Musings on Economic Freedom from the Texas Public Policy Foundation's Center for Economic Freedom

The state of Texas is underintense scrutiny right now in the national media. One reason for this isbecause of our amazing record of job creation. Since 2001, Texas has added 1.2million jobs while the rest of the U.S. has lost 713,000. The contrast is evengreater since the "Great Recession" began in December 2007: the rest of theU.S. has shed over five million jobs while Texas managed to add almost 200,000.

Many commentators try to dismissthis extraordinary record of job growth. For instance, New York Times'columnist Paul Krugman suggested it is caused inlarge part by a "high rate of population growth [that] translates intoabove-average job growth." In other words, Krugmansays the secret to job creation is population growth. If one follows thislogic, New York wouldn't be trailing Texas so dramatically in job growth if itcould just get more people to move there.

To help document the Texasrecord and explain why it works, the Foundation recently launched a new Texas Model section of our website. The Center for Economic Freedom has provided severalnew papers for this section, including The Texas Model Works, Texas and the Unemployment Rate, and Improving Health Care through Tort Reform. Additionally, we ran a related piece, The Texas Record, over at

To reiterate from last week, wedefine the Texas Model as policies that bring about low spending and taxes, apredictable, low level of regulation and strong property rights protection, asound civil justice system, and minimal dependence on/interference from thefederal government.

As we've seen, not everyonebelieves that the Texas Model is responsible for the Texas Economic Miracle.And it is often hard to prove cause and effect. But here is some pretty strongevidence:

It turns out that states that spend the least and tax the least have the most job,income, and population growth. And vice versa. Itwould be tough to find statistics to counter this. But we'd be happy to hearfrom anyone who wants to give it a try.

Finally,here is a comparison of the ten largest states in the areas of job growth,economic performance, and adherence to the Texas Model:

In this brief update, we've used statistics covering 2001-2011, 2003-2007, and2000-2009. But the results are all the same: states that use the Texas Model,or we could say, states that follow the American Dream, are the states whosecitizens experience the greatest prosperity.