When Mitch Daniels ran for governor of Indiana in 2004, a friend and videographer got the idea of filming the candidate in vidéo vérité style as he traveled around the state in his Indiana-made RV. In both his campaigns for governor—in 2004, when he won a close race, and in 2008, when he won reelection against the Obama tide in an 18-point landslide—Daniels visited each of Indiana’s 92 counties at least three times, appearing in places that hadn’t seen a statewide candidate in generations, or ever. If he wasn’t riding the RV, he came to town on his custom-built Harley Davidson, a solitary aide trailing behind.

He insisted on spending every night on the road in the home of a local family. Nearly all the families were strangers to him. He slept in guest rooms, family rooms, dens, and children’s bedrooms, on bunks and foldout couches, with pictures of pop stars staring from the walls and an occasional Disney mobile dangling overhead, proving to the people of his state that he could sleep anywhere. He was bit by a pig and, later, a farm dog. For his website he wrote a day-by-day account of the places he went and people he met. He paid special attention to the quality of pork tenderloin sandwiches he found in the local bars and diners. Pork tenderloin sandwiches, the size of a platter, are unavoidable in Indiana, no matter how hard you try, and Daniels made it clear he didn’t want to try. Food became a theme of the campaign. The best dessert he’d discovered, he said, was a Snickers Bar dunked in pancake batter and, this being Indiana, deep-fried.

All of this was the stuff of what became MitchTV. Daniels said he was skeptical of having his every move placed under the eye of a crew with a handheld camera and a boom mike. The first line of the first episode is: “The first thing you need to know about this is, it was not my idea.” But it was a good idea. The campaign edited the video down to half-hour episodes every week and bought time in nearly every TV market in the state, on Saturday nights, Sunday mornings, and Sunday evenings. A typical episode received a five or six share, a rating that shocked everybody and translated into tens of thousands of regular viewers.

I was alerted to MitchTV by a politically connected friend. Most of the episodes are available on YouTube. The shows are bizarrely compelling, as if D.A. Pennebaker had been let loose on the set of Hee Haw. The Hoosiers themselves​​—grizzled old farmers, bikers with attitude, housewives in floral prints, chubby kids in too-tight T-shirts—are part of the attraction. They are alternately delighted, disbelieving, and annoyed to find a well-known politician in their midst. The action, if that’s the word, plays out in county fairs and barn auctions and meetings of the chamber of commerce, against the woebegone beauty of small towns slowly sinking back into the Indiana prairie.

What ties the episodes together, of course, is the presence of Daniels. His telegenic appeal is highly unlikely. He’s 57. His pale coloring is set off by his reddish gray hair, and the day is fast approaching when the combover will no longer be able to work its magic. He favors pressed sport shirts and sharply creased Dockers, public-golf-course casual. His accent is hard to place. He calls it “hillbilly hybrid,” a term he coined to describe what happens when the rounded tones of Tennessee and Georgia, where he lived as a boy, are stomped flat as a griddle by the adenoidal twang of Central Indiana, where he’s lived, off and on, since he was ten. He has a fine sense of humor—after their dog bit him he told the family he was off to a diner for his new favorite breakfast, “two eggs over easy, biscuits and gravy, and a tetanus shot”—but his manner is just awkward enough to make you wonder, when you talk to him, if you’re making him nervous.

And voters, apparently, find it all endearing. In 2008 he garnered more votes than any other candidate in the state’s history, even as Obama became the first Democratic candidate for president to win the state since 1964. Daniels won 20 percent of the black vote and a majority of the youth vote. His approval rating among voters here, in the trough of the recession, ranges between 60 and 70 percent. He is everywhere in the news all the time; when I visited Indiana last month, his picture appeared on the front page of the Indianapolis Star, above the fold, on two of the four days I was there. He is at once so visible and so self-effacing that he seems to have sunk into a black hole of personal magnetism and come out the other side, where the very lack of charisma becomes charismatic. He is the un-Obama. Republicans—notably some wealthy and powerful ones who have decided he should be president​—seem to like that.

For a MitchTV fan, nothing can quite compare to seeing the thing play out in person. Daniels said I could go along with him to a couple of weekday events north of Indianapolis, but the day before we were to leave he decided to ride his Harley, leaving me to trail him in a black Sequoia with the state troopers who are a governor’s ever-present companions. When Daniels goes by motorcycle, another trooper will ride a bike a respectful distance behind. “I can pretend, at least, I’m all by myself,” he said. “It gives me the illusion of privacy for a little while.”

Our first stop that morning was North Central High School, in Indianapolis, where the governor was scheduled to bestow a statewide academic award on a prizeworthy math whiz. Daniels grew up in the neighborhood and graduated from North Central in 1967. His grandfather, born Elias Esau, came to the United States from Syria in the early 1920s. He chose the name Daniels at Ellis Island. After a few years Elias—now called Louie—made enough money to return to Syria and find a bride. He brought her back to Monongahela, Pennsylvania, and earned a good living running a pool hall and, his grandson says, making book. Mitch’s father married his mother, of Scots-Irish descent, in the Valley, and Mitch was born there, in the same delivery room that gave the world Joe Montana. After the sojourn in the South, his father landed a job selling pharmaceuticals and brought the family to Indianapolis. “It’s the typical immigrant story,” Mitch says. “Something that could only happen in America, and it happens all the time.”

