Authors: Lawrence Wright
In good times, a kind of forgetfulness falls over the land. It’s easy to make money when the price of oil skyrockets and building cranes loom over the cities like praying mantises and the malls are jammed and you can’t get a dinner reservation. Then the reckoning arrives.
The central fact about boom societies is that they inevitably go bust. The collapse of oil prices, beginning in the early 1980s, then falling into an abyss in 1986, put an end to one of the most expansive periods in Texas history, bringing down the savings-and-loan industry and puncturing the real-estate bubble that had created so much illusory wealth.
In the Age of Money, Roberta and I watched many of our friends sending their children to private schools named Saint This or Saint That. They spent their evenings going over architectural plans, and generally lived life as it is glimpsed in magazine ads. Occasionally, we made the mistake of going out to dinner with them. We spent more on the tip than Roberta and I would ordinarily spend on a meal.
A few years into the decline, I was serving on a jury in Travis County, which includes Austin. During a recess, I walked out of the courthouse to get some air, and there was a mob of people on the steps, pushing themselves forward to grab a paper that was being handed out. I had gotten used to signs of economic distress by then. Department stores were shuttered. Vacant skyscrapers were called “see-throughs.” Out-of-state interests bought up our newspapers and banks, so that we lost control of our sources of information and finance. Now Serving Breakfast banners foretold the next restaurant about to close. One of my neighbors, an engineer who worked for the city, lost his house and moved into his Volkswagen van. But I had never seen foreclosed properties for sale on the courthouse steps.
My father, who was a retired banker by this time, watched many of his friends and colleagues in Dallas go through bankruptcy. They had been some of the most respected people in the city, the money men who had raised Dallas fifty stories into the air. One of Daddy’s friends, Jim Toler, a jovial former college football star, was the mayor of Garland, near Dallas. At Christmas, we always got a burlap bag of pecans, inscribed Nuts to You from Jim Toler. He had made a fortune on a crazily speculative suburban condominium development along the I-30 corridor. Some of the properties were sold as many as eight times in a day, starting at $100,000 in the morning and winding up at a million bucks by nightfall. There was a lot of fraud involved. Savings-and-loan associations, once known as “thrifts” because they were supposed to be more cautious financial institutions, had been deregulated in the Carter administration, and they became the piggy banks for the speculators. They were making loans on properties at 110 percent of the grossly inflated values, meaning that buyers, instead of putting money down, got a cash bonus when they signed the loan. You’d walk away with thousands of dollars in your pocket. The concept spread like a virus, infecting SLs all over the Southwest. When the scheme collapsed, more than seven hundred financial institutions in the country were shuttered. Toler was eventually convicted on forty-one counts of conspiracy, racketeering, and bank fraud. Daddy used to visit him in prison.
Our former governor John Connally, who had been secretary of the Treasury under President Nixon, suffered a humiliating bankruptcy auction. He sat gallantly with his wife, Nellie, over the four days it took to dispose of their luxurious possessions, including his ceremonial saddles, extensive gun collection, Persian rugs, and even a Santa Claus cookie jar. At the end, Nellie salvaged a cardboard box so that Big John could have a bedside table for his alarm clock.
Texas was riveted by the Connallys’ plight, but they were merely the grand marshals of the bankruptcy parade, which included Denton Cooley, the great heart surgeon in Houston, who owed $100 million on his unprofitable real-estate holdings; the Hunt brothers—William Herbert, Nelson Bunker, and Lamar—who were $1.5 billion in debt, after two of them tried to corner the market in silver; and the owner of the Dallas Cowboys, Clint Murchison Jr., who died broke. Even Willie Nelson was wiped out, owing nearly $32 million in back taxes, one of the largest individual tax liabilities ever generated by the IRS. The government seized almost everything he owned, except his guitar, which he hid at his daughter’s house. That still didn’t pay the tax collector, so he made a record to pay off what he could. It was called
The IRS Tapes: Who’ll Buy My Memories?
One day in 1989, while our children were in Saturday-morning music classes in Austin, Roberta was talking to some of the other parents about real estate. We had invested in a little rent house with a friend, paying $62,500 for it only four years before. Now it was worth half that. Roberta asked one of the mothers about the house she had had for sale for months. “Well, we deeded it back to the bank,” the woman said. “It cost us a hundred thousand dollars, but at least it’s off our backs.” Then another mother asked, “Oh, how do you do that?” It turned out that every single parent in the group was thinking the same thing. They were all looking for some relief from their crushing financial burdens.
I knew about the fall of financial titans. I had read about the sleazy dealings of some of our most prominent political figures, and the corruption and mismanagement of our financial institutions. But when the bill for these misdeeds came due, it was paid mainly through the suffering of ordinary people. For some, the downturn passed by unnoticed. That same mother who told Roberta about deeding her house back to the bank recalled that the very next day her son was picked up for a concert by a friend in a Rolls-Royce with mink-covered seats.
