Why This Election Isn't All It's Cracked Up to Be
By Jonathan Chait
Sunday, June 20, 2004; Page B05
Four years ago, activist Arianna Huffington and comedian Bill Maher were performing at "Shadow Conventions" designed to ridicule the irrelevant banalities of the two major parties. Lefty Texas commentator Jim Hightower was speaking out for Ralph Nader. Filmmaker Michael Moore was alternately campaigning with Nader and urging people to vote for a ficus plant (or sometimes, bizarrely, doing both at once). This year all of the above, along with most of their ideological kinfolk, have pledged their loyalty to Democrat John Kerry.
Whence this outbreak of partisan loyalty? On "Larry King Live" earlier this month, Maher summed up his reasoning: "This is the most partisan I've ever been, because I think it's that important."
Actually, we already had a presidential contest of transcendent importance. It took place four years ago.
Consider the realm of economics, where many of the most far-reaching measures of the Bush presidency have been enacted. The 2000 Bush-Gore race determined enormous changes in the direction of government and who pays for it. By contrast, at least when it comes to economic policy, the 2004 Bush-Kerry race isn't likely to determine a whole lot.
Why not? First, Bush is probably tapped out. To be sure, he has some radical ideas: partially privatizing Social Security and sweeping away whatever taxation on investment income has survived his first three tax cuts, thereby shifting the entire tax burden away from capital and onto labor. These are both horrible proposals (and I reserve the right to fulminate against them in the most alarmist terms). Yet I can't see Bush actually managing to get either of them signed into law.
The president was able to steamroll his earlier tax cuts through Congress due to a confluence of favorable circumstances. The controversy surrounding his election somewhat paradoxically convinced Republicans that they had to enact Bush's highest domestic priority in order to validate his presidency . A seemingly huge budget surplus persuaded deficit hawks that even they could support tax cuts. An economic slowdown further increased the pressure to take action. And then 9/11 sent Bush's popularity through the roof, and he shrewdly used this unexpected political capital to push through even deeper tax cuts -- despite a distinct lack of public enthusiasm.
That lack of enthusiasm remains. In an Associated Press/Ipsos poll in March, respondents said they preferred balancing the budget over more tax cuts by a margin of 61 percent to 36 percent. But the confluence of circumstances that has allowed Bush to overcome such tepid support for his tax-cutting has disappeared. If reelected, Bush will no doubt seize on whatever world events he can as a rationale for his economic program. ("My fellow Americans: As our home continent drifts slowly but inexorably westward toward a disastrous collision with Asia, we have no choice but to cut taxes.") However, he seems to have used up all his political slack. Not only has Congress grown more concerned about deficits, his own popularity has eroded. And Bush's reelection strategy consists merely of making Kerry unacceptable to 51 percent of the voters, rather than building any positive second-term mandate for himself or his program.
If Bush has few prospects of enacting a dramatic second-term economic agenda, Kerry's prospects are even dimmer. First, his program itself is relatively modest -- only chipping away at the federal budget deficit, the government's overarching problem. Bush's tax cuts, if extended, would add around $2.6 trillion to the national debt over the next decade. Kerry proposes to repeal just under $900 billion, or one-third, of those tax cuts -- those that benefit only taxpayers earning more than $200,000 a year. Part of what makes Kerry's plan so modest is that, in his zeal to protect those who earn less than $200,000, he would preserve tax cuts that benefit everybody, rich and non-rich alike. For instance, keeping the lowest tax rate at 10 percent doesn't merely help those who pay all their income at the 10 percent rate. It helps those in the higher brackets as well, because in a graduated tax system, even millionaires pay the highest rate only on the portion of their income that exceeds $200,000 or so. The first $200,000 will be paid at lower tax rates.
