism about whether capitalism in the United States today relies on free markets.
Other survey data supports that notion. Rather than seeing large corporations as committed to free markets, two-out-of-three Americans believe that big government and big business often work together in ways that hurt consumers and investors.
Fifteen percent (15%) of Americans say they prefer a government-managed economy, similar to the 20% support for socialism. Just 14% believe the federal government would do a better job running auto companies, and even fewer believe government would do a better job running financial firms.
Most Americans today hold views that can generally be defined as populist while only seven percent (7%) share the elitist views of the Political Class.
—–
Other polls:
60% Say Capitalism Better Than Socialism
April 23, 2010
There is this as well:
Malpractice lawsuits plummet in Texas
May 30, 2011
http://www.mysanantonio.com/news/local_news/article/Malpractice-lawsuits-plummet-1402086.php#ixzz1Nw59q6Qc
Come on MG, you’re going to use that poll when as you note the terms were not defined?
I have no fear that people are thinking red China or old Russia are what they want. Instead I would bet we’re talking that people want some return to the what we called the “social contract”. They do know that 6 wks vaction is the norm in Europe as is cheaper internet.
With that, if we had a real socialist party that was as viable as either of the current 2, then we could legitly say there was some middle somewhere. As it is, I agree with Bill Maher’s take on the current party situation.
The drop in “free market” preference I do not find surprising either. People have learned that what they think of when “free market” is spoken is not what those out side of the “paycheck economy” (to steal the phrase, perfect don’t you think?) envision. You know it only is working for one club and not the other as currently implemented. Or have you changed your mind on outsourcing?
Many of the discussions attempting to knock Texas appear more political than factual. I doubt that it matters how successful Texas is to many of its detractors. Par for the course these days.
If you want to know where Texas stacks up economically in comparison to your State or another State, check out this updated report:
Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index
By Arthur B. Laffer, Stephen Moore and Jonathan Williams
http://www.alec.org/AM/Template.cfm?Section=ALEC_s_Award_Winning_Study_Ranks_Economic_Competitiveness_in_the_50_States
Rich States, Poor States – 4th Edition
http://www.alec.org/AM/pdf/tax/11rsps/RSPS_4thEdition1.pdf
The level of comparative detail is pretty good. The Texas haters (and Republican haters) will be pleased to know that Texas is not ranked no 1. Not even close.
Daniel,
I cited four polls, not one. These are telephone surveys. No one has to provide definitions of capitalism and socialism to me or anyone I know personally.
As far as I’m concerned, you’re living in a state of denial as to what is unfolding in various parts of the nation. As an example, there have been large protests in California which have focused on supporting socialism and communism. I have friends who have watched those protests and forwarded photographs of what occurred.
There is no point in pretending that we don’t have leftists who do not believe in capitalism. It’s easily understood that they do not support capitalism in their statements and policy proposals that they embrace and promote. They believe in socialism and other forms of government rule. Again, some of their thinking pops up in the polls. Young people are being influenced by these leftists. Things are changing more than you think.
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To answer your question: I haven’t changed my views at all regarding what offshoring (not only outsourcing) of production has done to our nation. I had a blowout fight with a trade economist this week over this very issue. He thought it over and called me back, agreeing with my conclusions. It is very clear that many of economic problems are tied directly to the changes in U.S. trade policy dating back to the 1990s. I can make the case that most of the problems are tied to this issue, but I won’t waste time making it here. It’s just a matter of connecting the dots and data. This is why Stormy stopped writing main posts. We have gone beyond the tipping point economically. He knows it. I know it. We’re screwed if changes do not happen. Soon.
CoRev,
Entrepeneurship displayed by the TBTF has been supported with huge taxpayer cash and a huge bite on the lower 4 quintiles in the US econo-society.
What more support to entrepreneurs do you want?
Maybe a few trillion for the little guys??
No PAC money there.
Economic models, I sort of like Sweden, a second would be Icleland.
If socialism is moving the ‘concern scale’ from the top 1% who own the congress to the bottom 80% who won very little, then call me a socialist.
Damned Yankees are the ones who stayed.
Tx is great place when oil >$100 bbl.
Not so good when goes to < $100. Or if other energies take off. I am a good Yankee, went there, worked there, and left.
Ok MG, I agree with you on the offshoring and outsourcing. My post starting from the begining has always been a tangent to stormy’s posting.
