Call this post “the good, the bad, and the ugly” for Rick Perry today to start off a new week for his campaign. He clearly wanted to start with a boost, and had fiscal-conservative icon Steve Forbes on Fox News yesterday with an endorsement of the Texas governor, tied to the upcoming release of Perry’s economic recovery plan based on the Flat Tax that Forbes himself championed in the 1990s:
On Tuesday, Rick Perry will unveil his economic plan which includes measures to drastically reform the tax code and lower the corporate tax rate. It will also, he says, provide generous exemptions for “adults and for children.” Unlike Herman Cain’s 9-9-9 Plan, however, Perry’s plan will not include a sales tax. Forbes asserts that this small but significant difference, coupled with the governor’s “firm leadership,” are reasons why he is endorsing Perry’s candidacy.
Unfortunately, the Austin Statesman hit the newsstands yesterday before Forbes’ appearance with an attempt to dent Perry’s record of fiscal success in Texas, although they have to reach back to the 1990s for the story:
Over his eight years as Texas’ farmer-in-chief, Perry oversaw a loan guarantee program with so many defaults that the state had to stop guaranteeing bank loans to startups in agribusiness and eventually bailed out the program with taxpayer money.
The state auditor panned Perry’s claims of creating jobs and criticized Perry and his fellow board members at the Texas Agricultural Finance Authority for not following their own lending guidelines.
In some instances, the auditor said, Perry and the authority guaranteed loans to applicants with a negative net worth or too much debt. Citing growing debts, the auditor finally suggested that state officials consider dismantling the program.
Even as the first alarms were sounded, Perry defended the program, saying no taxpayer money was at risk, blaming others and claiming he had fixed it.
There is something vaguely familiar about the end result:
By 2009, her successor, Agriculture Commissioner Todd Staples, also a Republican, asked the Legislature to pay off the loan guarantees with a $14.7 million appropriation. The finance authority could no longer afford the $541,000 to cover the annual interest on the bad debts, almost all of which dated back to Perry’s tenure.
“It’s bad,” Staples told the American-Statesman at the time. “Unfortunately, taxpayers are on the hook for something that happened as long ago as 1987.”
In effect, Perry, as governor, signed his own government bailout when he approved the 2009 appropriations bill.
In the end, loans that Perry approved had a default rate of nearly 30%. That overwhelmed the revenue generated by the good loans and created a sinkhole that taxpayers ended up filling in the end. The amount of money lost was far less significant than the one loan to Solyndra by the federal government in 2009, and nothing in the Statesman’s report suggests that the guarantees were issued to benefit political cronies, as was the case with more than one of the green-tech subsidies issued by the Obama administration. However, the loan guarantees ended up costing Texas taxpayers, for the similar purpose of government-subsidized job creation — only this time in agriculture rather than alternative energy.
On top of that, Perry seems to have forgotten a lesson learned in the 2010 gubernatorial elections. The once-promising campaign of Perry’s Tea Party challenger, Deborah Medina, imploded when she flirted with 9/11 Trutherism. In an interview with the usually soft-news outlet Parade Magazine, Perry sounds as if he wants to flirt with the Birthers this time around:
Governor, do you believe that President Barack Obama was born in the United States?
I have no reason to think otherwise.
That’s not a definitive, “Yes, I believe he”—
Well, I don’t have a definitive answer, because he’s never seen my birth certificate.
But you’ve seen his.
I don’t know. Have I?
You don’t believe what’s been released?
I don’t know. I had dinner with Donald Trump the other night.
That came up.
And he said?
He doesn’t think it’s real.
And you said?
I don’t have any idea. It doesn’t matter. He’s the President of the United States. He’s elected. It’s a distractive issue.
Yikes. Did Perry see just how well this issue worked out for Trump back in May? It’s bad enough to have self-absorbed celebrity candidates offer this kind of nonsense during a Republican primary that should be focusing on Obama’s disastrous economic policies. Now we’ll have to endure another round of conspiracy theories that make Obama look like a victim and Republicans look like nutcases. If Perry couldn’t see that trouble coming and know to avoid it with a “Yes, he was born in Hawaii, and his economic policies were born in the offices of the SEIU,” then I’m pretty sure the Flat Tax and the Forbes endorsement isn’t going to help him much.