THE PERRY PARADOX

The Wall Street Journal

  • NOVEMBER 3, 2011
  • By DANIEL HENNINGER

  • Austin

Rick Perry says Texas is the most successful state in America. He’s right. Texan economic output exceeds Mexico’s and Australia’s and rivals India’s. Rick Perry has been governor of Texas for nearly 11 years. Does the logic of politics lead us to conclude that the governor of the nation’s most successful state, ipso facto, is the best man to be president of the economically gasping United States?

We are about to find out. Getting lost, however, among the governor’s adventures in the lovely hamlets of New Hampshire is that Texas, with or without him, has a story the rest of the U.S. should hear—the parts of the country that want a better economy than they’ve got now.

Texas, unlike California, isn’t America’s most beautiful state. Through October this year, parts of Texas had 90 days of 100+ temperatures. Yet companies and people keep moving into the high heat of Texas.

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Martin Kozlowski

Rick Perry’s argument for himself is rooted in accounts of his efforts to bring companies to Texas. But the desire of businesses to sample Texas trail dust pre-dates Rick Perry. In 1990, one of the world’s biggest companies, Exxon Mobil, left New York City for Dallas. Exxon’s former CEO, Lee Raymond, says the move in part was indeed about costs and New York State’s notoriously overbearing tax authority. But it was also about working amid a culture of competence. “It’s just the attitude in Texas of getting things done and doing them well,” he says.

Mr. Raymond remarks that the economic policies that in time trapped the Northeast and Rust Belt in spirals of decline never touched Texas. But this is about something beyond low taxes and no unions: “In Texas the people tend to be farmers or individual businessmen, and they have this attitude: We have to make do with what we have and work together to get things done and survive. It’s can-do. That attitude permeates everything there.”

A more recent corporate immigrant, Alan Boeckmann, until recently CEO of Fluor Corp., the engineering and construction firm, says regulatory and legal hassles pushed Fluor out of California. Congress passed Sarbanes-Oxley, but “California had its own version.” There were constant class-action suits over Fluor’s benefits. “It could have been settled, but not in California. That’s how the game is played there.”

When word of the 2006 move got out, “California made no attempt to keep us.” In Texas, “things started to happen quickly, without us initiating them.” The Irving Chamber of Commerce did orientation sessions for employees and spouses, even helping with new-house searches. Or “little things”: Irving on its own renamed a street Fluor Drive, which in California or the Northeast would be laughable. Those Texas rubes!

Ed Trevis, a smaller fish, is also happy. A California-educated Brazilian immigrant and tech entrepreneur in Silicon Valley for 25 years, Mr. Trevis moved Corvalent Corp. to Austin for similar reasons. He had to hire a firm just to do California’s compliance. “In California,” he says, “you are always doing something wrong.”

In a preview of his “Wonderland” column, Dan Henninger discusses what he thinks the U.S. can learn from Texas.

“What I found in Texas is that from the standpoint of running a business, cost of living, education, the labor pool, quality of life, it just blew other states out of the water.” I heard this constantly—people enjoy being in business in Texas.

“Austin,” says technology consultant Bob Barker while taking a visitor around the nearby hills, “may have more Ph.Ds driving taxis than any city in the country.” Austin’s famed population of big and small technology companies has suffered layoffs. “But,” said Mr. Barker, “no one wants to leave.” They stay, plugging into Austin’s numerous business-support networks. In Austin you discover a primary reason beneath Texas’ success: It’s about competition plus collaboration. It seems everyone in Texas high-tech knows everyone, and if they can help each other, they will.

David Booth, who moved Dimensional Fund Advisors’s headquarters to Austin from Santa Monica in 2008, puts Rick Perry’s role in perspective: “He understands his job isn’t to get in the middle of everything.” (Fluor’s Alan Boeckmann seconded that.) But Mr. Booth and others said this is also true of the Texas lieutenant governor, its attorney general and the comptroller.

“They are very supportive of business,” says Lee Raymond, “in the sense of moving things along. If there is a rock in the road, they want to know what they can do to move it out of the way.”

This isn’t merely the “pro-business” bias of a Rick Perry or any other governor. Texas’ pro-business bias goes back about 175 years—and never died. “It’s just that they believe in the whole Horatio Alger myth down here,” said Mr. Booth. “It’s hard to understand if you haven’t lived here.”

And so Perry’s Paradox: Rick Perry is a success because he nominally presides over an American tiger state, a genuine free-market economy that doesn’t much need—or want—his tender loving care. If the job before us is unwinding an unimaginably vast, smothering national government, is Lone Star Gov. Rick Perry the man for that job?

This much is obvious: Texas, not California, better be the American future. Somewhere inside of him, Rick Perry of Texas understands this distinction. He should stick to explaining what he knows. Let voters figure out if he can explain it to Washington.

Write to henninger@wsj.com

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