Texas ‘Economic Miracle’ Giving Way to Regional Recession
Texas may be moving into a rapid decline from economic miracle to regional recession as a result of plummeting oil prices, according to JPMorgan Chief Economist Michael Feroli.
“The consequences could be far-reaching—job losses and a sharp pullback in home prices in big Texas cities among them,” writes Hiltzik, a Pulitzer-winning columnist with the LA Times. While no oil-producing state will be immune, “the weight of the oil industry in the Texas economy resembles that of mid-1986, when a similar oil price collapse created a major recession in that state—while the rest of the country reaped the economic benefit of lower spending at the pump.”
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Today, “the same pattern is bulking large on the horizon.” Hiltzik says a sharp decline in the state economy could imperil Gov. Rick Perry’s hopes of running for U.S. president in 2016, and “may expose a lot of economic wreckage to public view. One consequence of the state’s low-tax, low-service credo is that infrastructure spending has been starved, just at the moment when it’s most needed.”