Horses and Bayonets

In the 1980 presidential election between Carter and Reagan, the League of Women Voters had attempted to organize three debates between the presidential candidates and one between the vice presidential candidates. After the primaries, John Anderson entered the race as a third party candidate and was invited into the debates. Carter refused to participate if Anderson was included and Reagan refused to participate if he wasn’t. Therefore the first debate was held absent Carter, who hoped Anderson would knock off the almost unknown former governor of California. He didn’t. When Reagan made his statement at the conclusion of the debate, it was masterful and upbeat, speaking of a destiny “to build a land here that will be, for all mankind, a shining city on a hill.” The first debate was a Reagan win.

The wrangling between the Carter and Reagan camps over Anderson’s participation continued until it became necessary to cancel the second debate and the vice presidential debate. Reagan finally relented and the third debate was held on October 28, the last Tuesday before the election without Anderson.

Throughout their debate, Carter was somber, distant, and often preachy. Reagan was sunny, optimistic, even folksy at times. Carter’s solutions involved more government. Reagan’s involved limiting government and reducing taxes. Carter tried to portray Reagan as unsuited to assume the arcane workings of the presidency, a dangerous military hawk, and a radical conservative. He pointed to Reagan’s speeches as proof-texts. Reagan responded in good humor with his famous “there you go again” and “we don't have inflation because the people are living too well. We have inflation because the government is living too well.” Reagan’s debate summation was devastating to Carter as he asked the American people if they were better off now than four years ago, and he pointed out that “if all of the unemployed today were in a single line allowing two feet for each of them, that line would reach from New York City to Los Angeles.”

Reagan won the popular vote by 10% and for every electoral vote Carter got, Reagan got ten.

The 2012 presidential debates occurred in an environment similar to that of the single Carter-Reagan debate. The economy is in the tank with out-of-control spending and a soaring national debt that is 16 times larger than in 1980. While Obama is nationally more popular than Carter at the end of his first term, he is an even more radical big government liberal than Carter. There is no hostage crisis in the Middle East as Carter faced, but we’ve just lost an ambassador and three embassy personnel who were murdered in a terrorist attack that Obama long denied was any more than a spontaneous eruption caused by a video. Most striking is the similarity of the challengers in the debates – both were governors, but relatively unknown on the national stage, both derided as unsuitable candidates by the incumbents.

The Romney campaign did not consult me for ideas concerning its debate strategy but if it had I would have said the goal of the first debate – Round One – should be to put Obama in a hole with his base, the hard left. Knowing the Maximum Leader’s natural arrogance and condescension, he will underestimate Romney, whose fitness for President he holds in low regard, and thus he will more likely come to the first debate less prepared than he will be for the other debates. If the outcome of Round One is at least a draw or better for Romney, Obama will be forced to excel in the remaining debates. It’s unrealistic to expect a knockout, I would have counseled, but go into Round One loaded with facts and deliver them in a staccato manner that puts Obama on his heels and makes the broadcast audience sit up and take note that, hey, this Romney guy is a player!

Assuming the Romney campaign was foolish enough to ask my advice on the debate strategy for Round Two, I would have said that, after so strong a showing in the first debate, Romney’s goal is don’t lose your base with a poor performance. The better-than-expected first debate performance finally got the demoralized Romney base fired up after a summer of grousing about campaign mismanagement and sagging poll numbers following the Republican National Convention. So go into Round Two prepared with talking points on your domestic policy agenda, but understand that Obama’s somnambulistic first debate performance won’t be repeated. So don’t let him do to you what you did to him and lose your base. Obama, on the other hand, must reassure his base by being very aggressive – a turn-off for the Independent voter. The enthusiasm advantage has stoked the Republicans, the poll numbers are rising, so even a draw will keep Obama from gaining ground and force him to use the third debate to continue propping up his base rather than appealing to the center.

The second debate was a draw or a modest Obama win. Romney didn’t expect he’d have to debate Obama and the moderator, Candy Crowley, and that was a turn-off to people who believe the media are biased and it didn’t help Obama with the Independent voters. Romney lost little or no ground as evidenced after the second debate by the sheer panic among the mainstream media. Even with unblushingly biased polling, the media couldn’t get their guy out of the margin of error – let alone get him in the lead.

