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Net Net: Promoting innovation and managing change

Armey: Romney is the Front Runner, I'm Disappointed in Gingrich


It's a hog heaven in South Carolina as the mud slinging between the GOP candidates against former Massachusetts Governor Mitt Romney intensifies. Despite Romney's historic wins in Iowa and New Hampshire, the "excitement" is not there amongst the tea party activists and evangelicals. Tea Party God Father and former House Majority Leader Dick Armey (R-TX), who is now Chairman of FreedomWorks, is watching the primary season closely.

LL: South Carolina politics has been known to be historically dirty. Just how much heat will be turned up on Romney?

Leader Armey: Romney is the frontrunner after wins in Iowa and New Hampshire. I’ve always said, when you want center stage you get all the tomatoes. I believe South Carolina is so difficult, because it is such a make or break state for so many campaigns. If Santorum, Perry, or Gingrich have a poor showing, it's pretty much all she wrote.

LL: Romney's win in Iowa and New Hampshire was historic, but the battle for second place has taken the focal points in both. Is that because of the lack of Romney's ability to connect with the conservatives?

Leader Armey: Activists are looking for an authentic person, not a politician who says things and take positions to get elected. So they are looking into the records of these candidates. Romney has a problem with fiscal conservatives with his support of RomneyCare and the individual mandate, his hostility to fundamental tax reform, his lack of boldness on issues like entitlements. He is more of a technocrat, tweaking at the edges. Conservatives are looking for leadership to fix big problems, like trillion dollar deficits as far as the eye can see.

Ron Paul’s success is a testament to how much the electorate is changing and embracing folks who focus on the debt and deficits. It’s hard to call him the fringe with his strong finishes.

LL: Perry is making his stand in South Carolina. Will the Tea Party back Perry or Santorum?

Leader Armey: Both of these guys are trying to pick up Michelle Bachmann’s base and see if they can pull support from Newt as he stumbles. When I talk with tea party activists, they are still shopping. It seems like their favorite candidate is still 'none of the above.’ But in this race were at the point where this is the field. I assume they will split between a variety of candidates.

When I talk with activists, it is clear the enthusiasm is more in the upcoming Senate and House fights. No matter who is president next fall, they want to expand the majorities in the House and have a small-government supporting Senate.

LL: What do you think of Newt's attacks on Romney? Is he essentially doing the dirty work for President Obama?

Leader Armey: To put it bluntly, I’m very disappointed. This is the kind of attack I would expect from John Edwards.

LL: Are the attacks on Romney and Bain Capital against the GOP principles of supporting and strengthening the free enterprise system?

Leader Armey: Romney has plenty of problems with his policy background, but providing value for his investors is a fundamental part of the creative destruction of capitalism. The tea party movement is opposed to crony capitalism when companies like GE get millions of taxpayer dollars in handouts, make billions in profits, and still manage to avoid paying taxes. Private equity is a high risk business that is essential in reinventing failing enterprises, and that is good for our economy.

If I was an advisor to the governor, I would suggest he embrace his background. The federal government is bloated, bankrupt, and needs a healthy dose of someone to rationalize and downsize the government and restore fiscal discipline.

LL: Didn't the President essentially create his own PE firm when he bailed out the autos and shut down plants?

Leader Armey: I would much rather have seen private PE companies come in and rationalize GM and Chrysler. When I was a professor of economics, I always used to tell my students that the market is smart and the government is dumb. The private sector looks for efficiency and competitive advantage, politicians have political goals in mind.

Companies should focus on providing a better good or service at a better cost. When they get into other issues, they tend to become rent seekers and get into social engineering malarkey.

LL: Do you think Ron Paul will run as a third party candidate?

Leader Armey: No, I believe he is doing his service in changing the direction of the GOP. It cracks me up to see how it takes a 70 year old to bring in so many young people to the movement.

LL: Will the evangelicals and Tea Party support Romney if he becomes the GOP nominee?

Leader Armey: Most evangelicals and tea partiers I speak with want to see the president defeated. We could have an enthusiasm problem. But we have such great Senate candidates in places like Ohio, I would not be surprised if we had reverse coattails where the turnout and energy for the Senate candidates helps the top of the ticket.

LL: Contacts of mine who are from both sides of the aisle say they have never seen such a fractured Republican party in an election year.

Do you agree it's fractured? Not since McCain Bush have we seen such a nasty smear campaign.

Leader Armey: Politics is juvenile delinquency. You do see the old establishment GOP facing a challenge from the small government movement. We want cuts, not just a reduction in the rate of growth.

We want bold reforms, not a pat on the head. The old bulls are not going to go quietly.

LL: Will Romney be able to rise above the smear?

Leader Armey: He is the front runner. That’s going to be up to the voters in South Carolina and Florida.

LL: Does getting the Bain issue out now actually help Romney hone in on his jobs message and go after the President for employing PE practices during his administration?

Leader Armey: I'm sure the president will pick up right where Newt left off. This election will be about who is better on getting the spending under control, who is better at getting the economy growing.

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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."