A Vote for Bush, Barely
Jude Wanniski
November 2, 1992


I had promised to wait until the day after the election to tell you how I'd voted and why. This presumed the candidates might be adding information on how they would govern on this last day before the elections. It's now clear we have all the information President Bush, Governor Clinton and Ross Perot intend to give us. It is not as much as we'd like, but it will have to do. We're told they have spoken, in aggregate, some 47 million words since the campaign began, but where it counts they have been incredibly stingy with information. This is in large part a reaction to President Bush's "Read My Lips" promise of 1988, which Richard Darman and conventional wisdom believe was far too much information for the President to have given. We have a sense that each of the three candidates cannot wait to get past the voters tomorrow, having promised as little as possible, so they can do as they please, with maximum elbow room. If the President is to lose, as the polls indicate, it will be because the electorate feels it must punish him for breaking that gilt-edged promise, a mistake that is at the root of the nation's economic distress. None of the candidates have made any promises they can't break. Putting aside an impulse in me to punish the President for his blunder, I have to conclude he would be better for the country and the world in the next four years, given the sparse information available.

First, Ross Perot. I continue to have a soft spot in my heart for Perot. He has been an important ingredient all year in reminding the two Established parties how far they have drifted from the grass roots. And he'll be around making threatening noises about 1996 as soon as the votes are counted tomorrow. In the end, though, he proved himself a fish out of water, simply unprepared for political leadership. In the last week, I'd talked several times to his "campaign manager," Orson Swindle, suggesting how Perot could conscientiously offer more information to the voters on how he would govern, especially by telling us whom he would invite into a Perot administration. Swindle, a marvelous fellow who had labored in the Reagan Administration, could not "manage" Perot in the slightest. He told me that he had pressed my suggestions on Perot, but Perot, burned by outside advice on his first run around the circuit, on this trip did it all by himself. I'd asked Swindle last Friday what the new half-hour infomercial was like, "Chicken Feathers, Voodoo and the American Dream," which aired last night and will go again tonight. Swindle said he hadn't the slightest idea, that he only learned about it during the Sam Donaldson interview with Perot last Thursday night. Perot had reached the point where he did not trust anyone with the shape of his thinking, compartmentalizing information the way we imagine the Director of the CIA might operate. In the last week, he offered not one new bit of information to the electorate on how he might govern. He did not give us a single name of whom he might invite to help him govern. He repeatedly said he would come to Washington after his landslide victory and begin sifting through the programs now gathering dust on the desks of Republicans and Democrats and pick those he liked. With so little information on his direction, the electorate cannot take the chance of allowing him to get anywhere near the Oval Office. Perot's most lasting contribution may be the use of TV talk shows by the sitting President, to explain his programs to the electorate in order to drum up support in Congress.

Bill Clinton is as politic as Ross Perot is not, with the hide of a rhinoceros. He has plenty of character flaws, but we now know them all, and I have to say in aggregate they're no worse than mine and are easily offset by his lifelong commitment to public service. The country is going in the wrong direction with President Bush, we all agree. Will the change be for the better with Clinton, for the moment assuming no change in fundamentals in a second Bush term? Probably. There are several things that Clinton will do right away that will be good for the markets and the economy. The most important is that he will index capital gains against inflation de novo, protecting investments from 1993 onward. One of his closest economic advisors, Rob Shapiro, assures me Clinton has not taken a position yet on historic indexation. I've urged him to keep Clinton's mind open until he meets with Alan Greenspan, who assures me that he will tell whomever is elected that historic indexation would do wonders for the economy. Indeed, this is the only fiscal action Greenspan would support, as he is opposed to all forms of Keynesian or monetarist "stimulus." My guess is that Clinton will be persuaded to do this, over the ideological objections of party liberals, as once you open the issue of indexation, grass roots America will demand retroactivity. Clinton could offset liberal objections by proposing that capital gains, minus inflation, be taxed at death. This, at least, is Shapiro's recommendation, which is circulating in the business community. It would be a good tradeoff. Unfortunately, there is still too much guessing that I have to do about the shape of a Clinton administration. Bob Novak thinks Paul Volcker would be Clinton's Treasury Secretary, which would be optimum, as Volcker would work well with Greenspan. But unless I hear this from Clinton's own lips I could not be certain. If he sticks the wrong man at Treasury, 1993 would be a miserable year, in the U.S. and around the world. With Russia now on the verge of coming unglued, as a result of miserable economic advice by Western governments in general, and the U.S. Treasury in particular, the prospect of Clinton picking a Democratic version of Nick Brady gives me the willies.

My biggest fear of a second Bush Administration would be that Nick Brady would be replaced by another Wall Street clone or by Richard Darman. It's now clear Darman would not be elevated. The Wall Street Journal Washington bureau, which floated the idea of Darman at Treasury early last month, indicated 10 days ago it would probably not happen. On "Meet the Press" yesterday, RNC Chairman Rich Bond predicted Darman would be gone in a new administration. In the end, my vote for Bush is based entirely on the fact that we know Jim Baker would remain at the White House as chief-of-staff and economic czar -- foreign economic policy as well as domestic. If the President does not win tomorrow, in fact, I would have to blame JBIII for remaining entirely submerged during the campaign, allowing the Bush opposition to cow him into silence by their complaints of a Baker regency or deputy presidency. That's what we would have, though, and it would work well. JBIII and his deputy chief-of-staff, Bob Zoellick, are thoroughly attuned to the policy ideas required to get the economy on track. With Nick Brady and Dick Darman out of the picture, a fresh team installed, the second Bush Administration would deliver the goods, I think. Some of my confidence is based on discussions I've had with Zoellick. Some, on my knowledge that JBIII wants to get the domestic program through Congress quickly and get back to the State Department. Baker and Zoellick were, of course, responsible for crafting the President's economic agenda after the GOP convention, the plan presented at the Detroit Economic Club in September. They both appreciate the arguments made for historic indexing of capgains. They tried and failed to get the Justice Department to agree to doing it by fiat. I think they would make this a high priority with the new Congress. It is at least as likely that Ted Forstmann of Forstmann, Little & Co., would be Treasury Secretary in a second Bush term as it would be that Volcker would serve under Clinton. With JBIII at State and Forstmann at Treasury, we would get the most rapid, positive change in the U.S. and world economic picture. We have absolutely no idea whom Clinton would bring in at State.

It is on this slim reed that we'd choose Bush over Clinton. If we knew for sure it would be Volcker under Clinton, and Darman, or someone like him, under Bush, it would be enough for us to go the other way. As I believe in democracy, I of course believe the best man will win tomorrow, and that my opinion is only worth one vote. On this election eve, I feel surprisingly good about the way things have turned out thusfar, optimistic that the process will produce a better President, be it Bush or Clinton, than seemed possible nine months ago.