I looked around at the legacy of the great oil-fueled boom of the 1970s and early 1980s that had come to such a crashing end. Where were the cultural institutions, the schools, the public art? What I saw instead were cruddy strip shopping centers, garish beach communities, the ugly sprawl of car lots and franchise chicken joints and prefab warehouses that issued out of the heart of every city and crawled along our highways like poison vines. Texas in the wake of the boom was revealed to be a civilization built on greed and impermanence, a civilization that was here to take, not to give. It was odd, because Texans were always talking about how much they loved the state, but I wondered where was the evidence of that love.
I thought about what had brought us to this point. What was the source of the greed, the blunders, the bullheaded arrogance that had led to this monumental crack-up? It was clearly a culture that confused wealth with value, where every notable personality had to be a millionaire. Even during the downturn in the eighties,
published an annual review, called “The Texas 100,” of the wealthiest Texans. To strike it rich is still the Texas dream, although the state has never been rich in the way that Maryland and Connecticut and other old money Eastern states are. Even Nebraska has more millionaires per capita than Texas. And yet, when people all over the world think of Texas, they still think of big money. You can tell the oil is gushing when they start selling those oversized dollars in the airport souvenir shops.
I considered leaving Texas then. I don’t know why I didn’t. But something important happened in the wake of that mighty crash. There was a stronger sense of community as people hunkered down. The national schadenfreude that greeted the downfall of the Texas economy was sobering. Our political and business leaders began to realize that the state couldn’t compete without strong institutions and educated people. We had to diversify. Tolerance and openness were not notable Texas qualities, but they were vital for creating a resilient society in the modern world.
Maybe God, in His mercy, will spare Texas another oil boom.
You can find Confederate monuments all over the state. In 2015, the University of Texas at Austin, bowing to student demands, removed a statue of Jefferson Davis from the campus, together with one of Woodrow Wilson. Then, in the middle of the night, on August 20, 2017, workers removed the remaining Confederate statues: Robert E. Lee, General Albert Sidney Johnston, and John Reagan, who served as the postmaster general for the Confederacy. James Hogg, a progressive governor, who was the son of a Confederate general, was also taken down. The empty pedestals remain.
Steve and I both have ancestors who fought for the Confederacy. Steve’s great-grandfather was a cavalry officer in Bradford’s Regiment, assigned to guard Galveston against a federal invasion. He is thought to have been in the Second Battle of Sabine Pass, when the Yankees attempted to invade Texas in 1863. It was the most lopsided victory the Confederates enjoyed during that war. My great-grandfather on my mother’s side, Robert L. Peacock, was injured at the Battle of Chancellorsville. I have the cane a fellow invalid carved for Sergeant Peacock while he was recovering, as well as his pardon, granted at Appomattox Court House. I keep his powder flask on my desk. On my bedroom wall, as a child, I had a portrait of General Lee on his revered gray mount, Traveller. The historical memory of the Confederacy, and the lingering legacy of racism and separatism, have always been a part of my consciousness. I went through my entire education in Texas public schools without a single black classmate. I still feel ashamed of the prejudices that I struggled to shed. As a young reporter, I covered the civil rights movement, which was, after the writing of the United States Constitution, the greatest triumph of democracy in our country’s history. I had hoped that my generation would be the last to deal with racial discrimination, but hatred is a potent addiction.
Just inside the doors of the capitol building stand the marble statues of Stephen F. Austin, the entrepreneur who brought the first Anglo colonists to Texas, and Sam Houston, the first elected president of the republic. Both men were slaveholders, despite their stated opposition to the institution. Austin inherited the Texas project from his father, Moses Austin, who died of pneumonia shortly after gaining a grant to settle three hundred families in the portion of Mexican territory that was still mostly Indian country. Stephen was an unlikely frontiersman; he was short and slight, with curly hair and a fair complexion. He was better suited as a diplomat, and had it been up to him, Texas would have remained part of the Mexican nation. Although he was initially opposed to slavery, most of his colonists came from the South, and they insisted on the need for bondage. “The idea of seeing such a country as this overrun by a slave population almost makes me weep,” Austin remarked. The colonists got around the fact that slavery was illegal in Mexico by having their slaves sign a document, before entering Texas, that they were indentured servants. They remained slaves in all but the law.
The statue of Houston looks like a Roman emperor, in buckskin, gazing into the middle distance, where destiny awaits. I much prefer the gargantuan version outside Huntsville, which is sixty-seven feet tall, depicting the old soldier with a cane, staring out at I-45. Inscribed on the bronze plaque is Houston’s admonition to future Texas leaders that they should “govern wisely, and as little as possible.”