Wednesday, June 25, 2008

Is Texas Getting Screwed?

Of the many topics currently being debated in Congress virtually every position that the Democrats are pushing is bad for Texas. Here's a list.

Mortgage Bailout: The foreclosure rate in Texas has been flat and ever so slightly decreasing over the last 3 years, as included in my op-ed here. Home prices have not significantly declined, if at all. The bailout that just passed the Senate is for $300 Billion in loan guarantees. How much of this money will Texas get? Not likely much since we never had a housing bust. Now California with it's huge price declines and foreclosure rates that have surged over 300% will probably get the lion's share. This will be a huge redistribution of wealth out of our state.

Colombia FTA: Right behind New Orleans, the Port of Houston is likely to be the second largest beneficiary of increased free trade from Colomia from what I gather. Nancy Pelosi killed this one with a massive delay. Thanks for killing job opportunities in Houston, Nancy!

Cap and Trade: While I support the mechanism as a theoretical device, the cap being proposed by many will cripple manufacturers. Texas leads the nation in the growth of manufacturing jobs, with Houston being the largest center of those jobs in the country. We also tend to have heavier polluters because of the concentration of oil refineries. Texas will be disproportionately affected by the punitive limitations.

Windfall Profits Tax: With the overwhelming percentage of oil and gas companies headquartered in Texas, this is a direct assault on our state. Had it not failed, this would have been an enormous confiscation of profits, leading to fewer jobs and less investment capital.

Nationalizing the Oil Industry: I don't know if this is serious, but some House Democrats have expressed their support of this idea. This is grossly unconstitutional. Virtually every country on the planet is slowly denationalizing industry because they know from experience that the government can not efficiently run a business. This would cripple and atrophe an industry that employs tens of thousands of Texas.

Renegotiating NAFTA: There are thousands of companies that have set up shop in Texas because of our proximity to Mexico. They either sell to Mexico, buy from Mexico, or take advantage of cheaper labor in Mexico. Remember what the Smoot-Hawley act did for the U.S. right before the Great Depression? Wouldn't that be great for Texas?

Much of the same could probably be said for Oklahoma and Louisiana since their economies are dependent on much of the same industries.

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