Recession, Texas Style
We Texans pride ourselves on everything being bigger and better, but the definition of a “better” depression is a smaller, lighter one. I wrote months ago about how Texas was last into the Depression and has been hit less hard than most areas. At that time, only Brownsville, on the Mexican border, had an unemployment rate that matched the national average, which was in the mid-seven range then. At present we’re running 8.2 per cent., here in Texas, using government figures, with the national rate holding stubbornly at “9.7%.” I put that in quotation marks because I consider it a fairy tale, over and above that using traditional accounting methods would yield results almost exactly twice the official version. That half a point drop from 10.2% not long ago came too suddenly for me to find it believable.
I’m just a simple arithmetician but I understand the sort of figures we’re talking here and it is no use for the government to tell me there is no inflation — it has been at least 3% by the most stringent definition for the last three years — and that national unemployment averages 9.7% if we just don’t count everyone without a job. Laughter…my husband was a genuine mathematical genius who had a passion for statistics and understood numbers the way I understand words. I would love to hear John’s answer on what the unemployment rate is.
One reason we’re doing better in Texas is in the diversification of interests and in the tightly closed systems in our many small towns. Those are not totally immune, and in Hamilton the little, more expensive grocery store “down town” (that being the four blocks which surround the Courthouse square) has gone out of business. David’s, a small local chain, no doubt smiled, and stopped running so many loss leaders. What else? When it is twenty-five to forty miles to the next grocery store of any sort, pretty much you have a captaive audience. I imagine the newest restaurant in town will go under, but pretty much nothing much will change. It can be frustrating that kids who aren’t going to inherit a family business have to go elsewhere to find jobs in “normal” times, but it is quite comforting to know not many jobs will be shed in your town because there weren’t any superfluous jobs in the first place. Each business has a place in the local economy that isn’t going to go away, from the two drug store (neither chain) to Ace is the Place, to the feed stores. In the cities and industrial parks many areas are humming along nicely turning out machinery, computers, chemicals, and electronic devices. No, we’re not just about beef and oil. We’re making things they want in BRIC. The first quarter — first two months, actually — exports rose 24.3% over 2009, close to thirty billion dollars’ worth. Patrick Jankowski, Vice President of research for the Greater Houston Partnership, commented that there are over 700,000 jobs in Texas geared to manufacturing goods for export, probably not counting mounted steer horns and armadillo ashtrays. We account for about ten per cent. of the entire export output of the USA, a scary thought, in some ways. Bell Helicopter is gearing up for a big, new project in Amarillo, hiring now, starting at over twenty dollars an hour to assemble widgety things.
Sure unemployment is high in the barrio. When isn’t it? Teens in general are having a harder time finding summer jobs because there are those with more work experience and better motivation willing to take what they can find. Life is tough in some sectors of the oil business, thanks to the power of the Greenies and Mr. Obama outlawing the most promising drilling areas under the guise of expanding exploration. One of the articles I read posited that Texas began adding jobs again last fall, “thanks mostly to its great position in the largely recesion-proof energy industry.” Well…sort of. Maybe. Out in Odessa and Midland things are stalled because there is no way to get that sweet, light Texas crude over to the refineries, and for sure it’s too far to build a pipeline. Mr. Obama has decreed that no new refineries may be built (just which section of the Constitution would that be?) and if you can’t refine oil and can’t move it, once your storage facilities are full the best you can do is hope for a better future. One landman I know has cut her price from $450 to $200 a day because there isn’t a whole lot of leasing going on. Last November Texas crude production was down to 1.08 million barrels per day, on the order of half the amount pumped in the Reagan years. Natural gas is doing well — up about a third between 2004 and 2008 — which is cheering both because I expect the coal industry to be destroyed by fake science and a great deal of money put into that campaign by the LNG folks who stand to take over coal-fired plants. Seems to me, as a long-time Texan that we’ve got a bunch of capped wells that were shut down over the years because they produced “too much” gas and not enough oil to suit demands of the time.
