Last Call For Texas Wreckonomics

With former Texas Republican Gov. Rick Perry back in the race, The Kroog revisits the "Texas Miracle" that Perry touted in 2012 and finds things are not nearly as rosy.

The facts: For many years, economic growth in Texas has consistently outpaced growth in the rest of America. But that long run ended in 2015, with employment growth in Texas dropping well below the national average and a fall in leading indicators pointing to a further slowdown ahead. In most states, this slowdown would be no big deal; occasional underperformance is just a fact of life. But everything is bigger in Texas, including inflated expectations, so the slowdown has come as something of a shock.

Now, there’s no mystery about what is happening: It’s all about the hydrocarbons. Texans like to point out that their state’s economy is a lot more diversified than it was in J.R. Ewing’s day, and they’re right. But Texas still has a disproportionate share of the U.S. oil and gas industry, and it benefited far more than most other states from the fracking boom. By my estimates, about half the energy-related jobs created by that boom since it began in the middle of the last decade were in Texas, and this extractive-sector windfall accounted for about a third of the difference between growth in Texas and growth in the rest of the country.

What about the other two-thirds? Like the rest of the Sunbelt, Texas is still benefiting from the long southward shift of America’s population that began with the coming of widespread air-conditioning; average January temperature remains a powerful predictor of regional growth. Texas also attracts new residents with its permissive land-use policies, which have kept housing cheap.

Now one of the three big drivers of Texas growth has gone into reverse, as low world oil prices are bringing the fracking boom to a screeching halt. Hey, things like that happen to every state now and then.

But Texas wasn’t supposed to be like other states. It was supposed to be the shining exemplar of the economic payoff to reverse Robin-Hood economics. So its recent disappointments hit the right-wing cause hard — especially coming on the heels of the Kansas debacle.

So no, Perry's second term set Texas up for a disaster and now the state is cutting back even more on social programs. It's amazing how tax cuts for the state's top earners manage to not create anything but more money for the state's top earners.

Greece Calls The Troika's Bluff

Greece isn't paying up on its debt as PM Alexis Tsipras has called the troika's bluff, and the European Union, the International Monetary Fund, and European Central Bank are now scrambling to get something locked in before markets open on Monday.

The European Union's chief executive declined to speak to Greek Prime Minister Alexis Tsipras on Saturday after the leftist leader rejected as "absurd" international creditors' terms for a cash-for-reform deal to keep his country from default.

An EU official said European Commission President Jean-Claude Juncker, who has tried to bridge the gap between Athens and its lenders, refused to take a telephone call from the Greek premier since there was nothing new to discuss.

A Greek government official denied the report and said Tsipras held a conference call on the debt crisis with German Chancellor Angela Merkel and French President Francois Hollande.

The unresolved debt impasse, which is weighing on financial markets and could hit the global economic recovery, will hang over a Group of Seven leaders' summit that Merkel will chair in southern Germany from Sunday. A German spokesman said Tsipras was not invited.

With time running out for a debt deal and Greece struggling to meet its payment obligations, relations between Athens and its European and IMF lenders have turned increasingly raw.

A European Commission spokeswoman said in a text message: "I can confirm that there was a request for a call. President Juncker and PM Tsipras will certainly stay in contact in the coming days, as was said in the statement on Wednesday night."

Tsipras had been due to return to Brussels for more talks on Friday but, faced with a backlash inside his Syriza party, went to the Greek parliament instead and denounced the creditors' conditions as a "very bad negotiating trick".

"The Greek prime minister requested a phone call for 1100 CET on Saturday, but Juncker declined because there has been no progress in the discussions, and proposals that the Greek side promised on Wednesday night to deliver on Thursday have not arrived," the EU official told Reuters.

"There have been no new developments so there was nothing to discuss," the official said.

And so the deadline for Greece's debt payment has passed. There's "nothing to discuss" now.  The markets may have a very, very different opinion on Monday morning.

Post-Racial America Update

The more things change, the more they stay the same.

On Wednesday, four former security personnel at CVS Pharmacy stores in New York filed a federal lawsuit in Manhattan, alleging that their loss-prevention supervisors regularly instructed them to tail black and Latino shoppers in particular. The supervisors, the suit claims, told them that “black people always are the ones that are the thieves,” and that “lots of Hispanic people steal.”

The lawsuit renews attention to an issue that reached a high point last August when two high-profile retailers in New York, Macy’s and the luxury retailer Barneys, each paid more than a half-million dollars to settle racial profiling claims after investigations by the state’s Civil Rights Bureau.

“While there have been many high-profile shop-and-frisk cases filed by customers of large retailers in recent years,” David Gottlieb, attorney for the plaintiffs, told The New York Times. “this is the first time a group of employees has banded together to provide an inside account and expose the blatant racial profiling policy at one of the largest retailers in the world.” 

In a statement, CVS said it “rigorously enforces” its nondiscrimination policies, adding it was “shocked” by the allegations in the lawsuit and would “defend against them vigorously.”

But racism is over, because we elected a black president and stuff.

CVS I'm sure is hoping for a quick and quiet settlement, because if this goes to trial, the headlines are going to be nasty as hell for them.

Also, just took this place off my list of stores I visit.  Walgreens is also in the neighborhood and I'll choose to shop there from now on.