Texas at the Turning Point
by Jared E. Hazleton
In a popular movie a few years ago, Ann Bancroft and Shirley McClain play two ballet dancers. At an early point in their careers, Shirley McClain's character left the world of dance to become a housewife, while Ann Bancroft's character continued on to become a prima ballerina. Now in middle age, they are brought into contact -- and conflict -- when Shirley McClain's daughter suddenly emerges as a potential star of the ballet. The theme of the movie, as indicated by its title, is that at some point in one's life, there occurs a turning point -- events take place, decisions are reached, actions result -- which have far-reaching effects on the future course of events.
Each of us can point to turning points in our lives. But is it also appropriate to think of "turning points" in the collective lives of a people? I believe it is, and the thesis I should like to explore with you today is that events have conspired to bring Texas to a turning point -- a sea change, which promises to send us on uncharted, potentially perilous, but undoubtedly challenging waters. The decisions we make in the next few years will set us on a new course. The effects of these decisions will be with us for years to come -- impacting our social, cultural, and economic lives and shaping the future our children will inherit.
The pivotal decisions facing Texas today are the result of the major changes which have occurred in our state since 1973. In the absence of this period of rapid change, Texas might have continued on an evolutionary path -- following the gradual pattern of change which characterized the state in the 1950s and 1960s. The experience of the 1970s and 1980s, however, served to accelerate the pace of change -- collapsing into a few years a transformation that otherwise might have taken decades to occur and bringing us to a climax out of which a new pattern of growth for the state will emerge. Before examining these changes let us first consider the background against which they occurred -- Texas in the mid-20th century.
The Texan MythIt frequently is useful to see ourselves as others see us. In this regard, a delightful new book, Honkeytonk Gelato, by Englishman, Stephen Brook, is instructive:
In his description of Texas at mid-century, The Super-Americans, John Bainbridge linked the bonds that tie Texans together with the idea of the frontier:
"The puzzle of Texas is that it is simultaneously diverse and unified. Climatically, topographically, economically, the east has no connection with the west; yet the Texans sense of themselves, their cultural identity, whether formed by a shared passion for football or Willie Nelson or frosted margaritas, links the rancher from San Angelo with the timber merchant from Nacogdoches like mountaineers at different heights yet on the same rope. Education has much to do with it. Texas history is taught in schools and Texans grow up revering common heroes. A heritage compounded of legend and historical fact is communicated to each generation."(1)
Bainbridge, in Lon Tinkle's words, saw that "the reality, the experience of Texas was a kind of rerun for the rest of the nation of its growing pains."(3) Historian T. R. Fehrenbach observes that the Texan was the epitome of the American:
"In the same way that America stands as the frontier of Europe, so Texas stands in the collective American imagination as the frontier of America -- the land of the second chance, the last outpost of individuality, the stage upon which the American Drama, in all its wild extremes, is being performed with eloquence and panache, as if for the first time."(2)
What were those traits? Foremost among them was a naive optimism which gave Texans confidence even in the face of stiff adversity. Bainbridge observed, "Texans are imbued with an unshakably buoyant spirit, as if, in Camus phrase, there lived within them an invincible summer."(5) Coupled with an optimistic outlook, and perhaps dependent upon it, was the Texan's high capacity for risk-taking. Trying to coax a living out of hard scrabble land and attempting to find elusive deposits of oil under millions of acres of ground are hardly occupations for the faint of heart or for those of a doubting mind. Entrepreneurship seems to come naturally to Texans. The Puritan Ethic found fertile ground here. Texans have never been shy about their addiction to materialism. Fehrenbach writes:
"All his traits of heart and mind and actions were American traits in some degree. Nothing the Texan did, or believed, or thought, was foreign to America, though some of it was foreign to some Americans."(4)
Texans were also highly individualistic -- tending to look with scorn on government or other collective forms of action, convinced that each person could -- and should -- take care of himself. Fehrenbach notes:
"The Texan still believed subconsciously that work was the real virtue, and acquisition of property its reward; that ceaseless, aggressive action was the proper sphere for man, and God had given him the world for his arena; that social classification was wrong but status all-important; and that the only logical, or moral, basis for status was acquired wealth."(6)
