Dear Ed, Dear Jack: A Campaign Debate
In "Max Headroom for President" (REASON, August/September), Edward H. Crane, president of the Cato Institute, took Republican presidential hopeful Jack Kemp to task for embracing the status quo. Crane wrote: "Kemp, who seems obsessed with attacking Peter Ferrara's plan to allow young people to opt out of Social Security (it's 'antifamily'), has rather candidly made his peace with big government: 'Getting the government off the backs of the American people will be no one's slogan in 1988,' he told the Wall Street Journal recently. 'I've never understood why conservatives positioned themselves against the government.'" Following is the exchange that ensued between Crane and Kemp.
Dear Ed:
You make an excellent point about the importance of vision in politics, but your editorial unfairly implies that I am a supporter of big government. Nothing could be further from the truth, as proven by my 17-year legislative record (American Conservative Union rating of 90 percent). I'm no more at peace with "big" government than you or Cato. I agree with Jefferson that liberty recedes as government grows.
But I do not believe—nor did the Founding Fathers—that government is evil or that it should be weak or faint in its legitimate responsibilities. Conservatives should not oppose government per se but rather distinguish, as Adam Smith did in The Wealth of Nations, between legitimate functions of government and counterproductive intrusions on individual liberties and the free market.
For example, it is the duty of government to secure our inalienable rights, to protect society against internal and external violence, and to provide assistance to those who cannot help themselves through no fault of their own. Lincoln said it best: "The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do, for themselves."
The philosophy of Lincoln, Jefferson, and Smith, in my judgment, argues for balance and good judgment. On the one side, as you and Cato Institute have done a fine job of pointing out, the multiplication of government power and taxes can sabotage prosperity, reduce incentives, and subtly corrode the moral fabric of a free society. But weak governments can cause anarchy and chaos and also weaken foundations of freedom.
The political happiness of mankind is found in the "golden mean"—striking a balance between the rights of the individual and the demands of the community. I believe a major error of our time is relying too much on government and too little on our own efforts and those of free people and free markets—the only real source of continuing progress.
In my view, conservatives should not make the mistake of being against every government initiative or, worse, deny that there is such a thing as the common good. I have made peace with the existence of the Social Security retirement program, in part, because Social Security has become a fundamental part of our social fabric and in part because the genuine possibilities for reform center on issues like the 1988 and 1990 payroll tax increases (I'm against them), the earnings test (it should be repealed), and IRAs (I'd expand them).
You can count on me not to pick fights with Peter Ferrara or anyone else who is a fellow soldier in the good fight. But as a candidate for President, I have to identify my vision of government, which includes a positive role in creating an environment for free markets, free people, free enterprise, and free trade.
My complete and total commitment to free-market economics, free trade, decontrol of all energy prices, the 1981 Kemp-Roth tax cut, the Kemp-Kasten Fair and Simple Tax (FAST) plan, my Urban Homestead legislation, Free Enterprise Zones, and advocacy of a gold standard are some proofs that I don't shrink from challenging the status quo with sweeping alternatives when necessary. But why tilt at windmills on an issue that has been decisively resolved by the American public for 50 years? Indeed, why continually dredge up an issue that really has little to do with the survival and extension of democratic capitalism and has caused more conservatives to lose elections than any other single issue?
Ed, I will never compromise on a vision of an "opportunity society" of free markets and free minds, where individual rights to life, liberty, and property are fully protected. I hope to benefit from your continuing counsel to help turn Reagan's "new beginning" into a true renaissance of freedom for America and for the world. Thanks to you and Cato for helping to keep us on the path to freedom.
Sincerely,
Jack Kemp
Dear Jack:
Thank you for your letter. I regret that you feel my article unfairly depicts your attitude toward government. Certainly I believe that at an earlier point in your career you were a strong advocate of limited government. But that was a period when you were being advised by people like Craig Roberts and Bruce Bartlett, not John Mueller and Irving Kristol, two people who defend the welfare state and all that that implies ("statecraft as soulcraft," as George Will puts it).
Perhaps in your own mind you haven't changed your philosophy, only your strategy. But by adopting (to quote you) a policy of "feel good" politics that avoids criticizing existing government programs, you implicitly endorse the status quo of federal spending at 25 percent of GNP. Eventually, you end up explicitly defending the status quo, as you did when you attacked Pete du Pont for having the courage to offer a rational alternative to our existing Social Security system.
How can you be concerned about minorities, be in favor of economic opportunity, lower taxes, and more capital accumulation, and at the same time support the present Social Security set-up? The average black male entering the workforce today will die just about the time he qualifies for Social Security payments—after paying into the system his entire working life. As for opportunity, how can you have that if you can't get a job? No serious economist of any political persuasion denies that the payroll tax is a tax on employment that inherently creates unemployment. It already is a greater burden on most Americans than the income tax, and yet, under the Social Security Administration's own projections it's going to have to increase some 70 percent by early in the next century just to meet current obligations, if nothing is done. Even then, the rate of return for young workers will be close to zero.
And surely you must be aware of the negative impact that a pay-as-you-go retirement system has on savings. Instead of criticizing Pete you should be endorsing his plan to give young Americans an opportunity to privatize a portion of their retirement assets. Indeed, how can "individual rights to life, liberty, and property" be "fully protected," as you state you desire, if we aren't offered such an option?
If, as you suggest, conservatives have lost more elections over Social Security than any other issue, it is only because they have focused on cutting benefits to older people instead of offering opportunity to younger people. Du Pont's proposal actually increases the financial security of retired Americans while providing extremely attractive alternatives to the young.
To defend Social Security on the basis of its having "become a fundamental part of our social fabric" is an abrogation of your leadership responsibilities. You know that the present Social Security system is a bad deal for young people and a serious drag on our economy. That it has become a fundamental part of our social fabric is all the more reason for considering thoughtful alternatives.
Finally, I never said all government is evil or that there is no role for government in a free society. Clearly there is. But for you to invoke the Founding Fathers in defense of government spending that at all levels now equals 44 percent of national income is grossly unfair. Jefferson and the rest would be appalled at today's level of government spending, with which you seem satisfied. Do you really think we are in danger of falling into "anarchy and chaos" because our government is too "weak"? Surely this "golden mean" you seek between the "legitimate functions of government and counterproductive intrusions" is not to be found in today's status quo.
It is to be found at a dramatically lower level of spending and regulation. It is to be found by challenging the status quo, not endorsing it, as you did when you told the Wall Street Journal, "'Getting the government off the backs of the American people' will be no one's slogan in 1988." Well, as slogans go, it's okay with me—and I suspect lots of former supporters of Jack Kemp.
Jack, we all owe you a tremendous debt for the work you did in popularizing the idea of lower marginal income tax rates. But, as Milton Friedman reminds us, the true tax on the American people is the level of government spending, regardless of how it is financed. To reduce that burden, right-thinking political leaders must speak out against transfers, against the farm program, business subsidies, and all the rest. You have made your peace with the welfare state, but there are a growing number of us who have not.
Respectfully,
Edward H. Crane
P.S. I'm not sure how relevant your ACU rating of 90 percent is in terms of the size of government. It focuses heavily on social issues—areas where you and I probably disagree about government's proper role anyway—and not on spending issues. A more appropriate rating in terms of the point I made in the REASON magazine piece comes from the National Taxpayers Union. It deals with spending issues, and there you rate an NTU score of 44 percent—below average for Republican congressmen.