Memo To: Students of Supply-Side University
From: Jude Wanniski
Re: Choosing Political Leaders
[This lesson originally ran on February 6, 1998. Instead of updating it with
fresh examples, I decided to present it in its original form. Note the
reference to Senator Al D'Amato, who was defeated in his re-election bid later
that year -- I believe because he ran a negative campaign against his
opponent, Rep. Charles Schumer. D'Amato's 1992 campaign, which produced an
easy victory, was based solely on the positive things he had done for his
constituents in the previous six years. Also note my mention of Vice President
Al Gore, who I said back then would find it very difficult to win the
presidency, because of his basic way of looking at the world. He is at his
core a much different kind of man than President Clinton, Gore being
risk-averse to a fault, where Clinton has been able to successfully manage
risk, sometimes to a fault.]
* * * * *
In our lessons in recent weeks, we discussed the democratic
process at the simplest level, with the electorate having to vote yes or no on
a single issue. We found that on such matters as a bond issue to finance a
flood-control project, or a statewide proposition to limit taxes, or state
referenda on environmental or gun-control propositions, the voters may at
times 1) reject the advice of their political leaders and opinion leaders on
which way to vote and 2) tell public opinion pollsters one thing and vote the
opposite. In Massachusetts in 1976, we recounted a statewide vote that chose
Jimmy Carter for President over Jerry Ford. On the same ballot, there were a
dozen single-issue initiatives, each of which was placed on the ballot by a
liberal interest on the basis of polls showing clear support for the proposal.
In each case, the voters came to the opposite conclusion after serious
discussion of its pros and cons. I suggested the image of the electorate as a
mainframe computer, which processes all the information AVAILABLE to it in
making such calculations in the political marketplace.
This week, we will take the electorate to a higher level of complexity as we
consider the means by which it chooses political leaders or representatives --
leaders and representatives being quite different political actors. But first
we should bridge the discussion with some comments on the possibility of
running an entire political system with national balloting of this kind? Do we
really need presidents and prime ministers and senators and parliaments? The
short answer is yes, we do need them, if only because modern society can
afford the luxury of giving a small number of its members the job of doing the
day-to-day work of lawmaking and rulemaking. Just as we no longer spend part
of our week helping our neighbors build a new barn, or build our own homes, we
can now buy the services of carpenters and contractors and financiers who
specialize in doing those things. We elect those who have a comparative
advantage, with the tools and skills, to do the political work of the nation.
In doing so we economize on our time, which is the most precious,
non-renewable resource we possess. Economics is fundamentally about
economizing on our time. The political work force is an extremely important
segment of the general work force, because it can expand the free time we have
when it does a good job of lawmaking and rulemaking. When it does a bad job of
it, though, our free-time contracts as we have to deal with recession,
depression or war.
The single most important job in the nation is that of the top leader --
president, prime minister, king or dictator. The leader uses his skills best
when he correctly divines what the electorate would do if it took time out of
enjoying life to do the calculations that guide the course of the nation
state. If the electorate really would like to move west on the political
compass, and the leader makes the mistake of thinking it wants to move east,
the electorate will be forced to rouse itself in some fashion to let its
displeasure be shown. A computer, though, will not compute unless it is
presented with a problem. We cannot imagine a computer being programmed by a
computer, ad infinitum, just as we cannot imagine the universe without
a Creator. The electorate does not know if it wants or does not want a
flood-control channel, or a reduction or increase in tax rates, until
individual members of society who work in these areas ask for a computation by
the electorate. In the economic marketplace, American consumers did not know
if they wanted a hula hoop until someone thought up the idea of a ring of
plastic that you could wiggle on your hips, and persuaded others to finance
the idea. If you were to ask them in a public opinion poll or marketing survey
if they would pay $5 for a plastic hoop to wiggle on their hips, they would
almost certainly answer in the negative. When the entrepreneur -- the leader
-- takes the risks of trying it in the broad marketplace, a small number of
consumers discover it is fun, and persuade others that it is worth $5. My
friend Reuven Brenner of McGill University in Montreal, who I consider the
finest business economist in the world, observes the general futility and
negative returns of market surveys, when employed by giant corporations
wanting to bring new products to the market. The experience of candidates for
president using "focus groups" to find out what the political
consumers want and then campaigning on those promises is the exact parallel.
Every election season candidates spend tens of millions of dollars on focus
groups and useless public-opinion polls. They do not understand the process by
which the market has a conversation with itself in sorting out what it wants
and what it doesn’t.