So, why so concerned about the “socialism and comunism” protests. We have always had those elements in this nation. Things are not working for people, they are going to look else where. ie:Tea Party.
Yes you provided other polls. They show a small fraction of the population saying Yeah communism. A drop in those who think free markets is ok when people get what you get on outsourcing/offshoring is not surprising. So agaiin, why the concern?
As to defining the terms. I know you know that a poll that does not define the terms is not a poll that shows what people are for or against. It can not possibly be simply because there is no standard assuring everyone is deciding yea or ney to exactly the same choice. All that one poll shows is that people are thinking about something other than what capitalism and free markets currently are preceived to be to them. So, to respond that “No one has to provide definitions of capitalism and socialism to me or anyone I know personally.” is to be interpreted that I am wrong about your knowledge of polling, surveys, etc or it is dramatization on your part and thus throwing out the communism/socialism as booggiemen.
Frankly, I’m not interested in fear or any type when it comes to discussing our current economy and economic situation. We’ve got plenty of that happening via Kock, Fox, Tea Party etc.
And truly I wish Stromy would return to posting on his subject. It is needed and helps complete the picture on the issues of income inequality (my favorite subject).
I know you know people are hurting.
Well, I hope that explanation re products-liability law wasn’t as clear as I can make it. Yikes. I should know better by now than to sneak a peak at AB (especially the comments to one of my posts) and, seeeeeething, write up a response to a comment. Let me try again:
What matters for products liability is where the product was bought and used, or where the injury occurred, NOT where the product was manufactured. So if a product is made in Texas or in China, but was sold in Michigan to someone who then was injured by in Michigan, it is Michigan’s tort law that applies, not, um, China’s. The same is true when the product is made in Texas or another “tort reform” state; if the product is made in Texas, but was sold in Michigan to someone who then was injured by in Michigan, it is Michigan’s tort law that applies, not Texas’s.
So anyone who says that Texas’s tort laws have created jobs in Texas, and that national tort reform would bring back jobs from overseas, is saying, albeit unwittingly, that China’s, or Vietnam’s, or Bangladesh’s products-liability law applies in products-liability lawsuits filed in the U.S. if the product was made in China, or Vietnam, or Bangladesh. The claim is preposterous.
I glad to see from most of the remainder of the comments that that point was clear to the readers, despite my sort of jumbled post (which actually was a more detailed reiteration of my first response to you, Sammy). Maybe no one will make that claim again, because people far and wide read AB. Right?
Me, too. Even Germany’s system would be considered Socialist by the likes of MG. Funny, though; Germany’s economy is recovering relatively well. We aren’t.
Hi run.
Spot-on in pointing out medical-insurance premiums reflect the insurance carrier’s investment losses often at least as much as rising costs of healthcare; the carriers don’t, of course, lower premiums when their investments make a killing, but they do raise premiums when their investments lose a lot of money.
As for the Medscape article, what’s funny (I’m not laughing, though) is that apparently the medical-malpractice caps, while translating into lower medical-malpractice premiums, haven’t translated into lower MEDICAL INSURANCE premiums. So maybe Perry or Fisher (the Dallas Federal Reserve head) or Sammy could explain how the caps entice businesses to relocate manufacturing plants in Texas from, say, Michigan or, um, China, Vietnam and Bangladesh.
You can always steal jobs from other states and nations by gutting your regulations and lowering your taxes faster than the other guy. The problem is that the prize for winning such a race to the bottom is to become a banana republic. Texas is hell-bent on proving this.
In any case, only conservatives would think turning three $30/h union jobs in the midwest into five $15/h jobs in the south is a good thing.
I’ve been thinking what this implies if the Governor of Texas becomes President of the US. Then the “other guys” become the third world. And what changes would he envision to compete for jobs with the “new guys”?
Having grown up in MS, I like to point out to people that “outsourcing” began, not with other countries, but within the US with states trying to out-bid each other with free rents for a period, low wages and low taxes.
Late perhaps? But… I was one of the mobile homeless in Texas for a few months and what is missed, typically, is that countless people who have migrated to Texas, looking for work due to the hype, are not being counted. The group living there in ‘mopartments’ and in their vehicles is vast and they are living off of the grid. So instead of counting the lucky ones… count the unlucky ones?
Ray