Now comes the third debate. Surely the Romney camp would have come to its senses and not asked my advice again. But if they had, I would have said this. Look; Obama is desperate, his base is still shaky and lacking enthusiasm, he hasn’t pulled away from Romney in the polls, this is his last chance to sway the Independents and undecided voters in a side-by-side comparison, and the unfolding Libyan debacle threatens to engulf his campaign in a cover-up scandal. Romney’s goal in the foreign policy third debate is not to score points with his base, which is secure, it is to appear presidential to the undecided and Independent voters. Americans, after all, aren’t that interested in foreign policy, they just want to be assured that Romney has a grasp of it. He doesn’t have to be as granular as Al Gore in 2000 who knew the names of the leaders of all 192 countries in the world as well as the names of their wives, children, and pets. He can’t display declarative stupidity as Gerald Ford did by asserting that Eastern Europe was not under Soviet domination in the 1976 election. His Iran policy can’t scare voters into thinking he would blow up the world as Barry Goldwater did in suggesting the use of tactical nuclear weapons to end the Vietnam War in the 1964 election. Look presidential, I’d say, and don’t go for a knockout punch. Win the race rather than the debate.

Well, Romney took my advice and it frustrated the dickens out of the base when Obama served up several hanging curve balls that Romney didn’t swing at. Romney shook off Obama’s attempts to shoehorn him as a bomb thrower, (“we can't kill our way out of this mess”), an amateur (“I had the chance to be governor of a state … four years in a row, Democrats and Republicans came together to balance the budget”), and he shook off Obama’s many attempts to attack Romney which he fended off by reminding the audience that the incumbent had no record that he can run on.

Early in the campaign, it became patently obvious that the Obama strategy was to deflect attention away from the sorry state of the economy and the waning influence of the US in the Middle East by painting Romney as not ready for prime time. Romney had a record as a governor, a turnaround manager of the Olympics, and a successful business man. Given his own record, Obama had to turn these achievements into negatives and create doubts about Romney’s suitability as president and allege a bias toward the rich. The debates were his last chance and he failed.

Obama used the third debate to reach out to the undecided and Independents by portraying himself as the seasoned political executive versus the novitiate parvenu. “One thing I’ve learned as Commander-in-Chief,” he began one strutting assertion. “I know you haven't been in a position to actually execute foreign policy …” he moon-walked his soliloquy on the fine points of foreign policy – big talk from a community organizer whose only foreign policy experience prior to his election was to have eaten at the International House of Pancakes, paraphrasing Pat Buchanan.

People with Queeg-like personality disorders like Obama’s have to remind themselves of their self-worth by depreciating the worth and accomplishments of others. Under stress they lose their sense of equanimity as Captain Queeg did on the Caine mutiny witness stand. This causes them to say some truly stupid things like “you didn’t build that [business]” and “you’ve made enough money,” which usually return to haunt them as those statements did. Give them enough time and rope and they always hang themselves. And that is exactly what Romney did in the third debate. Be patient. Be a tar baby, letting Obama get stucker and stucker as he punched away. Smile at verbal abuses, although at one point Romney had to remind Obama that “attacking me is not an agenda.”

Then, voilà, Romney said, “Our Navy is smaller now than any time since 1917. The Navy said they needed 313 ships to carry out their mission. We're now down to 285. We're headed down to the low 200s” and Obama went for it like a mouse after cheese:

I think Governor Romney maybe hasn't spent enough time looking at how our military works. You — you mentioned the Navy, for example, and that we have fewer ships than we did in 1916. Well, Governor, we also have fewer horses and bayonets — (laughter) — because the nature of our military's changed. We have these things called aircraft carriers where planes land on them. We have these ships that go underwater, nuclear submarines. And so the question is not a game of Battleship where we're counting ships. It's what are our capabilities.

No doubt Obama thought he’d just had his “you’re no John Kennedy” moment, but Romney had played Obama like a fiddle, and His Immanence came off in this exchange as snarky, little, and condescending. Whatever bridges he had built during the debate to the voters on the sidelines, they probably collapsed with that remark.

After that the line, “horses and bayonets”, began trending on Twitter. "So much sass I was not ready to handle," one online comment read. Web searches for “bayonets” rose 7,215%, according to Google. Big Bird was Obama’s infantile response to the first debate, women and binders was the best he could muster from the second debate, now comes horses and bayonets. He hasn’t heard the last of it. Presidents don’t talk that way.

If you were a Martian who attended the three debates, you’d assume that Romney was the incumbent and Obama was the challenger – probably doubly so in the third debate. Romney got the bump in the polls after the first debates and is pulling away after the third. He’s ahead in Colorado and even in Wisconsin, states I’d previously conceded to Obama. Romney has pulled even in Ohio at 48% each.

