After reading the proposed budget by the government on Wednesday a friend sent this new article about the Texas economic model suggesting we might try it rather than what we're currently getting.
Of course I agree.
When the Economist Magazine wrote about this same subject back in 2010 they wondered if Texas would be able to continue the "miracle". It seems they have.
And as this post in 2011 points out;
"Facts are Facts. Relatively low taxes, low government spending and less regulation are better public policies, leading to higher economic growth in good times and lower declines in bad times.
"And it can be done without an income tax or VAT.
"I know a lot of sweat equity goes into public policy making here at home as well, making it difficult to consider that something else might work, but we've obviously been on the wrong track for a couple or more decades now.
"There is also no silver bullet or perfect solution to pull us out in the short term, but it's high time we pursued alternative public policies that provide different and statistically better outcomes for more Bahamians.
To paraphrase Einstein, our political class seems destined to prove that "doing the same thing over and over again and expecting different results" is insane pubic policy.
All true Texans love to sing the University of Texas Alma Mater, “The Eyes of Texas are upon you”.. Now the eyes of America are upon the economy of Texas that has prospered throughout the Great Recession.. Could it be the State’s policies of lower State taxes, cutting down on bureaucratic encroachment and over regulation and the establishment of incentives to attract businesses and investors to Texas.. It is a familiar ring but one that has worked.. Take notes Bahamas, you cannot argue with success..
For “insane policies” try New York, Massachusetts or California, where thousands of citizens leave every month for lower State taxes and better opportunities for employment or retirement.. Supply-side thinking states like Texas are leading the charge for economic recovery despite the the massive drag of insane policies and deficit spending spewing out of Washington..
Every economic regions circumstances are different. We seem always to make the mistake of ‘transferring’ another region’s case to ourselves, and thinking naively that their outcomes could easily be our own, without the basic acknowledgement that our circumstances are different.
So, not needed here, are comparisons with Singapore, Finland or indeed, Texas!
The Economist came closest to pointing out a(n) unique confluence of circumstances led to the outcomes in the Lone Star State …. let’s leave it at that, shall we?
To reiterate, here’s what I said:
“There is also no silver bullet or perfect solution to pull us out in the short term, but it’s high time we pursued alternative public policies that provide different and statistically better outcomes for more Bahamians.
There was also a “unique confluence of circumstances” in Singapore, where like Chile a “dictator” eventually gave way to sensible economic policy.
But for decades now we’ve been “doing the same thing over and over again and expecting different results”. It is insane pubic policy.
The difficulty for me is Cabinet Ministers like Khaalis Rolle, Michael Halkitis and Ryan Pinder should have a better understanding of business than they are exhibiting, or should I say allowed to exhibit.
I’m also sure they are aware that the unintended consequences of high taxation is less revenue for government as well.
Rick.. Does our fellow commentator really think that we are comparing apples to oranges?? The issue is plain and simple, Texas has deliberately fostered policies that have promoted economic growth, political stability and employment.. Through the implementation of supply-side economic principles combined with aggressive promotional techniques, Texas has attracted some of the leading corporations to move their corporate headquarters to the Lone Star State.. One of the first was Exxon, now Exxon Mobil, which left New York City for Texas many years ago.. Today, Texas is the leading State for the transfer and/or establishment of corporate headquarters in the United States..
Like Singapore, Hong Kong and Chile, these countries have deliberately set out to attract and maintain increased growth in business investment.. How Singapore aggressively went after Motorola, beating out six other Asian nations, is a classic example of how the government anticipated and then fulfilled the company’s needs for specialized labor skills.. These growth countries have the necessary and continuing leadership necessary to keep them in the for front of economic progress..
As for the Bahamas, our government is doing just the opposite.. Raising taxes, increasing regulations and bureaucratic bottlenecks which are gradually destroying the business climate.. Least we not forget the abrupt departures of Nestle (Switzerland), Bank of America (USA) and HIS International (Japan) as well as the reinsurance industry moving to Bermuda.. No, you can’t compare our Bahamas to Texas as it would be like comparing apples and oranges..
Every state in the US that is doing well has a republican governor who cut taxes,that is all you need to know.
There is never a blue print for economic change, the point is to look at what has been done and see that its not working and then try an alternative. Its not like the alternative of increased economic liberty is an arbitrary solution that just fell from the sky. There are examples that is works hence the need to look more closely at the Texas model and the research supporting it from days of old are at times are almost prophetic. However, increased liberty cannot be exercised without relinquishing power/control, that’s one of our biggest hurdles.
‘Hepples and horanges’, as our brothers say in Br’Island …
You guys have missed some obvious points – a couple which appeared in my previous Blogs – but rather than repeating them, perhaps you all have another look at the ‘attached’ articles to see what Texas is doing …. for example, they have gotten rid of UNIONS !!!!
Now, if you still think we are the same, then please re-read the articles.
