In the waning days of the Bush Administration, George Bush has rediscovered the supply side, but the economic team that destroyed him is still in place -- in effect jamming the message of the President's Sept. 10 speech to the Detroit Economic Club. Bush needed more than words, but he allowed a Justice Dept. underling to foreclose indexing the cost basis of capital gains -- the policy that would have made him credible. In the end, we are left with more mush.
Public opinion polls are an unreliable measure of Bush's reelection chances because they reflect anger at the President and not delight with Bill Clinton. What really looks bad for Bush are the betting odds, which have turned decisively against him. People will tell a pollster anything, but they are careful how they bet their money. The Boston consulting firm H.C. Wainwright & Co. reports that the odds have turned against Bush both in the Las Vegas betting market and at the Ladbroke betting parlors in London.
In the event that the oddsmakers have it right and Bush is history, here are three differing scenarios of what a Clinton Presidency could be like:
SCENARIO 1. Clinton inherits an economy ready to blossom: Inflation has been wrung out, the real estate crisis is over, companies are restructured and ready to compete, and debt is paid down. A surging economy provides no basis for a politics of revenge against the rich. Clinton is forced to become a moderate in order to benefit from the economy.
Under this scenario, the economy itself will bring the Democrats back to Middle America and force them to shed the left-wing infantilism that has banished the party from the White House for 20 of the past 24 years. This would be good for Republicans, too, who would again have to govern well in order to compete for the Presidency.
SCENARIO 2. Clinton sweeps in with his stable of eccentric economic advisers, including his old Oxford University buddy Derek N. Shearer, now professor of public policy at Occidental College in Los Angeles -- who has apparently slept through the 20th century -- and produces a rerun in the U.S. of France's disastrous experience with socialism a decade ago. Shearer thunders against the capital markets and Professor Robert B. Reich of Harvard University attempts to dismantle the autonomy of corporations with industrial policy. The dollar dies, capital flies, and long-term interest rates go through the roof.
With the world's monetary system at stake, the Group of Seven industrialized countries forces a chastened and shaken President Clinton to jettison his advisers and take on new, more sensible ones. Within 90 days, the experiment is all over. And just as in France following President Francois Mitterrand's retreat, no American ever mentions socialism or "economic democracy" (Shearer's euphemism) again.
This possibility has a lot going for it because it is the best way for the U.S. to catch up with the rest of the world and to get socialism out of its blood forever. It is extraordinary that Clinton has advisers who are determined to socialize America, while the rest of the world is trying to escape from the socialist ashes of the 20th century.
SCENARIO 3. The left wing grabs power and demands revenge for years of Reaganism. The Internal Revenue Service is used to yank the tax-exempt status of conservative think tanks for allegedly violating the rule against lobbying. Special prosecutors are used to indict -- as they are today -- many former members of the Bush and Reagan Administrations on one trumped-up charge or another. A floundering economy creates a public atmosphere that supports a politics of revenge against "those responsible." The ranks of the Republican Party are weakened by indictments, and the sources of its ideas are neutralized. America becomes a dangerously armed reactionary force in world affairs.
One might think this latter scenario couldn't happen in America, but much of its groundwork has already been laid by the Republicans themselves in the past decade. Policy differences have been criminalized, and President Reagan acquiesced in the appointment of a special prosecutor, who continues to hound former members of his Administration. The Republican Justice Dept. criminalized accidents in the Exxon Valdez case. Republican U.S. attorneys have succeeded in criminalizing civil violations of vague securities laws. Pretending that private fraud, and not government policy, is behind the collapse of real estate values, Bush Administration officials have indicted many innocent thrift executives and board members.
Under Reagan and Bush, federal prosecutors have been able to pervert the law into a scalp-collecting mechanism that has destroyed some of our traditional legal protections. Thus the door has been opened for the ideological left to wield these new practices now as Lenin described his use of them -- "to break up the ranks of the opponent, to wipe his organization off the face of the earth." This would be an ironical fate for Republicans, who themselves have unleashed prosecutorial abuses in their enthusiasm for convictions whatever the cost.