Hard-charging. Combative. The man who put the Lone Star State to work while the rest of America nosedived into the worst recession since the 1930s. The Rick Perry legend is going into overdrive, as the Texas governor throws his Stetson into the contest to secure the Republican ticket as Barack Obama's challenger in the 2012 presidential race.

It is a seductive package as America confronts the spectre of a double-dip recession and fears of a second banking crisis, with national unemployment at 9.1 per cent, growth at an anemic 1.3 per cent in the second quarter of 2011, and a swelling US$14.34 trillion ($17.3 trillion) public debt. No wonder polls show most Americans believe their country is on the "wrong track".

Perry, who succeeded George W. Bush as governor in 2001 and won three elections, says his "Texas miracle" is the way forward, boasting his state added one million jobs in the past decade, even as 1.4 million vanished nationwide.

Standing before a crowd in South Carolina on August 13 to announce his White House run, Perry said it was "time to get America working again". He accused President Barack Obama of downgrading American jobs, along with the nation's world standing and financial stability, and pledged to enact the anti-tax, anti-government policies he endorses in Texas.


The son of a tenant cotton farmer, Perry, 61, was once a conservative Yellow Dog Democrat, who supported Al Gore's 1988 presidential bid. In 1990, Perry defected to the GOP, in part because of urging from Karl Rove, George W. Bush's political strategist. Perry's mantra of low taxes, spending cuts, minimal regulation and small government has made him a strong rival to Michele Bachmann for Tea Party support.

Like the Tea Party, Perry wants a constitutional amendment to cap federal spending. His 2010 book, Fed Up: Our Fight to Save America From Washington, stokes right-wing fears and seems economically focused on the rear-view mirror, advocating a time - about a century ago, before the US became a global power - when small government was the norm.

"Washington is not our caretaker," he told supporters in South Carolina. "In America, the people are not subjects of the government, the government is subject to the people."

Last week, he threw the Tea Party some red meat and muscled Bachmann aside by saying it would be "almost treasonous" for chairman of the Federal Reserve Ben Bernanke "to print more money", warning Texans would treat this "pretty ugly".

Ostensibly an ideological purist, Perry is ruthlessly pragmatic. In 2009, he accepted US$17 billion in US stimulus funds to balance his budget, despite damning federal profligacy and refusing US$555 million in unemployment aid.

But Perry's unpartisan, hard-knuckled political style has alienated GOP elites. They include Rove, who chided Perry for his assault on Bernanke (as did that the bastion of fiscal conservatism, the Wall Street Journal) and called him "not presidential". The GOP establishment regards the governor as a populist loose cannon, whose embrace of Tea Party enthusiasts could torpedo the party's presidential dreams.

Perry's extremism, flirting with Texas secessionists, preaching creationism and dismissing climate change, plays well in the primaries and may be a canny tactic to elbow GOP rivals aside. But in a race fundamentally about the economy, Perry faces some hard questions. He boasts he can replicate the Texas miracle - economic growth twice the US average at 3 per cent, the nation's highest job creation since 2009, and a fairly stable real estate market - nationwide.

But is this growth down to his leadership or did he luck out? Who benefits from the miracle? And could he drag the US back into contention against rivals in a global economy?


Musing on America's future in 2009, the Economist magazine contrasted the fortunes of Texas and California, America's most populous states. California looked like a train wreck, with high taxes, "intrusive" regulations, spiralling public debt, soaring unemployment, crumbling infrastructure and a once great public education system close to collapse.

In contrast, as the Great Recession sent shudders through the US economy, Texas looked in great shape while a "business-friendly and immigrant-tolerant attitude" ruled.

Perry's Enterprise Fund has pumped almost half a billion dollars into attracting business in the past eight years. Texas has more Fortune 500 companies than any state in the union; 64 compared with California's 51 and New York's 56.

Since 2000, Texas has spawned 58 per cent of US jobs. The governor boasts Texas has added 40 per cent of US jobs since 2009 and that more jobs have been created in Texas during his watch than in any other state. He attributes this to a hands-off business climate, with no state income tax, civil laws that favour powerful interests in malpractice suits, low property prices and a "right-to-work" rule that bans compulsory unionism and has poached Californian business.

