The Economic Case for Jon Huntsman

There’s no two ways around it. The economy is going to be the premier issue in the 2012 presidential contest. The President’s economic record leaves much to be desired with high unemployment, stagnant growth and anemic job creation. And let’s not forget record deficits. Obama’s dismal record has created a genuine sense on the right that the GOP has an excellent chance of taking back the White House in 2012, so it’s no wonder that the field for the GOP nomination would attract a good number of candidates.

Yet despite the abundance of Republican candidates in this econo-centric election, surprisingly few have a strong economic record worthy of contrasting to the President’s. But nominating a Republican with a less than impressive economic record would basically defeat the purpose of capitalizing on an economically weak president. Relying on the president’s record being worse in comparison likewise seems a poor choice for the GOP to offer the American electorate. So it would seem that examining the GOP candidates’ fiscal rhetoric against their actual records would be more imperative for primary voters than ever before.

Newt Gingrich: Sure, Speaker Gingrich has a fiscally conservative reputation thanks largely to the Contract with America but upon taking the Speaker’s gavel Gingrich quickly squashed Social Security reform saying we should focus on more immediate problems, “not the ones that are 20 years out.” He likewise failed the Balanced Budget Amendment. Instead of championing the BBA into another election and gaining additional seats in both the House and Senate to ensure its passage, Gingrich let the BBA “whither on the vine.” Today, Social Security reform and balanced budgets are all the more pressing problems. When given a chance more than 15 years ago to lead on these issues, Gingrich punted.

Michele Bachmann: While the Minnesota Congresswoman has a knack for generating attention, she lacks a resume heavy on accomplishments, as she herself has acknowledged. In fact, her legislative record is even drawing comparisons to President Obama’s. If Obama’s thin resume was worthy of highlighting as a point against him in 2008, then Bachmann’s similarly weak record should give Republicans serious pause. Although she’s generating attention at the moment, I believe her record, or lack thereof, will eventually diminish her current popularity. I think it’s likely she’ll return to Minnesota in enough time to retain her Congressional seat.

Tim Pawlenty: In contrast to Bachmann, Minnesota’s other Republican candidate offers a slightly more accomplished resume. As a two-term governor, Pawlenty has based his 2012 fiscal appeal in large part on his ability to balance Minnesota’s budget without raising taxes. But a closer examination reveals a much less impressive record than Governor Pawlenty would have us believe. Pawlenty backed a cigarette tax increase and labeled it a “user fee.” Additionally, under Pawlenty Minnesota’s property taxes increased 65% while fees doubled. And his budget balancing prowess? From the Minneapolis Star Tribune:

But Democrats contend that Pawlenty ran his own Ponzi-like scheme in Minnesota, employing short-term budget band-aids that put the state’s books in technical balance. Among them: accelerating tax payments, delaying spending, using $1 billion from the tobacco settlement, relying on federal stimulus dollars and borrowing more than $1.9 billion from K-12 schools, much of which must be paid back.

Pawlenty’s camp says there was nothing untoward or unusual about his budget fixes. “Lots of governors who faced economic downturns have used creative ways to get through it,” said former Pawlenty chief of staff Charlie Weaver

Considering accounting gimmicks are part of the problem in Washington, I personally don’t find Mr. Weaver’s assessment very reassuring, but far more troubling than state spending is the weak economic growth Minnesota experienced under Pawlenty. Minnesota added only 6,200 jobs, or 0.5%, under Pawlenty. This might explain in part why his campaign continues to struggle. The GOP can offer better, and voters know it.

Mitt Romney: While Governor Romney continues to draw front-runner status, the truth is many republicans are looking elsewhere. Not only does Romney have the baggage of his Massachusetts healthcare law drawing comparisons to “Obamacare,” but his record on economic growth might be the worst of all the candidates. As the Boston Globe reported in 2007:

On all key labor market measures, the state not only lagged behind the country as a whole, but often ranked at or near the bottom of the state distribution. Formal payroll employment in the state in 2006 was still 16,000 or 0.5 percent below its average level in 2002, the year immediately prior to the start of the Romney administration. Massachusetts ranked third lowest on this key job generation measure and would have ranked second lowest if Hurricane Katrina had not devastated the Louisiana economy. Manufacturing payroll employment throughout the nation declined by nearly 1.1 million or 7 percent between 2002 and 2006, but in Massachusetts it declined by more than 14 percent, the third worst record in the country.