In the three debates Romney came armed with facts. If anything, he’s a domestic and foreign policy wonk who likes details. Leadership comes naturally to him. Obama came armed with insults and attack points. Facts and details have never interested him and his priorities as president are suspect. Refusing to see Netanyahu due to a “busy schedule,” he left Washington for The View and an appearance on the Letterman show. Evidence is now leaking out that the White House was told within two hours that the Benghazi consulate was under attack. He did nothing even after an al-Qaeda group credit for it on Facebook. Instead he took off for a Nevada fundraiser. One has to wonder if the man wants to be president or is it Michelle who wants him to be president.

The enveloping Libyan scandal has shaved Obama’s substantial lead over Romney on foreign policy and with the help of the third debate, they are now even. Romney is well ahead in handling domestic policy. The undecided and Independent voters have seen nothing in the debates that would scare them about Romney’s fitness for the office. So while Obama may have won the second and third debates by small margins, the important thing is that Romney is winning the race by an increasing margin with two weeks to go.

As it turns out, Obama was wrong even on horses and bayonets. True, horses remain in military use primarily for ceremonial reasons – largely funerals. My uncle’s remains were drawn to his burial site in Arlington National Cemetery on a horse-drawn caisson. Bayonets are a different thing. There are now more than 600,000 in the military inventory, more than the number of soldiers on the eve of WW I and WW II – something Obama might have known if he spent more time understanding the military.

Voters would do well to heed the questions Reagan asked them on the eve of the 1980 election:

Next Tuesday all of you will go to the polls, will stand there in the polling place and make a decision. I think when you make that decision, it might be well if you would ask yourself, are you better off than you were four years ago? Is it easier for you to go and buy things in the stores than it was four years ago? Is there more or less unemployment in the country than there was four years ago? Is America as respected throughout the world as it was? Do you feel that our security is as safe, that we're as strong as we were four years ago? And if you answer all of those questions yes, why then, I think your choice is very obvious as to whom you will vote for. If you don't agree, if you don't think that this course that we've been on for the last four years is what you would like to see us follow for the next four, then I could suggest another choice that you have. This country doesn't have to be in the shape that it is in.

An Atlanta caller to the Bill Bennett morning talk show this week said his drive route to his office takes him through “a neighborhood of million dollar homes.” In 2008 their front yards blossomed with Obama signs. This year there is only one Obama sign. All of the other signs say “For Sale.”

The Bane of Bain

Nowhere has Obama’s ignorance of capitalism become more apparent than his recent attacks on Romney’s tenure at Bain

"I think my view of private equity is that it is set up to maximize profits," the smartest man ever to be President said, proving his cluelessness about private equity, business, and capitalism.

“Maximize profits”? Well, duh, yeah. When I took Economics 101, which is only an elective in the Bachelor of Community Organizing curriculum, I do recall reading something about profit maximization as the goal of business. Doing that requires jumping through a lot of hoops – like creating a product or service that free markets will buy, finding and keeping good employees, and taking lots of risks (like losing everything if management fails to stay on its toes.) Detroit and the rust belt are good examples of what happens when profit maximization ceases to be a business goal.

Having no record to run on, the Obama reelection campaign launched a broadside against Mitt Romney’s long association with Bain & Company. One video ad shows a former steel worker calling Bain a “vampire” that “sucked the life out of us.” Another worker adds that Bain “walked away with a lot of money that they made off of this plant.” Joe Biden, who would have made a better carny barker for the bearded lady tent than VP, chimed in with his canned anti-Wall Street rhetoric babbling something about America ought to be a country that makes things again.

A few words about the steel company that Bain allegedly raped and pillaged … before Bain even got into the picture, its management had driven the workforce down from 4,500 to less than 1,000. As is the modus operandi in private equity (PE) firms, Romney and Bain thought this was a potential turnaround under good management. It acquired the company, GST Steel, in 1993, replaced management, merged it with another steel company Bain had acquired, making it one of the largest mini-mills in the country, persuaded banks to lend money to it, spent $100 million in modernization, and held it for eight years – hardly the acts of a looter. The plant was unionized, one of several factors that has kept American steel from being competitive in a global marketplace in which the Japanese have driven the price of steel below the cost at which Americans can make it. The company bankrupted in 2001.

That union part, incidentally, was conveniently left out of the Obama ad, and oops, I forgot to mention … Romney had left Bain two years before the GST bankruptcy to become President and CEO of the Salt Lake Organizing Committee for the 2002 Winter Olympics and Paralympics. Darn facts – they are such pesky things!