Critics charge Perry has an insular take on economics and got a free ride from the oil and gas business. Back in 2000, crude was US$25 a barrel. The price soared to US$147 in 2008 and is now around US$86.

Big Oil delivers some US$325 billion a year, with US$13 billion in taxes, 40 per cent of the total or about 20 per cent of the state budget, according to the New York Times.


At the same time Perry has benefited from a burgeoning trade with Mexico, up some 60 per cent since 2000, with a US$100 billion turnover in 2010.

And despite Perry's hostility to big government, the state is a big recipient of US largesse, spent on military bases and Nasa. Texas receives the most federal dollars after California and New York, taking US$227 billion in 2010, double the amount when Perry took over.

As Bush's successor, Perry inherited a state economy that had diversified since the early 1980s, when it was more dependent on rollercoaster oil and gas prices. And tough bank loan rules, generated by the Savings and Loan scandal in the early 1980s, helped insulate Texas from the real estate bubble that devastated California after 2007.

When it comes to jobs, the devil is in the details. In 2007, unemployment was at 4.4 per cent, with 510,000 Texans officially out of work. Today it is 8.2 per cent, with 1 million unemployed.

"High oil prices did insulate us a bit from the onslaught of the recession," says Don Baylor, a senior policy analyst with the Centre for Public Policy Priorities, a non-partisan think tank in Austin. "But once it hit, we've been at pretty elevated unemployment levels ever since. This is our 23rd consecutive month at, or above, 8 per cent unemployment."

The jobless are disproportionately represented among young males, especially those from minorities, who relied on now stagnant construction and manufacturing.


"Even though we've created over 200,000 jobs since 2009," says Baylor, "our unemployment rate continued to climb. It's the low-wage jobs, in education, health services and the leisure and hospitality sectors, that have grown. The only high-wage jobs are in natural resources and mining."

It is these bottom-level jobs that raise concerns as America contemplates 21st century competition with China, India, Brazil and other rapidly growing economies. The US Census Bureau says 9.5 per cent of the Texas workforce gets US$7.25 an hour, the minimum US wage, or less, sharing last place with Mississippi. Public sector hires are double those in private industry - about 19 per cent compared with 9 per cent - with the public payroll soaring 6.4 per cent as private jobs shrank 0.6 per cent.

The main failing of the Texas miracle is how it has ignored the long-term economic and social benefits of education, a serious misstep in a brutally competitive global economy, where a degree is increasingly necessary to build wealth. The Economist warns low investment in public education has left a "lost generation" of unskilled Latino workers. Per pupil spending on public education is ranked at 44th nationwide. Some 26 per cent of workers lack any healthcare, America's sorriest record, while Big Oil has bequeathed a toxic legacy of airborne carcinogens and waterborne poisons.

"The Texas model is not one I would like to see replicated nationwide," says Baylor. He says Perry's miracle drives a race to the bottom "in which we're probably at first place". Climbing back up involves education, a costly prospect. This means more tax, anathema to conservatives, whose embrace of anti-tax neoliberal dogma evokes ancien regime aristocrats before the French Revolution.

"Rick Perry's Texas is Ross Perot's Mexico come north," writes liberal commentator Harold Meyerson. He says Perry offers a "range of enticements more commonly associated with Third World nations" and that Texas is "a place where workers come cheap". It is not a vision likely to reboot the US economy, handicapped by a creaking infrastructure, poor public education and an increasingly polarised society - where 20 per cent of the populace hold 84 per cent of wealth, while 40 per cent flounder with just 0.3 per cent - and revive the American Dream.

"He has not had to make a lot of hard decisions," says Bryan Brown, an economist at Rice University in Houston and a Perry critic. "He has a very different perspective as Texas Governor than the president of the US. It's not just about stealing business from other states. But it's not at all clear to me that he understands the economics involved. Otherwise he wouldn't be saying the sort of things he said about the chairman of the Federal Reserve printing money."


If Perry wants to woo voters less enamoured by conservative platitudes than the Tea Party, he must articulate how he can turn the US around. Meanwhile, his Texas miracle suggests he has coasted along as governor, blithely unaware that a shifting energy paradigm challenges Big Oil and that new titans such as China realise education gives an edge.

"Rick Perry just happens to be the guy who was Lieutenant Governor when George Bush became President," says Brown. "And has ridden that a long way. We'll see what happens."