White House Wager

Three central truths will prove decisive for the prospective political and policy evolution of the Clinton administration. First, George Bush was one of the three or four worst presidents of this century; only a career apparatchik like Bush could have displayed for an entire term such exquisite policy ignorance and political ineptitude. Only an executive utterly devoid of judgment could have believed in the skills, foresight, and wisdom of an entourage comprising the likes of James Baker, Nicholas Brady, and Richard Darman. Only a fool could have believed in the viability of "bipartisanship" among a Republican president, the congressional Democrats, and The Washington Post. And only an utter incompetent could have transformed the Reagan bequest–the strongest economy in the world, the collapse of state socialism, the end of the Cold War, the most powerful and broad-based political coalition in more than a generation, and a Democratic Party in disarray–into the political disaster of November 3.

Second, perhaps paradoxically, Clinton inherits a U.S. economy that fundamentally is very strong, as a result of years of restructuring, efficiency improvement, and disinflation. The early signs of this strength already are apparent, as labor productivity growth has been very impressive for at least four quarters.

And third, whatever Clinton's intelligence, whatever his shrewdness, and whatever his desire to avoid the fate of our beloved Jimmy Carter, it is nonetheless a fact that political and policy principle have not been the pillars of his career, and were not the basis of his ascent to the presidency. Instead, he has understood instinctively how to scratch the many, varied, and conflicting itches of the electorate.

That Bush was so bad inevitably will lower the standard that Clinton politically will be required to attain; immunity from attack four years hence requires only that economic growth be a bit stronger, that the deficit and unemployment rate be a bit lower, and that inflation remain reasonably restrained. Enormous new mischief–taxes, regulation, spending, ad infinitum–is and will remain compatible with such modest goals. The underlying strength and competitiveness of the U.S. economy will yield much room for Clinton to indulge, if not his instincts, then the myriad Democratic Party interest groups soon to be engaged in a life-or-death tug-of-war over snout privileges at the federal trough. And the absence of central principle suggests that on many or most issues he will not know which arguments to believe among many sounding equally plausible, and he will not know which of his advisers to trust. In the end it is inevitable that short-term political considerations rather than long-term economic growth will emerge as the guiding principle for his decision making.

Let us consider some straws in the wind. Did Clinton manage to progress even five minutes into his victory speech on election night before attacking pharmaceutical producers and insurance companies? Here is a man who may mouth words to the effect that growth and wealth are created not by government but by the private sector, but his fundamental misunderstanding of market processes is beyond

Clinton actually seems to believe that "profiteering" by drug companies and insurance firms is the pillar of the "crisis" in medical care; can price controls on drugs and medical insurance be far behind? And look for drug companies to be required to give medicine away as a condition for FDA approvals and other regulatory largess.

And if the private sector is the fundamental problem, only an expansion of governmental power can provide a solution in principle. In a world of scarce resources, for example, there can be no such thing as "universal access" to any and all medical care; some people and some services must be competed out under any system. Since Clinton fundamentally does not understand this, he will blame the private sector for the queuing and cost increase resulting inexorably from "universal access," even though government is and always has been the source of the problem. For Clinton, more and more government will be the solution, now and forevermore. Thus are monsters created.

Let us turn to the environmentalism racket. It is bad enough that Clinton has signed on to the scientific and political fraud inherent in the purportedly "unprecedented new threats of globe climate change [and] ozone depletion." It is worse that he display no understanding at all of the role that the absence of property rights plays in all of this. But Clinton actually seems to believe that any and all environmental protection not only is costless but yields greater wealth in nonenvironmental dimensions.

Now, that is absolute nonsense: Many increments of environmental improvement may well be worth what they cost, but only those attempting to deceive others or themselves can believe that they are costless. This effort by the political left to transform environmentalism into a free lunch is part of the larger effort by socialists everywhere to gain legitimacy under democratic institutions for increased governmental coercion and confiscatory power.

That is the fundamental meaning of Clinton's warning that his administration will "demand responsibility from individuals, families, communities, [and] corporations...to do more to preserve the quality of our environment." And lest we allow competition among governments to spoil the party, Clinton notes that "Our country's leaders must be willing to exert international leadership on issues threatening the health of the planet."

On such fundamental issues as the North American Free Trade Agreement, Clinton cannot afford to lose in Congress, so he will have to pay high prices to innumerable special interests. It is possible that he will pay mere lip service to some interest group demands, but on others he will have no choice but to dance to the Democratic Party music.

Many bills vetoed or watered down by Bush will be passed again or strengthened, and Clinton will have to sign them; foremost among these are family leave and other innumerable mandated goodies imposed upon business. Bush's Clean Air Act and its implementing regulations–which will yield little or no improvement in air quality at an annual cost no less than $20 billion–will not be good enough by definition; a harsher bill will be passed and signed and more stringent regulations imposed. The same holds for such other blessings as the "Civil Rights" (quota) Act. Look for the return of race-norming on employment tests and for far more stringent language defining discrimination in terms of hiring proportions, thus making employers guilty until proven innocent. Look for bigger and more frequent increases in the minimum wage. And can quotas for homosexuals be far behind?

Look for Clinton and Joe Biden immediately to expand the federal judiciary as a means of diluting 12 years of Reagan/Bush appointments, and prepare yourself for Larry Tribe and far worse on the Supreme Court; we will have judges who will write law and ignore the Constitution. Look for even more money for AIDS "research" and for manipulation of the data to create a heterosexual AIDS "crisis" out of whole cloth.

Look for strengthening of the Davis-Bacon Act, proscriptions on hiring replacements for strikers, and other union goodies. Look for a huge expansion of public-works pork under the guise of "infrastructure investment" and "jobs." The use of the tax system to redirect resources will be enlarged greatly; thus, we will return to a system of high marginal tax rates combined with innumerable loop-holes. Look for the kind of meddling in energy markets that even Carter would have rejected. But don't bet the mortgage money on tort reform.

And then, of course, there is the ineffable Hillary. When Clinton on election night announced from the steps of the Old State House in Little Rock that his wife would prove to be the nation's "best First Lady," it was not hospital wings or tree plantings or flower arrangements or oatmeal cookies that he had in mind. No, indeed: Hillary's ardor is aroused by the prospect of big, powerful, activist government, the kind that can't be too rich or too fat.

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