Clinton's Second Term Economic Program?Commentary by Pete du Pont
October 03, 1996
Ronald Reagan exhorted conservatives to "paint our vision in such bold primary colors that no one will misunderstand our intention." Now the liberal left has taken a page from the Gipper's playbook. Not since George McGovern's presidential campaign has there been a clearer, bolder depiction of the liberal left's brave new world than in the Philadelphia Inquirer's recent series entitled, "A Nation in Search of Answers."
The Inquirer series paints America's challenges in Marxist hues as a class struggle between the rich and the poor. Corporate chieftains make too much money. Working people make too little. America is too rich. Other nations are too poor and pay their workers too little.
What to do about all of this exploitation? But of course: Bigger government, higher taxes and more regulations are the fiber of the Inquirer's recommendations:
impose a tax on imported goods equal to the wage differential between foreign workers and U.S. workers in the same industry;
get rid of individual tax reductions and raise tax rates as high as 70 percent;
give states incentives to raise their taxes by making federal grants larger if a state's tax level is higher;
provide access to the world's consumer markets on the basis of "national interest not because of a blind adherence to an abstract economic theory like free trade";
increase tariffs on foreign products equal to the costs they do not pay because their government regulations are not as stringent as ours;
cut back skilled worker immigration.
What all these ideas add up to is a constricting economic vise, tightening around the hopes and dreams of everyday Americans. Just as the information revolution is sweeping the globe, creating opportunity and empowering individuals instead of institutions, the Inquirer calls for a government run and regulated Fortress America, cut off from world commerce, expensive to live in, and discouraging the creation of jobs.
First comes a big tax increase for everyone by eliminating all tax deductions. Then higher tax rates - up to 70 percent - and ever larger tax increases for people who work their way up the ladder. Additional federal revenue handouts would go to states that raise their own tax rates, setting up a race by your state legislature and local governments to raise your taxes so they get more federal government money to spend.
Next, import controls and massive tariffs on any goods that are allowed into this country will raise the price of both imported goods - shirts, bananas, oil - and of domestic goods - cars, for example. What do you suppose the cost of a Chevy or Ford would be without the reality of foreign competition? The amount of the import tax will depend on the difference between U.S. and foreign wages. So, for example, if the Congress raises the minimum wage, it is automatically matched by an increased tariff on imported oil, meaning your winter heating bill goes up.
No expense deduction for interest on the money a company borrows to build a shop and create jobs means less shops are built and less jobs created. No expense deduction either for CEO salaries paid above 15 times the lowest-paid employee in the organization. Of course this rule applies only to people who produce things, not to more politically correct members of society like Madonna or Dennis Rodman or "Gangsta' Rap" musicians. Whether the magic multiplier of 15 is raised or lowered next year will be decided by the same people in Washington who tried to make Hooters hire male waitresses.
It is hard to imagine a more loopy set of recommendations, a clearer prescription for the impoverishment of the free world, or a greater barrier to individual opportunity. Controls on all of us at home implemented by the best and brightest in Washington. The rest of the world shut out, and higher costs loaded on working families now trapped in a zero sum society.
Unfortunately, this program is not just a hazy dream cherished by disaffected liberals holed up in the Inquirer's boardroom. It may be the blueprint for a second Clinton administration's economic plan.
After all, the Ross Perot/Pat Buchanan wing of American politics is virulently protectionist. NAFTA was opposed by 59% of the House and Senate Democrats. And tax increases and "incomes policies" are always a central plank of liberal platforms, as is fine-tuning the economy with political price and wage manipulations.
Reruns aren't only on summer television. This rerun of '30s socialism may well become the banner of the liberal brigades in a directionless second term Clinton presidency.