Meeting with Perot Jude Wanniski May 1, 1992

I met with H. Ross Perot in Dallas Wednesday morning for 2 1/2 hours. He'd been sampling opinions on economic policy among a wide range of people, one of whom recommended that he meet with me. He called me himself and we arranged to meet at 9 a.m. Wednesday, the earliest I could get to Dallas from meetings I'd previously arranged in California. I arrived the night before and stayed at a Sheraton a few minutes from his office, not far from Dallas-Fort Worth airport. I got to his office a few minutes early. He arrived five minutes later, greeted me heartily, and said he'd stopped by the hotel to pick me up, but had missed me by two minutes. 

He steered me into his office, adorned with Frederick Remington sculptures and Norman Rockwell paintings, but otherwise not especially large or impressive. He placed us in what I gather is his preferred one-on-one seating arrangement, hard backed chairs almost directly facing each other across a far corner of his desk. There was not a single interruption. All calls were held. No coffee or tea was offered. Half way through I asked if I could have a glass of water. He jumped to the door, spoke to his executive secretary, Sally Bell, and she brought me a glass of ice water. Nothing for Perot, who, legs crossed and hands folded, was a bundle of concentration throughout. Where Ms. Bell has a spectacular view of the region from her outer office, Perot has no such distraction. I asked him how he wished to proceed. He said he would leave that to me, that he was there to listen. I asked him how long I had. He asked how much time it would take. I said three days would be sufficient. He laughed and asked for a realistic estimate. I said I'd simply plunge ahead and fill whatever time was available. There were no ground rules, but I would simply offer general impressions, as this was not an interview.

He seems an easy man to like. He's clearly comfortable with himself, like Ronald Reagan, with no need to remind me at any point on how important he was or how much he knew, postures that almost always spring from insecurity. The only time he showed irritation occurred perhaps five minutes into the meeting, when he suggested I was wasting time by discussing history, when he wanted to know what I would recommend be done now! I told him I had decided to do it this way, first discussing economic history and theory as a backdrop to specific discussions, telling him I thought this might "stick to his ribs" in a way a laundry list of policy ideas would not. Okay, do it your way, he said, satisfied that I had a plan and was not simply babbling. We covered an enormous amount of ground. This is because he ended discussion on topics where he saw we were in agreement or in basic disagreement, where debate would likely chew up all available time without resolution. We would linger in areas of mere difference, close enough to exchange views until we reached common ground. 

I spent considerable time discussing macroeconomics and the simple difference between the demand-side and supply-side "policy mix." I thought it important to have him understand the gulf that separates the Bush Administration from the Reagan Administration. This was among his most eager areas of inquiry, on where things went wrong from my viewpoint. When I would pause from time to time to ask if he had any questions, to make sure I wasn't losing him, Perot insisted he was following my arguments and I could continue. I'm sure he was getting as much as he felt he needed, but I still wrote a long memo to him upon my return, to review the material. His tendency is still to see the Government as a "business" enterprise. My argument was that the success or failure of a Government CEO depends on the macroeconomic policies of his economic cabinet, chiefly his finance minister. A Business CEO operates within that larger realm, dependant upon the success or failure of his own microeconomic policies. Simply bringing business "efficiency" to the management of Government will not work. The correct monetary and fiscal policy mix is imperative. How much of an impression did I make? I don't know. But Perot heard me out and if he understands half of what I presented, that is, I'm sure, more than President Bush or Governor Clinton understands.

At my initiative, we spent a fair amount of time discussing Paul Craig Roberts' idea of having the President and/or Treasury Secretary change the definition of capital gains to effectively strip inflated gains from the reach of Internal Revenue. I said this is the first thing I would do if I were elected President, as it would liquify tens, probably hundreds of billions of dollars of frozen capital. He was unfamiliar with the idea when I brought it up and seemed pleased to learn about its particulars, although he left me with no indication of how it struck him as a realistic proposition.

We also spent some time discussing the mechanics of democracy, as he had read my FYI of April 20, "Howard Jarvis, Ronald Reagan & H. Ross Perot." My guess is that he is not quite at the point of supporting a Constitutional amendment to permit a national initiative and referendum, but he is certainly ripe. From his general manner, he would not have allowed me to spend so much time on the topic if he were not attracted to it. On the issue of congressional pay raises being ratified by a vote of the electorate, neither of us were sure if this could be done without changing the Constitution. I said I thought not, as I can't recall a single instance of an issue on a federal ballot. There's no doubt that Perot has a great deal more confidence in the collective judgement of an informed electorate than is the norm among politicians. I told him directly it was that aspect of his public performance to date that was most attractive to me. 

Mexico and Japan were discussed at great length. Perot has publicly criticized the FTA with Mexico and has been hard on Japanese trade practices. As I'd had these discussions with Jerry Brown, they played out in similar fashion with Perot. He's clearly a protectionist out of a belief that our trading partners enjoy unfair advantages. Still, he was genuinely open to argument, especially after I agreed with him that trade liberalization policies with Mexico should wait for a period of economic expansion, to lessen the adjustment burden on the American worker. More importantly, he seemed most receptive to my argument that the trade issue is not central to the distress in the American economy, and he should not devote an undue amount of his intellectual energy to it. If you have 100 units of energy, I said, I'd suggest you devote only 5 to trade instead of 25, freeing 20 for concentration on the levers that could lead the domestic economy to a boom. 

We discussed the Crash of '29 and Smoot Hawley. We talked about Japan's difficulties, its stock market decline and my argument that Treasury Secretary Nick Brady is Japan's biggest headache. In fact, we discussed the economic problems of Peru, of Russia, of Poland, of Germany, and I traced back each problem to the most important cabinet minister in the world, Nick Brady. Perot was carefully noncommital. In the entire meeting, he did not volunteer a single critical word about anyone, in our government or in others. In that sense, too, he reminded me of Reagan, and also of my father, who used to say, "If you can't say something nice about someone, don't say anything at all." It's a pleasant trait, a presidential trait, but one that has eluded me.

Perot was especially fascinated with my knowledge of what's going on in Russia, of my plan to stabilize the ruble. We discussed this at great length at the end of our session, and I emphasized again and again how my strategy was driven by a goal of minimizing the distress of ordinary people, where the IMF textbook strategy simply assumes pain and austerity is necessary for reform. Because of the line of his questioning, I was satisfied he had absorbed the material I'd sent beforehand and understood the essence of the plan. I told him I'd be going to Moscow again for the week of May 11, to meet with the Yeltsin cabinet. He wished me luck several times, and I left thinking this may be because he well understands the need for private foreign policy initiatives when those of government fail.

I can't say I came away thinking I would vote for him for President, yet. He's still in the process of forming his opinions, his agenda, his specifics. His closest advisors are solid, conventional businessmen, I'm told, without any particular vision. They are serving up to him people like me, in a kind of buffet lunch, trusting in Perot to fill his plate according to his tastes and idiosyncrasies. He has to begin defining himself soon, at least in bits and pieces, or the press corps will define him on its own, casting him in bronze whether he likes it or not. The New York Times has already decided his highest priority is balancing the budget with higher taxes on the rich. This is certainly not my reading of Perot, but he has been tapping into Felix Rohatyn, among others, and he may come down close to that pole. He does have the background and capacity to come down on the entrepreneurial side, though, and if he does, I'd probably vote for him, everything else being equal.