As a follow-up, the Obama campaign released another video ad featuring Bain’s past investment in American Pad & Paper, known as Ampad. The story spin was to show Ampad as another victim of PE avarice, driven into bankruptcy and job losses. Bain's $5 million investment resulted in more than $100 million in profits. Bain neutralized the attack ad with a written statement saying that during the four year that Bain owned Ampad, the business grew and jobs were created. Ampad’s bankruptcy occurred four years after Bain had sold the company. Minor detail.

Out of the mouths of fools foolishness comes. Such is the fodder for the Reelect Barack Obama to Four More Years of Economic Black Holes and Lost Years campaign. If private equity firms bought companies, gutted them, and left the carcass to move on the next victim, the industry would be out of business quickly. Banks would no longer lend the millions needed to restructure PE-owned companies. Investors, mostly institutions – i.e. pension funds, including $220 billion of public employee unions’ pension funds – which hate publicity, especially when it’s bad, would cease providing capital.

Private equity makes money by enhancing the value of the firms they buy or invest in – not by looting them. They are not long-term investors. Generally a PE firm will hold a company for an average of about five years before making its exit because the providers of private equity – institutions and wealthy people – want their capital back (with a return) so they can redeploy it in other investments even if it means foregoing future profits. But nobody loses money taking a profit, sooner rather than later. So, private equity’s strategy is to get in, fix what’s broke, and sell its stake at some future time either to another PE firm or to the public in an IPO. The only way this exit strategy works is the new buyer sees value that can grow in the future and earn more profit.

The history of PE – aka venture capital – is long and varied. The American colonies were created with an early form of venture capital. Later, planters created plantations that were backed by capital sponsors in England who were called “adventurers” – a term that morphed into venture capital in the ensuing years.

Around the beginning of the 20th century, railroads were the new, new thing. Building them required more capital than one person or family could supply. The risks of building the cross-country lines required stern stuff in addition to capital. Most railroad entrepreneurs lost their shirts. A few didn’t, among them Cornelius Vanderbilt, Leland Stanford, James Hill, Edmund Harriman, and Mark Hopkins whose names would head family dynasties in later years.

The 1890s were years of economic turbulence and a third of the railroad track mileage then existing went into receivership. A primitive form of PE financing existed then in the form of merchant and investment bankers. Merchants who had the wealth to finance their own activities began to finance the activities of other merchants and ultimately became merchant bankers. J.P. Morgan was among the first and best known of them in this country. Investment banks were an outgrowth of the need for foreign capital in the development of railroad lines. J.P. Morgan blurred the lines distinguishing merchant and investment banking by stepping into distressed railroads, taking management control, and restructuring the underlying capital. He was hated and feared because he was good at it.

Morgan later expanded into other industries. Approaching Andrew Carnegie to sell his steel company to him, which he intended to merge with other steel companies he controlled, Morgan asked Carnegie to name his price. Carnegie wrote $480 million on a sheet of paper – a staggering sum at the time which Carnegie thought would kill the deal. Morgan glanced at the figure and said, “I accept this price.” The steel companies were merged into the new United States Steel Company, which was capitalized at $1.4 billion in bonds – the currency Morgan used to pay Carnegie and his partners in perhaps the first leveraged buyout. “How does it feel to be the richest man in the world?” Morgan asked Carnegie, knowing he had made the wealth possible. The Federal government spending for that year was $524 million.

After World War II, there was a dearth of capital available to start new businesses during the boom following the war. American Research and Development Corporation (ARDC) was founded in 1946 to provide “venture” capital. In 1957, two MIT engineers formed a company to make computers that were smaller, cheaper, and easier to use. They called their company Digital Equipment Company (DEC) and sold a 70% interest to ARDC for $70,000. When DEC went public eleven years later, ARDC’s stake was worth $450 million – an annualized return of more than 100% -- a rapacious vampire if there ever was one. Of course, this return was netted against the many ARDC investments which failed, which is the nature of venture portfolios.

Two years after receiving a joint Juris Doctor and Master of Business Administration from Harvard University as a Baker Scholar, Mitt Romney entered the management consulting industry at Bain & Company. He rose to become its Chief Executive Officer during a period in which Bain was in serious financial crisis. Noting that when consultants were successful they increased the value of their client companies substantially, Romney reasoned that if the consultants could buy their troubled clients’ companies, they could pocket the gain in value on an exit instead of a relatively small consulting fee. Thus, in 1984, he co-founded Bain Capital, a private equity investment firm spin-out that became one of the largest PE firms in the nation and quite profitable.