While the number of employed people over age 16 in the United States rose by nearly 8 million, or close to 6 percent, between 2002 and 2006, the number of employed residents in the Commonwealth is estimated to have modestly declined by 8,500. Massachusetts was the only state to have failed to post any gain in its pool of employed residents. The aggregate number of people 16 and older either working or looking for work in Massachusetts fell over the Romney years.

Again, this is hardly the fiscal record worth championing in comparison to the president’s. Logic dictates that if Romney was near the bottom on job creation, then there are plenty of other choices out-ranking him.

Rick Perry: Although not officially in the race for the nomination, Governor Perry has recently made indications suggesting he will indeed toss his hat in the ring based on the strength of his economic record in Texas. And while some pundits have likewise promoted Perry’s fiscal record as strong grounds for supporting his candidacy, a closer examination shows Perry’s record is far less stellar than he and his supporters would have us believe, as the Star Telegram reveals:

Yet before the latest [budget], the Texas budget had consistently grown during Perry’s time as governor, with total spending rising faster than inflation and population growth, state data show.

What’s more, spending through 2011, adjusted for population and inflation, rose more on average while Perry has been in charge than it did under his predecessor, George W. Bush, according to a Star-Telegram analysis.

Additionally, Texas’ debt has doubled under Perry, but recall what former Pawlenty chief of staff Charlie Weaver said: “Lots of governors who faced economic downturns have used creative ways to get through it.” Indeed, and Governor Perry is one of them. While praising his most recent budget, Perry has highlighted that he balanced Texas’ budget while maintaining a $6 billion Rainy Day Fund. But the Texas Tribune points out Perry’s accounting creativity:

Lawmakers have already drawn down $3.1 billion of the fund’s roughly $9.5 billion reserve to cover a deficit in the current budget. Then, to make the 2012-2013 budget balance, the state’s projected share of expected Medicaid costs is underfunded by $4.8 billion — for many, a conservative estimate.

That means when lawmakers come back in two years — and without a change in federal law diminishing the state’s obligation to Medicaid or an increase in Rainy Day revenue from an improved economy — they will need most of the remaining $6 billion to pay another past due bill.

“Effectively they’ve used it,” said Bill Hammond, president of the Texas Association of Business and a former state lawmaker. “They just aren’t going to fess up until January of 2013.”

Many of Perry’s supporters prefer to champion his record on job creation but, again, a closer inspection reveals these claims to be exaggerated. For example, Virginia Governor Bob McDonnell’s claim that Texas “has created more jobs over the last decade than the rest of the states combined,” is not quite true. In fact, Perry’s job growth rate pales in comparison to another Texas politician:

Perry often talks about the robust growth of jobs during his tenure. But jobs grew at about the same rate during Democrat Ann Richards’ four years as governor. And they grew at a much faster rate during Republican George W. Bush’s six years in the office than they have in Perry’s 10. Even before the national recession hit in 2008, jobs grew at a slower rate in Texas under Perry than under Bush.

Indeed, more recent data comparisons show Perry’s record isn’t as rosy as he and his supporters proclaim:

The Massachusetts labor market deteriorated less than in Texas from 2008 to 2010, according to data compiled by Bloomberg.

Massachusetts was the fourth most-friendly state for employment in the period, the data show. Texas, where Republican Governor Rick Perry has touted his state’s title as Chief Executive magazine’s best for business, was sixth.

Bloomberg’s ranking weighed changes in states’ employment, their jobless rates and annual median wages. Alaska and North Dakota, which placed first and second, were the only states where the number of jobs in 2010 was more than two years earlier.

While it might look at first glance that Governor Perry has a strong fiscal record, the truth of the matter is Governor Perry’s record pales in comparison to Governor George Bush’s. Selling the full American electorate another Texas governor with a record less impressive than Bush’s will be an uphill battle to say the least.

As my title implies, there is, of course, a candidate with an impressive economic record: Jon Huntsman.

Under Governor Huntsman, Utah not only led the nation in job creation but was also named the best managed state by the Pew Center. Even after he left Utah for China, Utah continued to rank high in economic development. More recently:

Utah’s economic growth pace continues to be the strongest in the western Continental U.S., although current growth pales when compared to stronger economic growth during 2004-2007, according to the Summer 2011 issue of Zions Bank’s Insight–Economic News of Utah and the Nation released today.

