punched through previous peak employment levels. here is the job creation record of the so - called mega - states within the united states since 1990. and last, and just for fun, here is the record of texas ’ job creation over the past two decades versus resource - rich countries, such as australia and canada, as well as versus the major countries of europe, the u. s. and japan. bis central bankers ’ speeches indulge me for a minute here. i share these with you not to engage in stereotypical “ texas brag ” or because st. andrews has become a popular destination for recent generations of undergraduate scholars from texas. i do so to illustrate a point, specifically the influence of fiscal policy on the effectiveness of monetary policy. the limits of monetary policy and the importance of fiscal policy here is the rub. as mentioned, the fomc sets monetary policy for the nation, for all 50 states – its influence is uniform across america. the same rate of interest is charged on bank loans to businesses and individuals in texas as is charged new yorkers or the good people of illinois or californians ; texans pay the same rates on mortgages and so on. why is it that the texas economy has radically outperformed the rest of the states? a cheap answer is to revert to the hackneyed argument that texas has oil and gas. it is true that we produce as much oil as norway and almost as much natural gas as canada. and we have some 60 percent of the refineries of the united states. but remember that the numbers i showed you are employment numbers. only 2 percent of employment in texas is directly generated by oil and gas and mining and related services. we are grateful that we are energy rich. but we are a diversified economy not unlike the united states, where business and financial services, health care, travel and leisure activities and education account for similar portions of our workforce. why, then, do we outperform the rest of the united states? bis central bankers ’ speeches to me, the answer is obvious : we have state and local governments whose tax, spending and regulatory policies are oriented toward job creation. we have the same monetary policy as all the rest ; our income is taxed at the same federal tax rate ; and we are equally impacted by washington ’ s tax, spending and regulatory policies. but we have better fiscal policy at the state level. we have no state income tax ; we are a right - to - work state ;

months earlier, in december 2009. 2 we have now recovered fully from the great recession and are back on pace in leading the nation in job growth. yes, we have a very large number of people earning minimum wage, a still - too - high unemployment rate of 7. 8 percent and many other deficiencies, all of which were pointed out in high relief when a certain texas governor was briefly in the hunt for his party ’ s nomination for the presidency. but i ’ ll bet you, those who love to point these things out and are given generally to texas - bashing would give their right – or should i say, left - arms to have the record of job growth of the eleventh federal reserve district that is documented by these charts. so good citizens of austin and of texas, you have much to be proud of. as to projections, there is no reason to not expect continued job growth at the same pace in texas. the budgetary constraints originally assumed for the state government have proven less severe than originally thought : due to stronger - than - anticipated tax receipts, cutbacks in employment for schools and other state and local institutions may end up being less drastic. and if the dallas fed ’ s texas business outlook surveys for january, released this past monday and tuesday, are reviewed, job expansion looks promising and expectations regarding future business conditions are at the highest level in almost 12 months. our most recent employment indexes in those surveys signaled an increase in both employment levels and in hours worked. 3 thus, barring some unforeseeable shock, i would expect texas to continue leading the nation in job creation. according to the national bureau of economic research, the nation went into recession in december 2007 and came out in june 2009. according to the dallas fed ’ s texas index of coincident indicators, texas went into the recession in august 2008 and came out in december 2009. these surveys can be found on the dallas fed website at www. dallasfed. org / research / surveys / index. cfm. bis central bankers ’ speeches an inconvenient truth incidentally, our record of job growth and the fact that people and companies have been voting with their feet and relocating to texas from other states illustrate what for some is an inconvenient truth. the citizens of texas and the eleventh federal reserve district operate under the same monetary policy as do the rest of our fellow americans. we have the same mortgage rates, pay the same rate of interest on commercial and consumer loans,