Bain has done quite well for its investors, the companies it invested in or acquired, and therefore it has done well for itself. Since Bain Capital was formed, its portfolio at various times has included AMC Entertainment, Aspen Education Group, Brookstone, Burger King, Burlington Coat Factory, Clear Channel Communications, Domino's Pizza, DoubleClick, Dunkin' Donuts, D&M Holdings, Guitar Center, Hospital Corporation of America (HCA), Sealy, The Sports Authority, Staples, Toys "R" Us, Warner Music Group, and The Weather Channel.

Bain’s success and the important need it and other PE firms fill in providing high-risk capital caused the leading lights of the Democrat party to criticize Obama’s reelection campaign tactic of demonizing Romney’s Bain tenure. Moreover, when Romney left the Bain firm, which he had turned around, he successfully turned around the failing Salt Lake Winter Olympics. Thus, Cory Booker, the mayor of Newark, Ed Rendell, former two-term Governor of Pennsylvania, former Representative Harold Ford Jr. (D-TN), and Deval Patrick, Governor of Massachusetts believed Obama’s demonization of Romney would only draw attention to Romney’s successes.

Moreover, at the same time Obama was criticizing Romney and Bain on one hand, he was taking in money with the other hand from fundraisers hosted by PE leaders such as Hamilton E. James, COO and president of Blackstone whose website claims it to be “one of the world's largest private equity fund businesses." Other bagmen (Obama’s handlers call them “bundlers”) are significant players in the PE industry and didn’t like being slandered by the guy for whom they were raising campaign cash.

In 2008, PE firms donated $3.5 million to Obama’s campaign, and he has gotten more for his 2012 campaign. Pinning the “destroyer of jobs” label on Bain in particular and PE firms in general wasn’t enthusing the PE bagmen, and it doesn’t square with facts. Firms restructured by private equity lost only 1% more jobs than other comparable companies in their industry, according to the National Bureau of Economic Research. The bane of Bain is a loser’s pitch – just like the people who put it together and the guy who delivered it.

It’s hard to make the distinction that Romney’s association with Bain was bad whereas firms like Vestar Capital, which resuscitated Birds Eye are good. In 2002, Birds Eye, the famous frozen food company, was losing $131 million on $1 billion in sales. Vestar shrunk the workforce from 4,000 to 1,700, provided the needed capital and management, and by 2009 had Birds Eye making a $54 million profit on $936 million in sales. Despite the job loss, was society better off? With a $185 million positive profit swing on virtually the same level of sales before and after the restructuring, does anyone wonder what the 2,300 “lost” jobs ever did for Birds Eye?

In contrast let’s look at Obama’s kind of capitalism – crony capital projects. They are little more than politically-motivated handouts from government which are disguised to look like “investments.” His green energy fiascos come to mind.

The Obama administration granted SunPower, a green energy venture, a $1.2 billion loan guarantee. At the beginning of this year, it owed more than it was worth. Then there’s Brightsource, another green energy black hole and the recipient of a $1.6 billion loan guarantee. Its major accomplishment to date has been to lose $177 million. Oh, and there’s Solyndra, which I blogged about last year. It got $535 million in loan guarantees from us taxpayers and went bankrupt, leaving us standing at the alter like a jilted bride.

As revealed in in his book, Throw Them All Out, Hoover Institute scholar Peter Schweizer revealed that 71% of the Obama Energy Department grants and loans went to "individuals who were bundlers, members of Obama's National Finance Committee, or large donors to the Democratic Party." In a gambit that would make the PE firms green with envy, these Obama cronies raised a total of $457,834 for his 2008 campaign, but they got grants or loans of nearly $11.4 billion. PE firms, eat your hearts out. That’s a return on their campaign “investment” of almost 25,000%! Organized crime isn't that profitable!

Last month when Obama was trying to draw a distinction between Romney’s success at Bain and the role of the presidency, in which business success, according to Obama, means zilch, The Great One said that the president's job isn’t "to make a lot of money for investors …" Well, he sure seems to be making a lot of money for his political investors, albeit at taxpayer expense.

Unlike private equity, in which investors voluntarily put their money at risk, crony capitalism takes money from taxpayers by force of law and “invests” it in government-favored projects, like those listed above. The taxpayer/investor has no say in the use of the funds appropriated by force. And government bureaucrats, who lack the business success derided by Obama’s critique of Romney’s PE background, make incompetent investment decisions, as is clearly evident in the results of their misadventures. These were never viable business ventures to start with … they were scams cooked up by political con artists, which explains why more than 100 green energy criminal investigations are underway in the office of the Energy Department’s Inspector General.

Team Obama is about to release a third video campaign ad about the bane of Bain targeting the “Wal-Mart Moms” whom they believe will be the swing in the swing states. The focus is on the job losses caused by Bain PE investments – and by implication, Romney’s fault. How they expect to spin this into a positive for reelecting Obama is anyone’s guess. Lying might work.