The state’s unemployment rate declined to 7.3% in the latest month, down from the 7.6% average of the prior 12 months. While the rate is expected to fall at a consistent pace during the next 2 to 3 years, it will be a number of years before Utah approaches the 2.8% average jobless rate during 2006-2007.

Make no mistake – Huntsman’s success wasn’t by accident but rather due to a carefully crafted 10-point plan he outlined before the 2004 election:

Economic development is the critical link that will allow Utah to pay for education by raising overall revenues — not by raising taxes. In conjunction with many of Utah’s best and brightest private sector leaders, I have developed a plan to revitalize Utah’s economic base and provide the long-term funding required to educate our children. This plan centers on creating an environment that will allow Utah to sustain, attract, nurture and retain good businesses.

My 10-point economic plan — when implemented in a timely, effective and coordinated manner — will dramatically strengthen Utah’s economy for the years ahead. The 10 points are as follows: (1) Revamp Utah’s tax structure (2) Improve the competitive environment for small- and medium-size companies (3) Recruit businesses to our state (4) Attract more capital (5) Promote growth in target industries (6) Enhance Utah’s national and international image (7) Capture global opportunities for Utah companies (8) Promote tourism (9) Energize economic development in rural communities (10) Make state government more efficient.

True to his word, Governor Huntsman’s commitment to his 10-point plan was reflected in his priorities:

Economic Development. Governor Huntsman has long held that the State’s economy is the means by which its government is able to provide services. As such, economic development is one of the cornerstones of his administration. Creating new jobs, looking for innovative reforms to health care systems, and increasing the number of tourists in Utah is vital to the economic viability of the state.

Education. Utah’s future depends on the quality of its education system. The growth in Utah’s economy has highlighted the need for a well trained workforce. Governor Huntsman is providing unprecedented support of Utah’s public and higher education programs that focus on meeting the needs of children, parents, schools, and teachers to ensure we are preparing the best workforce for Utah’s future.

Indeed, regarding his 2006 State of the State address the Deseret News said, “Huntsman’s sights are squarely in the future, focused on economic development, making meaningful investments in the state’s public schools, creating an adequate transportation system and protecting Utah’s environment.” In other words, Governor Huntsman followed through on his campaign promises.

As you may have noticed, Governor Huntsman repeatedly mentioned increasing Utah’s tourism. The results of this attention? Another thriving success:

An economic sector performing well in Utah, according to the Governor’s office of Planning and Budget, is tourism. Total spending by travelers and tourists in 2008 reached $7.190 billion. Despite the national downturn, tourism spending reduced the tax burden on each Utah household in 2008 by approximately $708.

This year visitor days are down in many tourism sectors nationally, however a bright spot in Utah is that visitation to Utah’s parks are up. Year to date through October, National Park visits were up 5.8% and National Monuments up 4.9%. State parks showed similar gains year to date through September at 4.5%. In 2008, Utah’s national park visitation was up 4.14%, while national park visits declined by 0.26% nationally. Additionally, the ski industry enjoyed five consecutive record breaking years for skier visits from the 2003-04 season through the 2007-08. Furthermore, since 2006, Utah Office of Tourism ad campaigns have generated an average of $12.68 in state and local tax revenue for each $1 spent on advertising. These trends support the latest study from the U.S. Travel Association that ranked Utah 8th in the Nation for the percent increase in spending by Travelers and Tourists during the 2006-07 travel year.

Point number one in Huntsman’s 2004 plan was to “revamp Utah’s tax structure.” He again followed through, proposing reforms at his 2006 State of the State address, and delivering in 2007, along with increases to education.

In addition to this impressive record of economic growth (and political integrity), Governor Huntsman is the only candidate in the GOP field with international experience. Of course, some republicans have dismissed Governor Huntsman’s candidacy because of his service as Ambassador to China under the Obama Administration, never mind that he also served the Reagan Administration. But certainly this experience is an asset when considered in global economic terms. China is our most important trading partner, and holds a substantial amount of U.S. debt. Should a financial crisis involving China occur, would you rather have a president who was a former ambassador fluent in Chinese and familiar with their culture, or a former member of Congress with no legislative accomplishments to his or her name? Perhaps someone whose record makes George Bush look like an economic genius?

So while some GOP candidates offer charismatic rhetoric or distorted statistics, if Republicans are serious about putting a proven economic leader in the Oval Office then their choice should be clear. They should nominate the candidate whose record will most starkly contrast to the president’s; a proven record of economic growth, job creation and tax reform. That candidate is Jon Huntsman.

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