A Non-Pocketbook Election
FRUM, DAVID
A Non-Pocketbook Election By David Frum Twenty years ago, Jude Wanniski published a book arguing that the stock market astutely gauged the wisdom (or folly) of the policies being pursued in...
...The folly of government matters a great deal: Every major industrial nation has permitted government regulation and expenditure to grow rapidly since 1970, a weight gain that explains why their economies no longer can run as fast as they used to...
...everyone would be better off...
...The way is open, in other words, for a trenchant debate between intelligent alternatives-between the New Democratic economics Bill Clinton espoused in 1992 and the robust advocacy of economic freedom that won the three presidential elections of the 1980s for the GOP Instead, the presidential candidates of the two parties seem interested only in melding economic gimmicks like the gas tax cut and a hike in the minimum wage while acquiescing more or less grudgingly in the major spending programs that make up government as-we-know-it...
...Three huge new regulatory statutes were imposed in 1990-91 (the Americans with Disabilities Act, the Clean Air Act of 1990, and the 1991 Civil Rights Act...
...Since 1980, Republican presidential candidates have offered voters a clear and exciting alternative to the confiscatory politics of the Democratic party...
...if interest rates were lower...
...And what happened...
...Bad public policy is not harmless...
...Bill Clinton is promising America's wealth-producers, "I won't hit you again...
...Adjusting for inflation, the median American family earned less in 1994 than in 1990, and only $900 more than it did in 1980...
...Absolutely nothing...
...In 1984, he promised to keep tax rates low-and his successor, who repeated the promise, was rewarded with a convincing win in 1988...
...if America's airports and highways could move traffic at faster speeds...
...This Eisenhowerish self-presentation is not, needless to say, entirely honest...
...Ronald Reagan won a huge majority in 1980 by promising to stop inflation and cut income taxes...
...Lyndon Johnson's inflation and Richard Nixon's price controls deserve much of the blame for the economic pain of the 1970s...
...In 1996, every politician with a bold plan to improve America's economic performance was either screened out by the primaries-Pat Buchanan, Steve Forbes, Phil Gramm-or deterred from entering them in the first place-Jerry Brown, Jesse Jackson, Paul Tsongas...
...economic expansion of the 1990s has moved at a weirdly sluggish pace: 2.2 percent growth in 1993, 3.5 percent in 1994, 2.1 percent in 1995, 2.6 percent expected in 1996, a little less projected for 1997...
...I can't imagine it excites very many of them very much to hear Bob Dole chime in, "Well, I won't hit you again either...
...Oddly enough, this affectless election is occurring at a remarkably hospitable moment for real economic debate...
...But whatever the man's actual views, he will be offering his supporters only the tiniest little economic inducements in exchange for a second term...
...Just as American business seems to have disconnected from politics, so Bob Dole and Bill Clinton have disconnected themselves from the U.S...
...A surprising consensus exists across the political spectrum that social programs like Medicare, Medicaid, and Social Security need to be rethought, that private-sector saving and investment need to be taxed at lower rates, that governments must not manipulate prices (except of course for that of gasoline), that inflation does not raise incomes, and that protectionism is stupid...
...and it has since shrugged off with equal lack of interest Gingrich's troubles and the increasing likelihood of a Clinton reelection...
...Under President Clinton, antitrust scrutiny has revived, personal income taxes were raised again, and the federal regulatory apparatus has turned hostile...
...if saving and investment were taxed less punitively...
...economy entered its 61st month of consecutive growth since 1991-the longest expansion without a single quarter of negative growth since George Washington's presidency...
...On the other hand, had Bill Clinton actually put into practice the policies he promised in 1992-had he fought a trade war with Japan and massively hiked social spending, had he taxed stock-market speculation and forced every small-business owner in the country to buy a federally mandated health-insurance policy for his employees-we'd all be poorer...
...It's as if the American economy has collectively decided that it has nothing much either to hope or fear from Washington-as if the Democrats can't hurt it and the Republicans won't help...
...In April, as David Hale of Zurich Kemper points out, the U.S...
...And meanwhile, the difference between the growth path America is on now and the path it was on before the advent of the Great Society will represent about $300 billion of forfeited output over the next four years, or enough to put $2,000 into the retirement account of every working American...