You can't really blame Kerry for his moderation. For one thing, if he tried to repeal the whole Bush tax cut, he'd probably lose the election. For another, should he win the election, even his partial repeal would have trouble passing Congress. Remember, in 1993 Bill Clinton had wide majorities in both houses of Congress and passed his top-bracket tax increase by merely one vote in each house. In all probability, Republicans will control both houses of Congress again next year. Even under the most optimistic scenario conceivable for Democrats, their party would scrape in with congressional margins far narrower than Clinton enjoyed. And if Kerry's tax hike can't pass, then he has no way to finance his imaginative plan to expand and rationalize health care. He could try to enact the plan without paying for it, but he'd have a hard time winning over deficit-conscious moderates in both parties. All told, you can't help concluding that a Kerry presidency would bring little more than gridlock.
What you can blame Kerry for is his choice of emphasis in the campaign. Kerry's best chance of passing a significant economic program would be to focus relentlessly on Bush's misplaced priorities and thus win a mandate to reverse them. Instead he has focused unremittingly on two things -- job losses and high gasoline prices -- that aren't really Bush's fault. The result has been an economic debate that bears almost no relation either to the damage that Bush has wrought or to the issues that the next president will face.
Take jobs. Kerry has relentlessly blasted Bush as the first president since Herbert Hoover to preside over a loss of jobs. Yet there isn't even a remotely plausible theory as to how Bush's policies have caused those job losses. The truth is that structural economic forces, not policy, have caused unemployment. Now, if you press a smart Democratic economist on this point, he or she will insist that Bush could have stemmed job losses more effectively by channeling more of his stimulus to lower-income groups, who spend more. This, however, remains a hair-splitting argument. The Bush tax cut did give substantial relief to those at the bottom (albeit at the insistence of congressional Democrats). By including tens of billions of dollars in pumped-up military spending, Bush has also pumped massive stimulus into the economy.
Democrats' true objection to Bush's policies is that, rather than confine himself to short-term measures keyed to recovery, the president insisted on permanent tax cuts that will cause revenues to hemorrhage long after the recession has ended. They may be right, but that hasn't had much effect on employment. In all likelihood, if Al Gore had become president, he would have been the first president since Hoover to preside over a loss of jobs. Not only is the jobs critique unfair, it has almost nothing to do with Bush and Kerry's policy differences going forward. The recession, after all, seems to have ended, and jobs are rebounding. If Kerry wins the White House, restoring jobs will almost certainly fade from his agenda.
Even less inspiring is Kerry's constant harping on the rise in gasoline prices. This isn't Bush's fault, either -- it results from higher demand in India and China, along with international uncertainty. (Kerry tries to blame Bush's Iraq policies for creating that uncertainty, but his Iraq policies would create uncertainty, too.) What makes Kerry's fixation on this topic even more appalling is that he almost certainly doesn't believe in it. As a genuine environmentalist -- and if there's one unquestionably authentic element in Kerry's record, it's his commitment to the environment -- he has to know that cheap gas only encourages Americans to buy gas-guzzlers.
If Kerry could rule by fiat, he'd no doubt raise gasoline taxes to bring prices at the pump more or less into line with those in Europe -- namely, twice as much as now, or even more . And he'd be right to do it. But that's just one of the bold ideas you won't hear during the campaign. You can make a plausible case that Kerry's demagoguery on oil is a necessary protection against Bush's demagoguery. (I think it will backfire politically if gasoline prices drop in the fall after the summer driving season.) But you can't say that it's a persuasive indictment of Bush's polices or an accurate analysis of the differences between the two candidates.
This sort of banality is not an impermeable feature of our system. In 2000, Gore precisely identified what made Bush's program so radical: his fealty to business interests and his mania for tax cuts that would disproportionately benefit the best-off 1 percent. Alas, few people took Gore's critique seriously. Even when presented with an incisive framing of the fundamental ideological choices facing the voters, reporters and many liberal activists concluded that the whole process amounted to irrelevant and tiresome quibbling. The conventional view at the time was summed up by the late Democratic senator Pat Moynihan, who told the New York Times, "There is no great ideological chasm dividing the candidates -- each one has his prescription drugs plan, each one has his tax-cut program -- and the country obviously thinks one would do about as well as the other."
This year, with an election that, on the economic front, really does amount to little more than irrelevant and tiresome quibbling, everyone is convinced that we're facing an unusually momentous election. Sorry, everybody. You're four years too late.
Jonathan Chait is a senior editor at the New Republic.
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