To that end, the Gaffe of the Week prize goes for this Obama lollapalooza: "We've created 4.3 million new jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine."

Let’s unpack Obama’s assertion.

The Bureau of Labor Statistics publishes employment data. According to these tables, in January 2009, the month in which Obama was crowned, the private sector employment was 110,985,000. The latest figures are preliminary and for the past 18 months the preliminary figures have been adjusted down by the actual figure, but let’s use the preliminary number. In May 2012 private sector employment was 111,040,000. Thus far during Obama’s tenure, the private sector has created 55,000 jobs. That’s 0.05% or five one-hundredths of one percent! And that’s through May; we have months to go.

If we look at total employment – private and public – the BLS data tables show January 2009 employment at 142,187,000 and May 2012 employment at 142,287,000. That’s 100,000 jobs or a job growth of 0.07%. Now, in the part of the country where I live, we call that flat – not 4.3 million new jobs.

But during the time Obama has been President, working his Obamanomics magic, the available labor force has grown but employment has not. What happened to the rest of the available labor force? They are unemployed. James Pethokoukis of the American Enterprise Institute puts the real unemployment rate at around 11% rather than the official unemployment rate of 8.2% published by BLS, because the latter is based on a sample of 60,000 households and counts as “unemployed” only those actively looking for employment. Those who have ceased to look for a job, given up, or taken a part-time job are not counted.

No sitting President since Franklin Roosevelt has won re-election when unemployment was over 7.2% on election day.

And Obama … you ain’t no FDR.

Who Is Rick Perry?

He is a fifth generation Texan, the son of hardscrabble west Texas tenant farmers – Democrats but conservatives through and through. He grew up in a farm town too small to be on the state map. Life was so hard that he was six years old before his house had indoor plumbing. His mother sewed his clothes, including the underwear he wore to college.

He is an Eagle Scout. After Paint Creek High School, he attended Texas A&M, graduated, and was commissioned into the Air Force where he became a C-130 pilot.

Now 61 years old, he has won nine elections to four different offices in Texas state government. In the first three elections he ran as a Democrat then switched to the Republican Party. He is currently the 47th governor of Texas – a position he has held for 11 years, the longest tenure of any governor in the nation.

He has never lost an election.

Rick Perry was the Lieutenant Governor to whom Governor George Bush handed over the office after winning the 2000 Presidential election. Since then, Perry won gubernatorial elections in 2002, 2004, and 2010, the last time by 55% against a field consisting of a Democrat, a Libertarian, a Green Party, and an Independent.

Since he became its Governor, Texas – a right to work state that taxes neither personal income nor capital gains – has added more jobs than the other 49 states combined. In the last two years, low taxes and little regulation led his state to create 47% of all jobs created in the entire nation. Five of the top ten cities with the highest job growth in the nation are in Texas. People follow jobs, so in the last four years for which data are available, Texas led every state in net interstate migration growth.

Perry signed ground-breaking “loser pays” tort reform and medical litigation rules that caused malpractice insurance rates to fall. Some 20,000 doctors have since moved to Texas.

Texas boasts 58 of the Fortune 500 companies – more than any other state. Since May 2011 Texas resumed its pre-recession employment levels. Only two other states and the District of Columbia have done that.

Texas ships 16% of the nation’s export value. California trails at 11%. Of the 70 companies that have fled California so far in 2011, 14 relocated in Texas.

In this year’s Texas legislative season, Perry got most of what he wanted. With no new taxes, a fiscally lean state budget was passed leaving $6 billion in a rainy day fund even as other states around the country struggled to balance budgets and avoid more deficit borrowing. A voter ID bill passed that was designed to prevent ballot box fraud and illegal voting. A bill passed that makes plaintiffs pay court costs and attorney fees if their suits are deemed frivolous.

Perry scored points even in his legislative failures. He failed to get sanctuary cities banned – Texas towns in which police cannot question detainees about their immigration status. The blame fell on the legislature. Perry also failed to get a so-called “anti-groping” bill passed that would put Transportation Security Administration agents in prison if they touch the genitals, anus, or breasts of passengers in a pat down. Federal officials threatened to halt all flights out of Texas airports and the bill died in special session. That endeared Texans even more to TSA employees living in Texas.