Thank you
S3S, the problem is we’re different and won’t do anything else!
Is there an echo in here? :o)
Right to work states are the winners when it comes to competition between the states to attract new and existing businesses.. How interesting the one major hotels in the Bahamas that experienced no layoffs or seasonal closings during the the last five years economic downturn was a non-union property..
Rick, The Texas State Government just announced a 20 billion dollar budget surplus.. Without doubt Texas must be doing something right as it is a leader in attracting new business to the State.. Like it or not, financial prudence is paying off for Texas.. Despite the excuses of economic differences, there is much the Bahamas could learn from the Texas experience.. That being said, one wonders if our officials have the necessary insight to undertake constructive economic change..
Again my fellow Bloggers, they are not ‘economic excuses’ for the imbalance, merely the reasons WHY we are different, including but not limited to:
1. Texas welcomes immigrants (mainly from Mexcio and makes best use of them) – what do we with our most plentiful supply of immigrants? Have we thought to revise and update our immigration policies?
2. Texas has gotten rid of Unions; we celebrate them – See my Blogs on the scourge of unionism and the drag it is on economic growth.
3. Texas is a dynamic economy built on high-tech firms, starting with Dell Computers – how many high-tech firms have taken up residence in The Bahamas?
4. Texas is awash with entrepreneurial firms – entrepreneurship is not a word that has entered the lexicon of The Bahamas in any meaningful way (indeed the average age of a firm is >24 years – See my two Blogs on the subject).
5. And here’s the killer, Texas is home to more than 180 tertiary institutions (Colleges and Universities), which should mean two things to even the least observant of us:
(i) Texas can supply almost continuously an educated workforce in all major academic disciplines and (ii) Companies are generally attracted by a plentiful supply of talent (some in The Bahamas believe we need a costs-benefits analysis to decide whether we should have a 4-year instituion). Again, see my Blogs on the subject.
Should I go on or is it now blindingly obvious that we are not nor can we be placed in the same ‘economic boat’ as Texas?
We are seriously deluded if we think we can turn an economic miracle with an uneducated workforce, no way to educate them, forceful unions and a long history of collective bargaining in the workplace and a workforce populated with lawyers! End of ….
S3S are you suggesting that we should keep doing what we’re doing or should we try to change the direction we’re headed?
Rick, you correctly paraphrased the phrase: insanity is when we continue to “do the same thing over and over again and expect different results” (forgetting for the moment, whether it was Einstein or Ben Franklin before him, who said it).
For the life of me, I can’t think that any of my 28 or so Blogs over the past year advocated mainatining the status quo in The Bahamas on any of the key subjects associated with Texas:
Entrepreneurship (to rebalance the economy);
Higher education (the urgent need for);
Unionism (the bane of our commercial lives)
Expansion and re-orientation of the economy (we are wedded to Tourism and what’s more interesting, despite having a mediocre product).
If in doubt, you are welcome to re-read my posts.
If you agree we should try different models or aspects of different models why does it appear you you are contradicting the point of this post?
Why don’t we try new things like cutting taxes & see what happens because if we continue on this same path we are on now there will not be many options left soon.This country is hell bent on being the worlds greatest bureaucracy seems to me & all that will do is drive the prices higher.
Sorry to flog a dead horse, Rick, but you started this Blog by saying your friend suggested “we might try it rather than what we’re currently getting” and that “of course (you) agree.”
I am merely pointing out why it is IMPOSSIBLE for us ‘to try it’ by highlighting the stark differences that exist between Texas and The Bahamas.
Ah, now we’re getting closer to a reasonable discussion.
Of course we cannot implement it over night, but there are certainly aspects that can be considered.
And of course I agree to try different ideas.
I also point out that there is no silver bullet.
And there are stark differences between The Bahamas and Texas as we are stuck in the backwater of public policy when Texas shifted sometime back.
Because of this Texas has been able to sustain economic growth and we are virtually a failed state.
Just look at California verses Texas.. California in 2012, under it screwy Governor, Jerry Brown, recorded a 28 billion dollar deficit with 20 billion estimates for 2013 through 2018.. Texas last year had a 20 billion dollar surplus..
Starting in 1990, California has had a net decrease in population leaving the State of over 3.6 million people packing their bags to get out.. In contrast, Texas has had a 1.4 million increase in domestic migration.. Note that this was domestic migration and not from across the Mexican border.. Perhaps this explains why California has one of the worst credit ratings of any State, and would you believe Texas has one of the best/highest..
In Texas the individual still counts while in California, it is the collective that rules.. Yet, it is this collective mentality that is taking California down the tubes.. Lest we not forget that in 1990, California was the third largest economic entity in the world.. My how the great and mighty have fallen in pursuing foolish policies of self-destruction..
Differences aside, should the Bahamas follow the Texas or the California model?? Unfortunately, our political cowboys are singing, “California here I come”..