The most detailed presentation of his views came in a June 5 interview with the Los Angeles Times. In it, Perot cites, as he often does, the “declining job base” as the nation’s major economic problem. Huh? Between 1980 and 1990, the U.S. economy created 18.6 million jobs. True, employment dropped in the recession, but the decline (1.8 percent) was about half the loss of the 1981-82 recession.
The “job base” obsession is designed partly to justify Perot’s protectionist tendencies. He opposes a Mexican trade agreement because " labor is a 25-year-old with little or no health-care expense working for a dollar an hour. You cannot compete with that in the U.S.A., period." Sounds convincing. All our factories would flee to Mexico. Indeed, the logic suggests we shouldn’t trade with any country that has much lower labor costs.
That’s wrong. In 1991, we had our first trade surplus with Mexico in a decade. Since 1985, our exports to Mexico–from paper to computers–have jumped 144 percent, to $33 billion. Ditto for exports to all developing countries. Since 1985, they’ve doubled to $147 billion. In 1991, they rose 15 percent, twice the growth of all U.S. exports (7 percent). Economic theory since David Ricardo (1772-1823) explains why nations with different wage levels can trade for mutual benefit. Countries specialize. They use what they earn abroad to buy abroad.
Our border is already fairly open to Mexican products. A trade agreement might well give us more concessions than it gives Mexico. The advantage for Mexico is that today’s easy entry to the U.S. market would become permanent, and this would improve the investment climate. But a prosperous Mexico also benefits us. Mexicans could afford a cleaner environment and would be less likely to immigrate to the United States. Demand for our exports would increase. We supply nearly 70 percent of Mexico’s imports. Flirting with protectionism threatens our economy’s strongest sector: exports.
Perot’s promise to reverse his phantom “declining job base” also serves as his solution to budget deficits. Get people back to work. They go off welfare, pay taxes. Again, sounds great. But it’s simply a promise to speed up economic growth-the same painless pitch made by Presidents Carter, Reagan and Bush. No president has much power to raise the economy’s basic growth rate. Nor r-an Perot reform corporate management from the White House. Even if he could, faster growth alone won’t erase the budget deficits.
A candid Perot would be bluntly explaining how to end federal deficits. The outlines aren’t complicated:
Taxes have to be raised 5 to 10 percent, or roughly $50 billion to $100 billion. This would equal about 1 to 2 percent of personal income.
Spending has to be cut $50 billion to $100 billion. Some programs would have to be ended and others trimmed.
Unless health costs are controlled, federal spending ultimately can’t be controlled. But cost control may require more governmental power and less personal choice in health care.
Instead, Perot peddles platitudes. He favors a line-item veto (presidential power to kill specific projects). So do President Bush and Bill Clinton. A report from the General Accounting Office estimates that the line-item veto had it existed between 1984 and 1989-might have cut budget deficits by 7 percent. The line-item veto wouldn’t eliminate entire programs or touch entitlements.
In his Los Angeles Times interview, Perot deplored “waste” and cited the Agriculture Department, which “is bigger than it was when a third of our people were farming.” In fiscal 1992, it will spend $62 billion and employ about 112,000 people. If everyone were fired, the savings would be less than $5 billion. Most people work for the Forest Service (42,000), in food inspection (16,000) or in soil conservation (14,000). About half of the spending goes for food programs (food stamps, school lunches, etc.). Probably $10 billion to $15 billion could be cut by eliminating most direct subsidies to farmers. In my view, that’s a good idea. Does Perot favor it? Hard to know.
He opposes higher taxes but hints he’d make people like him pay more. Big deal. A 10 percent surtax on income over $1 million (also a Democratic favorite) would raise $1.6 billion in 1994. No tax would generate major money unless the middle class also paid.
Perot partisans argue that their man couldn’t possibly be worse than the alternatives (Bush, Clinton). Oh, yes he could. Perot has no experience in foreign policy. He would have to govern without any party support: people in Congress with shared interests. Inevitably, he would have to rely heavily on public opinion, which is fickle. A year ago, Bush’s approval rating was 75 percent; today it is 35 percent. Congress (Democrats and Republicans) wouldn’t bolster a President Perot if he hit a patch of unpopularity.
Worse, people are for Perot mainly because they’re against his opponents. But this sort of support can crumble when people discover he’s not for what they’re for. Ambiguity can build an election coalition. It cannot build a governing coalition. If Perot means to govern, he needs to take the riskier electoral strategy of constructing a solid popular base by speaking candidly–that is, offending people–to persuade voters to favor a program for governing.
Candor is also what the country needs. Our budget problems are difficult, but not unsolvable. A $50 billion tax increase, though unpleasant, is not a national calamity. But our political taboos prohibit debate at any level of detail. Perot might break the taboos and, thereby, start the messy process of creating consensus. The potential of his campaign is to sweep away the politics of overpromise and to help clarify our choices. So far, it is unfulfilled.
