GOP Presidential Race Is Forced to Confront Economic Insecurity Issue

The economic argument now rumbling through the Republican presidential race isn’t the debate Bob Dole expected. He said as much in a remarkably revealing comment the day before his stumble in last week’s New Hampshire primary.

“I didn’t realize that jobs and trade and what makes America work would become a big issue,” Dole announced, displaying, as is often the case, more honesty than tact.

Dole, however, wasn’t the only one to make that mistake. Neither Phil Gramm nor Lamar Alexander--the two career politicians Dole expected to emerge as his principal rivals--had much to say about jobs or incomes before the past few weeks either.

Through 1995, in fact, Dole, Alexander and Gramm (who’s already left the race) all built their campaigns around similar themes of shrinking government and upholding traditional moral values. Likewise, since taking power last year, House Speaker Newt Gingrich and the GOP congressional leadership has focused almost entirely on retrenching Washington.

This focus on reducing government and defending traditional values is hardly irrational for Republicans: Each is a cause that excites significant elements of their coalition.

But the GOP’s collective silence on the slow growth in living standards over the past 20 years amounted to ignoring an elephant sitting in the middle of the room. By failing to address the diffusion of economic insecurity in the middle-class, the GOP’s political leadership created a vacuum that has been filled by the two leading non-politicians in the Republican presidential race: Steve Forbes and Patrick J. Buchanan.

First Forbes and now Buchanan have wrenched the GOP presidential debate away from the Gingrich agenda of shrinking government toward the larger question of whether the economy is producing sufficient prosperity to improve the lives of average families.

Forbes set back his campaign with other miscalculations. But his sudden rise in January and Buchanan’s surge now have sent Alexander and Dole scrambling to articulate their own agendas for lifting the middle class. These convulsions in the Republican race should also set off alarm bells for President Clinton, who has let his own focus on living standards waver over the past year.

The economic argument among the Republican contenders is following a pattern familiar in American history. In periods of intense economic and social change, American politics often reduces to an either-or choice. On one side are those who welcome and would accelerate the changes; on the other, those determined to resist them.

That division defined the competition between Andrew Jackson’s Democrats and Henry Clay’s Whig Party during the 1820s and 1830s--another period of fundamental economic change. The Whigs represented those who welcomed the revolution that transformed America in the early 19th century from a barter economy based largely on personal relations to a market economy with banks, corporations and paper money.

The Jacksonian Democrats stood with those who felt threatened by this upheaval; Jackson’s agenda, which symbolized his opposition to a national bank, “was designed to thwart the rapid change . . . which modernity had brought,” wrote one historian of the period.

This divide reappeared in the late 19th century as America again strained under a massive wave of immigration, the shift to an industrial economy, and the consolidation of economic power in the hands of giant corporations. In the late 1880s, the populist movement arose as the aroused voice of farmers, small-business owners and urban workers who feared they would be submerged in these swelling tides. But the populists could never command majority support for their agenda, which married reform to nostalgia; eventually, the populist impulse to suppress the change gave way to the progressives’ instinct to manage it.

Now, as the United States uneasily shifts into a global Information Age economy, this old divide is recurring. Together with such disparate figures as Ross Perot and Jesse Jackson, Buchanan steps into the shoes of Andrew Jackson and the populists, arguing that America should build a dam against the rising waters of change.

It is unrealistic, Buchanan says, to ask Americans to adapt to a world in which they must compete with workers in Mexico or China earning a fraction of their wages. “The global market in labor,” Buchanan says, “is going to force down the wages of the highest paid workers.” Buchanan would seek to push the world away by repealing the North American Free Trade Agreement, slapping new tariffs on imports from China, Japan and the Third World--and imposing a moratorium on immigration meant to increase the wages for low-skill labor by decreasing its supply.

Forbes stakes out the other pole in this argument. “Change,” he says, “is unavoidable.” Like Gingrich, Forbes sees the perpetual explosion of information technology not as a corrosive, but a liberating force: the emerging Information Age, Forbes says, “is anti-hierarchical, anti-authoritarian, very Jeffersonian in its ultimate impact.”

Rather than resisting the currents of globalization and technology, Forbes proposes to quicken them by negotiating more free-trade deals (including one with Japan). The key, he says, is not to protect old jobs, but to constantly create new ones; and the key to that, he argues, is his 17% flat tax, which he says would “inspire an investment boom.”

In their attitude toward the underlying changes, Alexander and Dole place themselves much closer to Forbes than to Buchanan. But the two politicians haven’t been as specific as either Forbes or Buchanan in their vision of how to help average Americans adapt to the changes.

Both start by insisting they will spur growth by reducing government spending, taxes and regulation--an argument whose foundation is more theological than empirical. Beyond that, Alexander strikes notes reminiscent of Clinton from 1992 in proclaiming the importance of improving workers’ skills through education and training. In a speech last Saturday night, Dole expressed sympathy for a more hawkish trade policy; that followed his head-turning remarks a few days earlier, criticizing corporate downsizing.

It is difficult to imagine Dole taking that corporate critique very far. It jars not only against his debt to the business interests that have contributed generously to his campaigns but also his overriding message of reducing government: If Americans believe that business isn’t meeting its social obligations, the logical response is to strengthen, not weaken, government’s oversight. At the moment, Dole has made more progress at acknowledging the problem affecting working Americans than constructing a response.

The debate between moving forward or turning back is really no debate at all. Stopping economic change is no more plausible than stilling the tide; in the 1820s, Andrew Jackson won the political argument, but the market economy took root anyway. Even if Buchanan could erect barriers against foreign products and immigrants, the other forces pressing down on working-class wages--from technology to the declining power of unions--would continue operating; moreover, America would lose high-wage export jobs from the trade war his agenda would inspire.

Buchanan, though, still deserves credit for forcing back into the center of political debate the real question: What can be done to help those losing ground in this transformation to a new economy?

Even the president needs that reminder. In 1992, Clinton argued that globalization was irresistible, but that government should help Americans adapt with an agenda that combined aggressive efforts to open markets abroad with massive investments in research, education and training. But since the GOP seized Congress, Clinton has sublimated that agenda to the push for a balanced budget (which voids the possibility of large new public investments) and a rhetorical focus on “common ground” and values.

Nothing in either party’s quiver can restore the world of reliable raises and dependable jobs that Buchanan summons from the mists of memory. But the appeal of Buchanan’s insular, sometimes exclusionary, agenda shows the risks to both sides of abandoning the search for practical ways to help average Americans advance--from expanding job training programs to raising the minimum wage and even providing tax incentives for corporations to upgrade their workers’ skills.

“If the mainstream political people are not going to deal with the problems of normal people,” said Richard B. Freeman, a labor economist at Harvard University, “they open the door for something else. And Buchanan just marches right through.”

The Washington Outlook column appears here every other Monday.