The White House decision late Thursday to abandon efforts to index capital gains by executive order followed a day-long struggle to get some wiggle room on the issue from Attorney General Bill Barr. I spent the day in Washington, meeting with the relevant players at the White House, the Bush-Quayle campaign committee, and the U.S. Chamber of Commerce. It was clear that Jim Baker's heart was in the right place, but that he was not prepared to have this issue unresolved going into the Labor Day week. Next week is a make-or-break week for the President, the last chance he has to develop a campaign theme large enough to win back the disenchanted electorate. Baker knew the arguments of the Justice Department bureaucrats were flimsy. He also knew that Charles Cooper, the former head of the Office of Legal Counsel, would be rebutting their arguments on this morning's Wall Street Journal editorial page. In the end, though, he was not going to have this one narrow issue complicate his life going into the next critical week.
I appreciate his position. As the chief political strategist for the President's re-election, only since the Houston convention, JBIII has had his team huddled for less than two weeks. He has not yet called a single play. Indexing was the only play the team visibly considered. It would have been great for the stock market and the economy, if it could have been pulled off, but Baker's objective is the re-election of the President, not the stock market. All the hints I picked up on my swing yesterday was that the first play we can credit to Baker will be the President's speech next Thursday to the Detroit Economic Club. The President's acceptance speech in Houston had been cobbled together by the old team, with a few touches from Bob Zoellick, Baker's alter ego. It had no Grand Theme, which is what the President needs, to lift his campaign out of the mud that the previous foxhole strategists provided. Another catalog of micro-ideas and programs will only sink the campaign deeper, finally persuading the electorate that a fresh, young Bill Clinton is preferable to a tired, old George Bush. JBIII and Bob Zoellick, though, think big. We're not going to see a pop-gun strategy from them, I think, but rather a credible commitment to serious economic growth objectives and a credible plan to get there. I'm told it will be ambitious.
There is a George Bush who is old and tired, ready for retirement. But since 1967, when I first met him, I've argued that there are two George Bushes -- the Connecticut Yankee and the Texas Wildcatter. The George Bush of the last four years was the Connecticut Bush, born to wealth, matured in war, educated as a post-war Atlanticist, trained in all the cautious diplomatic skills, perfectly suited to a Presidency that had as its chief objective the Cold War end game. There is no reason for the voters to keep this Bush around. But after the war of his youth, George Bush went to Texas, and learned firsthand about entrepreneurial capitalism, coming to understand the dynamics of great risks that lead to great failures and also great success. This is the kid who should be President for the next four years, if he is still around.
I'm disappointed that indexing didn't make it. I'd put a lot of time into it over the last few months. It was, though, the one idea I could think of to save the old George Bush. If we are to see the Texas Bush next week in Detroit, he won't need to go around the Congress with executive orders. He'd not only win re-election. The voters would also give him a Congress eager to help him get the country moving again.