It does not help if you get standing ovations at one speech after another,
appealing to what you believe to be the tastes of your audience. In his quest
for the 1980 GOP presidential nomination, former Texas Gov. John Connally
brought the house down everywhere he went with a promise to shut off Japanese
imports. I tried to persuade him that he was appealing to the dark side of his
audiences and that they would on reflection turn against him. The several
million dollars he spent produced only one delegate. In his 1988 race for the
GOP nomination, Jack Kemp’s biggest applause line was that he would refuse
to negotiate with the Soviet Union unless Moscow first lived up to its past
promises. On reflection, voters decided that they wanted their President to
negotiate with Moscow no matter what, as the alternative was nuclear
confrontation. Of the several contenders, George Bush was the only one who
supported Ronald Reagan’s negotiations with Mikhail Gorbachev. After his
losing campaign, Kemp told his closest backers that the line was his biggest
mistake of the campaign. It could be a hard line the voters would accept in a
candidate for the Senate or House. But that is because the national electorate
attempts to elect to these "committees" a mixture of force and
diplomacy, hawk and dove, pessimist and optimist. In the one national leader,
the President, the electorate requires a balance, an equilibrium, the harmony
of yin and yang.
The greatest assistance the leader has in anticipating the desires of the
electorate comes from the electorate’s representatives. The congress or the
assembly or the parliament is composed of men and women who reflect varied
parochial interests, which must be taken into consideration and somehow
composed by the nation’s leader. It is useful to think of the U.S. Congress
as a committee of the whole people, supported out of the private earnings of
the population, which we term the public expense. The committee is a mass of
contradictions, especially in a nation as varied as the United States, and the
mechanisms designed to compose those differences are unique in the world. If
the President is a great leader, one who knows what the electorate wants
before it even thinks it needs it -- like a hula hoop or a tax cut -- the
electorate will even give him the number of Senators and Congressmen he needs
to get his program passed. The phenomenon came to be called the President’s
coattails.
Switzerland is the one state that successfully operates with a mechanism that
relies on the general electorate to make its own calculations on all serious
matters, delegating only housekeeping details to the political work force.
There is a head of state in Switzerland and a national legislature, but all
matters that involve redesign of the governments tax and spending powers are
sent to the voters for ratification. In my entire life in political journalism
or political economy, I’ve never known the name of the Swiss president or
head of state. Among his many talents, McGill’s Reuven Brenner is an expert
on the Swiss political system. He especially appreciates how it can function
at such high levels of efficiency with such low levels of domestic conflict
when it is comprised of three essentially different ethnic regions -- one
German, one French, and one Italian. With a little more buttering up, I might
persuade Professor Brenner to give us an entire lesson on the Swiss
mechanisms, but suffice it to say that it has found a way to reduce the
slippage between the political desires of the electorate and the resolution of
those desires. As in Massachusetts, almost every year there are referenda on
the Swiss ballot that have been promoted as political fads, after polls show
they are clearly popular when the people hear them described by the pollster.
The voters then go to work and shred the ideas, looking for nuggets that might
be useful someday, but otherwise voting them down.
Switzerland can do without a clear leader because the Swiss choose to be
neutral in global affairs while the United States cannot. A nation-state
composed of distinct populations of Germans, French and Italians could not be
anything other than neutral in a century of war among these ethnic groups.
Switzerland is an example of a computer that is programmed by a computer which
is programmed by programmers. A nation has to have a primary leader when it
cannot be neutral, when it has to choose sides among competing commercial
nations or warring nations. If Switzerland were alone in the world, it would
have to have a leader, because it could not program itself. As it is, it is
constantly assessing where it is in the world relative to what the rest of the
world is doing, on taxation, on monetary policy, and on foreign policy.
Because the United States was formed as a state, not a nation -- albeit a
state which brought forth a new nation -- the mechanism our forefathers had to
devise in the Constitution was different than all other mechanisms, and
really only appropriate to the United States. The careful mixing of democratic
and republican forms, the checks and balances of the three branches, and the
powers granted to the individual states that comprised the union, had to have
a precise kind of architecture. It had to be one that would enable the
different ethnic and religious groups that came from other nations to live
together in peace and harmony. This not only meant a more democratic
architecture than existed in the Old World, but also mechanisms that militated
toward the golden mean of moderation and tolerance. If you want to design a
tool enabling you to easily pour liquid into a bottle, without having it
splash about, the tool will have to look like a funnel. That kind of thinking
went into the design of our mechanism. The best source is The Federalist,
which is a compendium of op-ed pieces written for the New York newspapers,
arguing the merits of the
. Right up front, in the first of the Federalist papers, Alexander
Hamilton describes the concept of the funnel in different words: "Were
there not even inducements to moderation, nothing could be more ill-judged
than that intolerant spirit which has, at all times, characterized political
parties. For in politics, as in religion, it is equally absurd to aim at
making proselytes by fire and sword. Heresies in either can rarely be cured by
persecution [p.3]"
The key words are inducements to moderation. The structure of government, with
the federal umbrella to state, county and local jurisdictions, is an
inexorable inducement to moderation. In a homogenous nation state,
parliamentary mechanisms produce simple coalitions of interests. In our
federal system, there is the no real glue holding the political parties
together. This results in a kaleidoscopic shifting of coalitions from one day
to the next, one issue to the next.
