Is There Any Economic Debate Between Clinton and Dole?

September-October 1996

By James W. Skillen

Campaign rhetoric about America's economic past and future remains considerably distant from hard economic realities. On the surface the economy is not in bad shape. Unemployment is relatively low, the stock market is booming, and the U.S. trade deficit has been declining. Bill Clinton has the advantage here and Bob Dole sounds somewhat extreme in calling for an economic fix that the economy does not seem to need.

Yet, despite differences in the extent and the targets of their tax-cut proposals, both presidential candidates are walking down the same unrealistic and economically dangerous road: 1) Clinton and Dole both assume that economic growth will continue indefinitely; 2) both promise to balance the budget by 2002 but put off the most burdensome spending cuts until 2000—after the next election; 3) both have promised not to touch Social Security and Medicare, even though these are the programs most in need of restraint if the federal budget and national economy are to remain viable in the long run; and 4) neither candidate's proposals come to grips with the truly long-term problems of our economy, including slow productivity increases, flat or declining family incomes, and especially the growing distance between the most employable, highest paid citizens and the least employable, lowest paid citizens.

With respect to the last point, President Clinton advocates education and training programs to help unskilled, semi-skilled, and under-educated citizens. But his hope that additional government funding for public school systems—as currently governed—will do the trick does not appear well founded, judging by the record of the past three decades. Dole is the courageous progressive at this point, calling for reforms that will liberate educators from bureaucratic and union control. He supports the growing movement for school choice that would make it possible for parents and students to choose the schools best suited to them, whether government-run or independent.

The candidates also have other questions of economic justice to answer. Both say that America needs to save more and invest more. But Clinton as well as Dole is following the road of supply-side, consumption-oriented economics. If more goods and services are produced, then people will continue to spend more. Spending is the key to growth. Thus, the contradictory messages from Washington urge citizens both to save, save, save, and to spend, spend, spend.

Why should we be surprised then to discover that more and more bankruptcies are being declared by middle-class individuals? Just like the federal government, they have spent more than they have earned. Credit card companies encourage this profligacy But what happens when, as many are predicting, the next recession drives even greater numbers of people into bankruptcy, and when government, because of its own debts and budget limits, has fewer means of responding to the crisis? If such a recession does not become a depression, it will certainly further widen the gap between the rich and the poor. Neither Clinton nor Dole appears ready to face these and other consequences of our consumption-oriented economy.

Interest-Group Politics vs. Reality

We also have to face the fact that interest-group politics increasingly defines the race for the presidency as well as the governing process after the elections are over. In the absence of strong political parties able to define coherent agendas that bind their candidates, presidential contenders put together collections of discrete (and often incompatible) promises to appeal to a diverse range of interest groups.

Clinton knows he needs labor and teachers unions, African-Americans and various liberal interest groups. Dole knows he needs suburbanites, small entrepreneurs, large corporations, the farm states, and the Religious Right. Since few if any of these groups lobby on behalf of the long-term well-being of the country as a whole, the candidates, in turn, target their campaigns to short-term, interest-group demands.

Both candidates know that the hottest political struggles of the day are over education, gay rights, abortion, pornography, and other social-cultural issues. But they also know that these concerns can be highly divisive. So they are placing them lower in priority after the economic themes during the campaign because the record also shows that most voters will allow economic considerations to guide their vote for president.

Does this mean that the candidates are more serious about the economy than about other matters? Does it mean that they are giving more careful consideration to the country's long-term economic stability than to other matters? Not necessarily. After the election the power of competing interest groups will rise far above the superficial themes and symbols of the quickly forgotten campaign. Interest-group politics has become our mode of government, regardless of who is in power.

America's Economic Future

Clinton appears to have a greater awareness that government's economic policies must increasingly take into account environmental limits and conditions, the deepening distress of the hard-core poor both in this country and abroad, and the fact that government must increasingly act as a facilitator rather than as a bureaucratic manager of the economy.

Dole seems to represent the consciousness that economic growth has its own rewards. Further, he associates economic freedom with the freedom of nongovernmental institutions—families, churches, and a diverse range of voluntary organizations—which are crucial for creating the social conditions that undergird a healthy economy

Neither candidate has said or done much on the international economic front besides vote for free trade and try to advance American interests as defined and pressed by the dominant interest groups. Questions about the effects of the policies of the World Bank and the International Monetary Fund, or about relief of many African states from devastating debts, or about America's continuing dependence on Middle East oil, or about the rules of international trade—none of these is a preoccupation of either candidate. Both appear to be passive reactors to international circumstances and crises.

Overall, Clinton leans more in the direction of believing that government's efforts to do many good things in all directions will lead to greater economic well-being. Dole leans more to the belief that economic freedom and greater productivity will help people sustain their own good society. Neither is far from the economic center of American life—-a center defined as midway between the extremes of radical libertarianism (minimal government), on the one hand, and radical liberalism (state socialism), on the other In many respects, "there ain't a dime's worth...."

For Whom Shall I Vote?

Obviously one will have to base one's vote on more than economic considerations and on more than a candidate's economic leadership potential. Economically speaking, however, the following might be one way to weigh the matter.

A vote for Dole without a vote for other Republicans will likely mean a very dull, managerial four years marked by small-scale presidential skirmishes and compromises with congressional Democrats, all of which will leave us as much in the dark as we are now. A vote for Clinton without voting for other Democrats will mean four more years of what we have had the past two years: stalemate and constant complaint from Congress or the White House that the other party is at fault for holding America back.

A vote for Clinton and for a Democratic Congress will mean either a rapid shift back to traditional liberalism or continuing conflicts between an economically moderate president and the diverse range of Democratic interest groups. A vote for Dole and for a Republican Congress could mean another Reagan era as Dole follows Jack Kemp down the tax-cutting path but then comes up short in balancing the budget because none of the Republican interest groups will allow the budget to be balanced on its back. Or it might mean a fight between the more cautious Dole and the younger, wilder Republicans. Or the outcome might be a raging battle between pro-life social conservatives and economically conservative, pro-choice Republicans over control of the legislative agenda, leaving Dole on the sidelines.

I am no more able than the candidates themselves to tell you what they will actually do. Except on a few matters, the party platforms mean relatively little with respect to specific economic policies. Certainly those of us with deep convictions about God's call to us to do justice will have to decide which presidential candidate represents the lesser of evils. Beyond that, however, we need to cast our biggest vote for—and give our most prolonged efforts to—electoral reforms that help create disciplined parties capable of producing coherent platforms on economic and other issues of the day.