On the 80-mile drive from San Antonio to the Texas capitol in Austin, it’s difficult to miss the signs of growth. At every highway exit, it seems, huge new shopping malls greet motorists. Valleys where cattle grazed five years ago now sport shiny new Target stores, tract homes, and tennis courts. Between 2000 and 2009, Texas added about 4 million residents, more than half of them migrants from elsewhere in the nation. And Texas will almost certainly emerge from the recession with the nation’s strongest and most important economy.

In May alone, Texas, America’s second most populous state, added over 75,000 jobs—more than California (the biggest), New York (third biggest), and Florida (fourth biggest) combined. Texas has shown consistent gains in 10 of the 11 categories of private employment that the Bureau of Labor Statistics measures.

The state is far more than cowboys and oil: It has several of the nation’s leading medical research centers (Baylor and UT hospitals among them), one of the biggest computer makers (Dell), and a financial industry that never took a turn for the worse. And, even though unemployment remains a tick over 8 percent (about a point and a half lower than the national average), the rapid growth is bringing this down quickly. During the last week in June, the job-hunt website Monster.com offered more new job openings in Texas than in California even though the Golden State has over 10 million more people. In a nation looking for economic good news, Texas stands out as a bright spot.

What are the real secrets to Texas economic growth and attracting new residents? High oil prices, Lack of state income tax, nice weather and business-friendly environment all play an active roll but the real secret lies in Texas’ limited but activist government and affordable homeownership.
- Spending on public schools, improved the universities, and funneling dollars to efforts to make Texas a medical research hub
- Spending hasn’t increased faster than population growth and inflation.
- Expanding Transportation infrastructure; every major Texas metropolitan area has built new roads or greatly expanded existing ones.
- because of its prodigious road building, put more areas within easy commuting distance of its job centers.
- Remaining affordable homes; as a result, it was possible to build homes in Texas without resorting to subprime loans that damaged the rest of the economy.
- Inland location offers major metropolitian areas room for growth
- Public and private investments in the arts, parks, and universities have brought Texas a large affluent professional class.

In short, a state known for size and excess has succeeded because of public policies that avoided excesses of big government overspending, poorly conceived private lending, and business-government land planning. In this way, Texas offers important lessons for other states looking to claw their way out of the recession.

By Eli Lehrer. See the full article from The Weekly Standard here.