Wooing companies to Texas with lower wages and less regulation is not a model that can be replicated at the national level
Rick Perry's campaign is publicizing a series of quotes from Meg Whitman intended to vouch for him as Mr. Job Creator. But her words, posted on his website and emailed to reporters, in fact paint him as Mr. Job Poacher, an economic marauder who raided other states for the greater glory of Texas and pursued a growth agenda that would be impossible to replicate on the national stage.
According to the Perry campaign, Whitman said last year: "Texas Governor Rick Perry says he comes on hunting trips to California. ... And I said, 'Really? What are you hunting out here?' He said, 'Companies.'"
Perry bragged to her about the "virtually zero percent corporate income tax" and "lightning speed" permitting process in Texas, she said. She praised the state's tort reforms and "ombudsmen for every industry." If she were launching eBay right now, Whitman says, "probably Texas" is where she'd do it.
That's all really great for Texas, but it's hard to see the benefit for anyplace else -- and even harder to see how it can be a model for the country at large.
Let's say that every state streamlined its permitting, added industry ombudsmen, lowered its corporate income tax rate and offered incentives to companies to expand or relocate.
Michigan still wouldn't have Texas assets like oil and gas reserves, a warm climate, NASA and huge military installations. It would still be saddled with the heartbreaking decline of its major city, Detroit. It would still be seeing an exodus of people and the consequent loss of teachers, firefighters, cops and other government workers needed to serve them -- just as Texas has gained public employees as its population has surged.
Furthermore, before we head down the road of "We are all Texans now," those outside the Lone Star State need to ask ourselves: do we really want the Texas model? The safety net there is seriously frayed. Texas may be No. 1 in job growth, but it's also No. 1 in people without health insurance (more than a quarter uninsured), No. 1 in high school dropouts (more than 20 percent don't have a diploma or GED) and the nation's No. 1 emitter of carbon pollution. It's among the top states in child poverty, teen pregnancy and low-paying jobs, as well.
But say Americans are so desperate for change that they are okay with risking a race to the bottom. The next question is how to turn Perry's zero-sum job strategy into one where America, not just Texas, wins. Where are states like Michigan and Nevada going to poach jobs from? Mexico? Ireland? China? You can't undercut their wages. And if the answer is to be smarter, how do you take away $4 billion from education -- as Perry just did in Texas -- and still make that happen?
Back in 1991, the New Hampshire economy was in such bad shape that competitors in its pivotal primary, including Bill Clinton and Paul Tsongas, issued full-blown plans to revive that one state's economy. Maybe Perry could start with job plans for a few of what you might call donor states. What would he do in Nevada, which already has zero corporate income taxes -- even lower than Texas? How about California, which is hamstrung by union clout and voter mandates that make it nearly impossible to fund the government?
On a national scale, will he concede that not all regulation is bad for an economy? Texas is living proof. In 1998, before Perry was governor, it began requiring a 20 80 percent downpayment on mortgages, or mortgage insurance if you put down less. That helped shield Texas -- and Perry's record -- from the housing bubble and bust that is ravaging states like Nevada, Arizona and Florida. Would Perry recommend that all states emulate Texas?
Will his only proposal on health care be to let states do whatever they want with federal money? Besides "getting out of the way," does he see any federal role in reviving the economy?
A national economy can't grow by some states sucking jobs from others, based on which tax the least and let corporations off the hook on the widest range of societal responsibilities. Odd, then, that Perry's campaign would advertise him as being so skilled in this respect.
Image credit: Alex Gallardo/Reuters