A follow up on an earlier point about Houston and extractive economies
The earlier piece: "I get tired of the articles that ascribe Houston's economic success to its lack of zoning."
Jerod Foster, Texas Tribune.
It always bugs me when people ascribe success for a reason which is mostly extraneous. In the case of Houston, Texas, while it is true that housing costs are lower because of sprawl, it's not becuase of the "lack of zoning" (which is often countered with a serious regime of deed restrictions), which is touted by people like Joel Kotkin.
Despite claims about small government and low taxes (e.g., "Everything is bigger in ... including job gains"), Texas' success has to do with its place in the oil economy in terms of production, processing, refining, and chemical manufacturing. Houston is the headquarters region for the oil industry, and as the price of oil has increased, and as production from fracking has increased, the impact on the economy in Houston, Dallas, and other Texan cities has been significant.
But the job growth isn't because Gov. Rick Perry is particularly noteworthy or miraculous ("Oops: The Texas Miracle that isn't," Washington Monthly). He can thank George Mitchell and fracking for the big increase in US oil production, and for awhile the simultaneous rise in demand from Asia, countered by supply reductions due to unrest in the Mideast, which for awhile jacked prices significantly.
Now that the price is falling, depending on where the price levels off, states reliant on oil production, especially Texas, Oklahoma, and North Dakota, risk economic contraction.
From the Main Street article "Plummeting Gasoline Prices Can Wreak Havoc on Economy Short Term":
Lower oil prices will benefit the regional economies of the energy consuming states of New York and California, the East and West coasts and the industrial Midwest, said Kutasovic. In those states, lower oil prices act as an effective tax cut by boosting consumer discretionary income and at the same time lowering production costs for manufacturing firms. ...
Yet the impact on the energy producing states such as Texas remains uncertain and depends largely on the magnitude of the decline in oil prices. If oil prices decline enough, exploration and production companies will cut both production and capital expenditures on new projects, resulting in significant job losses and a slowing in regional economic growth in these states, Kutasovic said.cf. the Businessweek story, "The Petro States of America."
Interestingly, those of us in carless or car-light households that don't purchase much gasoline aren't seeing the same significant increase in disposable income that is currently being enjoyed by car-dependent households.
In high price of gasoline scenarios, we do better, disposable-income-wise.