North Central gleamed. A glass elevator stood in the polished foyer, and a ramp curved up to a balcony where one wall was devoted to the school’s Alumni Hall of Fame. A picture of Daniels—straight A student, president of the student council, delegate to the national Boys State convention in 1967—has pride of place, next to a photo of BabyFace, the music producer who has evidently been forgiven for discovering Paula Abdul. Later I remarked to Daniels how the schools I’d seen in Indiana all had the same gleam and polish: immaculate athletic fields, vast cafeterias, swimming pools.

“Yeah,” he said, “it’s a problem.”

I’d meant to flatter him but he sounded appalled.

“When we were first campaigning, I started to notice, we’d drive through these rural counties, these very poor counties, and we’d drive up over a hill and on the other side you’d see a brand-new high school that looked like Frank Lloyd Wright had just been there. Enormous gold-plated buildings. It turned out we had higher capital expenditures for educational construction per square foot than any other state. There’d be a bond issue and then the architects and contractors would run amok, spending money on things that had nothing to do with academics. I understand why it happens. The school board likes it because they get to play designer for a year. But we couldn’t afford it.”

Daniels put a 120-day moratorium on new school bond issues. “We’ve told them, if you propose a project that costs more per square foot than the national average, be prepared to show cause.”

Daniels is a font of statistics, but one comes to his lips more than any other. “Only 61 cents of every education dollar gets into the classroom in Indiana.” School funding increased every year under Daniels before the recession, and since the downturn, when most areas of state government have seen cuts of 25 percent or more, education has been reduced by only 2 percent. Yet the local school boards and their Democratic allies in the state legislature continue to complain. Daniels calls education funding “the bloody shirt” of Indiana politics: “It doesn’t take long before somebody starts waving it.” One of my favorite bits of Daniels video on YouTube shows him at a press conference defending a bill to end “social promotion” in the state’s grade schools. School districts were appalled that the bill would pass without “additional resources” to educate the kids who would be held back.

A reporter asked him about it.

“By the time a child has finished third grade, the state has spent $40,000 and the school district has had 720 days to teach that child to read,” he said, tight-lipped. “If that child can’t read by then, there is a fundamental failure in that district. And they’ll need to remedy it. The most unacceptable thing to do is to shove that child along to fourth grade into almost certain academic failure. That’s a cruel thing to do, it’s a wrong thing to do, and we’re going to put an end to it.”

The reporter pressed: But won’t the schools need more money?

Daniels’s eyes got wide.

“More than $40,000 to teach someone how to read? No. It won’t and it shouldn’t and any school district that can’t do it ought to face consequences.”

We were having lunch one day at a favorite spot, the St. Louis Street Soda Shop in Vincennes, on the Wabash River. Having resisted the Fried Bologna Sandwich ($3.49, with chips, pickle extra), Daniels was washing down a quarter-pound Coney Island dog with a large butterscotch milkshake—“the best in the state,” he assured Dolly, the delighted owner—when a reporter from the local radio station appeared. She pressed him on the education budget cuts too. She told him the local school board had just laid off nine teachers and an administrator.

“What would you say to those people?” she asked.

He visibly flinched, just as he had on MitchTV.

“I’d say it should have been nine administrators and one teacher. There are 20 things that school board could do before it had to lay off one teacher.”

In fact, the governor’s office has publicized a “Citizens’ Checklist” that people can take to their local school boards to see if school officials have made every possible economy. Citizens in Vincennes need to take that list and get answers, he said. The list is filled with questions. Have the administrators “eliminated memberships in professional associations and reduced travel expenses”? Have they “sold, leased, or closed underutilized buildings”? Have they “outsourced transportation and custodial services”?

“I want citizens to understand,” he said. “When people start demanding we spend more money, they’re saying, ‘We want to raise your taxes.’ And the citizens should say, ‘Okay, tell me. Which one of my taxes do you want to raise?’ ”

While local boards set the schools’ budgets, the responsibility for collecting revenue and allocating it to schools has been consolidated in the state government, at Daniels’s insistence. The main benefit, as Daniels sees it, has less to do with schools than with taxation. In Indiana, as elsewhere, schools have been typically funded by local property taxes, which local officials could raise to match their budgets, by increasing either rates or assessments. Consolidation took that option away from them. Under Daniels, home property taxes have been cut drastically—by one third in most cases—and are now capped at one percent.

“Property taxation is the most pernicious taxation there is,” he said. “Where else in life can you just decide how much you want to spend and then just dial up the rates to get enough revenue to pay for it? Elsewhere in life, you figure out how much money you have and fit your budget to that. If you’ve got less to spend, well, you’ve got less to spend.”

He treats waste in government as a moral offense. “Government isn’t a business, and it shouldn’t be run as a business,” he said. “But it can be more like business. It has a lot to learn from businessmen.” Government operates without the market pressures that produce efficiency and increase quality. The challenge for government leaders is to produce those pressures to economize internally, through an act of will. “Never take a dollar from a free citizen through the coercion of taxation without a very legitimate purpose,” he said in an interview last year. “We have a solemn duty to spend that dollar as carefully as possible, because when we took it we diminished that person’s freedom.” When you put it like that, overspending by government seems un-American.

