Paul Krugman reiterates that he thinks that the Texas miracle is Republican mumbo jumbo. However, I’ll reiterate that Texas might still have a slight edge over New York and Massachusetts. I highly doubt that the result is budget related, but I simply think that unemployment rate (depicted in Krugman’s graph) does not tell the whole story.
When looking at employment since peak rather than unemployment rate over time, Texas remains above (relatively speaking) New York and Massachusetts. Again, absolutely not a miracle, but Texas is, according to those numbers, doing a bit better.
Update: Free Exchange at The Economist Online has a post on the issue.
In Paul Krugman’s analysis, he uses unemployment rate, which might not tell the whole story about the labour market. The following graph uses the same three states, but depicts the employment situation since the peak, before the recession.
The graph does show that Texas has a bit of an edge on Massachusetts and New York. In fact, it shows that Texas is doing fairly better 22 months after its employment peak. Surely, it does not seem like Texas has had a full proof economy throughout the recession, but employment does seem to be doing better so far.