Has Governor Bush Monkeyed Around With Business?

Overwhelmingly CEOs say they'll support you for president, but that's curious, George.
by Paul Burka

On the northeastern fringe of Austin the subdivisions and office parks peter out and the prairie takes over, a pastoral scene that goes on for miles until it is broken by a trapezoid facade of green glass and a mammoth longitudinal complex that goes back and back and back, evolving from offices to factory as it recedes into the distance. This is the U.S. headquarters for Samsung Semiconductor, one of the prize catches for Texas in the high-stakes competition for corporate expansion and relocation, and it is here, Brenda Arnett says, because of George W. Bush. "We were competing with Georgia and Oregon," recalls Arnett, the former head of the Texas Department of Commerce (now called the Texas Department of Economic Development), "and he met with Samsung's top executives. He didn't promise them anything. He talked about how much he loved Texas and why this was a good place for business, and that really impressed them. He's a seller."

As Arnett related how the governor had sold the Korean high-tech company on coming to Texas, I realized that his message was much like what he had told me when I had asked him about his record on business issues. "It starts with philosophy," he had said. "I understand that the role of government is to create an environment in which entrepreneurship flourishes. Our business environment sends a clear signal that entrepreneurship is welcome here, that Texas is a good place to take a risk." Bush should know. Not only did he start his career as the head of his own oil company in Midland and move on to become the managing general partner of the Texas Rangers baseball team, but in deciding to pursue the presidency he has now embarked upon the biggest political risk of all. Apparently the Samsung executives are not the only business leaders who have been impressed. A recent profile of Bush in Fortune cited a poll of CEOs in which a whopping 86 percent favored him for president. This near sweep is all the more remarkable because one of his chief competitors for the Republican nomination, Steve Forbes, was a CEO himself.

As with other polls showing Bush astonishingly far in front of his rivals, Republican and Democratic, the question that comes to mind is, Why? Indeed, Bush himself asked it a year ago, when early polls for the 2000 presidential race showed him rocketing to the top before he'd displayed any overt interest in running for the White House. Is the support for him explained by his familiar name and the royalist impulse of conservatives to favor the promotion of whoever has the best claim as heir apparent? Or are his supporters aware of his philosophy and actions? How much do CEOs know about Bush's business record? It is quite an intriguing record, and one that reveals the kind of politician Bush is. In 1995 he made good on a campaign promise to bring tort reform to Texas—but he also declined to veto a 1997 bill, the first of its kind in the nation, exposing HMOs to malpractice suits. He believes that science should prevail over politics in environmental decisions—but his appointees to the Texas Natural Resource Conservation Commission last fall made a highly controversial decision to shut down the Sierra Blanca low-level radioactive-waste facility in the West Texas desert after eighteen years of work and $50 million had been spent. He believes in helping business create jobs, as he did by wooing Samsung—but the rate-cutting and pro-deregulation policies of his appointees to the Public Utility Commission have so weakened Texas electric utilities that one, Central and South West, has been bought by an out-of-state company and others fear that they will suffer the same fate.

What these battles have in common are high visibility, considerable controversy, and friends of the governor's on both sides. Their outcomes suggest two indisputable facts. The first is that George W. Bush is not the kind of politician who falls on his sword over philosophical fine points. The second is that, even in Texas, it is not as easy to be pro-business as it used to be.

The importance of a healthy business environment has been a continuing theme in Texas politics ever since the petrochemical and defense industries began the industrialization of the state's economy in the thirties and forties. In the ensuing decades Texas governors spoke reverently of nurturing a "good bidness climate," which meant low taxes, friendly regulation, hostility to unions, and protectionist policies for Texas companies, like intrastate trucking firms. Texas was a one-party state in those years, and the Capitol was ruled by conservative Democrats who were loyal to business and warred constantly with populists, labor, minorities, and others in the party's liberal wing. In the sixties Governor John Connally foresaw the growth of the Sunbelt and convinced business that if Texas was to attract Northern companies seeking to relocate, the state had to spend more money on basic services, from education to parks.

And so it came to pass. The seventies were boom times in Texas, but prosperity brought about the fall of the old political order. The Northerners who immigrated to Texas with their companies were mainly Republicans who cared nothing for the state's byzantine political traditions. The conservative wing of the Democratic party withered; its adherents drifted toward the GOP, and the remaining Democrats moved left. Meanwhile, the diversification of the state's economy made it impossible for business to continue to speak with a single voice. The oil bust of the eighties was fatal to business's political clout. Politically active independent oilmen, real estate developers, and lenders were wiped out, and in many cases ownership passed to out-of-state interests indifferent to Texas politics. The phrase "good bidness climate" disappeared into history, plaintiff's lawyers dominated the Capitol and the courts, and Democratic governors Mark White and Ann Richards were elected after campaigning against utilities and insurance companies, respectively. The nineties have brought to Texas, as elsewhere, a politics that revolves more around personality and social issues than the concerns of business, with the single exception of tort reform. From the top-down politics of the fifties and sixties, with the business establishment at the apex of the pyramid, we have moved to the bottom-up politics of the end of the century, where power is in the grass roots. No governor, Republican or Democrat, can ignore that fundamental shift, and George W. Bush certainly hasn't. It is no coincidence that the unpopular industries attacked by White and Richards—utilities and insurance—have been losers during the Bush years.

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