Perry jogs daily in the morning. He has no bodyguard with him, but his daughter’s dog runs by his side and he carries a laser-guided automatic pistol in his belt. Last year while jogging in an undeveloped area, a coyote paralleled his jogging route, eyeing his dog. He drew his pistol and killed the animal with one shot, leaving it where it fell. “He became mulch," Perry said. Animal rights groups protested, but Perry shrugged it off. “Don’t come after my dog,” he warned them.

Recently, Obama asked Perry to delay the July 7 execution of Humberto Leal in order to comply with the International Court of Justice in The Hague and the Vienna Convention on Consular Relations. Perry refused. Therefore Obama asked the US Supreme Court to delay the execution because it would damage US foreign relations. The Court refused 5-4 and Perry ordered the execution to go forward as scheduled. Over the howls of diplomats, politicians, and the UN, Leal was administered a lethal injection at 6:20 p.m. Before he died, he admitted his guilt and asked for forgiveness.

The case has special implications for Perry, who is considering a run for the presidency in 2012. Even his critics resent federal interference in a Texas execution, which is related to a state, not a federal, crime – an alcohol and drug-fueled rape and murder 17 years ago by an illegal whose family brought him into the country 35 years ago as a child. The interference hinges not on the man’s guilt, which Leal’s advocates acknowledged, but on a technicality – failure to inform Leal that he could have gotten legal representation from the Mexican consulate in lieu of the court-appointed attorneys who represented him. Independent Texans saw Obama’s interference as another intrusion of federal power into the affairs of a state, which could cost Obama support in other states.

Needless to say, Perry is a hard-edged conservative and a ferocious defender of 10th Amendments rights (“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”) – an explicit restriction of the federal government to only those powers granted in the Constitution. Perry accuses the federal government, especially the Obama administration, of illegal overreach.

Perry said “no thanks” to the feds whose stimulus offered taxpayer dollars for education and unemployment assistance. The strings on “free money” from Washington, he said, would restrict Texas in managing its own affairs. Perry even depleted all state funds to fight recent wildfires before asking Washington for disaster relief. His request has been ignored, which comes across as an unvarnished federal power play, further pitting Perry and Texans against the federal government.

It’s little surprise, then, that 31% of Texans prefer Perry, who hasn’t announced for the presidency, versus 15% who prefer Romney and 11% who like Bachmann. This is consistent with a Fox poll which put Romney at 18% with national Republicans, Perry at 13%, and Bachmann at 11%. A Marist poll had Romney leading with 19% but Perry and Giuliani, neither of whom has announced, are tied for second at 13%. Perry is the favorite among Tea Party voters, beating Palin, also unannounced, and Bachmann. For a guy who is not officially running, Perry has more than an insignificant following compared with the announced candidates.

But none of the candidates – announced and unannounced – has caught fire. It’s still early in the 2012 election cycle, and polling results this far out border on meaninglessness. Yet I would have expected Romney to have a greater lead, given his money and name recognition, unless he is being perceived by voters as a nomination retread, now haunted by the Massachusetts experiment that Obama claims inspired his unpopular remaking of the national healthcare system. His business and economic expertise towers over Obama’s, but I suspect it would be easier for him to be elected than nominated. Palin has a fan base rather than a constituency ready to hand another rookie the keys to the White House. Bachmann, recently insulted by Chris Matthews in an interview asking if she was a “flake” because of her bizarre statements, might keep in mind that James Garfield was the only House member to be elected President – and that was over 130 years ago. Ryan may have recalled that fact when he declined to run.

But Perry is not without his negatives. French cuffs and cowboy boots adorned with the words “Freedom” and “Liberty” bespeak a self-assuredness that wears well in Texas and even in the south and southwest, but will it work in Philadelphia, New Hampshire, and Ohio?

Perry is ruggedly handsome – a modern Marlboro kind of man – whom the late Texan and liberal columnist, Molly Ivins, called "Governor Goodhair.” His high octane rhetoric is unmistakably conservative. Speaking to the Republican Leadership Conference in New Orleans last month, he pumped the air with both fists as he strode to the podium. “Whew!’ he cried repeatedly. “Yeah!” He was like an excited race horse being shoved into a starting gate.

I stand before you today a disciplined conservative Texan -- a committed Republican and a proud American -- united with you in the desire to restore our nation and revive the American dream…

Our party cannot be all things to all people. It can't be. And our loudest opponents on the left are never gonna’ like us so let's quit trying to curry favor with 'em! … Let's speak with pride about our morals and our values and redouble our effort to elect more conservative Republicans. Let's stop this American downward spiral! …

This administration in Washington that's in power now clearly believes that government is not only the answer to every need, but it's the most qualified to make essential decisions for every American in every area. That mix of arrogance and audacity that guides the Obama administration is an affront to every freedom-loving American and a threat to every private sector job in this country.