We Texans are proud of having our own electric grid — bearing in mind that a hamlet about thirty miles from me went without power for over three weeks after Ike. Their juice came from a different plant in Houston. I’m not a big fan of wind power, myself, between the cost of the enormous three-bladed devices (about a quarter of a million dollars, which doesn’t include shipping and handling and perhaps not even installation) and the difficulty of “storing” electricity; it is commonplace to see a lot of those pricy units turned off when there is ample wind to spin them merrily. There are those who hope to begin exporting electricity to the rest of the US, such as Paul Sadler of Wind Coalition. That might be fine for wind power operators, but it would almost certainly raise prices locally, judging from what happened a decade or so ago when Washington started selling power to Oregon and California, which was in a bind because of foolhardy insistance in flushing away water needed for irrigation and hydroelectric facilities in the name of dear little fishies. There isn’t a person reading this who can’t come up immediately with “Same amount of product sought by more people equals higher prices.” I don’t think anyone has come up with “Keep Texas for Texans,” but it sounds reasonable to me. It may be too late since we have already gotten the attention of Denmark, Spain, and Queen Beatrix. Fortunately, one reason we could construct our grid fairly easily is that we weren’t tied down with federal regulations or coordinating with other states. With luck, trying to connect to Boston, Kansas City, and San Diego (just for examples) would turn out to be as frustrating and time-consuming as attempting to build a nuclear plant. I noted that Texas can now put out 10,000 megawatts which was stated as being sufficient for three million homes, and I thought, immediately not “NIMBY” but “KIIMBY” for Keep It In My Back Yard. Sure, I can handle Vestas and Iberdrola coming over to play, but retaining control of our power strikes me as “prepping” on a national level. T-Bone Pickens considered putting what even he thought was a bundle into wind power and decided there were faster, better ways to make a good ROI.
Our housing market remains far more stable for several reasons. Turnover has always been slow in rural areas, and we had a hefty influx of dazzled Californians early in the century. They may have been buying while the bubble was bursting, but compared to prices in the Golden State our housing was considered ludicrously under-priced. Dallas has been especially fortunate over the years, and prices there are only 7% off the 2007 highs, Case-Shiller indicates. That’s okay, there’s no point in coming to Texas if you’re going to live in Houston, Austin, San Antonio, D/FW, or El Paso. You seen one big city, you seen ‘em all. Sure, the River Walk is pretty (if you like tourist attractions), but other than that SAT is five million people, two freeway rings, and traffic that would scare anyone other than a Los Angeles cab driver. We’re doing better in terms of lower delinquency rates on mortgages. In particular, those three or more months behind average 5.78% here and 8.78% nationwide. (Do you suppose someone makes these figures up? With 99 other choices, yet the terminal two digits are the same?) It should also be noted that Texas law limited taking out secondary loans that amounted to more then eighty per cent. of the value of the property. People were protected somewhat from their own greed and the myth that “Real estate will always increase in value!”
I bridled somewhat when I read, ‘Once a separate nation, Texas has recently been behaving more like an independent economic republic than a regular state. While it hasn’t been immune to the problems plaguing the nation, the Texas housing market, employment rate, and overall economic growth are relatively strong. Chalk some of this up to accidents of geology and geography. But Texan prosperity also reflects the conscious efforts of a once-parochial place to embrace globalization.” and “Texas today is more suburban engineer than urban cowboy, more Michael Dell than J.R. Ewing. Austin, home to the University of Texas, the state government, and Dell Computer, has a 7 percent unemployment rate…ExxonMobil is based in Irving. But the state’s energy complex is increasingly focused more on services and technology than on intuition and wildcatting. And it is selling those services into the global oil patch. Russian, Persian Gulf, and African oil developers now come to Houston for equipment, engineering, and software. While its political leaders may occasionally flirt with secession, Texas thrives on connection… “
I couldn’t help feeling that this was a little condescending and I was reminded of an ancient expression, “Poor boy, he must be tetched in th’ head.” We may enjoy wheelin’ and dealin’ but at heart we’re still Texans, with our own unique culture that we’ve done a lot better hanging on to than the USA has of agreeing on how to define an American. Businesses come and businesses go, like a li’l ol’ company that had a base here on my stomping grounds long ago, name of Texas Instruments, but cattle and corn fields are forever. We aren’t going to get over feeling that an Aggie ring (signifying graduation from Texas A&M, not 20 minutes from me) is worth two degrees from Harvard and Yale any day. Besides, Dell’s in Roundrock. Laughing at myself. This is like only Aggies being allowed to tell Aggie jokes (non-Aggies can tell ‘em if they make the dunce a Polack, a perfectly respectable term ’round here.)