When Daniels took office, in 2004, the state faced a $200 million deficit and hadn’t balanced its budget in seven years. Four years later, all outstanding debts had been paid off; after four balanced budgets, the state was running a surplus of $1.3 billion, which has cushioned the blows from a steady decline in revenues caused by the recession. “That’s what saved us when the recession hit,” one official said. “If we didn’t have the cash reserves and the debts paid off, we would have been toast.” The state today is spending roughly the same amount that it was when Daniels took office, largely because he resisted the budget increases other states were indulging in the past decade.

No other state in the Midwest—all of them, like Indiana, dependent on a declining manufacturing sector—can match this record. Venture capital investment in Indiana had lagged at $39 million annually in the first years of this decade. By 2009 it was averaging $94 million. Even now the state has continued to add jobs—7 percent of new U.S. employment has been in Indiana this year, a state with 2 percent of the country’s population. For the first time in 40 years more people are moving into the state than leaving it. Indiana earned its first triple-A bond rating from Standard and Poor’s in 2008; the other two major bond rating agencies concurred in April 2010, making it one of only nine states with this distinction, and one of only two in the Midwest.

Indiana, Daniels likes to say, is the “peony in the parking lot.”

One morning I sat with Ryan Kitchell in his office in the statehouse so he could tell me how this happened. One of the reasons is Kitchell himself, and people like him. In his mid-30s, Kitchell was a numbers whiz on the fast track at Eli Lilly & Co., a flagship company in Indiana, when Daniels strong-armed him into placing his career in abeyance and joining the state government for a couple of years. He’s been there for six, most recently as director of the state’s office of management and budget. “He’s very persuasive,” Kitchell said, with ironic understatement. “You think you’ll go back to your old job and he says, ‘Just give me another year, just as soon as we get this project done.’ The year goes by and the project gets done, and it’s ‘You can’t leave now, wait till we do X or Y, then you can go.’ But there’s always a new project.”

Daniels has laced the government with such people, at the first and second tiers of more than 70 state agencies. You can lump the recruits into three groups. There are midcareer professionals like Kitchell, who had just begun exploiting their gifts in the private sector, and have every intention of going back. There are young and energetic neophytes grabbed fresh from Ivy League government departments and business schools. Perhaps most important of all, there are the Hoosier equivalent of Roosevelt’s dollar a year men—accomplished businessfolk at the end of their careers or fully retired, willing to tackle one last challenge for the sake of Daniels’s grand reforms. The governor’s chief of staff, for example, is Earl Goode, former president of the phone company GTE. With a farm in Kentucky and a ranch in New Mexico and a pleasant golf course retreat, “I’m not doin’ it for the money or the power,” he says, in a Kentucky drawl. Daniels’s first head of economic development, the woman who founded Vera Bradley, was succeeded by an executive who had led foreign operations for Procter & Gamble; his secretary of commerce built cable television networks throughout the Midwest. It’s a long list.

“We aren’t here to prove anything,” Goode told me, with the genial air of a man who figures he’s proved quite enough already. “We’re doin’ it because we believe in what he’s tryin’ to do.”

Kitchell recalled sitting outside Daniels’s transition office after the 2004 election in the weeks before his swearing-in. “These very accomplished businesspeople would come in and they’d be waiting for the governor-elect. They’d say, ‘Yeah, I’d love to help him but I just don’t think I can do it at this point in my career.’ Then they’d go in there and 15 minutes later they’d come out scratching their heads: ‘Uh, I think I just agreed to be the secretary of agriculture.’  ”

The reforms began instantly. On his first day Daniels reversed an executive order signed by a Democratic predecessor granting collective bargaining rights to state employees. Union membership plummeted overnight. “I think they were happy to have the extra thousand dollars that would have gone to dues,” Kitchell said. Decertifying the public-employees’ union has spared Indiana pressures that have crippled other state governments. Unhindered by union demands, the governor instituted a “pay for performance” scheme, rewarding state employees who met explicit goals with raises ranging from 4 percent to 10 percent. The salaries of underperforming employees stayed flat. No one was fired, but every time a job went vacant a supervisor had to justify hiring a replacement. The number of state employees has fallen from 35,000 to under 30,000, back where it was in 1982.

The effects of reform showed up pretty quick too. The state Bureau of Motor Vehicles, another patronage sump that was routinely ranked one of the worst in the country, was drastically reorganized. “He likes metrics,” Kitchell said. “He likes to measure outcomes.” Every line item in the state budget has at least one objective formula attached to it to indicate how well each service is being delivered. Regulatory agencies track the speed with which permits and variances are granted. The economic development agency has to compare the hourly wage of each new job brought to the state with the average hourly wage of existing jobs. In the case of the BMV, the two most important metrics were wait times and customer satisfaction. Now each receipt is stamped with the time the customer arrives and the time his transaction is completed. Wait times have dropped from over 40 minutes to under 10 minutes. Surveys put customer satisfaction at 97 percent.

