EDITORIAL

Perry’s ‘Texas Miracle’

If it weren’t for the entertainment value, I’d be worried about Texas Gov. Rick Perry entering the Republican presidential race. After all, the four-term chief executive of the nation’s second-largest state has to be considered the presumptive favorite in the Republican field. And if he gets nominated, there’s no telling what the voters might be fooled into doing. Look at how far George W. Bush got.

Sure, you have former governors Jon Huntsman of Utah and Buddy Roemer of Louisiana as voices for sanity among the GOP hopefuls, but there appears to be little demand for sanity among Republican primary voters. Mitt Romney has been forced to renounce most of the good things he did as governor of Massachusetts — particularly the state’s health care plan that was the model for the federal Affordable Care Act — and while he is the choice of establishment Republicans and editorial boards, it is doubtful that the fundamentalist Christians who drive the Tea Party movement will tolerate a Mormon as a nominee.

Rep. Michele Bachmann (R-Minn.) had her day in the sun Aug. 13 with the victory in the Ames, Iowa, straw poll, but Perry deliberately eclipsed Bachmann’s moment as he chose that day to announce his own candidacy for the White House.

Perry had a rough start when reporters got ahold of his Washington-bashing book, Fed Up!, in which he opined last year that Medicare and Social Security are unconstitutional “Ponzi schemes,” as well as his off-the-cuff remarks suggesting that Fed Chairman Ben Bernanke would be engaging in treason if he increases the money supply in an attempt to improve the economy before the election. That loose cannon shot got Wall Street’s attention in a week that the stock market was in free fall — adjusting the money supply is part of Bernanke’s job description, after all — and Karl Rove, who brought Perry into the GOP but has since fallen out with Gov. Goodhair, called Perry “un-Presidential,” but Republican kingmakers are finding that the bench is thin and Perry’s Bernanke bashing may appeal to the teabaggers. After all, as Austin political consultant Harold Cook notes, “Don’t you imagine that all those wing nuts whose support Perry is after like that there is now a candidate in the race who is ‘un-Presidential’?”

But despite the talk of a Texas “Economic Miracle,” there is considerable doubt that Perry had much to do with the state’s relatively good health. Almost half of the state’s job growth in the past two years came in the education, health care and government sectors, Laylan Copelin reported in the Austin American-Statesman (July 17). Those same areas took a hit as federal stimulus money ran out and the Legislature cut 8% from state spending, forcing layoffs of thousands of state workers, health professionals and teachers. Indeed, the state’s jobless rate increased to 8.4% in July.

The state’s natural advantages include a thriving energy industry, Gulf ports and proximity to Mexico, as well as a young and rapidly growing population. “As for our reputation as a low-tax, low-service state, that’s always been true, ever since the Republic,” James Galbraith, a professor at the Lyndon B. Johnson School of Public Affairs, told the Statesman. “Gov. Perry did not inherit a high-tax, high-service state and transform it.” Galbraith said other economic factors, not Perry, are driving the Texas economy: “He has no influence that I’m aware of over geology, the oil price, immigration or capital inflow.”

The state has relatively low tax rates, as the average Texan spends just 7.9% of his income on state and local taxes, compared with 9.8% nationally, according to the Tax Foundation. That 7.9% is up from 7.1% when Perry became governor in 2001. But only five states have lower tax burdens.

Texas has relatively low housing costs, ranking 40th in median home prices. Texas was not hit as hard by the collapse in housing prices as other states where housing prices were inflated by speculators. Texas has stricter regulation of home equity loans that limited “cash out” refinancing, where homeowners could take advantage of higher house prices to refinance their homes and pocket the difference. The state did not allow home equity loans until 1997 and then Democrats, in one of their last populist stands before the Republicans took over, insisted on limits that made it harder for bankers to misuse home equity loans. (Perry was agriculture commissioner at the time and was not a leader in the home equity debate.) In Texas, cash-outs and home equity loans cannot total more than 80% of a home’s appraised value and borrowers cannot use the refinance to pay other debts.

Much of the Austin boom was due to the state’s investments in the University of Texas and high-tech research centers in the 1980s that fueled the high-tech boom in the 1990s. But this year the state cut $4 billion from public schools and $1 billion from universities, which could make it harder to find qualified workers.

The proportion of adults without a high school diploma is projected to increase from 12% today to 30% in 2040 if current trends continue, the state Comptroller’s TexasWorks study reported in 2008. That study also predicted another 30% of the 2040 labor force will have only a high school diploma and no training for high-tech jobs.

Texans used to be proud that university costs were kept low enough that the children of working-class parents could pursue a college education. The state paid 85% of the cost of running the University of Texas in 1970, when tuition for Texas residents was $50 per semester and fees were $54. The Legislature has reduced its appropriations to cover about 20% of the university’s budget. Tuition now costs $4,908 per semester for Texas residents and the total cost for undergraduates, including fees, room and board, is almost $25,000 per year, putting it out of reach for many middle-class high school graduates.

Perry also brags that Texas has generated 37% of the country’s new jobs since 2009, but he is less forthcoming about the 26% of Texas residents who lack health insurance — ranking 50th among the states — compared with a national average of 17%. Sarah Kliff of WashingtonPost.com noted (Aug. 15) that the 6.3 million uninsured Texans is a population nearly equal to the entire state of Massachusetts.

Texas has a high number of retail and service jobs, as well as a large agricultural sector, all industries that are less likely to offer health benefits. The Kaiser Family Foundation reports that 71% of Texas uninsured are part of a family that includes a full-time worker. Put another way, 63% of uninsured, working-age Texans have a job — just not an offer of insurance to go with it.

Medicaid is relatively limited. The state covers some optional populations — pregnant women and those in long-term care, but otherwise largely sticks with the federally mandated minimums. And Perry would like to do away with those requirements.

Insurance rates are largely unregulated. Texas does not require insurers in the individual market to sell to anyone who applies for a policy. The insurance company can charge higher rates or refuse to sell policies to older people, women or those with pre-existing conditions.

Perry has done little to make health insurance more affordable. He promoted a 2003 law that caps medical malpractice awards, making it harder for injured patients to recover damages from negligent physicians, because now there is little incentive for lawyers to take malpractice cases. But “tort reform” has not controlled health care costs — since 2003, Texas Medicare reimbursements have actually been rising faster than the rest of the country, Public Citizen reported in December 2009.

Perry is a good-looking guy and a competent speaker, if he can learn to stick to the script. If he can sell himself in Iowa, he could lock up the race next March in the southern primaries regardless of what Mitt Romney does in New Hampshire.

His Texas record is a target-rich environment. His campaign gives us an excuse to reprint Molly Ivins’ snark (see page 8). As I told a friend who is covering Perry’s campaign for a Texas daily newspaper, “I hope you have a good ride on Perry, but not long enough to where he does real damage to the country.” — JMC

From The Progressive Populist, September 15, 2011