Describing the Texas of the 1950s, Bainbridge observed:
". . . inevitably, the survival of its value system, and the strengthening of that system particularly in the west, led Texas to deal with its poor, its handicapped, its colored, and its blind, insane, and aged less compassionately than any comparatively wealthy state . . . Votes for Negroes, desegregation, welfare, and various forms of the so-called civil rights for the non-peer group were forced down the Texas throat from the outside."(7)
Like all myths, the stereotyped description of the Texan was never completely accurate. But it served the societal function of myth -- to give a shared sense of identity. In the 1950s and l960s, the myth was slowly coming unraveled as Texas commenced that process of homogenization that is the hallmark of industrialization. Fehrenbach wrote of that process:
"The life- style in Texas is marked by bravado, zest, optimism, ebullience, and swaggering self-confidence . . . the spirit of the frontier persists, giving Texas its special tone and explaining in large part its peculiar fascination for foreigners -- especially Americans, since the frontier is the most highly cherished element in the American experience."(8)
"As the raw scar of the frontier fades and the frontier values evaporate, as they must; as Texan society grudgingly grows genuinely metropolitan, as it mixes and amalgamates with fresh waves of human stock, patterns change. The people change, as they must change . . . Already certain Texas chauvinisms are dying; Texans are revising their own mythology . . . When they have lost it altogether, and when the office-working, car-driving Texan is completely indistinguishable from his Northern counterpart, the history of Texas, as Texas, will be done."(9)
Fehrenbach thought that it might take a hundred years for the reality of the frontier to fade from the memory of Texans. His book, published in 1968, could not foresee the major changes Texas would undergo in the next two decades. To some, the events of these years have brought a stark new reality to Texas. To others, they simply served to validate the old myth.
Perhaps the most dramatic changes have been those dealing with the state's population. The population of Texas has been growing at a rate far in excess of that of the nation as a whole. In 1950, about 7.8 million people resided in Texas. By the 1970 Census, that figure had grown to 11.2 million, but the growth rate appeared to be tapering off. But in the 1970s, Texas added over 3 million people -- a whopping 27 percent increase as compared with an increase of 11 percent for the nation as a whole. In the first five years of the 1980s, the growth continued and the state's population rose almost another 2 million. Thus, in the past 15 years, Texas experienced a population growth rate nearly three times that of the nation.
Much of that growth was due to in-migration of people from other states. With falling birthrates throughout the nation, the single most important factor in population redistribution became interregional migration. Between 1970 and 1980, net in-migration to Texas amounted to 1.7 million people and accounted for 58 percent of our population growth. In the first half of the 1980s, net movement into the state averaged 300,000 per year! However, the number of in-migrants steadily declined, from an annual average of 358,000 in 1980-1982 to 241,000 in 1982-1983 to 33,000 in 1983-1984. It is likely that in the 1985-1986 period, net in-migration to Texas virtually ceased. In-migrants were drawn to Texas by the prospect of economic opportunity, a temperate climate, and a relaxed style of living.
Those moving to Texas in the 1970s and early 1980s -- on the average -- were well educated, above average in income, and upwardly mobile. Interregional migration in the was fueled by the entrance into the labor force of a large pool of "baby boomers." They tended to be relatively well-educated -- in comparison to previous generations, unmarried, and hence, mobile. However, as the "baby boomers" have aged, and as the number of new entrants into the labor market has waned, the pool of potential migrants has shrunk and interregional migration has diminished.
At the other end of the population spectrum, the elderly account for a growing share of interregional migration. Declining birthrates over the past two decades resulted in a rise in the median age of the U.S. population. The number of people over age 65 has risen dramatically. At the same time, as a consequence of more than 50 years of Social Security, Medicare, and post-World War II prosperity, more and more elderly people are able to realize income security during their retirement years. This relative influence has encouraged geographical mobility among the elderly, and people over 65 now account for a growing percentage of interregional migration. While Texas has attracted its share of this elderly age cohort, the median age of the state's population remains below that of the nation at large.