“But when you meet your goal,” Kitchell said, sitting at his office conference table, “he just moves the goalpost.” He turned to his computer and scrolled to an email the governor had just sent. That morning a transportation official had emailed with the happy news that bids on a new road construction project were coming in 28 percent below projections. No doubt he expected a hearty attaboy for driving a hard bargain to save the taxpayers’ hard-earned dollars. Kitchell read me the governor’s reply: “Shoot for 30 percent.”

Daniels gathered his agency heads on his first day and told them they were henceforth to pursue a single organizational goal—all successful businesses unite their efforts behind a goal, he said. His was this: “We will do everything we can to raise the net disposable income of individual Hoosiers.”

“So whatever we do,” Kitchell said, “we have to be able to show it moves toward that goal.” At the BMV, Daniels said, time was money: Cut wait times and Hoosiers have more time to run their businesses or work at their jobs. In some cases, the goal requires enlarging government rather than cutting it. The administration hired 800 more child caseworkers and vastly expanded efforts to help single mothers collect child support, a particular Daniels obsession. (The state now withholds hunting and fishing licenses from deadbeat dads, and casinos, licensed by the state, are required to check the child collection rolls before dispensing winnings.) He began a program to underwrite discounted prescription drugs. To supplement Medicaid, and in time perhaps replace it, he introduced state-sponsored medical insurance built around health savings accounts. Participants were required to pay in to the accounts, which were heavily subsidized by the state, and they had the responsibility of making their own health care decisions. To pay for the program, and to enable the property tax cut, Daniels agreed to increase the state sales tax by one percentage point.

Far more often, though, Daniels’s goal means cutting government, high and low. It is work to which he is well suited. He is a famous skinflint. A former employee recalled that Daniels, in private business at the time, asked him to dinner for a job interview and then insisted on splitting the bill. He played golf for several months using a garden glove from home instead of a store-bought golf glove​—“I didn’t want to buy one until I knew I was going to like the game enough to stick with it,” he told me. Family lore has one of Daniels’s four daughters, in grade school, piping up in class during a discussion of money. “Our family has money,” she announced to the teacher, “but my daddy won’t let mommy spend any of it.”

Like governor, like state. Daniels’s miserliness has proved infectious. In the early days of the administration he had a hunch that the government owned more cars than it could use. Lieutenants were dispatched to the parking lots of state facilities to place pennies on a tire of each car. They returned in a month and if the pennies were still there, Kitchell told me, “We said, ‘Give us the keys.’ ” To save on paper, a study was made to find the narrowest type font. Most state newsletters, once printed in color, are now in black and white. The state no longer pays for employee business cards. Agencies that were discovered to be net-users of paper clips—another study—were put in touch with the revenue service, which had a surplus of clips sent by taxpayers with their tax forms. The list of economies is long.

Daniels’s popularity among Hoosiers, a thing majestic in its dimensions, took a while to grow. Well into his first term, odds on his reelection were heavily against him. “You can only do the kinds of things we were trying to do if you don’t really give a damn,” he told me last month. “I mean about reelection. I wouldn’t have liked to lose, and I’d hate to see everything we did reversed. But if I’d thought about that nothing would have gotten done.” Early on his most significant accomplishments were his least popular. Indiana stands athwart two time zones, the eastern and central. It was also one of the last states in the country that did not uniformly honor Daylight Savings Time; some counties did, some didn’t. For half the year no one inside or outside the state could be certain what time it was in, say, French Lick or Buddha or Oolitic without consulting a timetable. Businessmen hated it. Daniels hated it too.

The reasons for sticking to “slow time,” as it was sometimes called, offended him as much as the effects on commerce. For generations the foremost apostle of slow time was Gene Pulliam, publisher of the state’s most powerful newspaper, the Indianapolis Star, back in the days when you could describe newspapers as “powerful.” A devout man, Pulliam took the metaphysical view: The Indiana legislature could not undo what God had ordained, which was slow time. Less theologically inclined Hoosiers merely admired the quirkiness of the checkerboard arrangement and took pride in its utter irrationality. I’ve never met a man with a deeper or more intuitive appreciation for Hoosier irascibility than Daniels, but business is business. By April of his first year in office, old time had been done away with, and all but the Chicago suburbs in the state’s northwest corner were on eastern time. Around the state, it took a while for the shock to wear off.

His next act took aim not only at the state’s parochialism but also its xenophobia. As governor, he said, you do what businessmen do: “You look for underperforming assets and turn them around.” The most egregious underperformer was the Interstate toll road that stretched across the state’s northern tier from Ohio to Illinois. In the hands of politicians and their patronage hires, the road fell into poor repair and lost money; tolls hadn’t been raised in 20 years for fear of offending voters and Teamsters. Daniels got the authority to put the road up for a 75-year lease and held an auction at the peak of the market. The winning bid contained good news—the price was a stunning $3.8 billion, beyond Daniels’s fondest dreams—and bad news: The bid was placed by non-Hoosiers, indeed non-Americans, a consortium of Spanish and Australian financiers. Hoosiers paid less attention to the money than to the fact that foreigners would now be running their toll road.

