Although you would never know it from The Wall Street Journal or the The New York Times, there are boomtowns in the United States beyond temporary housing camps in the Dakotas. I have been in Dallas and Houston three times in the last month for business. It is almost as if I have entered another country.
There are cranes everywhere in Houston. In Dallas McMansions are rising again in the Park Cities and Preston Hollow. Two of my good friends who are successful entrepreneurs have begun start-ups investing tens of millions of dollars of their own money in new ventures. The unemployment rate statewide is 7.1% and sharply on its way down. The employment rate in Midland in the heart of the oil fields is 3.7%.
Much of my business in Texas in the last month has been energy related and as the son of a Texas oilman I recognized all the signs of an energy boom. It is not just the conspicuous consumption that is a traditional part of Texas culture, but investment funds sloshing around looking for new ventures and new wells. Could it be that the second largest state economy and largest exporter has said enough is enough and is leading the United States out of recession?
The story here in Boulder is much the same. The Colorado unemployment rate is 7.8% and in Boulder it is 5.7%. In Texas and here in Boulder economic growth is not just slightly positive it is booming. In Boulder entrepreneurial ventures following the classic Silicon Valley path of start-up, angel financing, venture capital backing, to IPO and private equity buyouts has generated social media, cloud-based services, robotic, outdoor and adventure businesses. They coughed in early 2010, then went right back to expanding. Our biggest problem in the city to the benefit of the County of Boulder is there is no commercial office space available to rent.
What lessons can we draw from Texas and Boulder? First and foremost that the quality of your products matter more than your politicians. That the ability of your products to further your customer’s goals and interestes matters more than ideology.
In Texas science is generating huge dollars and revolutionizing our export balance, our national security, and air pollution. It is science because hydrocarbon production done correctly is amazing applied science. I helped fund my college years working in oil fields and putting in a well or developing a field is an amazing array of geology, geophysics, fluid dynamics, and engineering. If done right, it is also an amazing work environment to make money.
In Boulder the combination of a major research university, the presence of a core of successful entrepreneurs who are now venture capitalists, a major airport, and the quality of life has generated a new economy incubator. Texas is as conservative as you can get and Boulder is as liberal as you can get.
You simply cannot equate boomtown economies with political ideology. What does exist in Texas and in Boulder in slightly different tones is confidence. A confidence largely missed in the news coverage and blogosphere. Throughout the Great Recession large regional pockets, such as the northern part of the Front Range of Colorado and much of Texas have slowed down but never stopped growing. Now they are booming.
The press and much of the blogosphere are so focused on political narrative they are missing the regional successes that may announce the arrival of a real recovery. Wall Street is not the only player in the economy. There is a booming market for corn and cattle that overlaps with energy production and is generating a farm boom across the prairie. Every farm in Nebraska I saw two weeks ago has a new all metal barn and a new tractor. I just hope it is not financed on inflated land values.
There is good news regionally throughout parts of the United States. We should focus at least as much on that news as the latest Wall Street misstep. Because confidence can spread, particularly when it stems from making things world-wide customers want.