Texas is now one of the most urbanized of the states. In 1950, about four Texans in ten resided in rural areas. Today that figure has fallen to less than two Texans in ten. In fact, the 1980 census revealed that Texas is now more heavily urbanized that the nation as a whole.
The growth in Texas population has been broadly distributed across the state. In the 1960s, 146 of Texas' 254 counties lost population. However, in the decade of the 1970s only 44 of the counties lost population.
Unlike the nation as a whole, however, urban areas in Texas grew faster than rural areas in the 1970s and early 1980s. The proportion of the state's population located within metropolitan areas has risen markedly -- from 78.3 percent in 1970 to 82.5 percent in 1986. While all of Texas' metropolitan areas experienced positive growth over the past 15 years some grew quite rapidly. The geographic distribution of the state's high growth areas centers around the Interstate 35 and Interstate 45 corridors and along the international border with Mexico -- where growth rates have exceeded three percent per year. Only three metropolitan areas -- the Texas-Oklahoma-Arkansas border areas of Wichita Falls, Beaumont-Port Arthur-Orange, and Sherman-Dennison -- experienced population growth rates of less than one percent.
Within urban areas, the most rapid growth has taken place on the fringes and in the suburbs. This growth has out-paced the growth of the population within our central cities. From 1960 to 1980, the amount of land located within metropolitan areas increased over 70 percent! Today, over 28 percent of the land area in Texas lies within one of the state's 26 metropolitan areas. In summary, as Texas entered the 1980s, it could be described as having a population growth rate more than twice that of the nation, a rapid rate of in-migration, and a predominantly metropolitan population. However, by mid-decade, these trends had largely abated. In part, this was due to the coming of age of the "baby boomers7 which reduced interregional migration. Also, it largely reflected the changing fortunes of the Texas economy -- a topic to which w e now turn.
In looking at the winds of economic change that have swept across Texas since 1970, one must be careful to distinguish between the "oil boom" years of 1974-1981, and the years of economic decline between 1982 and 1986. Both periods play a crucial role in bringing the state to a turning point.
Texas has experienced a rapid growth in employment. Statewide, nonagricultural employment grew by more than 45 percent between 1970 and 1985. This compared to an increase in the nation of just over 27 percent. However, since 1981 Texas has lost nearly 234,000 jobs in mining and manufacturing. The bulk of these jobs were associated directly or indirectly with the internationally beleaguered energy sector. In spite of this loss of jobs in manufacturing and mining, Texas managed to add 500,000 jobs over the past five years -- due to growth in the trade, services, finance, and government sectors.
During the oil boom years, the structure of the state's economy changed very little. The industries that accounted for exports out of the state in 1970 were the same industries that accounted for exports out of the state in 1980. However, in the past five years, the structure of the Texas economy has been changing, as illustrated most clearly by changes in each sector's relative share of employment. Over the past five years the share of the industrial sector -- defined to include mining, manufacturing, construction, and transportation -- has fallen by 6.4 percent while the trade, service, finance, and government sectors have risen by 6.2 percent. While the same general trends may be observed in the national economy, the impact in Texas has been greater than in the nation as a whole.
For the most part, structural change in the Texas economy reflects the state's heavy dependence on the energy sector. At the height of the oil-boom years, petroleum and natural gas accounted for 28 percent of the state's gross product. Today that figure has fallen to less than 20 percent and continues to decline. The heavy dependence of the Texas economy on energy markets results from the fact that nearly all of the state's mining and much of its durable goods manufacturing are highly sensitive to changes in the price of petroleum. A significant portion of nondurable manufacturing is concentrated in petroleum refining and petrochemicals. Both ends of the energy sector -- production and processing -- are in the throes of structural change, and many of the effects are being felt in Texas today.
