The water here is luminously clear. It is also calm. And to those of us who would deny life, liberty and the pursuit of happiness to the fish along North Carolina's Outer Banks, this is bad news. At the famed Kitty Hawk Pier, the assembled sages have been in prolonged confabulation for months, speculating on how they might activate the fishing. Perhaps they should call in Sen. Robert Dole, chairman of the Senate Finance Committee. He would doubtless advise that they levy a thumping tax on fishermen. The more productive the fisherman, the heavier Dole would tax him. Surely that would activate the fishing.
Does Dole's reasoning sound implausible? Well, it convinced many of the assistant presidents around Ronald Reagan. They have moved in a matter of months from being champions of the largest tax cut in American history to being champions of the largest peacetime tax increase in history. I should like to see these bright fellows in action on the Kitty Hawk Pier. One day they would be casting mightily. The next day they would be in with the fish. They have no constancy because they have no ideas.
The only man in the White House who has ideas, ideas about the purpose and worth of government, is Ronald Reagan, and apparently he who once counseled with men like Milton Friedman and William F. Buckley Jr. is now allowing himself to be governed by the successors to Haldeman & Ehrlichman, Powell & Jordan. Such philosophes, of course, have no conception of what affairs of state might be. They are the political tacticians, the bright boys who convince politicians that they know how to keep their man in office. Alas, the record of this species of Machiavel over the past three presidential administrations has not been awe-inspiring.
Today Ronald Reagan is under the professional care of Baker & Darman, who believe that they can remain in power even longer than Ehrlichman & Haldeman or Powell & Jordan. Dole has convinced them that interest rates will drop if the federal deficit is narrowed by higher taxes. There is no economic evidence to support this conclusion. In fact, President Carter followed this policy during the last futile presidential administration. He raised taxes some $300 billion. When he left office, interest rates had jumped and so had the deficit. Our recent deficits have come from economic decline, and one major cause of that decline is the burdensome taxation weighing down upon productive Americans to pay for Tip O'Neill's Good Fairy Politique.
In a word, Americans are over-taxed. This message, however, does not get to Washington, where high taxes always mean flush times for bureaucrats and pols alike. Washington is the land of spenders and taxers. It is not a land of producers. Few of our noble political leaders have ever produced anything, aside from hot air and paper work. What do they know about the fabled bottom line? Their economic knowledge at best consists of hunches, and the hunches are usually wrong. Some weeks ago, they insisted that a budget resolution was a matter of utmost urgency if Wall Street was to lower interest rates. The resolution passed on a Thursday. On Monday, Citibank raised its prime interest rate. The stock market swooned. The pols plodded on.
Republican congressional leaders, aided and abetted by the White House Machiavels, induced House Republicans to vote for that budget resolution by telling them it was the only way to pry spending cuts from their opponents in the Party of the Good Fairy. Now, six weeks later, the spending cuts amount to less than one-third of the cuts promised, and the tax increase to be slammed down on us during these recessionary times grows daily. Still, the pols plod on. Once again the saps of the GOP are becoming willing tax collectors for Democratic spending programs, and even out of power the Democrats are successfully managing to spend still more.
Last December, a very shrewd Republican declared that "the only proper way to balance the budget is through control of government spending and increasing prosperity and productivity for all." This is shrewd politics and also sound economics. The speaker was Ronald Reagan.
What has happened to the Ronald Reagan who told us on April 1 that "you don't raise taxes in a recession"? What has happened to the Ronald Reagan who last December insisted that such taxation amounted to "robbing the people"? Apparently he has handed himself over to Baker & Darman. They now guard the palace with the same steely vigilance that characterized the stupendous performances of their predecessors, Powell & Jordan, Haldeman & Ehrlichman. They control what the president reads and whom he sees. They have apparently overwhelmed him and muzzled all his embarrassing talk about lower taxes and lower spending. They have won the battle for the president's ear.
This fall they will watch proudly as the Republicans march off to battle beneath the banner, "We Raised Your Taxes." I should like to have been in the Oval Office to hear how they sold this particular piece of idiocy to Ronald Reagan, whose earlier tax cuts represented Washington's only serious attempt to control government spending, to revive American prosperity and to make Republicans the majority party.