Friday, October 4, 2013

Texas Named #1 State By Global Trade

Global Trade Magazine rated Texas as the number one state (out of 50, unless you're an Obama fan, then it's the best out of 57) for International Trade. Earlier in the year, Global Trade Magazine rated 6 Texas Cities in the top 25 US Cities in the realm of international trade. Houston, TX was ranked the best city in the US.

The Magazine ranked not only volume of importation and exportation, but customer service and "friendliness".

"They include three from last year’s ranking—Houston, Dallas and San Antonio—plus newcomers to 2012’s list: Corpus Christi, Brownsville and Beaumont. The Lone Star State’s export volume from small- to midsize manufacturers was outpaced only by California, but where the state laps the Bear Republic is business friendliness."
The scores for the top state: $51,200,446,724 (9) | Infrastructure:8 Red Tape: 9 | Total Score: 26. Florida ranked number 2 for
overall score with a 23. California had a higher volume ($68,087,967,616 (10)) and reportedly better infrastructure (10) but fell short with a bloated bureaucracy that ties up business with red tape (1). The ratings do not include taxes, of which California is among the highest in state level income and capital gains tax rates in the nation.

Governor Perry's office issued a statement containing Rick Perry's remarks on the ranking:

"Over the last 10 years, Texas has built one of the best job creation climates in the nation by committing to low taxes, smart and predictable regulations, fair courts and a maintaining a highly-skilled and educated workforce," said Gov. Perry. "This combination has not only attracted businesses of all sizes from around the world, it has also given Texas the opportunity to grow and thrive."
 The Office of  the Governor goes on to recognize a tradition of successful capitalism-based state policies:

These rankings continue a decade-long trend of awards and recognitions for Texas' strong jobs climate. Earlier this year, Texas was named best business climate by Business Facilities Magazine and most competitive state by Site Selection Magazine. Chief Executive Magazine has also ranked Texas as the best state for business for nine years in a row through their annual survey of CEOs.

Meanwhile, eyes are on Washington, DC concerning the temporary, partial bureaucratic shutdown, the ongoing budget debate, and the pending federal government's credit limit debate.

The House of Representatives has passed four (4) budget bills establishing a Fiscal Year 2014 (FY14) budget that was scheduled to take effect on Oct. 1, 2013. Senate Democrats, who currently hold a bare majority, voted all four of these bills down. The US Senate has failed to pass a budget bill since 2008, when it passed the FY09 budget that expired in Oct. of Obama's first year in office.  The Senate has been comprised of a Democrat majority since, at least, 2006.

The House has also passed several "Continuing Resolutions" (CR) to continue the FY09 budget just like those that have been passed throughout Obama's administration.  They have passed 3 of these in the past two weeks. The Senate has failed to do the same.

Now several politicians, including Obama, have started the propaganda spins concerning the "debt ceiling" debate.

Raising the debt ceiling has no impact on the repayment of US Debt. It does not pay back that debt. It allows the government to borrow more, increasing that debt, and making it more difficult to pay back. Of course, politicians do not care. It isn't their money. It's OUR money and a debt that is shoved onto each citizen's shoulders.

Standard and Poor has issued several studies covering the bureaucratic furlough and the pending debt ceiling debate.

"Standard & Poor's Ratings Services estimates that the U.S. government shutdown will shave approximately 30 basis
points (0.3 percentage point) off of real GDP growth for each week it drags
on. We base this, in part, on the experience of the back-to-back shutdowns of
almost four weeks that happened during the Clinton Administration in
1995-1996. If the current shutdown were to run as long as that one, it could
trim approximately 1.2 percentage points from fourth-quarter growth. However,
with the economy much weaker now than it was in in the mid-1990s, the impact
could be much more severe.
[...]
"[W]ith consumer confidence hitting a 31-year low in August and third-quarter GDP
growing just 1.4%. Given that this round of debt-ceiling negotiations will
come on the heels of a government shutdown, the impact on the economy could be
even more severe."

S&P also reports the debt ceiling debate is likely not to change the current US federal credit rating. It will not improve it and will not likely bring it down, either.

Standard & Poor's sovereign rating on the U.S. is 'AA+' with a stable outlook, which according to our rating criteria indicates that we believe there is a less than 1-in-3 chance of a rating change over the next two years. We revised the outlook on the rating to stable from negative in June of this year, primarily in light of three factors:
  • The ability of the branches of government to negotiate a compromise that lessened the impact of the so-called fiscal cliff;
  • The decline in the annual general government budget deficit to half of its 2011 level, with projections of further declines through 2015 (10% of GDP in 2011, 4.9% in 2013, and 2.9% in 2015); and
  • The strengthening economic recovery.
These developments suggest to us the potential for further compromise and allow more time in deciding upon further fiscal adjustments. Also, most sovereigns find it easier to adjust when the economy is stronger.

Of course, those are all contingent upon further reduction of the deficit, passing an actual budget, and not increasing the federal debt or its proportion of GDP. The above was the reasons for the change from "negative" to "stable" with no increased in actual rating. Note that the second bullet is a direct result of the so-called "sequestration" that many politicians have since vilified.

Perhaps legislators and bureaucratic heads in DC need to visit Texas and take a lot of notes on "what 'right' looks like".