One More for the Gipper
Who's a likelier heir to Reagan, Bush or Kerry?
BY STEVE FORBES
Sunday, October 31, 2004 12:01 a.m.
This presidential election gives voters their starkest choice since Ronald Reagan challenged Jimmy Carter in 1980. President Carter had left a record of high taxes, economic stagnation and out-of-control inflation on the domestic front, and an America reeling from setbacks overseas, thanks to a gutted military and a weak, dithering foreign policy. Reagan, in contrast, promised to slash income-tax rates, rein in runaway government spending and push deregulation. He also vowed to launch a massive military buildup and a confident, assertive foreign policy against the Soviet Union.
We've been living off of Ronald Reagan's legacy ever since. We won the Cold War against all expectations. Our economy blossomed, bursting forth with fantastic innovations. The U.S. has gone from creating about one-fourth of the global GDP to about one-third today. Our stock markets now account for roughly half of global market capitalization, having appreciated nearly tenfold. American household net wealth has never been higher. Japan's and Europe's net new job creation has been microscopic compared with ours. Our formerly hollowed-out military has become the best in human history.
But we cannot coast any longer on Reagan's legacy; we must renew and expand it, both at home and overseas. Giants India and China are waking up economically. A growing number of countries are adopting the flat tax and becoming more competitive. And as for national security, Islamic extremists seek to sap Western civilization's morale, thereby enabling these fascists to reign supreme in Muslim countries while non-Islamic states quiver in fear.
We need a renewed Reaganesque revolution. So which candidate is the more likely Reaganite reformer? John Kerry? To ask the question is to answer it--with gales of laughter. President Bush, on the other hand, has a program as radical as Reagan's was.
On national security, Sen. Kerry would be Carter reincarnated. He would cut and run in Iraq. He would engage in ineffectual diplomacy with regard to the imminent nuclearization of Iran. He would treat terrorism as a law-enforcement problem, as if Osama bin Laden and his ilk were simply Islamic Tony Sopranos. Sen. Kerry is unlikely to "pull the trigger" for America to fight a new, hot war, if such a war became necessary. A commander in chief must have an overarching goal and sense of direction. Abraham Lincoln had it during the Civil War. Despite severe, demoralizing setbacks and mistakes, Lincoln never lost sight of what the conflict was all about and never wavered in his determined prosecution of it. In contrast, Bill Clinton skedaddled out of Somalia after one hard firefight. Mr. Kerry would be a Clinton. He really believes that people like Jacques Chirac and Gerhard Schroeder possess superior, more sophisticated wisdom. One can only wonder what folderol that French-Swiss boarding school pounded into young John Kerry's head decades ago.
President Bush, unlike Sen. Kerry, has embraced the Wilsonian dream of making the world "safe for democracy." More, he is actually pushing the process in the Middle East. George W. Bush is no "realistic" balance-of-power statesman--he wants to remake societies just as we remade Japan and Germany after World War II. Mistakes have been made in Iraq, including busting up Iraq's army last year. But President Bush's goal is no less the revolutionary: enabling Iraq to become a liberal, more Western-like state. And Iraq and Afghanistan are the beginning, as he envisions "free governments in the broader Middle East that will fight terrorists, instead of harboring them."
Sen. Kerry is a trade protectionist who would disrupt one of the greatest wealth-creating, wealth-spreading mechanisms since World War II. President Bush has learned the painful lesson of trade protectionism--it doesn't work economically or politically. That's why his administration worked overtime to get the global Doha Round of trade talks back on track a few months ago.
On the domestic front, Sen. Kerry is very much the defender of a stagnant, liberal status quo. He would hike taxes on small-businesspeople and upper income earners who don't have the assets of Teresa Heinz Kerry to be able to load up on tax-free municipal bonds. Sen. Kerry and his cohorts can't seem to fathom that taxes are a burden and a price. Increase the price of risk-taking and success, and you'll get less of them. The legendary quarterback John Elway could not have done what he did with a 50-pound football, nor could Barry Bonds with a 100-pound bat. The same holds for taxes and entrepreneurs.
Sen. Kerry wants more government intervention in health care and would move us toward the kind of systems that are so glaringly failing in Canada and Europe. Social Security? Do nothing, except perhaps someday raise taxes. Education? Do nothing except throw money at it and resist vouchers, curb charter schools and oppose anything else the education-undermining National Education Association dislikes.
Sen. Kerry would also pander to fashionable and apocalyptic fantasies, such as global warming or the ever-recurring notion that we are running out of oil. And to fulfill a fraction of his lavish campaign promises, John Kerry would make generous-spending George W. Bush look like a piker.
On domestic issues President Bush is, again, the revolutionary, his vision encapsulated by the words "ownership society." On Social Security, President Bush wants to allow workers, if they choose, to have a portion of their payroll taxes go into their own personal retirement accounts. This would make the economy stronger by creating more capital. Who is going to employ the money better--investors or politicians? In this instance, by turning a pay-as-you-go liability into an asset, the president would be taking a page from Alexander Hamilton. Pull out a dollar bill and you are holding non-interest-bearing debt of the U.S. government--clearly a liability--but it's also currency, something you can use to make investments or buy goods and services. Social Security reform would undergo a Hamiltonian transformation--from pure fiscal drain to wealth creator. Every worker, even those earning minimum wage, could build up real capital.
The president has already signed into law Health Savings Accounts, an IRA-like device that will increasingly put patients in charge of health-care spending instead of third parties. Again, who is going to get more value from these health-care dollars--patients or third parties?
On taxes, the president has made clear his intention to simplify this corruptingly complex code. A flat tax, anyone?
President Bush also believes in tort reform. Trial lawyers are laying waste to increasing swathes of American society. These predators are now threatening our pharmaceutical industry. Sen. John Edwards wants us to believe that he and his ilk are there to "help the people." What trial lawyers have done to workers compensation programs in many states puts paid to that notion. Workers comp was once a no-fault system to ensure that injured workers got medical coverage and received pay. Today, it is too often a feeding trough for the plaintiff bar.
Two areas the president hasn't addressed are reforming the growth-destroying International Monetary Fund, and bringing in, as Reagan wanted to but couldn't, a commodity or gold-based monetary system that would stabilize the value of the dollar and give us even lower interest rates than we have today. But the Bush agenda, nonetheless, is breathtaking in its sweep.
Alas, for a revolutionary, President Bush has been un-Reaganesque in communicating his bold ideas. His recent fervor on the campaign trail concerning his foreign-policy vision came awfully late. The public should have been hearing more of this months ago. Ditto the theme of the ownership society; here, too, the groundwork was not well laid. But these are quibbles over tactics. President Bush's strategic vision is, as our British allies would put it, "spot on."
Wherever you look, it is George W. Bush who is the Reagan revolutionary; John Kerry, the reactionary, with a stand-pat-ness worthy of a 19th-century aristocrat.
Mr. Forbes is editor in chief of Forbes magazine and president/CEO of Forbes Inc.
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