The important part isn’t what I interpreted as a slur on my own, my native land, but that we’re doing some things right here the rest of the country isn’t.
Regards,
Linda Brady Traynham
Whiskey & Gunpowder
April 28, 2010
P.S.: The new figures on inflation are out, and I relish telling you about them soon. NO inflation? Ho, ho, ho!
Linda Brady Traynham
Linda Brady Traynham is a former editor and analytical project report writer and is now a Whiskey & Gunpowder field correspondent on a ranch in the Republic of Texas. She studied Counseling at Boston University and got her Masters degree in Philosophy from the University of Hawaii.
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Linda,
I share your sentiments about Texas having lived here nearly 40 years and raised my native born Texas children here. However, as I have been in the energy business for my entire career, I would like to correct some of your ‘facts’.
First those wind generators are closer to $2-3 million a copy, not $1/4 million and the costs are rising as each successive generation of them are typically larger (more power) and more expensive (but less so per kw output).
Regarding drilling in west Texas, there is generally not an issue on getting oil to the market, in fact most of the drilling companies are currently switching to drilling for oil from natural gas since the price of natural gas has remained depressed since the summer of 2008 due to too much ‘success’ in finding the stuff in the U.S. I also point out that there is a drilling ‘boom’ occurring as we speak in south Texas as folks are leasing and drilling the Eagle Ford shale that runs from Mexico near Laredo northeast to nearly Victoria (it may extend all the way to Louisiana). Folks are getting $1500/acre or more currently for leasing that acreage for drilling.
Finally your note about refineries is not entirely correct. While no ‘new’ refineries are being built, there is over 1 million barrels of new capacity that is being added as we speak as expansions (out of a total of 16.5-17 million/day of U.S. capacity). In fact, despite the popular version of ‘facts’ we will have more capacity than we will need in the near term. A number of older, inefficient refineries have been shut down in the U.S. over the last two years as margins have fallen below operating costs and are not expected to rise appreciably despite a modestly improving economy due to the new expansions underway. Your friend is not suffering for lack of leasing activity due to lack of refining capacity, rather the fact that drilling in general in the U.S.(and in Texas specifically) is lower than two years ago due to low natural gas prices (which accounted for 77-81% of the rigs two years ago). Rigs running in the U.S. are at 75% of the peak in September, 2008 and have recovered from less than half of that peak.
Thanks for your thoughts, I hope this ‘sheds’ some light on a few things.
Missed you Linda, welcome back. I was stationed in SAN Antonio in 1946. Love it. A story for you.
Rancher and his wife were driving East from El Paso. About 1:00 Am, he decides it’s time to turn in. Sees a
very nice Motel and registers. Right to bed, early rise and time to check out. Gets bill. $350.00.
What, we just slept here for 5 houirs. This must be a mistake.
No sir that is correct.
How do you figure?
We have a spa, olympic pool, Jacuzzi, great floorshow, fabulous buffet, computer access, HBO TV–
Hold on feller, we didn’t use any of those.
But you could have.
OK, here’s $50. and we are even.
What, you owe us $300.00. The $300. is for sleeping with my wife. I didn’t. No, but you could have!!
Great article, Linda! I never thought I’d be homesick for Texas (too hot and not nearly enough mountains), but you’ve made me a little whistful even for the fragrance of leaking oil well seals wafting up Hwy 183 from Luling in summer … And after three years of Oregon taxes, politics and property values (i’m actually in Kentucky now), Texas is looking a lot prettier. I’ve been waiting anxiouisly to see whether Texas would follow Arizona’s lead on the immigration issue.
Linda,
Nice to read another article of yours. Pert near three weeks since your last missive. That was a long drought for my brain. I hope that Texas continues to prosper and is able to ward off unwanted advances from our wayward Federal government. Keep giving us sound advice on how to survive the coming economic disaster.
