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Right Turn
Posted at 09:30 AM ET, 09/02/2011

Crony capitalism: Perry’s Achilles heel?

For a time, Sarah Palin and Texas Gov. Rick Perry were kindred spirits. They both cheered the Tea Party and sneered at establishment Republicans. But then Perry entered the presidential race. Lately, Palin seems determined to turn up the heat on the governor. Last month, CBS reported on Palin at the Iowa fair:

Palin also took a subtle shot at Texas governor Rick Perry, who is entering the presidential race on Saturday. Perry is sometimes dismissed as [a] “weak governor” by virtue of the way his state’s government is structured, and Palin seemed to draw out that distinction when asked to contrast their records.
“You have different functions in the state of Texas and the state of Alaska in terms of governing powers from the governor’s office,” she said, “So it’s tough to compare what the executive duties are. We have a very strong governor’s office . . . but, he’s a great guy and I look forward to seeing him in those debates.”

But that was bean-bag compared to what is coming up.

RealClearPolitics tells us:

Though she won’t be a candidate when she delivers a major address at a Tea Party rally in Iowa on Saturday, Sarah Palin will make it clear that if she enters the presidential race later this month she will vociferously challenge Texas Gov. Rick Perry’s ingrained image of solidarity with the Tea Party movement.
In her speech at the bucolic National Balloon Classic field in Indianola, Palin will lean on loaded phrases like “crony capitalism” and “permanent political class” in laying out her view of the U.S. political system’s deep-rooted ills, according to a source close to Palin and familiar with the content of the speech.

In this regard she is echoing Perry’s Texas critics as well as free-market conservatives who have complained about Perry’s cozy relationship with big donors: “Though she will not call Perry out by name, Palin’s carefully couched rhetoric will leave the impression that she may soon draw more overt attention to one of the Texan’s potential vulnerabilities as a candidate: his history of doling out plum positions and other benefits to generous campaign donors during his nearly 11-year tenure as the nation’s longest serving governor.”

You can speculate on the reasons for the attack. She may still want to enter the race. Perhaps she sees Perry as a Tea Party interloper. Maybe it is simply personal jealousy. But it’s a potent accusation because it strikes at the heart of Perry’s appeal to the base and because there’s some truth to it.

Right Turn has reported on Perry’s penchant for appointing donors to top positions and on his tech funds, which doled out big grants to connected businesses. Now news reports are providing a wealth of details.

The Post has an extensive report today on the appointment of Perry’s donors to top spots:

The Post looked at Perry’s top 50 donors, who collectively gave more than $21 million to Perry, and found that 34 received some benefit from Perry’s administration or the state, including grants, contracts and appointments. The donor list was compiled by the nonprofit Texans For Public Justice.
Twenty-three donors won Perry’s appointment to state boards, often the boards of regents at the University of Texas or Texas A&M.
Roughly one in three of the top Perry donors had business interests that secured grants, tax subsidies or project approvals under his administration, the Post review found. Five donors gained both an appointment and a state boost to their specific company or interests.

Perry’s spokesman insists that all of Perry’s appointments were based on merit. Does that pass the smell test? Palin is going to suggest it doesn’t.

In isolation this might be a minor issue. (After all, Perry ran an effective state government in challenging times.) But then there are the tech funds. The Wall Street Journal runs a report on that today:

Critics on the right and the left are taking aim at Texas Gov. Rick Perry’s trademark job-creation funds as he steps up his campaigning for the Republican presidential nomination.
The funds, which dole out tax dollars to companies that launch or relocate in Texas, became controversial in the state soon after Mr. Perry persuaded the legislature to start one in 2003 and put it under his control. Mr. Perry believes the funds have contributed to job growth in Texas, which has accounted for 40% of all new jobs in the U.S. since the recession’s end in 2009. . .

The Obama administration’s practice of picking winners and losers is the subject of frequent criticisms by the Tea Party. In Perry’s case, therefore, it raises concerns that, as the Journal put it, he is “not always the free-market fiscal conservative he claims to be.” The concern is also that the fund rewards “his campaign donors and friends.” More to the point, was it really necessary for Texas to bribe businesses to open there? After all, it does have low taxes, modest regulation and tort reform.

These issues, which Palin has chosen to focus on, present two problems for Perry. First, they strike at the heart of his message that he is the conservative purist. Second, they fuel worries about electability. Is President Obama going to go to town on this stuff? Does Perry lose a viable argument against Obama because the Texas governor has practiced the same brand of crony capitalism?

Palin’s not in the race, but she still commands media attention. Moreover, it’s very likely that Rep. Michele Bachmann (R-Minn.) and others will pick up on these criticisms. In the debates Perry will have the opportunity to defend himself. Unless he does so effectively, the crony capitalism charges will linger.

By  |  09:30 AM ET, 09/02/2011

Categories:  2012 campaign

 
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