Because each member of Congress has to rely on pulling all kinds of strange
allies into his coalition, when he wants something that benefits only his
constituents, he cannot afford to make many personal enemies. In the Senate,
it is rare to find men and women who remain personally hostile toward each
other for a long period of time because the mechanisms punish the extremes of
passion. Politics makes for strange bedfellows. The fellow on the other side
of the aisle whom you would secretly like to strangle today, next week is in
your political embrace, as the world has turned and the issues have shifted.
The voters of each political subdivision not only want their representatives
to generally represent their interests, but they want men and women who seem
to have the political skills necessary to get along with the representatives
of the other jurisdictions. During the past century, as a rule Democrats have
had more such skills than Republicans, primarily because they come out of heterogeneous
subdivisions. They have to be able to speak a little Italian, a little
Yiddish, a little Spanish, a little Polish, or they will not be able to
represent these combinations in a way that will enable them to defeat the
Republican candidate, who need only knit together the Episcopalians, the
Methodists, the Presbyterians, the Baptists, and the small- business class
that speaks the language of money.
It does not mean you cannot be aggressive. Because Texas is so big, yet has
only two Senators to fight for its piece of the resource pie against the likes
of Rhode Island, Vermont, New Hampshire, etc., it tends to send hard-nosed
scrappers to Congress. There is no Senator who plays hard ball more than Phil
Gramm of Texas, and he has no trouble getting re-elected as a result. He is a
pit bull in getting his state’s share of national resources. But this did
not work when he ran for President in 1996, when he raised a fortune from a
business class that did not understand that when people vote for President,
they are not looking for a pit bull. We can say without fear of contradiction
that Gramm is in the Daddy Wing of the Daddy Party, far from the center of the
Daddy-Mommy spectrum, which is where American presidents are found. Jack Kemp
is clearly in the Mommy Wing of the Daddy Party, so much so that political
pros say he would have a much easier time winning a general election than he
would the GOP nomination.
They are wrong, though, because when Republicans vote for their presidential
candidate, they assess the likelihood that he will be able to win the general
election. Because we only have one leader at the head of the national family,
he or she will more often than not come from the Daddy Party, as long as the
party nominee is at least close to the Mommy wing. John F. Kennedy was in the
Daddy wing of the Mommy party, as is Bill Clinton and as was Jimmy Carter. Bob
Dole could shout "Liberal, liberal, liberal" at Clinton in the 1996
campaign, but the electorate knew better. The voters of Massachusetts continue
to send Teddy Kennedy to the Senate, and he is among the leaders of the Mommy
wing of the national party. Even if he were not burdened with Chappaquidick,
he never had a chance of winning the White House. Similarly, Vice President Al
Gore provided the balance on the Clinton tickets of 1992 and 1996, because he
is a traditional Mommy, averse to risk-taking and "risky schemes,"
and devoted to the idea of perpetual security. It is hard for me to imagine
him winning the White House in 2000, unless the voters are so unhappy with the
GOP choice that they again decide on divided government, to balance a tough
Newt Gingrich Republican Congress.
In The Way the World Works, I suggested what I came to call the
"chicken-duck-parrot" model as the simplest form of my general
political model.
As an example of this political model
in its simplest terms, consider the following caricature. Assume that the
purest expression of the electorate’s self-interest is a chicken. It
attempts to communicate this desire to the politicians through a multitude
of voices in a great variety of ways. Only a very few of the individual
voices will come close to expressing this desire precisely, most of the
voices expressing negative tastes for everything that is not a chicken. If
there are two keen politicians contesting, on election day one might have
refined his platform to express a duck. The other thinks the voters want a
parrot. And because a duck is more like a chicken, the electorate will
choose the candidate who expresses duck. Personality is as important as
substance, however. If the duck candidate has shown sufficient signs of
being untrustworthy, so weak and vacillating that in post-election he might
easily become a hawk, the electorate would choose the more trustworthy
parrot.
If the two contesting candidates were not keen, but insensitive to the
expressions of the multitudes, on election day one might express a vulture,
the other a worm. The vulture might win if in addition he showed signs
during the campaign of moving in the direction of a more peaceful bird, and
perhaps thereby being educable in office. Otherwise, the voters would likely
choose the less threatening worm and wait for the next election, hoping for
the best. The fact that the vulture candidate had at least expressed a bird
might not be sufficient to persuade the voters that their interests were
being given first consideration; the vulture candidate might have confronted
the electorate as being an obstacle to be surmounted, his expression of bird
of prey being a purely personal taste rather than a reflection of the
electorate’s tastes. In any case, with such a poor showing by the
political alternatives, voters would be inclined not even to make a trip to
the polls.
