Memo To: Political Reporters
From: Jude Wanniski
Re: Pat Buchanan's Third Try
I've known and admired Pat for almost 30 years, from the first time I met him in the Nixon years. His most distinguishing characteristic is his native populism, his genuine concern for the people who make their living with their hands. I'm a few years older than he is, but we both were raised as Roman Catholics at a time when the church still was Old Guard and Latin. We both grew up in big cities. We both had a yen for political theory and for opinion journalism, which eventually led both of us to editorial pages and opinion columns. As far as I can tell, he was always a Nixon conservative -- "Right From the Beginning" -- while I went through a socialist phase, then an attraction to the Democratic Party's liberal wing, which included a blind hatred for Richard Nixon. From these roundabout paths, our most memorable time together was a dinner he and I and his new wife Shelley had two or three nights after Nixon departed the Oval Office. Because both he and I are life-long optimists, the dinner was more of an Irish wake than a funeral party. My youthful hatred of Nixon had by 1963 given way to grudging admiration, then enthusiasm as I began to appreciate his views on foreign policy, especially toward China. In 1974, when we had that Irish wake, Pat was counselor to Nixon inside the White House, I was The Wall Street Journal's chief defender of Nixon, the devil's advocate as some called me.
We divided politically and intellectually over economic policy, as a result of his turn toward trade protectionism in the 1992 election process. The divergence was not as great as it now might appear to those of you who cover elective politics. Pat's transformation came as a genuine response to the distress he encountered among ordinary people on the campaign trail, distress they and he identified with foreign competition in the goods they had produced to earn a living. It only was because Pat never had invested much time in understanding the supply-side economics I had helped develop that he addressed the problem without subtlety. His solution simply was to put the tariff wall up high enough to make our workers competitive in foreign trade. My solution for a quarter century has been to make our economy more competitive by the development of untapped domestic capital AND by the export of supply-side ideas to the developing world, which would enable the foreign poor to become better off by development of their domestic trade, instead of having a handful of people get rich by keeping their people poor enough to feed the export trade.
There are areas of agreement between us still. Pat is not afraid of the gold standard and knows ordinary people are better off when the elites are not able to manipulate currencies for their own fun and profit. He also is a dedicated enemy of the IMF's evil empire, which chiefly serves the elites of the industrial world in keeping the world poor down and out, as a source of cheap commodities. That is, drawers of water and hewers of wood. In 1996, I publicly defended parts of his economic nationalism, saying I could support a slightly higher tariff if it were accompanied by an elimination of the capital gains tax. That is, we could increase our average tariff from 6% to no more than 10%, I said, as a source of revenue, because a rate higher than that truly would be protective and cause revenues to decline. The problem at home is the dearth of capital, which keeps labor plentiful in relative terms. And when labor is plentiful, it is cheap, which is not good for the working man. A zero capital gains tax, which Pat and I both support, would so increase capital formation that the working man would be able to bid up wages without any inflationary impulse. The big corporations of course do not like this solution, preferring to keep a reserve army of unemployed. The Business Roundtable always had opposed a lower capital gains tax. Alan Greenspan at the Fed theoretically supports a zero capital gains tax, but his responsibility is in monetary policy, where he manages the levers of power in a way that keeps the economy growing at a rate that benefits the big guys at the expense of the little guys. The two-year decline in commodity prices as a result of Greenspan's monetary deflation is part of the process applied internationally by the Fed, to benefit from the cheap commodities of the drawers of water and hewers of wood.
I did not think Pat would make this run, because so many of his issues seem to have been blunted by the current economic good times. But these good times will not last forever if the Fed continues its stranglehold on commodity prices. By the time the primaries roll around a year from now, Pat's message might well be hitting more nerve centers in the masses of ordinary people than they did the first two times he made his pitchfork rounds. The only other candidate who is addressing the concerns of the blue-collar crowd in this fashion -- as the NYTimes editorial page points out today -- is former Vice President Dan Quayle. I haven't known Quayle as long as I've known Pat, but he is another of the 2000 candidates with a history of populist support and a keen awareness of the IMF's evil empire. Pat will hang in their as a gadfly, making life interesting for all of us, but my guess is that by the end of the day his message will merge with Quayle's. If Steve Forbes enters as most predict, there will be yet another foe of corporate socialism on the hustings. Out of this soup will come the GOP nominee, the people's choice I believe, not George W. Bush, who remains his father's son, the establishment's choice.