He left the podium and stage as he had mounted it: pumping his fists, shouting “Yeah!” and “Whew!” as if he were returning to his corner after Round 1 of a prize fight.

It’s hard to imagine the cautiously moderate Romney, the bland somnambulistic Pawlenty, or even the outspoken and misspoken Bachmann delivering that performance. Yet, what a contrast Perry is to the pontifical, condescending Obama speaking style, his head robotically swiveling from side to side, nose unconsciously elevated. I suspect even the leading GOP candidates wish they had Perry’s “negatives.”

Perry’s speech was a tea partier’s delight. The almost cocky swagger. The Texas accent. But I wonder how it would sell to political independents – those more pragmatic than ideological?

Sweeping these concerns aside, Perry’s biggest challenge may be overcoming the fact that he is “another” Texas governor seeking the White House. After four years of Obama, Bush fatigue may have attenuated. But by how much? For those in the center – the ones who will decide the next election – the choice will be between four more years of someone they know (which they didn’t four years ago) versus someone who reminds them of someone they know (Bush) and wish they didn’t.

Beyond the Texas Governor’s mansion, the accent, and the swagger, however, the similarity ends. Their differences have been no small source of friction between the Bush and Perry camps.

A 2007 YouTube, for example, showed Perry at a fundraiser saying, “George Bush was never a fiscal conservative – never was,” going on to say, “I mean, ’95, ’97, ’99, George Bush (while he was Texas Governor) was spending money.” The video came to the attention of Bush aides and they were not happy with Perry’s criticisms of their man.

Then after initially embracing Bush’s “No Child Left Behind” law, Perry turned against it, calling it “a monstrous intrusion into our (i.e. the Texas education system) affairs” in an interview. His 10th Amendment fire-breathing can’t be contained.

When Perry ran for his third gubernatorial election, the Bush family and political team retaliated by backing Perry’s Republican opponent, Sen. Kay Bailey Hutchinson, providing her campaign with fundraising and organizational support. Perry won the primary and went on to win in the general election by a sizable margin, no doubt giving him cause to gloat and giving the Bush camp cause to mope.

The relationship between Perry and Bush continues to be frosty. But it would be foolish for Perry to provoke the Bush family into working against him if he chooses to run for President. And it would also be petty of the Bush family to deny that politics requires a candidate to show that he is his own man, not a clone of his former boss. Gore ran against Clinton in 2000, and if Perry runs, he will have to show his independence of Bush if he is to have any hope of shedding the “Oh no, not another Texas Governor” image.

Bush ran as a “compassionate conservative,” probably a euphemism for the liberalism of his rich family, which is what caused Reagan to balance his conservative ticket with running mate George H. W. Bush. Perry will have to show that he intends to reverse the reckless spending of the Bush-Obama years.

Bush ran as a “uniter, not a divider.” Perry will have to show that he intends to be an unmistakable contrast to everything Obama stands for and will undo the Obama program, even as Clinton undid the Reagan legacy and Obama undid the Bush programs, complaining all the while that Bush was responsible for everything that was wrong with America.

Perry has not yet said he is in the race. Time is running out for him to do so. But should Obama be concerned if Perry runs? Absolutely. Obama cannot run on his record – an unpopular healthcare law, a failed stimulus, unprecedented spending and debt, a jobless “recovery” and the threat of a double-dip recession, not to mention a foreign policy he can’t explain and his undeclared war on Libya. Obama’s record is a disaster. Perry by contrast produced in Texas an oasis of prosperity in a sea of misery during the Obama years.

Not being able to defend his own economic record, or attack Perry's, Obama might try to paint Perry as a representative of the far right. That wouldn't be easy. Perry served three terms in the Texas House as a Democrat, and supported Al Gore's 1988 presidential bid. That was when there were still some conservative Democrats. Perry switched to the Republican Party in 1989 when the Democrat Party began moving left.

Obama might attack Perry’s ideological extremism. But Perry could remind voters that Reagan was initially painted as a conservative extremist, until Reagan’s folksy “Now there you go again” confidence showed Americans that the extremist was in the White House. Reagan’s proof was the economic chaos Carter had wrought (“Are you better off now than you were four years ago?”) and the foreign policy catastrophes his policies produced in Iran, whose hostage crisis was nearing 400 days.

Unlike Perry, Obama is all hat and no cattle. There is no Obama thrust that Perry can’t parry if he keeps his good humor and enthusiasm and reminds Americans that, yes, his flaws are large – until you compare them with Obama’s.