The only difference in reality from this simple chicken-duck-parrot model is
in the number of variables that compose the consensus of the electorate’s
desires. The electorate may desire in addition to a domestic policy of
chicken a foreign policy of eagle, and the task of the contending
politicians becomes geometrically more difficult. A candidate may be near
perfect in discerning the domestic desires of the electorate, but if he is
widely off the mark on foreign policy he could easily lose to an opponent
who is less correct on domestic policy, but less incorrect on foreign
policy. No single candidate could possibly satisfy all the electors,
however. In the modern nation state, individual electors have self-interests
that are diametrically opposed to the interests of other electors. There are
individuals whose well-being is served by economic growth and there are
those who benefit by economic contraction or stagnation. So too, there are
individuals whose welfare requires peace and those who benefit from tension.
Each such interest is, in its own way, a legitimate one that the politician
must in some sense take into account, for as long as peace and prosperity
are not always society’s condition, it has need of those who can deal with
the alternatives. Pediatricians benefit directly from life; undertakers from
death.
When former Georgia Gov. Jimmy Carter
ran for the Democratic nomination in 1976, he faced several nationally known
Democratic contenders, including Morris Udall, Fred Harris, Birch Bayh, and
Hubert Humphrey. Each of these four had read the public opinion polls and
decided that the American people were mad at the big oil companies and the big
auto companies, so they campaigned on various promises to punish big oil and
big auto. Udall of Arizona was the favorite among the liberals to win, and on
January 23, 1976, I wrote about the race in the lead editorial of The Wall
Street Journal, entitled "The Politics of Despair."
On "Meet the Press" last
month, he capsulated his campaign, declaring that the days of "cheap
land, cheap timber, cheap resources, cheap everything" are over, and
"the story of our lives is going to be how we are going to adapt to the
end of that era." He proposes to "move us to an era in which our
lives are different, but our lives are going to be better. We are going to
recycle, we are going to be thrifty, we are going to conserve energy, and we
are going to bring the people down below the poverty line up, and we are
going to have a just society where everyone pays fair taxes and we have
national health insurance and a lot of other things.
The politics of despair appeals to the liberal Democrats because, as Mr.
Udall’s rhetoric makes so clear, once you have written off growth you have
to concentrate on the issue of wholesale income redistribution. This is a
program to transfer power from the conservative wealthy elite to the liberal
intellectual elite, which is to say, to the left wing of the Democratic
Party. So our guess is that the liberals will recognize Mr. Udall as their
man, since he is the only Democratic contender to explicitly embrace a
Club-of-Rome, doomsday, no-growth philosophy.
Now we do not believe the American people are yet quite ready to throw in
the towel and abandon the American dream, and it will be a very tough job
marketing political despair to the electorate at large. So even though the
liberal wing will exert considerable clout at the national convention, the
party will reach out for alternatives. [To] the true liberals... Mr. Carter
is unacceptable because he is soft on private enterprise and does not want
to break up the oil companies."
I remember Bob Bartley, editor of the WSJ
editpage and my boss back then, asking me why I thought Jimmy Carter was
winning the primaries when he did not seem to stand for anything, with his
competitors complaining that he fuzzed and fudged all the issues being
debated. I recall telling Bartley that if one candidate says, "Elect me
and I will kill every fifth American," and another says, "I will
kill every tenth American," and another says "every 15th," and
another "every 20th," and then Jimmy Carter steps forward and says
"I haven’t made up my mind. Maybe I won’t kill any Americans."
The voters will of course pick Carter, as they did, going on to beat President
Ford in the general election.
Why was he, Carter, successful against Ford and unsuccessful in winning
re-election in 1980 against Reagan? The history books being written say all
kinds of silly things, but at the time I was observing that Ford had an
opportunity to lift Richard Nixon’s price controls on the oil and gas
industry. He decided not to because his political advisors worried the price
of No. 2 fuel oil would rise and the voters of New Hampshire would be mad. The
Texas wildcatters, furious at this betrayal, begged Ronald Reagan to run
against Ford, and Reagan came within a whisker of beating him. In the general
election, Jimmy Carter signed a letter to the oil state governors promising he
would lift oil prices by executive order as soon as he was elected. Not quite
"read my lips," but "read my letter." Once elected, the
new President was persuaded to extend the controls again. When Reagan ran
against him in 1980, heavily financed by the Texas wildcatters, Carter lost
the oil patch and the presidency. There were many other things going on, but
this could easily have been the margin.
What we’ve learned in this lesson is something of how the masses go about
picking a leader. We have certainly not exhausted the subject, but the
concepts here are the most basic in the political model I think works best.
Questions?