In 1981, the price of a barrel of West Texas crude stood at roughly $35 and most energy experts were predicting that the price would rise -- after adjusting for inflation -- at a two to three percent rate throughout the remaining years of the century. Conveniently forgotten were the lessons of elementary economics -- when the price of a commodity rises rapidly, consumers attempt to conserve on its use, or find substitutes, and producers attempt to expand output while new firms attempt to enter the industry. The high petroleum prices of the late 1970s generated all of these effects.
Two principal factors are responsible for the loss of domestic refining and petrochemical capacity. First, the recent wave of mergers and acquisitions among the big oil companies are being accompanied by the disposition of refinery and petrochemical plant assets -- either to satisfy legal requirements or to raise cash to reduce debt burdens. Second, it is becoming cheaper to buy refined products abroad than to manufacture them at home. Over the past year, imports -- encouraged by lower prices, the strong dollar, and by excess capacity abroad -- have climbed more than 80 percent and now account for about 15 percent of total domestic gasoline consumption. The problem promises to got worse in future years because OPEC and other oil-exporting nations have spent billions on new state-of-the-art plants that, because of artificially low crude oil and feedstock costs and the absence of environmental standards, can undersell U.S. producers.
It is important to recognize that the statewide pattern of employment change is somewhat misleading since it tends to mask the much more profound changes under way in the state's regional economies. What is emerging is a sharp distinction between the experience of the diversified economies of the San Antonio - Austin - Dallas/Ft. Worth Metroplex corridor and the highly energy-vulnerable economies of the Gulf Coast. Much of the structural change in the Texas economy and the loss of mining and manufacturing jobs have been in the latter region. The metropolitan Houston area alone has lost an estimated 170,000 mining, manufacturing, and industrial construction jobs since 1981.
Accompanying the slump in the energy industry in recent years have been growing problems in American agriculture. As with petroleum, the impact of those problems has been more severe in Texas than in the nation as a whole. Between 1981 and 1983, the real value of cash receipts from the marketing of American agricultural products grew by only 5.3 percent, down considerably from the growth rates of the 1970s. In Texas, agricultural cash receipts over this period fell by 4.5 percent! Those problems resulted primarily from substantial declines in cash receipts from exports, and they reflect not a loss of comparative advantage by the U.S., but the overly high value of the American dollar.
The changing fortunes of the Texas economy are reflected in the level of per capita income. In 1950 per capita income in Texas amounted to $1,349 -- about 90 percent of the national average. By 1980, per capita income in Texas had caught up with that of the nation -- rising to $9,521; and in 1981 and 1982, per capita income in Texas exceeded that of the nation. However, we slipped below the national average in 1983 and continue to be below the national average today.
In summary, in sharp contrast to the boom years of the 1970s, for most of the 1980s Texas has been in an economic tailspin. The uneven performance of the past 15 years leads us to a number of important observations which bear on the future of the state.
ConclusionsThe Texas of today is far different than the Texas of only 15 years ago. The demographic and economic changes which we have witnessed have been dramatic. Because the prosperity of the 1970s and early 1980s seemed to validate the qualities of the mythical Texan, it was viewed by many as a natural consequence of our state's perceived virtues -- individualism, fiscal conservatism, optimism, entrepreneurial risk-taking, and unabashed opportunism. Perhaps it is not surprising, then, that the abrupt cessation of prosperity has resulted in a period of self-doubt. If our prosperity was the result of our virtue, is our recession a consequence of our loss of virtue, or is it merely a temporary blip on an otherwise steadily rising path of prosperity and growth? In reality, it is neither.
The prosperity experienced by Texas in the 1970s and early 1980s -- and the accompanying influx of people -- was not due to the inherent qualities of Texans. Instead, it resulted from the actions of an external force, the OPEC cartel, which managed to drive up the price of our main export far beyond levels that could be supported by the market. It is equally clear that we are highly unlikely to experience such a situation in the future.