I look forward to your next article.
Just heard some in Texas were considering adopting Arizona immigration laws.
It was quickly decided against the laws adoption.
The logic was that if the illegal’s could cross 300 miles of desert on foot, that they qualified as being Texans.
Now, I do not know if this is true.
I do believe Texas could stand on it’s own.
Idaho is doing okay a bit better than the rest of the nation. During the 70′s stagflation all 3 of our major industries (farming,mining and lumber) were hit incredibly hard so the state started going after light industry and tourism and other employers. Our worse thing was the housing bubble and folks overbought or over leveraged real estate. What surprised me is the state government started cutting back spending in early 2008 before the worst of the recession started. We have a balanced budget and most of our “Rainy Day Fund” is unspent. Now if the Feds would just leave us alone we will be okay.
Robert, you wag! Remember Texas is roughly 750 miles top to bottom and side to side. We’re having the prettiest spring you can imagine, with a new type of wildflowers, baby goats, calves coming soon, and soft breezes when we sit out every afternoon. Of course, if we relocated the Rio Grande and got rid of the cactus and the illegals…
Lynne, I always liked the idea of Idaho/Wyoming/Montana, but how GREAT! A surplus?!!!
Thanks, John. It hasn’t been quite that long, but I was about to ask Gary if I had become personna non grata and nobody had thought to tell me! He’s been traveling, and perhaps Adam has been on vacation. There are two more lined up rarin’ to go, one about the latest Bureau of Labor Statistics, which only a real Doom & Gloom type could find exciting. NO inflation?! Riotous laughter. Thank you VERY much for such a nice letter, because it really lifted my heart. Which needed it after a day in which I had to go see my lawyer and deal with a health department inspector who is really trying to be nice and helpful but he and I might as well be speaking Spanglish and Urdu trying to sort out a mess a tenant made. The best part of the lawyer visit was my explosive “NO!!!” when Steele (honest) suggested I compromise. Darling Charles caught my eye and murmured, “Thomas Jefferson,” and we caroled together, “Millions for defense but not one cent for tribute!” That kind of love and joining of minds accounts for why my life is so wonderful, but a letter like yours is the inch deep cream cheese icing on my carrot cake. Regards, Linda Laughter…if I have a right to have a lawyer how come mine charges me $300/hour?!
Guess I ought to fill you in, crew. We’ve been battling for 4 1/2 years against my mother’s vindictive will and the extremely expensive lawyer she named as her Executor who has come up with an astounding number of ways to waste our money and hers. I bought some assets from the favorite grandchild to whom Ma left as much as possible, and her darling baby is claiming her signature on a 3-year-old document, one of three provisions of which has been concluded, is a forgery. The lawyers asked hopefully if I would give her some more for another signature. Of course not. It’s the principle of the thing and it would weaken my claim to the 3rd item, the one I really want, mineral rights. So far as I’m concerned we can brangle over $25,000 until it won’t buy a Happy Meal before I’ll budge. She’s already had over a million, with $100K for her only child, and with luck I’m going to get that $25 and maybe $15 more…and have to pay the Executor to boot! The other 4 grandchildren are getting $13,275.24 cents each. Grandmotherly love at its finest, huh?
Linda, not much of a surplus but at least some and we are doing a hell of of a lot better than most states as we aren’t in the red. My momma told me all about you Texans, if we could kick all the crap out of you we could bury you in a shoe box. LOL It’s just hard to kick the crap out of y’all. I do believe that is an impossible task.
Idaho would be as big as Texas if we just ponded all our montains flat.
I’m just funnin and talking a bit of trash my family are okies and survivors of dust bowl that left. A lot of folks hung tough and rebuilt and stayed on. Plus I got a great granddad that rode with the Youngers when he was young and sowing a wild oat or two. Hell we maybe related a few old boys in my family threw a mighty wide loop. So I can’t say anything to bad about you sweetie.
So it you every want to see the biggest stand of “White Pine forest” or Wilderness in the lower 48. Or the deepest canyon in the Americas. Or trees so tall you got to lay on your back just to see the tops come to Idaho.
