Is Rick Perry Ready for Primetime?, Where Will the Jobs Come From?

Federal Reserve Treason?
Texas Governor Rick Perry's entry into the 2012 Presidential race has turned the contest on its head. Perry, hardly a well-known national figure before this year, instantly became the national man to beat, surging to the front of polls of Republicans. Well Romney still holds a comfortable lead in New Hampshire and Michelle Bachmann will undoubtedly be competitive with Perry in the Iowa Caucuses (Romney is more or less conceding Iowa), Perry has jumped to first in the betting odds overnight (his odds of receiving the nomination are 37%, Romney's are 30%, according to Intrade.)

But Perry has stumbled out of the gate, stopping just sort of calling Federal Reserve Chairman Ben Bernake (who has originally appointed by President George W. Bush) a traitor and implying he would get roughed up if he came to Texas. He has Karl Rove calling him a lightweight and major GOP figures questioning his intellect.

The George W. Bush comparisons are flying fast and furious, and for obvious reasons. Perry followed Bush as Governor of Texas, both have stepped on their words at times and questions about the intellectual horsepower of both persist. And both have that signature Texas twang.

I look at Rick Perry and see a different parallel. In 2008, a conservative, experienced, southern politician was more or less begged by conservatives in the establishment to get into a race that was being fought between a moderate establishment candidate and a series of conservatives who couldn't win a general election. When this candidate finally got in the race late, he instantly vaulted into the top 2 in polling, but quickly flamed out as he ran a horrible campaign that failed to live up to the pre-candidacy expectations. That man was former Tennessee Senator and former star of Die Hard and Law and Order, Fred Dalton Thompson. I think Perry is this year's Thompson. Conservatives liked the idea of his candidacy but will soon sour on the reality. Assuming Perry shows up for the debate September 7th, we'll get the first glimpse of if I'm right.

Where Will the Working Class Work?
A stable democracy demands an economy where the working and middle classes exist and can work in jobs that support a decent standard of living. Throughout history, different structures have emerged that support growing economies in ways that support broad employment. Agrarian economies had the population working in fields, planting and harvesting crops. After the industrial revolution, the working class moved to higher value work in factories as farming became more automated. The 1990s saw the dawn in the US of the service economy, with more people working in call centers, retail stores and financial services and fewer in factories as manufacturing started to move abroad.

So, with 9% unemployment now, where will the jobs come from? Apple, the crown jewel of American innovation and the most value company in the world doesn't even crack the top 50 employers in the US. The top 5? Wal-Mart, McDonald's, UPS, Sears and Home Depot. Three retailers, a fast food restaurant and a parcel delivery service. It hardly feels like the 21st century economy.

The risk, of course, if broad swaths of the population either remain unemployed or work for peanuts (or Big Macs) at McDonald's and economic wealth continues to concentrate amongst the gifted few that land the big dollars in capital markets or as an executive at Apple, is that the majority of Americans will no longer feel the system works or that they have a stake in the economy. The lack of a stable middle class is extremely destabilizing, as is evident in much of the third world.

So how do we solve this? We should have an industrial policy that focuses on the industries that generate middle class jobs, as Germany has done with high-end manufacturing. Our problem is, we have no political will to create such a coordinated policy and the deficit taints the possibility of serious reinvestment in the economy.

Until that changes, expect the wealth gap to continue to grow.

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