Daniels was shocked by the hostile reaction. He took to his Harley and barnstormed the state, explaining the realities and benefits of globalization, and in time the deal was approved. You don’t hear many objections anymore to what the governor calls “the Transaction.” The $3.9 billion went into a fund that can only be used for road construction and can’t be counted against the general budget. A backlog of projects that piled up over decades has been cleaned out and hundreds of new projects approved, without a dime in debt or new taxes. You can’t drive for 20 minutes in Indiana without coming upon a growling earth mover. Another fact helped mollify the xenophobes: the collapse of world financial markets has made it obvious that the foreigners got screwed.

One of the charms of MitchTV is the occasional critic Daniels encounters. “What are you going to sell off next?” one old-timer in coveralls snarls, repeating, “I am not a Mitch man” as he steams away, flapping his hands behind him in disgust. To my disappointment I saw nothing even remotely like that old timer as I witnessed MitchTV live, rumbling from Indy to Kokomo to Terre Haute to Vincennes to Evansville and back again.

After the ceremony at North Central High School, Daniels got back on the bike, but only for a minute or two. The troopers told me he is given to random and themeless stops, and on travel days his staff puts enough slack in the schedule to make them possible. He pulled into the parking lot of a McDonald’s for coffee, and for a chance to review a backgrounder about the next event.

Heads whipped around as he shuffled to the counter. His walk is a bit like a cowboy’s, shifting noticeably from side to side as he advances, bowlegged maybe from a lifetime of Harleys. He never encounters a citizen without trying to shake his or her hand, and they react as though they can’t believe their luck. He got his coffee and moved to the back of the restaurant where all the booths but one were empty. He homed in on the booth with citizens in it, a pair of unkempt young men in wifebeaters hanging loose at their shoulders. Both had pony tails.

“Can I sit with you guys?” he said.

They looked up, annoyed at first until they recognized him.

“We are having breakfast with the governor!” one of them cried, yanking on the bill of his cap.

“You have got to be sh  .  .  .” said the other, stopping himself, “foolin’ me! You on the bike this morning?”

On the table was a mountain of balled up wrappers. Daniels pushed it aside to make room for his cup. He told them where he’d just been, where he was going, and asked the same of them, and they told him.

They were roofers stoking themselves with five or six Sausage McMuffins before getting to the job. The governor asked whether the building trades were picking up. They were extremely genial and had no more than a dozen teeth between them.

“I’m having breakfast with the governor!” the first one repeated.

“You all got families?” Daniels asked.

The roofers looked at each other.

“I got kids, yeah,” the first one said. “They’re with their mama. I just got single again.”

“Why’s that?” Daniels asked.

“Well, governor, me and my kids’ mama, we were together for like five years .  .  .”

“S—, governor,” his friend said. “You’re going to make him cry. Again.”

“I do take care of them, I go without so I make sure they got everything they need.”

“Well, that’s good,” Daniels said. “I guess. But what they really need is you.”

The man dropped his head and swung it back and forth.

“I know this, governor, I know this.”

There was another unexpected stop on the way to the day’s main event.

“I never pass by Sherrill’s if I can help it,” Daniels told me later. The official name for Sherrill’s, which is a combination bar/diner/filling station on Route 31, is “Sherrill’s Eat Here and Get Gas.” The tenderloins are bigger than a Frisbee.

The first table near the door was a foursome of elderly ladies in print dresses.

“You don’t have to introduce yourself to us,” one of the ladies said, flapping her hand. “Everybody knows who you are!”

“Do you like catfish?” another of the ladies said, apropos of who knows what.

“I sure do,” Daniels said.

“I like catfish,” she said, eyes widening. Then she made an effort to lift her tiny body from her chair. “I’d like to go catfishing with you,” she said, stretching the vowel, a rising oooooooooo, until it reached some terrible, unnameable pitch of desire.

Daniels was unfazed. “I’m ready when you are,” he said. Before long he’d grabbed the coffee pot from behind the counter and was making his way from booth to booth offering refills, keeping up the patter, modestly accepting compliments and thanks. “We’re trying,” he would say, when someone mentioned the BMV or a new highway bypass.

As we were leaving, a woman in a dishwasher’s smock moved shyly from the kitchen, cradling a camera. “You want a picture?” Daniels said. “I’m afraid I’m not very photogenic right now.” He was in jeans and his biker jacket, a black leather job with zippers and hooks.

“That don’t matter,” she said. “You’re just you. You’re real.”

Is such a thing possible? A famous and celebrated political personage, living life in the camera’s eye and not faking his sincerity? I wouldn’t have thought it so. But there’s this: By the time we left Sherrill’s a posse of bikers had gathered. They’d got word that the governor was passing through and thought it might be a terrific idea if they accompanied him the final few miles into Kokomo, to the day’s main event, a luncheon with local businessmen. Daniels already knew a lot of these guys. They were co-members of a bikers’ safety group called Abate. With their tats (“Bad to the Bone”) and patches (“Marine Riders”) and headscarves and handlebar mustaches, they looked badass to me, but what do I know.