Realization that the "oil boom" years were unique -- and unrepeatable -- has resulted in doubts about the future of Texas. What will happen to our state as our oil and gas reserves continue to decline and as oil prices fail to rise sufficiently to compensate for reductions in output? Hasn't the state arrived at a point where it will begin to look more like the nation and experience the economic dislocations and social problems so familiar to us all? Won't the rapid immigration, changes in the ethnic composition of our population, and increasing urbanization alter attitudes, weaken commitments to fiscal conservatism and individuality, and intensify the divisions within our society?
Make no doubt about it -- faith in the state's economy and in the capacity of the state to maintain a good business climate and a fiscally responsible government has been deeply shaken by the events of the past five years. Turning points -- whether in the lives of individuals or in the life of the body politic -- are difficult times of transition. The poet, W.B. Yeats, has painted an accurate picture of such times:
Turning and turning in the widening gyre,
The falcon cannot hear the falconeer.
Things fall apart; the center cannot hold.
Mere anarchy is loosed upon the world, and everywhere,
The ceremony of innocence is drowned.
The best lack all conviction, while the worst
Are full of passionate intensity.
Today, we do not lack for discordant voices. Political discussions are beset on every hand by special interests arguing their narrow cases and making known their demands, "with passionate intensity." Meanwhile, confidence in our capacity to preserve those characteristics, those qualities, those traits that have made Texas great is weakening. Some with ill-disguised glee borne of envy, others with a heavy heart, express doubt that we can hold on to those values we cherish.
Many predict that Texas will move to look just like any other industrial state. They paint a picture of closing factories and high unemployment in central cities, of urban congestion and a blighted environment, and most depressingly, of diminished opportunities for entrepreneurship and a bloated public sector.
I see a different picture. We can learn from the experience of others -- we are not doomed to repeat the mistakes of the past. It will require the very best that we have to build a Texas which continues to be unique -- a Texas which affords opportunity to all to improve their lives -- a Texas which combines a healthy economy with a high quality of life -- a Texas which achieves effective, yet fiscally responsible, government.
The challenge facing Texas today is to understand that age of the "mythical Texan" is gone. In its place, we must construct a new myth -- revised guideposts for a new future. We need not discard all of the past values, but we must choose carefully those we will retain.
We must begin with the recognition that our economy will depend much more on its human resources and much less on its natural resources. Investments in public education and in our colleges and universities, as well as in physical infrastructure -- highways, water supply, wastewater treatment, and airports -- are essential to long-term prosperity. Simply stated, Texas must determine the appropriate level and pattern of public spending needed to ensure its continued economic diversification and future prosperity. At the same time, Texas must retain those qualities which attract businesses and permit them to expand.
To accomplish both of these goals, Texas will have to ensure that public spending is efficient and effective by setting clear priorities, eliminating waste and duplication, and improving accountability for the use of public funds. Reallocation of funds within program areas may offer a means of achieving state objectives without massive increases in spending. If new revenues are required -- and it seems inevitable that they will be needed -- care should be taken to ensure that they are generated with a minimum negative impact on the economy. Tax burdens should be fairly distributed between and among individuals and businesses.
Turning points -- whether in the lives of individuals or in the life of the body politic -- are intervals of discontinuity. The line of the past has been broken, but the line of the future has yet to be determined. In ending his candid and often revealing survey of Texas, Stephen Brook reminds us that beneath the cultural artifacts of present-day Texas, there are qualities which will see us through our turning point:
"'ON THE EIGHTH DAY GOD CREATED TEXAS,'says a popular postcard with typical Lone Star braggadocio. Still, Texas is gloriously special, separate in style and panache from anywhere else in the United States. It has a culture that’s forthright and unmistakable. Its rich brew of cattle, oil, chili, country music, TexMex food, Stetsons, cookoffs, beauty pageants, rattlesnake roundups, ostentation, pickup trucks, silver belt buckles, machismo, and chauvinism inspire as much loathing as affection. But no one can deny that Texas has a vibrant character of its own, and a determined optimism that makes most Europeans look world-weary and effete in comparison. Nothing is impossible, say the Texans. And they mean it."(10)