Earlier this month, Alf Landon died at the age of 100. He had been the Republican presidential candidate in 1936, a goat shoved into Franklin Roosevelt's political den, where the Lion of Hyde Park ate him alive. Landon went down in history as one of the great losers of all times, carrying only Vermont and Maine. It took decades for his sagacity, intellectual independence and sheer decency to be recognized.
Walter Mondale was even a bigger loser than Landon. In 1984, Mondale lost every state but his native Minnesota. As a politician he was discredited, as a party leader he was given the gate. He was accused of many political sins (pandering to special interests, for instance), but his worst sin was calling for a tax increase to balance the federal budget.
Now Mondale's political blunder has become the commonplace antidote for what ails the stock market. A president who said that taxes would be raised over his "dead body" seems to be having an out-of-body experience as a fiscal realist. A team from the White House is meeting with congressional leaders, and no one thinks that new sources of revenues (taxes) will not be found. Wall Street clamors for a tax increase to narrow the budget gap, insisting the deficit, coupled with the trade imbalance, caused the stock market to collapse. This is the accepted wisdom. As Tevye noted in "Fiddler on the Roof," when you're rich, everyone thinks you're wise.
But a tax increase is precisely what Mondale proposed on July 19, 1984, after four years of the Reagan presidency and unprecedented deficits. "Here's the truth about the future," he said in his acceptance speech to the Democratic National Convention. "We are living on borrowed money and borrowed time. These deficits hike interest rates, clobber exports, stunt investment, kill jobs, undermine growth, cheat our kids and shrink our futures." That approximately is what Wall Street is now saying -- but in 1984, with few exceptions, it was singing a different tune. Back then most of the booming financial community was squarely in Reagan's corner. Greed will vanquish common sense any day.
As a campaigner, there was plenty wrong with Mondale -- but not his math. "Whoever is inaugurated in January, the American people will have to pay Mr. Reagan's bills," Mondale said. "The budget will be squeezed. Taxes will go up. And anyone who says they won't is not telling the truth to the American people." A bit later, Mondale added, "Mr. Reagan will raise taxes, and so will I. He won't tell you. I just did." With that, Mondale challenged Reagan to explain how he was going to reduce the deficit without raising taxes. Reagan responded with balloons and smiles and proceeded to clobber Mondale on Election Day.
Mondale's acceptance speech was not only bold, it was prescient. But there was a corollary point he wanted to make. It was not just that higher taxes were needed, that the government was being starved for revenue, but that Reagan's fiscal policies had produced the growing deficit. The initial Reagan tax cut, a bender of supply-side economics concocted by Rep. Jack Kemp and Sen. William Roth out of wishful thinking, was the cause of it. The deficit had not descended from Mars, was not an act of God, but was the consequence of the president's program. Once again, though, greed seduced common sense. Times were good, and listening to Mondale was like listening to your tax accountant.
Now Walter Mondale is back in Minnesota, the land of many lakes and, given its 1984 vote, some common sense. Until recently, he was an asterisk in history, the great political klutz who lunged at the the Electoral College and almost missed entirely. He ended his 1984 convention speech with a declaration: "I want to be president of the United States." He was denied that. Maybe he'll settle for Prophet in His Own Time.