The Bidness Myth

Why the image of the go-it-alone, get-the- government-off-my-back Texas entrepreneur is as bankrupt as Enron.

January 2006By Comments

IF THE BUSINESS OF AMERICA is business, as Calvin Coolidge once said, then the business of Texas is bidness. The distinction isn’t just phonetic; our locution tells the rest of the world that there’s something fundamentally different about our economic model. From our primordial real estate impresarios and legendary cattle barons to wildcatters and information-age entrepreneurs, Texas bidness boasts a storied lineage of up-from-the-dirt, git-the-gummint-off-my-back innovators who have proudly borne the standard of a leaner, hungrier, more gloriously unfettered form of free enterprise—or so we like to think. Just the way we pare down the word to a couple of syllables and hard consonants amounts to a Texas declaration of independence bordering on a threat. You best watch your big-gummint-lovin’ Yankee ass; we fixin’ to do some bidness.

Dallas billionaire Ross Perot was the first to grasp the nationwide political potential of this mythos, setting up his pie charts about the federal deficit and basically implying, “See, you got to run the whole dang gummint the same no-nonsense way we Texans do bidness.” Despite his third-party status and on-again-off-again campaign, Perot won almost a fifth of the popular vote in the 1992 presidential election, so it was hardly surprising that an MBA who had been a managing partner of the Texas Rangers baseball franchise and a former CEO of the Texas-based Halliburton energy corporation came up winners eight years later. The media proclaimed the first “CEO presidency,” but most conservatives had a more explicit understanding: Under the Bush administration—aided by the most powerful man in Congress, former Sugar Land pest exterminator Tom DeLay—the business of America would be bidness.

Ironically, the state that minted this bidness model would not fully adopt it until two years later, when a decade-long campaign to make Austin more bidness friendly culminated in historic Republican majorities in the Texas House and Senate. The 2002 sweep was touted as a climactic victory for the “business lobby,” a conclusion with which the Texas Association of Business eagerly agreed, bragging that the nearly $2 million it had secretly raised from dozens of corporate donors and spent on “voter education” attack ads against Democrats amounted to an “unprecedented show of muscle.” As a result of that flexing, Texans could expect to profit from an all-bidness government extending from the statehouse to the White House, run with all the virtues of Texas bidness: nimbly innovative, crisply competent, and fiercely dedicated to lean, mean fiscal responsibility.

Well, that’s what the prospectus promised. Critics will say that both the statehouse and the White House have been run like a real Texas bidness—Enron—and even friends have been more shocked than awed. At the White House, forget about a bidness model where failed managers get promotions and clueless cronies get heckuvajob plaudits. Let’s just cut to a bottom line so egregiously in the red that it has conservative economists seeing red themselves. The grumbling on the fiscal right has largely been sotto voce, but in February one of the nation’s most respected supply-side gurus, former Reagan aide Bruce Bartlett (recently of the Dallas-based think tank the National Center for Policy Analysis), will publish The Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy, which very publicly dings Dubya for the biggest spending spree since LBJ’s Great Society.

The president isn’t the only Texas entrepreneur who has turned out to be a closet Keynesian. Two decades ago, DeLay went to Washington to get government off the back of small bidnessmen like himself, but as House majority leader (until his recent indictment), he has force-fed bloated budgets. In 2004 the Boston Globe found that the number of pork barrel projects secretly larded onto appropriations bills was up a mere 7,000 percent from the 1994 Congress, which was the last one controlled by Democrats. DeLay went so whole hog to pass the administration’s $400 billion prescription drug benefit for senior citizens (a bill that made many fiscal conservatives wonder if the administration was on drugs) that he promised to back the political aspirations of a balky House Republican’s son in exchange for the gentleman’s vote, a shakedown that got DeLay spanked by his own House’s ethics committee. Yet in the wake of still more deficit spending for hurricane relief, when the Washington Times asked DeLay to suggest areas in which some of those costs could be offset, Whole Hog Tom declared an “ongoing victory” against government spending, noting that if any fat remained in the federal budget, he couldn’t find it.

Meanwhile, back at the statehouse, the wholly owned Seventy-ninth Legislature was flunking school finance. The “education lobby”—those pesky PTA moms, teachers, and school administrators—was scapegoated for an impasse that extended over one regular and two special sessions in 2005, but the real problem was the head-butting between two successful bidnessmen, House Speaker Tom Craddick, the most powerful man in state government, and his archrival, Lieutenant Governor David Dewhurst. And where was the “business lobby” that claimed to have paid for all this corporate efficiency? Bickering among themselves, with property-rich businesses and labor-intensive employers unable to decide how to reallocate the property tax burden on homeowners. In the end, Craddick, an almost compulsive wheeler-dealer in his private-sector life, refused to deal and decided to wait for the state Supreme Court to legislate school finance from the bench.

The bidness administration that was supposed to take off like the Google IPO is now just about belly-up in opinion polls. The left submits this meltdown as proof that bidness and government should be kept on separate sides of the school yard, and the right essentially agrees, saying that the golden age would commence if only we could realize tax cut zealot Grover Norquist’s fantasy of a government starved until it can be drowned in a bathtub. But the bipartisan belief that bidness and government are inevitable adversaries doesn’t reflect the way we have historically done bidness here in Texas; it only reflects how we popularly imagine the way we do bidness here. The real reason our ostensibly pro-bidness government can’t get business done is that it has bought into one of those colorful but misleading Texas tall tales: the Bidness Myth.