Good article. In Arkansas we haven’t been hurt to bad by the economy. I have to agree with your laughter on inflation. I guess the feds don’t shop for the essentials: food, gas, etc. The state was smart enough to have a rainy day fund.
Nice seeing you in print again. Look forward to more of your work.
Dear Dr. H: Good to hear from you! I’m alive, well, happy, and 1300 e-mails behind, not counting new ones today, due to a streak of annoyances ranging from lawyers to a tenant causing a ruckus, one of the goats piercing the copper tubing causing 250 gallons of propane to hiss gently into the air, which has us without a dryer until the system is replaced, the backhoe going out, and so forth. To all those I owe e-mails, you aren’t being snubbed and haven’t been forgotten! Hope things are well with you, Dr. H, and that one of these days you’ll write me an article. Jamie, I’ll do my best to get yours read today. I’m sure I’ll love it. Hugs to all, Linda
Dear Lynne: Thanks for the funny, colorful response, and if I ever get up Iddy-Ho way I’ll beg the borry of an extension cord and a garden hose for the small Casita Charles and I like to travel with, if you’d like company. Andrew went to the University in Boise for a couple of years and loved it there. Hugs, L
Dear Robert: I haven’t kept up with local news, but the report on Texas sounds like our idea of a joke. My favorite is, “You bought the lunch, I’ll buy the Cadillacs.”
Dear Terry: I’m not ignoring you and your points are well taken. I think I’ll address them as part of an article because if I try to write that much the SPAM filter will eat it for sure. Leasing is way down at least here in CenTex and over in Odessa/Midland; drillers aren’t willing to take chances on the political situation, I think. ‘Sokay, our lease isn’t up for nearly a year!
I am catching up on my “Linda homework.” Here in Copperas Cove we have had some smaller established businesses close up shop. I believe the smell of retirement pushed them out sooner rather than later. The hair salons have not been suffering nor child care businesses. Chevy and Ford new car dealerships closed down last year, however used cars are still being sold, although that inventory seems high to me.
My road trip to ABQ last week was an eye opener. Leaving early in the wee small hours of Wednesday morning-April 21st, the majority of fellow travelers were exclusively truck drivers and their rigs…all the way. On the return trip from Ft Sumner to Clovis, Hiway 84, twice, a caravan of 8 and 6 cars respectively, passed us going in the opposite direction toward the interior of New Mexico. Our fellow travelers were mainly truck drivers and their big rigs. Curious, that.
I travel the country a lot for work. The one thing I notice about Texas that makes it different from every other state in the union is that Texans are loyal to Texas first. In my opinion, that is why Texas is not suffering as much as the rest of the country from the recession/depression. The only other place I have noticed even a spark of that attitude is in Richmond, VA. Why did we ever think becoming “the United States” instead of “these United States” was a good idea? At least a few of the western states seem to be following TX’s lead… Arizona, Montana, Idaho, etc.
Having been to Texas more than 20 times over the last decade, the only thing I do not like about the state is the traffic in Houson.
If it is true that Texas removed Thomas Jefferson from your history textbooks I wholeheartedly agree that an independent republic would be a good idea.
Linda, I’ll leave the light on for you and the extension cord is ready when you are. Sorry about all the aggravations you are having at this time. Those who God loves best, face the hardest test. I’m think God is showing you lot’s of love. Keep the faith.
No inflation? I purchase supplies for the yacht I work on and keep accounting backlogs. Some products have increased 50 to 75 % in the last year alone. I was at sea (in transit to Europe) from 4/6 to 4/28 and apparently missed out on some news. Spain has 30% + unemployment and people just don’t have anything to do all day, lots of them wandering around the waterfront in Barcelona. At least the government here is reporting the numbers honestly. And folks here really do want a solution even if it affects them personally.
They seem to be willing to pull together and sacrifice. Wish more people in the States had that attitude. We could use more states that felt less beholden and more independant of the Federal gov’t. As for the refinery dictate, I wish some entreprenur had the balls to tell The Anointed One to —k off and just build. Really what could he do?
