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Suddenly, the election is once again about George Bush, taxes, and the economy. DÃ©jÃ vu? No, call it “It’s the Economy Stupid, Part II.” But as Democrats attempt to revisit the winning election playbook that brought Bill Clinton to office, they’re discovering that things are a little different this time around.
What’s a Democrat candidate to do? They can’t really oppose Bush on terrorism or eliminating Saddam Hussein. Their attempts to use scare tactics on Social Security reform have mostly failed. The Enron-style corporate corruption issue is mostly on hold, thanks to a sweeping new reform bill. And new polling shows that the economy and jobs are the top issues of concern to Americans. So, last week, the Democrat leaders launched a vigorous new attack on George Bush’s “handling of the economy.” Typical was Tom Daschle’s (D-SD) rip that “…there has not been such catastrophic mismanagement of America's economy since the presidency of Herbert Hoover."
Of course, markets are still down, growth is flat, and it’s not like Washington Republicans have been disciplined lately when it comes to the U.S. budget. But while there might be some fertile ground for political gains here, unlike in 1992, Democrats are discovering they’re in a box on the economy issue.
Democrats might attack the orgy of irresponsible new spending in Washington. Doing so would probably get support among independents (remember Ross Perot’s charts?) and work against Republicans on their base. But the Democrats are just as, if not more, responsible for Washington’s current spending binge as the GOP. More important, Dems are also disarmed on taxes; unlike his tax-raising dad, George W. Bush is cutting them.
In the absence of a coherent policy vision, the Democrats go to their old election stand-by: scaring senior citizens. Consider the AP’s description of the new ads they’re running nationwide on the economy:
In one of the ads, a young husband is getting ready for work with his wife in the background.
She asks him: "So, first day of the new job, ready for the big adventure?" And he responds: "Ready as I'll ever be."
The narrator then talks about "$175 billion in savings gone, over 2 million jobs lost. Many seniors starting over, looking for work."
The ad…cuts to a senior citizen getting ready for work with his wife in the background. "So, first day of the new job, ready for the big adventure?" she asks him, and he shrugs and replies: "Ready as I'll ever be."
Yet on the economic policy front, Democrats are not ready for much. For example, despite their anger at the President, they are mostly unwilling to press for repeal of his tax cuts. It’s symptomatic of the box they’re in: Senate Democrats continue to block the effort to make the Bush tax cut permanent, but they won’t try to actually repeal it. "We're sort of at a balance here," Daschle recently said. “Can we repeal it? No. Can we stop it from getting worse? Yes."
Trapped on spending and taxes, and mostly in opposition to free trade and reducing bureaucracy, Democrat leaders are left with few policy options: mostly increasing the minimum wage and aping Bush with small, temporary tax cuts. Last week, Dick Gephardt (D-MO) gave a speech that calls for $125 billion in new spending and $75 billion in one-time “tax rebates.” Meanwhile, ambitious Senator John Edwards (D-NC) offers a plan which has, as its “centerpiece,” (his word) a $500 one time tax rebate to help with winter energy costs. Even when some Democrats manage to propose tax cuts, they still can’t resist the impulse to tell you how to spend your money!
These proposals are laughable in their lack of substance, principle, and imagination. Tax cuts are great, but let’s make permanent cuts in marginal tax rates to increase the incentives to work and save. This “one-time rebate” stuff is mostly a waste of time. Let’s get real, substantial reform to make the tax code simple and fair.
With the election just 13 days away, and the Dow Jones up over one thousand points this month, it looks like the Democrats’ focus on the economy will fail to connect with voters. Voters are more likely to blame corporate corruption, the craziness of the Internet bubble, and 9/11 terror for the slow economy rather than either of the political parties. Republican pollster Matthew Dowd notes in a recent memo that, “The public's desire, in spite of the Democrats best efforts to the contrary, is to not fix political blame for the economy. They continue to look for positive solutions for job creation and economic growth.” Voters understand that the Bush tax cut benefited the economy by pumping $40 billion back to the private sector in 2001, and by offering the promise of future growth from cuts in tax rates.
No matter what happens on Nov. 5, it’s great that both parties are now talking about America’s economic future. Government policy certainly impacts economic growth and opportunity. But, Democrats aren’t calling for the type of bold reforms needed to unleash American enterprise—a flat tax, free trade, permanent repeal of the death tax, and less red tape. (And we’d like to see more Republicans embrace this vision as well).
The real economic struggle in America is between the Big Government politicians in Washington—from both parties— and the American businessmen and women that are struggling against high, complicated taxes and regulations.