“You hang around these guys and they’ll surprise you sometimes,” Daniels told me later. “They all look the same, dress the same. And you go up to one of these dudes and you say, So what do you do? ‘Oh, I’m an ophthalmologist from down in Greencastle.’  ”

Daniels talked about bikes for a minute, told them of a group of Harley riders he’d met back at the McDonald’s, asked them what they’d been hearing. Then he got on his Harley and the Abate guys got back on theirs, and they moved onto the highway. Twenty minutes later, a small delegation of gray-suited businessmen who had been deputized to greet their governor were standing on the porch of Pastarrific Italian Restaurant in Kokomo, when their governor appeared, hunched on his Harley, with a gang of 25 men in long hair and black leather jackets behind him, in a thunderous internal-combustion roar.

When Daniels found there were some empty seats at the luncheon, he brought a few of the bikers in to sit among the businessmen and their wives. The rest dispersed to the VFW hall for beers. I watched Daniels’s presentation, mostly about the glories of the Hoosier renaissance despite the recession, and I realized he’d used the same tone, the same expressions—the same jokes, even—no matter who he was talking to, old ladies or bikers or pillars of middle American commerce, without condescension or false modesty, as equals—citizen to citizen. The dishwasher might have it right.

"I as amazed,” Al Hubbard told me one day. Hubbard is one of the Indianapolis businessmen who talked Daniels into running for governor in 2004. “I knew he’d be a very good governor. I didn’t think he’d be a good candidate. I didn’t think he had it in him.”

Daniels has lived most of his public life out of the public eye. He seemed to have the soul of a staffer. He was the guy just beyond camera range at the politician’s shoulder, always in time with the perfect statistic or the forgotten name of a supporter. His sister Deb tells the story of young Mitch arriving at the Boys State convention—a mock-up of a political party nominating convention, complete with candidates and campaign speeches and roll call votes. With some friends he found a nice-looking kid playing the piano at the hotel. “That’s our candidate,” Mitch told his friends, who thereupon helped him put the boy’s name up for nomination. “I don’t think it occurred to him to be the candidate himself,” his sister says.

After graduating from North Central, Daniels went to Princeton and spent the summers back in Indy, interning for the mayor, Richard Lugar. Lugar has called him a “genius,” and the admiration is reciprocated. Daniels managed Lugar’s successful campaign for the Senate in 1976 and followed him to Washington. He was a Senate staffer for the next eight years, getting a law degree from Georgetown Law School at night. In 1978 he married Cheri Herman, a fellow Hoosier and, perhaps more impressively for a baseball fanatic like Daniels, the granddaughter of the Hall of Fame second baseman Billy Herman. In 1980, their first daughter was born, “and after that we started stamping ’em out one after another. Every 20 months, bam, there’s a new daughter.” All the while, he says, he and Cheri were itching to leave Washington and get back to Indiana. “But Lugar could be very persuasive,” Daniels told me, describing his mentor in nearly identical terms to the ones his staff uses about him.

Ed Rollins, the political consultant, hired him as a political aide in the Reagan White House, and he took the top political job there after Haley Barbour, his immediate boss, left for a career in lobbying. Lou Cannon, in his President Reagan: The Role of a Lifetime, describes Daniels as the only White House staffer willing to confront Don Regan, Reagan’s wildly unpopular chief of staff, and tell him he should resign for the sake of the president’s popularity. Daniels was a staff guy but a nervy one.

The Daniels family finally moved back to Indianapolis in 1987. He practiced law half-heartedly and became President and CEO of the Hudson Institute, a think tank that had landed in Indianapolis after a series of financial setbacks. Daniels is widely credited with putting the institution back on its feet. “You do what a businessman does,” he told me when I asked about taking over Hudson. “You cut costs. You look for underperforming assets. You watch your spending. You find new markets for your services. We had a budget of $14 million. Even though it was nonprofit it was still like a small business. We had a bottom line.”

He also enjoyed the company he kept. “There were a lot of really smart, really interesting, really flaky people,” he said. Hudson placed him in the thick of the conservative intellectual counterculture of the 1980s. He dabbled in highbrow activism, joining the board of the human-rights group Freedom House and founding a pro-immigration group with the great economist Julian Simon. He still seeds his conversation with references to George Gilder, Thomas Sowell, Michael Novak, and, especially, Charles Murray, whose work, he says, demonstrated that big government liberalism—or statism, to use Daniels’s preferred term​—does more harm than good to the very people it was designed to help.

And it does this by smothering free enterprise, which works as the real engine of human innovation and betterment. “I’m enough of a Whig to know that government can create the conditions in which free markets can flourish,” he says. “Beyond that I get skeptical.” Daniels valorizes businesspeople, and he proved, by all accounts, to be an excellent businessman himself. Lilly hired him away from Hudson in 1990 to head its corporate affairs division. He rose rapidly through the corporate ranks—and unexpectedly, since Lilly was a notoriously inbred company, opening its top jobs only to people who had spent their whole careers there. He designed the company’s counterattacks on the Church of Scientology, which had launched a massive PR campaign against Prozac, a Lilly drug, in an effort to persuade Americans to drop their attachment to antidepressants and begin worshipping deceased science fiction writers. The campaign was so successful that the Lilly board of directors named Daniels head of the company’s North American operations, a multibillion-dollar business with more than 30,000 employees.

In 2000, George W. Bush, at Hubbard’s suggestion, named Daniels director of the Office of Management and Budget. “I never thought I’d go back to Washington,” he said, “but this was the one job I’d go back for. It’s the best job in government. Everything comes together right there.” Daniels left Lilly and liquidated all his stock options and other securities, for a payoff well over $20 million.