I agree steve, inflation is low if you discount fuel and food. But most folks I know need fuel and food every month and not a new wide screen tv. I know they are cooking the books at a government level and to a certain extent I expect that, but it is now becoming noticeable by lots of folks. Folks are talking about getting out of 401′s because of taxes or 401 being made into a federal annuity. Folks are hunkering down to pay off debt. Small businesses are looking to stay under the 50 person hire to avoid new mandates. People are going Galt now not as political statement but just to survive.
The economy in the USA runs on optimism and confidence and I’m not seeing that happen. I see folks running up the stock markets because that is the only way to make money right now. It’s not based on anything but speculation and when the Bush capital gains tax expires next year it will be gone about the same time Commercial real estate tanks. I think this will make the “stagflation” of the Carter years look like a love in. I hope I’m wrong and I have been wrong before, but what pisses me off is I was right about the housing bubble, I was right about the mini-crash of the markets. Well I hope I’m right again about preping and buying hard goods.
Dammit if I can see this coming as someone who got GED and being self-educated. Why can’t those “bloody” ivy-leagues seen it coming as well. Well screw them, they are so damn smart. I will eat, I will have energy, and I’ll do my damnedest to save my family and neighbors. I won’t and will never have played the game at that level.
Damn I’m a bit sorry for the folks that will get bit again and ground up the works. Hell if I can figure it any one with a high school diploma should be able to do the same.
[...] Recession, Texas Style – Whiskey & Gunpowder [...]
Dear Mike: Thanks for the nice letter and understanding. We Texans (other than in hotbeds of wickedness around the Capitol and in our big cities, and even they do when it comes to truly sacred events like the Texas A&M-TU game) really do have our own, recognizable culture. We go for quaint sayings we take real’ serious and old-fashioned virtues. When a Texan gives his word you not only CAN trust it, you’d better take it, or he’s gonna be more than a mite upset. Most people wouldn’t believe how many things we buy on Craig’s List and have delivered on verbal agreement. We’ve never gotten anything that wasn’t precisely as advertised, and nobody has ever been sent home without a sale even with money for his gas and time. We like being colorful and ENJOY being Texans. You are so right that we also need a sense of national identity and not all this touchy-feely mess, and even more right about Houston traffic! I never get within 80 miles if the place if I can get out of it.
Thanks, Lynnie. God must hate lawyers, too, because I’m giving them plenty of grief! Only lawyers would have one draw up some figures and charge me, call the other lawyer to tell him (he charges me, too) as billable hours, and then that lawyer insists we need a conference so he can pass that info on. The first lawyer billed for a letter asking me if I want him to call a realtor. No, if I want an agent called, I’ll do it myself. I hope we DO get to meet. Hug, Linda
Alan, everyone I know is hopping mad about Bowdlerizing history. It is really time to root the lefties out of our schools and boards. How can even the worst liberal bigot think he/she can ignore Jefferson, Washington, Dan’l Boone, and so forth? There are days when I almost think it would be funny if a lengthy blackout taught people why Eli Whitney was significant. You can work all day to pick a pound of cotton fibers off those seeds. How can you tell kids a bunch of Texicans of “Hispanic” birth were at the Alamo if you don’t mention the war for Texas Independance? We have always coexisted fine with the descendants of early settlers from Mexico. We like and admire each other. None of us like the slow, steady invasion from Mexico. We can’t imagine not teaching “Remember the Alamo!”
[...] for the essentials: food, gas, etc. The state was smart enough to have a rainy day fund. …Continue Reading This entry was written by thwogel , posted on Monday May 03 2010at 09:05 am , filed under crude [...]
[...] Last November Texas crude production was down to 1.08 million barrels per day, on the order of half the amount pumped in the Reagan years. Natural gas is doing well up about a third between 2004 and 2008 which is cheering both because I expect ….. In Arkansas we haven’t been hurt to bad by the economy. I have to agree with your laughter on inflation. I guess the feds don’t shop for the essentials: food, gas, etc. The state was smart enough to have a rainy day fund. …Continue Reading… [...]
[...] Recession, Texas Style [...]
ANOTHER GREAT READ,Linda !! I so enjoy seeing what you have to say next on whatever the subject matter may be….thanks again from another lifelong fan!