A 1996 Political Letter Jude Wanniski December 26, 2004

Memo To: Website Fans, Browsers
From: Jude Wanniski
Re: Thinking About Pat Buchanan

In the new year, I've decided to see if some of my old client letters will hold up as current "memos and the margin." Please let me know if you have strong feelings one way or another when I post one. Today's is an early 1996 letter pondering Pat Buchanan's success in the early Republican primaries of that presidential election year. To put this in some context, I had decided in September 1991 that President Bush had shot himself in the foot with his support of an unnecessary tax increase after promising "read my lips, no new taxes" at the 1988 GOP national convention. I wrote a NYTimes op-ed suggesting supply-siders find a new candidate, inasmuch as Bush was probably toast. Within weeks, Buchanan announced his challenge to Bush, but it came to naught. In 1996, though, Pat had his hat in the ring again, thinking it might be easier to win in a field of Senate Majority Leader Bob Dole, Steve Forbes the magazine publisher, and the second independent candidacy of Ross Perot. Hey, it seems like just yesterday...

 
February 23, 1996
THINKING ABOUT BUCHANAN

To understand why Pat Buchanan is doing so well in the early primaries, we must fully appreciate the sophistication of the national electorate, which knows it is engaged in a process. It now is trying to coax the candidates in the right direction, aware that its decisions still are not final. In other words, the voters of New Hampshire might have voted much differently if they knew their selection on primary day would be final. In that event, I suggest Pat Buchanan would not have won the New Hampshire primary. I believe Bob Dole probably would have won, but not because the voters would have been thrilled to support him, but because he is the safest choice, the organization candidate. The electorate would prefer a candidate other than Dole, I think, and there still is time for one of the others to develop, particularly Steve Forbes, perhaps even Buchanan. Dole's dark unpredictability is simply not capable of standing up to President Clinton's continuing improvement as President; the fall campaign would not be very interesting. The voters would not give the GOP both the White House and Congress if Dole were the nominee. Meanwhile, the voters have the luxury of using the primary process to influence the course of the debate, the party agenda, and national direction. By giving Buchanan these early triumphs, they are alerting both political parties to the economic anxieties at the bottom of the social pyramid.

My free-trade friends have always puzzled about my sympathy for Ross Perot's anti-NAFTA posture in 1992 or Buchanan's protectionist message today. My 1977 discovery that the gathering storm which produced the Smoot-Hawley Tariff Act of 1930 had caused the Wall Street Crash of 1929 surely certifies my tree-trade credentials. The seeming contradiction only can be explained by my Marxist past. If Karl Marx were alive today, he would have noted that the industrial giants got behind Smoot-Hawley in 1929 because they were fighting off foreign competition -- and they got behind NAFTA in 1992 in search of profits, with no fear of foreign competition from Mexico. The World Trade Organization (WTO), which both Perot and Buchanan fought, is in my mind a hideous addition to the international financial bureaucracies that are unaccountable to national electorates. Like the IMF and World Bank, it was designed to serve the stateless multinationals and money-center banks.

Marx, a Ricardian tree-trader, warned that it was the mindless quest for profits by the big guys, insensitive to the interests of the little guys, which would ultimately doom capitalism. The only possible salvation he saw anywhere in the world was in the United States, which might be able to restrain the capitalist beast through "active, universal suffrage." The people who run the multinationals are not evil. Driven by the law of the jungle, they do what the law allows. Early in the century, our democracy was quick enough to produce Teddy Roosevelt, the trustbuster, but it was unable to do any better than Herbert Hoover for the complex problems that arose in the 1920s.

In 1994, when I was still advising Bob Dole, I could not talk him into postponing a vote on the GATT agreement into the Republican 104th Congress -- with the intent of stripping out the WTO that had been inserted by President Clinton at the behest of his pals, the Big Guys. Dole at least attempted to negotiate a letter of commitment from the Treasury to agree to a capital gains tax cut in the 104th Congress, on the symmetrical grounds that both needed a waiver on the budget rules. When Treasury refused, Dole caved in anyway. The Big Guys do not want a cut in the capital gains tax, and have been fighting it for as long as I can remember, because it will produce greater bottomup competition and drive up real wages. To watch Dole now running around, promising to save the GOP from Buchanan and his "extremism," would be amusing if it were not so irritating. He has not the slightest idea that ordinary Americans at the bottom of the pile are being crushed by anxieties about their families and their futures. As he sees his last grasp for the presidency falling short, he is willing to do or say anything to hang on, becoming a Darth Vader caricature of himself

Buchanan's "pitchfork" rhetoric may sound extreme to some, but to tell the truth, I've been in a pitchfork mood for some time now and it sounds just dandy to me. It is Buchanan's uninformed nationalism that leaves me wary of his candidacy, even as I cheer his early successes in driving the Establishment wild. Yet I am aware that he at least has taken the trouble to inform himself on the distress that is being felt by ordinary Americans as a result of the tilting of the tax codes for the past 30 years -lowering tax rates on goods and services produced abroad, raising tax rates on goods and services produced at home. He doesn't quite know why, but his combination of protectionist trade policies and' supply-side domestic policies approximates a reasonable solution to the problems of ordinary people. In watching him last night in the debate at Arizona State, I found him more rabid than I had ever seen him on the subject of the U.S. trade deficit. He is barking up the wrong tree when he complains about our export of dollars, in that every dollar we spend abroad is used to buy something here. (We are net sellers of financial assets.) Yet his focus on the merchandise trade deficit reflects the fact that this is where ordinary people are hurt. People at the bottom of the pile sell their labor to produce low value-added goods and services, to keep the wolf from the door. People at the top sell financial assets, because they can only consume so much in the course of a day.

It is now routine to dismiss Buchanan's views as those of an anti-Semitic, Nazi-loving, fascist bigot. But Pat is none of those things. By the time we are teenagers, we are what we are in matters relating to cultural tolerances. I've known and watched Pat for 30 years and can state unequivocally that there is not a bigoted bone in his body. Michael Kinsley, who I believe is the most intelligent Jewish liberal of his generation, has known Buchanan for 15 years, best through their relationship on Crossfire. His conclusion is the same as mine: Pat Buchanan is a stand-up guy who will always be the last man in a lynch mob. I've never put my own capital on the line to defend a man accused of being a Nazi, but that's only because the opportunity never presented itself, as it did to Pat. As most of you know, I have defended almost every other variety of critter, most recently O.J. Simpson and Louis Farrakhan. This springs from Pat's fanatical Roman Catholicism, which always reminds him about a Jew who was once unjustly nailed to a cross. The reason Pat attracts so many nutcakes is that he is practically alone in national politics in being prepared to represent nutcakes.When you come right down to it, the President of the United States, in a unipolar world, has to represent 6 billion people, nutcakes and serial killers included.

Which brings us back to Steve Forbes, another fellow I've known for a long time, only 20 years to be sure. Relative to Pat, Steve's disadvantage is that he will never know what it is like to be born in a working class family. His advantage over Pat is that he had a father who trained him from little up to look at the world from every angle. He really does know how to compose the differences between those of us in the family at the top of the pyramid and those at the bottom. In the Arizona State debate last night, it was most interesting to see Pat casually stating that he would like to have Steve's help in a Buchanan administration. Pat knows Steve knows stuff he does not know. In any case, the electorate plans a long conversation between these two boys before it comes to any conclusions.

Jude Wanniski
Polyconomics, Inc.