Bush called him the Blade, at least in public, and the first budget Daniels submitted was indeed restrained, in comparison with the Bush budgets that followed. With his excellent political sense Daniels fastened on a couple of gimmicks to illustrate his tight-fistedness. He tried to have his office voicemail system altered to play “You Can’t Always Get What You Want” when callers were on hold, but had to settle for piping the song into the Government Printing Office location when congressional staff showed up to pick up their copy of the budget. At a Capitol Hill hearing, out of patience, he said he’d discovered the motto of Congress: “Don’t just stand there, spend something.”

Then came 9/11 and Iraq. In some quarters, Daniels is notorious for publicly declaring that the war in Iraq would cost no more than $60 billion, as a way (goes the theory) of solidifying political support. It’s a particularly egregious charge, reeking of toadyism. It won’t die, and it clearly rankles him.

“The facts are otherwise,” he told me, exasperated, when I mentioned it. “I thought we’d dispensed with this, but I guess not. I think we got it straightened out on Wikipedia at least. I got so sick of it I put together a whole file of stuff that lays out the facts.” Among the material is a background briefing Daniels gave reporters in April 2002, outlining Bush’s request for $74 billion to fight the war. “I said to the Pentagon, give us your assumptions. They talked about a six-month conflict, and we made our estimate on the basis of that.”

The briefing transcript bears this out. “This [budget request] will, to the best of our ability to estimate this, cover all costs from now to the end of the fiscal year,” Daniels said then. “Six months contemplates a conflict, a period of stabilization in Iraq, and the phased withdrawal of a large number of troops.”

He says now, “If someone had come to us and said, What will it cost to invade Iraq, beat the Iraqi Army and stay in Iraq for eight more years, we would have given a different answer. But that wasn’t the question.”

The invasion was over, and the war was just beginning, when Daniels went back to Indiana. For more than a year he’d been implored by Hubbard and others to challenge the sitting governor, though it’s clear he didn’t need a whole lot of imploring. To the press he was coy, saying in mid-2002 that he was focused exclusively on his present job, fulfilling his commitment to the president, and was entertaining no thoughts of running for governor. A year later he was in the RV, campaigning.

So is he going to run for president? I asked him at the end of a long dinner in a pleasant, not-too-expensive restaurant on the north side of Indianapolis, and he did what he’s been doing for a year whenever interviewers ask the inevitable question—pursed lips, followed by a half-smile, a slight shake of the head, and the recitation of a long string of phrases nearly identical to the ones he used eight years ago when he denied he was running for governor. He has no intention to run, but he’s leaving the door open, but right now he’s focusing on the commitment he made to the people of his state, but if no one else steps forward it’s something he might be forced to consider, but he doesn’t expect that to happen, but .  .  .

There are smart people in Indiana who think he won’t run​—that his demurrals are a ploy to better position himself as governor. “He can’t run [for governor] again, but you notice nobody here considers him a lame duck,” said John Ketzenberger, a veteran statehouse reporter. “He’s still a player in the minds of people here because he’s seen as a player on the national scene. He knows how to leverage that.”

At dinner Daniels admits as much. “Newt [Gingrich] told me, look, quit saying you’re not going to do this. If you don’t run, you don’t run. But say you’re leaving the door open, and the national press will pay a lot more attention to your viewpoint.”

In the past year he’s raised money and recruited candidates for this fall’s state races. Republicans have a good chance of winning both houses of the state legislature, giving the governor a free hand in the next legislative session when he resubmits a raft of reform ideas rejected by the Indiana house’s Democratic majority. The session begins in January and runs through April. One last, truncated legislative session, in 2012, will require much less of the governor’s attention. After next April, in other words, he’ll still be governor, but he’ll have more time on his hands.

Also over the last year, he’s been attending a series of small lunches and dinners arranged by consultants and fundraisers from Indiana and beyond, and his recent visits to Washington have been packed with TV appearances, press breakfasts, closed-door kibitzing, and fundraisers for his state political action committee. After 30 years of national political activity, he doesn’t need any introductions.

But he has yet to set foot in New Hampshire or Iowa, as other potential nominees have. So far his only scheduled campaign appearance out of state is in Ohio, at a rally for John Kasich, the Republican candidate for governor.

“I really don’t want to run,” he said again. “It’s very important this time around that the party get it right. It’s not going to be enough to be the un-Obama. We need to focus more on the What of the campaign than the Who.” When he describes the What, though, it sounds tailored for a particular Who.

“What we’ve seen in the past year, what I call shock-and-awe statism, has put the American experiment at risk,” he said. “For the first time in my life, the country faces survival-level issues.”

Those would be, along with “terrorism in a WMD world,” the national debt and the recurring federal deficits.

“There are things that I would advance as a candidate that the playbook says are folly—suicidal,” he said. “We’d have to fundamentally change all the welfare and entitlement programs. What Bush tried to do [in proposing private accounts for Social Security] was mild compared to what needs to be done. You have to have a completely new compact for people under a certain age, for Medicare and Social Security. You’re gonna have to dramatically cut spending across the whole government, including, by the way, national defense. When Bush arrived, we were spending $300 billion on national defense, and he thought that was plenty. Now it’s, what, $800 billion?”