At the heart of this myth is the belief that we do bidness better because we have done a better job of keeping the government’s grubby mitts off our nearly virginal private sector. That belief was embodied by Dick Cheney in his 2000 vice-presidential debate, when he remarked of the tens of millions he’d made on Halliburton stock options, “The government had absolutely nothing to do with it.” His opponent, Connecticut senator Joe Lieberman, could only whimper in slack-jawed Yankee envy at this invocation of the Bidness Myth, unable to retort that maybe the former five-term Wyoming congressman’s uninterrupted quarter-century working for the federal government might have had something to do with his lucrative four years as a mythical Dallas CEO—and, as we all know now, Halliburton does do a bit of bidness with the government. Similarly, while lecturing on the national debt during the 1992 campaign, Perot never got out a pie chart to illustrate that he had built his fortune on big-spending federal budgets by wisely anticipating that the nanny state would need to process all of those Medicare payments. Even New Dealer and Great Society architect LBJ owned a share of the Bidness Myth, spending lavishly to run his Pedernales River spread as a working ranch. Yes, even LBJ wanted to gaze upon that herd of Herefords and say the most important words any Texas bidnessman can ever say: “The government had absolutely nothing to do with it.”

But that’s the myth. In reality, the government—and its shrewd exploitation by generations of enterprising Texas bidnessmen—has had an essential role in literally raising modern Texas up from the dirt, in just a few decades transforming an agrarian economy based on sharecropping (the American equivalent of serfdom) to today’s diversified powerhouse. As we entered the thirties, cotton still reigned as the state’s topsoil was blowing away; what saved us from a permanent depression was a powerful presence in Washington that included Vice President “Cactus Jack” Garner, future House Speaker Sam Rayburn, and LBJ, who ran FDR’s National Youth Administration. But the most powerful Texan of all was Reconstruction Finance Corporation chairman Jesse Jones, the Houston banker who became the New Deal’s economic czar, dispensing billions to build new businesses, all the while jawboning his fellow bankers to shut up and go along with the government plan. Texas benefited even more from World War II spending, with new refineries on the Gulf Coast and giant aircraft factories in North Texas laying the foundation for booming postwar petrochemical, defense, and high-tech enterprises. (Along for the ride were such legendary Texas firms as Brown and Root, now Halliburton’s nation-building KBR subsidiary, which built dams for the government in the thirties, military bases during WWII and the Cold War, and NASA’s Houston complex in the sixties.) Today Texas remains a net “tax receiver,” meaning we get a bit more than a buck in federal spending for every tax dollar we send to Washington, while rivals like California and New York subsidize us, getting back less than 85 cents.

So why is “government” such a dirty word hereabouts? There was a time when annexation by the United States was the long-term economic strategy for the floundering Republic of Texas, but the Civil War soured the state on the feds. Without the engine of slavery to compensate for a puny industrial base, Texas developed a victimized, often paranoid economic outlook, manifested in everything from the 1890’s farm-based Populist party and its “free silver” crusade to charges of Yankee economic “colonialism” leveled by UT professors in the thirties. By the time DeLay went off to Congress in 1984, the idea of the Texas bidnessman as just a little guy beleaguered by malevolent outsiders, be it railroads in the 1880’s or OSHA and EPA bureaucrats a century later, had been hardwired into our psyche. Yet at the same time, the national media, from news magazines to series television, were celebrating the splendid chaos and runaway growth of unregulated, wheeling-and-dealing, oil-boom Texas. That’s when the current Bidness Myth crystallized: Suddenly the perennially shafted little guys had brought in the big one, and not only had the government had absolutely nothing to do with it, the gol dang gummint had been agin’ it every step of the way.

The Bidness Myth has an upside. It’s a powerful magnet for immigrants who have diversified Texas’s economy and culture. But as the philosophy buttressing the world’s largest and eighth-largest economies, the Bidness Myth has encouraged policies that need a good shrink as much as better accountants. There’s the split personality of an administration that cuts taxes like Ronnie but spends on guns and butter like Lyndon; it’s hard to manage effectively when Personality A keeps saying, “Government is the problem,” and its alter ego says, “No, government is the solution.”

Still worse is the clinical paranoia that’s right out of the little-guy-getting-screwed playbook, even when the little guy is big business. According to our leaders in the statehouse and the White House, despite booming corporate profits and workers’ declining real wages, our businesses are besieged on every side. The greedy trial lawyers, the wacko environmentalists, and the militant labor unions were only the vanguard of an ever-expanding threat that now includes almost all of us: menacing parents who expect businesses to step up to the challenge of educating their own workforce or conniving customers outrageously demanding protection from defective products and willful negligence. Forget any farsighted energy conservation or environment-friendly policies, however lucrative the long-term potential of the underlying technologies; they might “hurt our economy” before the next election. Listening to the apparatchiks in Washington and Austin, you would think that our bidnesses are fragile hothouse flowers and the future itself has become their enemy.

The good news is that even though our government can sell its Bidness Myth as long as China, our principal strategic rival, is willing to buy our debt, real businesses must eye the future more pragmatically. The world’s largest reinsurer (an insurance company for insurance companies) recently cited global warming as actuarial fact, and Wal-Mart has opened its first solar-and-wind-powered Supercenter in the Dallas exurb of McKinney; all across the country, CEOs are badgering our elected leaders about meaningful health care reform. Our best and brightest businesses know that they’re tough and adaptable enough to change with the times, and soon enough their lobbyists will be clamoring for a new deal. The bad news is that only then will Texas politicians finally chuck the Bidness Myth and allow our state—and our nation—to giddyup into the twenty-first century.

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