The Spectacle Blog

Success of Texas Public-Sector Employment Reflects Fiscal Conservatism

By on 8.17.11 | 5:55PM

Former Biden economist Jared Bernstein posts the following graph, and claims that it's evidence of a latent Keynesianism on Gov. Rick Perry's part: 

Bernstein thinks it's important that Texas used stimulus funds while increasing government jobs: 

Now, I've got no problem with a state government using Recovery Act funds to retain or create jobs.  In fact, the figure and quote above shows Texas to be following a traditional Keynesian game plan: as the private sector contracts, turn to the public sector to temporarily make up part of the difference.

So, no disrespect Gov, but when you're getting your Keynes on like that, no need to hide it behind all that anti-gov't rhetoric.

When I look at the graph, though, what I see isn't necessarily evidence of a grand Keynesian strategy on Perry's part. It could just as easily be a product of prudent fiscal conservatism. The fact that Texas has gained public sector jobs on net suggests that it prudently managed its finances so that it wouldn't have to lay off teachers and other workers when the recession dried up tax revenues -- as happened in so many other states. 

It might be worth mentioning here that Texas is a state that does not allow collective bargaining for its public employees. It seems that the kinds of reforms Gov. Scott Walker has fought for in Wisconsim have served Texas well during the recession, giving the state the flexibility to constrain spending without cutting jobs.

As for the stimulus funds used to close Texas's deficit: there is nothing wrong, as a governor, with opposing the stimulus while also using stimulus funds to plug a budget gap. Bernstein doubtlessly realizes that Texas taxpayers ultimately paid for the stimulus bill, so there's no reason Perry shouldn't have accepted stimulus funds on their behalf (unless those funds came with strings attached). 

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