Beyond the debt and the deficit, in Daniels’s telling, all other issues fade to comparative insignificance. He’s an agnostic on the science of global warming but says his views don’t matter. “I don’t know if the CO2 zealots are right,” he said. “But I don’t care, because we can’t afford to do what they want to do. Unless you want to go broke, in which case the world isn’t going to be any greener. Poor nations are never green.”

And then, he says, the next president, whoever he is, “would have to call a truce on the so-called social issues. We’re going to just have to agree to get along for a little while,” until the economic issues are resolved. Daniels is pro-life himself, and he gets high marks from conservative religious groups in his state. He serves as an elder at the Tabernacle Presbyterian Church, in inner-city Indianapolis, which he’s attended for 50 years. In 1998, with a few other couples from Tabernacle and a nearby Baptist congregation, he and his wife founded a “Christ-centered” school, The Oaks Academy, in a downtown neighborhood the local cops called “Dodge City.” It’s flourishing now with 315 mostly poor kids who pursue a classical education: Latin from third grade on, logic in middle school, rhetoric in eighth grade, an emphasis throughout on the treasures of Western Civilization. “It’s the most important thing I’ve ever been involved in,” he told me. His social-conservative credentials are solid.

But about that truce .  .  .

“He might be one guy who could get away with it,” said Curt Smith, head of the Indiana Family Institute, who’s known Daniels since the 1980s. “He has a deep faith, he’s totally pro-life, and he walks the talk. And in an acute situation, like the one we’re in now with the debt, he might get away with a truce for a year or two. But to be successful in office he’s going to have to show those folks he shares their vision.”

In 2008, Smith supported an amendment to the state constitution to codify marriage between a man and a woman. He asked for the governor’s support.

“I wish he’d been more vocal about it, but that’s not his way,” Smith said. “What he told me, and told the public, was ‘As a citizen I will go into the voting booth and vote for it eagerly. As governor, I don’t have a role in this. The legislature and the people amend the constitution.’   ”

A couple of his friends say the one thing that will keep Daniels from a presidential campaign is deference to his family.

“Who would want to have your life opened up like that,” he said at dinner. “Who would want to subject his family to it? It’s vicious. My daughters are terrified of the idea.”

His wife Cheri isn’t crazy about it, either. She has been a low-flying first lady, hosting occasional receptions and launching a campaign to educate Hoosier women about heart disease. And she proudly won the watermelon-seed-spitting contest at the 2007 Indiana State Fair. But she never campaigns with her husband and rarely attends official functions.

“Right from the start she told me, ‘I don’t do the whole politician’s spouse thing,’  ” Daniels said. “She’s not apolitical. She’s not unpolitical. She’s antipolitical. I told her I would never ask her to do anything she didn’t want to do. And I haven’t. And she hasn’t.”

When the oppo researchers and the national press do get around to opening up Daniels’s life for inspection, they will find a few embarrassments. One is his arrest in 1970 for marijuana possession when he was a student at Princeton. He spent two nights in jail and paid a $350 fine, and later wrote about the bust in a column for the Star in 1989. More painfully, he and his wife Cheri divorced in 1994. She moved to California, leaving Daniels with the four daughters, aged 8 to 14, and married a doctor. She divorced again and moved back to Indiana. She and Mitch remarried in 1997.

Cheri has never spoken about this publicly, and from what I can tell it’s been mentioned in print only twice. Daniels’s only comment was to the Indianapolis Star in 2004: “If you like happy endings, you’ll love our story.”

Daniels’s valorization of business and private enterprise is essential to his view of public life, and it makes for a clear contrast with the views of President Obama. It may also be at odds with the public mood. On the other hand, President Obama’s valorization of government is at odds with the public mood, too.

As our dinner wound down—I insisted on paying the bill, he offered to split it—he said he was going to give a commencement address the coming weekend, at Franklin College, south of Indianapolis. It had been inspired partly by the theme of “public service” struck by Obama’s recent commencement addresses, in which the president discouraged the pursuit of mere material gain in favor of nonprofit and government work.

“That strikes me as exactly the wrong message to send to young people,” Daniels said. “He’s got it completely wrong. Government service—nonprofits—all that’s fine and necessary. But the host can only stand so many parasites.”

He stopped himself and glanced at my open notebook.

“Maybe that’s too harsh,” he went on. “But someone’s got to say to these kids, There’s nothing wrong with going into business. It’s not selfish. It’s good. Build a business, create jobs for people, create wealth for people. It helps people. And that’s what we’re supposed to do, isn’t it.”

The troopers pulled the Sequoia up to the door of the restaurant, and Daniels left me with what he said was one of his favorite quotations.

“I remember it from a book by Bruce Catton,” he said. “It’s a Union general commenting on Ulysses S. Grant. He said, ‘There was no nonsense, no sentiment; only a plain businessman of the republic, there for the one single purpose of getting that command across the river.’

“I like that. I like that a lot.”

Andrew Ferguson is a senior editor at The Weekly Standard and the author of Crazy U: One Dad’s Crash Course in Getting His Kid Into College.

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