Campaign Cross Currents
Jude Wanniski
July 15, 1988


At first, it seemed a brilliant move by Governor Dukakis to choose Lloyd Bentsen as his running mate, and the choice was in fact a good one. Although hardly a fireball, Bentsen is clearly a cut above John Glenn as a campaigner, and his selection does suggest Dukakis is prepared to be a more centrist candidate and more centrist President. But the Duke has handled it so badly, fostering the notion that he wanted to snub Jesse as a way of courting conservative Reagan Dems, that the black community can no longer be counted upon as solidly Democratic. The congressional black caucus is furious with the Duke and letting it be known that they like Lloyd Bentsen better than they do Dukakis. "A man who will do anything to be President" is an undercurrent that is threatening the Duke with a Machiavellian tint that will not wear well among white voters either. If this question mark of a Duke personality flaw takes hold, his candidacy could take on the coloration of a Gary Hart, Joe Biden, Gerry Ferraro pastiche. His problems with the Massachusetts budget take on a new importance and could produce further cracks down the line. Still, he did seem awfully smart with the Bentsen pick and may have a rabbit in the hat that will disarm Jesse and take the sting out of this week's shenanigans.

On the GOP side, all of the serious advice George Bush is getting on a running mate is coming down to Bob Dole and Jack Kemp. Bush may go against his entire campaign team on this point, but the betting is it will be one or the other. Early opposition inside the Bush camp to Kemp as a potential loose cannon seems to have worn away completely as they have watched him as a Bush surrogate and as they see the strength of his support among Reaganites and House Republicans. The Texas GOP delegation is solidly Kemp, the GOP leader of the California legislature has endorsed Kemp as a "Californian," the Governor of South Carolina, an early Bush supporter, is urging the VP in Kemp's direction. Dole has not helped himself as a surrogate for Bush among the party faithful by continuing his losing primary campaign against the federal deficit (which, by the way, will look better and better when June tax receipts are reported). My belief that Kemp would look better as the GOP convention approaches is holding up and he is rapidly becoming the favored betting choice among the Washington political cognoscenti. Unless there is a rabbit in the Duke's hat, a Bush-Kemp ticket would get the highest proportion of black votes of any GOP candidate since Ike in the '50s and would seem to be a winning ticket.

PS: GOP Senator Malcolm Wallop of Wyoming will take the lead after the Democratic convention in trying to amend the trade bill on the Senate floor, to prevent the dilution of presidential power on trade actions. The Wallop Amendment will not be a "killer amendment," but would neutralize the worst protectionist element in the bill. If a free-trade campaign on its behalf gets it sufficient support to even suggest a threatened presidential veto -- which would require George Bush's support my guess is there would be the votes to pass it in order to save the trade bill as a whole.

PPS: Alan Greenspan's threat to push for higher interest rates if the unemployment rate falls below 5.3% is an attempt to build FOMC support for a discount-rate hike. The rumor that he tried to push through a rate hike last week but could not get the support of the other Reagan appointees is probably correct. We think Fed policy will be steady and this will be enough to continue strengthening of the dollar and lower gold without a further rate hike.