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Why Texas May Not Be Equipped for the Recovery From Harvey

ORANGE, TX - SEPTEMBER 06:  Juan Aquinaga walks by a submerged car while going to check on his sister's house in Orange as Texas slowly moves toward recovery from the devastation of Hurricane Harvey on September 6, 2017 in Orange, Texas. Almost a week after Hurricane Harvey ravaged parts of the state, some neighborhoods still remained flooded and without electricity. While downtown Houston is returning to business, thousands continue to live in shelters, hotels and other accommodations as they contemplate their future.  (Photo by Spencer Platt/Getty Images)
Can Texas fix this?
Spencer Platt/Getty Images

The vast Greater Houston area continues to dig out, dry off, and otherwise recover from the epic floods of Harvey. Even before the total damage estimates have rolled in, it’s clear that the impact is going to be significant and far-reaching. This is true not just because a lot of the property damaged was uninsured, and not just because Houston is an important node in the global networked economy, or because it may not have enough construction workers.

Rather, it’s because Houston is in Texas.

Which, of course, is obvious. What is less obvious is that when a region or state is hit by a devastating effect, it’s easier to have an effective and equitable recovery when the impacted area is relatively small, densely populated, and in jurisdictions that are capable of some degree of central planning and mobilizing significant resources to build public goods for all residents.

Texas needs money, and lots of it—damages are estimated at well over $100 billion. But it also needs to be make some serious decisions: what neighborhoods should be rebuilt (and which ones should not be rebuilt); how to invest in reservoirs, dams, and other infrastructure; how to ensure that all schoolchildren have a classroom to attend; how to ensure that everybody has safe drinking water. This is a time when collective action is both necessary and sufficient. Houston doesn’t just need to rebuild houses, replace cars, and fix schools; it needs to re-engineer its housing, transportation, and educational systems.

Does Texas possess the capability to take collective action quickly and effectively? I’m not so sure.

Yes, it’s a very rich state in which people have made vast fortunes and in which huge companies (from ExxonMobil to Dell) have grown up.
And we have seen some of that exuberant, can-do Texas spirit in the Hurricane Harvey response: Mattress Mack taking people in, Michael Dell kicking in $36 million for relief, and so on. The federal government has pledged an early $8.7 billion, with more to come should Congress get its act together. Given the scope of the damage and the scale of Texas, these are drops in the bucket.

On the other hand, Texas has a long history as a quasi-libertarian paradise. This is also a state that didn’t bother to bring electricity—a basic amenity of human life and a prerequisite for a modern economy—to huge chunks of its territory until Franklin Roosevelt set up the Rural Electrification Administration in the 1930s. (Some of the most affecting passages in Robert Caro’s biography of Lyndon Johnson cover the way in which power finally arrived to the state’s farms and ranches.)

Even as it has grown wealthy, Texas has not taken adequate steps to hook up its residents to 20th century living. And it’s all been a matter of choice. Texas does not have a state income tax (aside from Florida, it’s the only truly large state not to have one). Which means it doesn’t have a mechanism to mobilize statewide revenues for big efforts. In the state, some 500,000 people live in colonias—informal settlements that aren’t connected to infrastructure like sewers and lack other basic government services.

Because it refused the Medicaid expansion and hasn’t worked to make Obamacare work, Texas has a rate of uninsurance—about 16 percent—that is nearly twice the national average. In fiscal year 2014, only seven states spent less per capita on education than Texas did.

The costs of recovery and reconstruction are unknown. But it is likely that the combination of federal and insurance payments won’t cover the entire cost. Five years after Sandy, New York state, New Jersey, and New York City are still spending significant funds to repair the damage from that storm.

Texas and Houston have chosen and built up their organizational designs over the last several decades. And when commodity prices are high and collective challenges are low, it works quite well. Being a libertarian paradise suspicious of central planning, overlaid on top of a systematic lack of interest in the plight of the poor, may be a recipe for having low housing costs, high employment, and lots of rich people. But it’s not a recipe for bouncing back strongly from a once-in-500-years weather event that affects large swaths of territory and a big section of your population.