...He kept his word and was rewarded...
...We have conducted a top-to-bottom overhaul of Federal regulations, and are eliminating 16,000 pages of outdated or burdensome rules altogether...
...A Non-Pocketbook Election By David Frum Twenty years ago, Jude Wanniski published a book arguing that the stock market astutely gauged the wisdom (or folly) of the policies being pursued in Washington...
...A nickel a gallon off the gas tax-that's what Bob Dole is offering America's overtaxed middle class...
...if the average American were better educated in math and more proficient in the use of language...
...Some rude remarks about CEO pay during the New Hampshire primary-that's what he's offering voters worried about their economic security...
...A higher minimum wage may be a good idea or it may not-but it's hardly enough reason for an unemployed former insurance broker in Dallas to make a trip to the polls...
...A dollar invested in the Dow Jones average five years ago would be worth more than $2 today...
...While Washington ought generally to avoid manipulating the microeconomy, Clinton argued, in order to induce American workers to accept change, a more cushioned welfare state was needed-in particular a national health-care system...
...the stock market has recorded its best two-year performance since the early 1960s...
...Clinton came to power with a comprehensive analysis of America's economic problems and a large-scale plan to set things right...
...Federal personal income taxes were hiked in 1990...
...More troubling still, this unexciting expansion has translated into fewer jobs and feebler growth in personal incomes than in past growth spurts...
...economy...
...It would all be horribly boring, if it weren't so damn depressing...
...It's generally believed that the American economy has been underperforming for 20 years...
...Listen to the man himself, via his March Economic Report of the President: "My Administration has reduced the size of government: as a percentage of civilian nonfarm employment, the Federal work-force is the smallest it has been since 1933, before the New Deal...
...But while sound politics can help the American economy, America's politicians seem strangely indisposed to try...
...The rest of Clinton's economic message is essentially the same as that which England's Tory prime ministers gave the country squires 150 years ago: Change is coming, you won't like it, I can't stop it, but vote for me and I might be able to slow it down a little...
...Government had to invest more in training and education to prepare American workers for a world in which routine manufacturing was destined to gravitate toward Asia and Latin America...
...It's now 1996...
...The great economic story of the 1990s is the near-total separation of the U.S...
...The president plainly still hankers to leave his fingerprints all over the U.S...
...Even in 1992, a substantial gap separated the aimless but market-oriented George Bush from the interventionist Governor Clinton...
...Don't misunderstand...
...What does the Clinton of 1996 say...
...If the savings-and-loan collapse of the 1980s had been averted...
...Since 1990, America has made one bad political choice after another...
...But this year, President Clinton has reinvented himself as the most conservative Democrat candidate for president since John W. Davis in 1924...
...And, of course, he boasts he's narrowed the deficit...
...The U.S...
...What we are left with is two politicians whose idea of economic policy is to lower the gasoline tax by 4.3 cents per gallon or raise the price of beef a few fractions of a cent per pound...
...Statist Europe and interventionist Japan are doing even worse...
...It is not axiomatically true this year that the Republican nominee-regardless of who he is and what he says (or doesn't say)-by virtue of his party card alone can claim to be the champion of economic freedom...
...It needed to build an ultra-modern infrastructure of fiber-optic cables and high-speed railways...
...economy...
...It's certainly not true-as writers like the New York Times's Thomas L. Friedman endlessly claim-that the power of modern markets means the folly of government no longer matters...
...it yawned and kept plodding along when Newt Gingrich roared into power promising to yank the country back rightward...
...As for Bob Dole, one has to wonder: When was there last an election in which the presidential challenger has had so much trouble thinking up criticisms of the incumbent's management of the economy...
...economy from politics...
...All the excitement of the volatile politics of the 1990s seems to have affected American business about as much as a thrilling World Series: The economy chugged along imperturbably as Bill Clinton kicked George Bush out of office and took Washington on a leftward lurch...
...What does that tell us about the political wisdom of President Clinton...
...We have reformed environmental, workplace safety, and pharmaceutical regulation to cut red tape...
...These disappointments aren't facts of nature...
...American business has taken every punch and kept smiling...
Vol. 1 • May 1996 • No. 36
