In San Francisco on Wednesday and Los Angeles Thursday, I told their respective financial analyst societies that I would be somewhat surprised if the Dole/Kemp ticket did not win on November 5. My assessment began with the argument that both Dole, in his debate with President Clinton, and Kemp in his debate with Vice President Al Gore, avoided the pleas of Republican intellectuals -- from The Wall Street Journal editorial page to Bill Kristol’s Beltway Standard -- that they take off the gloves and attack Clinton’s character. The instant polls taken after both debates indicated Clinton and Gore were easy winners, and if I were scoring according to Oxford standards I would agree. Both Clinton and Gore learned formal debating skills and were polished in scoring technical points. Kemp had never debated formally, one-on-one, as he had to do against Gore, who is an enormously gifted debater. Kemp is a preacher, who needs a pulpit from which to deliver his gospel and time in which to develop it. This national conversation we are having about who will be in charge of the national family for the next four years is not about debating points. At the level of presidential leadership, Dole and Kemp set a much more compelling direction, demonstrating their own characters by their refusal to smear the President’s. On questions of who had the better ideas for the future, Kemp outpointed Gore among the same people who said Gore had won the debate. MSNBC viewers who were polled said 32% were more likely to vote Republican after having watched Kemp-Gore, 18% saying they were more likely to vote the Democratic ticket.
At this same point leading up to the 1992 election, there really was no reason to expect a change in the voting outcome because the voters were not going to vote for Ross Perot and would not forgive George Bush for upending the Reagan Revolution and breaking his solemn tax pledge. This year, voters will discuss the options right up to the last minute. In 1976, I remember my wife asking me on the morning of election day if there were any reason I could give her at the last minute for not voting for Jimmy Carter, and I said I could not think of any. We essentially decided to split our votes. This year, the 30-point gender gap that is the foundation of Clinton/Gore optimism can be overcome in the last week if the nation’s husbands can overcome the concerns of their wives about their fears of a Dole presidency in combination with a Gingrich Congress. I sent a memo to Vice President Gore this morning, which I posted on our website, in which I pointed out that the administration’s slow-growth, bond-market scheme for the national economy is far riskier than the Dole/Kemp rapid-growth “risky scheme,” as he persisted in calling it during the debate. Here’s how I put it:
It is a core assumption of the supply-siders that all growth, including political growth, is the result of risk-taking. Because the Ph.D. economists who advise the Clinton administration and the Democratic Party honestly do not share that core belief, they do not see a way to have the economy grow faster than it is. The economists at CEA, Treasury, Labor and the White House were taught that once the economy runs out of bodies, it can’t grow faster, except by technological advance. This is why the administration has acceded to the false idea that the economy cannot grow fast enough to put upward pressure on wages. The only answer to an economy that has been in decline for 30 years, to the point where our capital stock is valued at only 60% of its measured value of April 1966, is a rapid increase in the formation of capital relative to labor. Because the fiscal and monetary policies of Keynesians and monetarists have favored labor over capital, labor has been growing rapidly and capital has been in decline. To boast that eight million jobs have been added is not a good thing when the aggregate value of all jobs continues to decline. To have everyone working twice as hard to stay in the same place is an indictment of the economic management of this administration, as it was of previous administrations -- with the exception of those few years under President Reagan when capital was forming faster than labor. It is only when capital is in surplus and labor in short supply that real wages will rise, which of course means that the national living standards of ordinary Americans will rise. The risks you are taking by resisting reforms of the tax system that reward risk-taking are genuinely frightening to me.
The people who are hurt worst by the Clinton slow-growth strategy are those at the heart of the Democratic Party’s New Deal constituency -- especially younger black and Latino men and blue-collar whites -- who will never be able to dig themselves out of the hole they are in as long as the national government blocks serious capital formation. It still is my belief that between now and Election Day, there will be a significant exodus from the Democratic Party’s “liberal plantation,” as it is now called by Minister Louis Farrakhan. By sheer coincidence, the second and final debate between the President and Dole will be held next Wednesday, which is also the first anniversary of the Million Man March. Farrakhan delivered a blistering attack in St. Louis two weeks ago on President Clinton and the Democrats for their “betrayal” of the African-American community, yet received almost no media attention. There is the potential here for a major shift toward the GOP. In his St. Louis speech, Farrakhan answered Kemp’s challenge to renounce anti-Semitism and bigotry once and for all as a prerequisite to national reconciliation with the Jewish community, but the one reporter present from the national media, a Chicago Tribune scribe, did not mention Farrakhan’s positive remarks. (“Let me say frankly, I denounce anti-Semitism in all its forms, and anybody who would hate Arabs, Jews, or any people because of their faith or color, I denounce that.”) On Wednesday, he will speak in New York City, and his remarks will not go unnoticed.
In my meetings in California with business and financial leaders, there was ready agreement that a break in the minority vote could make a ballgame out of the campaign. Still, they said there remains too much cynicism about Dole’s commitment to a high-growth strategy -- especially as they have seen so little discussion of it outside of Kemp’s efforts. The Dole paid media effort remains as dismal and ineffectual as it has been all year. If Dole is going to produce any surprises in his Wednesday debate with Clinton, it had best involve some kind of an initiative or iron-clad promise that will dissolve the large, remaining doubts about a unified Republican government. The nation’s women, who are justifiably concerned about the risks of a Dole/Gingrich assault on spending, are not going to be persuaded by the men of the family that the risks are worth taking unless something is put forth to clinch the deal. George Bush did it in 1988 with his “read my lips” pledge, but the breaking of that pledge is now a large part of Dole’s problem.
It’s also part of President Clinton’s. When he and Gore reel off their shopping list of all the goodies they plan to pass out next year when re-elected, I sincerely doubt more than two or three Americans take them seriously. The country knows they have no plan, foreign or domestic, and that they cannot really trust the President to act on principle, only self-interest, which becomes dicier when he will not have to worry about running again. I still believe he could be impeached for his whim to bomb Iraq. With three weeks of national conversation remaining, it is for these reasons I would be surprised if he won re-election.