Saturday, February 21, 2004

Thin gruel soup, this Kerry. Emphasis added.

Kerry Is Not Bush--and It Shows

By Lawrence B. Lindsey
Posted: Wednesday, February 18, 2004

Financial Times (London)
Publication Date: February 18, 2004

This will strike some of my former colleagues as off-message, but I like John Kerry, even though I am not going to vote for him. I got to know the senator 13 years ago when I made a courtesy call seeking his vote for my confirmation to the Federal Reserve. He confronted me with a 1988 article I had written as a Harvard professor criticizing the Massachusetts economy and the administration of Michael Dukakis. Mr Kerry had been lieutenant-governor under Mr Dukakis, and I was feeling uncomfortable. He then said: "You turned out to be right, didn't you?"

Telling an egghead like me that he was right is like telling a mother her baby is cute. That and all my subsequent conversations with Mr Kerry were policy-oriented and highbrow. His reputation as one of the more cerebral Senate members is well deserved.

That is why I am so disappointed in his campaign. Now that he has his party's nomination wrapped up, he and his spokesmen are positioning themselves for the main election, by moving to what the media calls "the centre". But the positioning challenge for the Kerry campaign is not horizontal--moving left, right or centre. It is vertical. Its current policy positions lack depth.

Take taxes. Mr Kerry has called for the repeal of President George W. Bush's tax cuts for people earning more than $200,000 (106,000 pounds) a year. One of my firm's clients, a Democrat, asked us to calculate how much revenue that would raise. The Kerry campaign had not put out a revenue estimate of its own. Nor did it make it easy for others to do so. The Kerry proposal did not specify whether it meant $200,000 of taxable income or total family income. It did not say whether that threshold was for families or single taxpayers. Most importantly, it did not say whether it was repealing the rate reductions alone, or also raising taxes on dividends and capital gains received by these taxpayers.

By contrast in December 1999, when then-Governor Bush proposed his tax plan, the campaign produced detailed multi-year revenue estimates as well as distributional analyses of what this meant for different income brackets.

On economic policy more generally, the Kerry campaign gives no indication of the kind of economy it expects to inherit. In 2000, the Bush campaign had developed a quarter-by-quarter forecast. Having a well developed and detailed policy made it possible to govern from day one.

The Kerry campaign is for controlling healthcare costs and reforming Medicare but has no plan on how to do so. Mr Kerry says he will review all trade agreements in the first four months. To what effect? The candidate running on fiscal discipline does not even have a budget. The Bush campaign kept a detailed budget that simulated non-partisan congressional scoring methods from day one.

Mr Kerry's disappointing lack of detail is mirrored by an even more disturbing vacuum on the personnel side. Mr Kerry has smart political tacticians, such as Bob Shrum, and good speechwriters. But who is his chief economic policy adviser? Who is his chief national security adviser? The Bush campaign formally announced that Condi Rice and I would fill those roles in March 1999. At that point, Mr Bush and I had been discussing economic issues for well over a year and his conversations with Ms Rice had been going on at least as long.

As the clear choice of his party's Washington-based establishment, Mr Kerry could have attracted top talent back in late 2002. Given his intellectual proclivities, it surprises me that he did not. It is also surprising that the media let him get away with this. [Not me. It's the media, stupid.]

With insufficient time left for the candidate to get comfortable with new people and new ideas, the Kerry campaign will probably go for the default option: bring in the Beltway establishment. One should expect to see Senate Democratic staffers and Washington and Wall Street notables moving in to fill the policy and spokesmen vacuum. The country could do worse; but it could also do better.

A Kerry victory in November is most likely to occur if things deteriorate badly and the country really needs bold new ideas. A Kerry administration staffed from Capitol Hill will not deliver. Try to think of one bold new idea that has emerged from the Senate Democratic caucus in the past 10 years.

With four months until the Democratic convention, Mr Kerry is going to have to think hard about what he will do if elected. My hunch is that this autumn, voters will care a lot less about Mr Kerry's curriculum vitae and electability and a lot more about what will happen after the election. If so, not being George Bush will not be enough for John Kerry any more than not being Bill Clinton was enough for Bob Dole. That is the Kerry campaign's problem. But it will become the country's problem if Mr Kerry is elected.

Lawrence B. Lindsey is a visiting scholar at AEI and former chief economic adviser to President George W. Bush.

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