Mr. Clinton's Mantra
by Harry Browne
July 26, 1993
[With Bill Clinton recently departed from the White House, we thought you might enjoy reading an article written just after Mr. Clinton entered the White House. This was published in Harry Browne's Special Reports in 1993. We hope it provides a change of pace from the intensity and fervor of today's political diatribes.]
Bill Clinton is without a doubt the most engaging, persuasive president this country has had in my lifetime which goes back to FDR. Neither Ronald Reagan nor John F. Kennedy, each widely praised as a presidential charmer, could hold a candle to Mr. S. Willie.
In an interview, a news conference, or a prepared speech, Mr. Clinton comes across as sincere, down-to-earth, humble, extremely knowledgeable, and passionate about his beliefs.
But it's also true that, in a profession in which dishonesty is the first and foremost qualification, Bill Clinton stands head and shoulders above the pack when it comes to telling whoppers. I have never in my life seen a man for whom lies roll off the tongue with such ease.
And it's simply too much to believe that a man who seems to have stored so many facts and figures in his brain ready to be trotted out whenever the appropriate question is asked doesn't realize that what he's saying is completely opposite to the truth of the matter at hand. Not only that, too often what he says is completely opposite to what he said just a few months or days earlier or even a few minutes ago.
Prevarication in Motion
On July 20, I watched him in action on The Larry King Show. In that wonderful, engaging style of his, the fibs came pouring out one after another.
Of course, all his stock clichés were there this is the "first serious effort," "I've spelled out specific cuts,", "had to make the tough choices," "gays have served with distinction," "ask the rich to pay their fair share," and so on. Not to mention his #1 cliché "the past 12 years" which pops up at least every five minutes.
But beyond these vacuous phrases and the endless slogans were the misstatements, inconsistencies, twisted logic, invented facts, and to put it mildly barefaced lies.
One minute he said that all the savings from his economic program were going into a trust fund to reduce the deficit and that was an absolute promise on his part. The next minute he was saying there was plenty of money available for the Mississippi flood victims because, thanks to lower interest rates, the current year's deficit was lower than expected.
At five minutes past the hour he was saying we must encourage American businessmen to create more jobs. At quarter past, he was saying you don't have to worry about the tax bill because the rich (American businessmen, I presume) were going to pay almost all of it. By the half hour, he was railing as usual about the rich getting a free ride for you guessed it "the last 12 years." But by quarter of, he was back on their side again saying that deficit reduction would lower interest rates enough that even the rich would come out ahead.
A particularly outrageous whopper was his statement that, because of his courageous efforts to finally "come to grips with the deficit," the recent Tokyo summit was the first time in (let's all say it together now) "12 years" that foreign leaders had treated an American president with respect. It seems they had been pleading for (ready now, 1-2-3) "12 years" for American presidents to do something to stop "sucking money from all over the world to pay for our deficits."
I guess at those state dinners Ronald Reagan was made to sit at the children's table.
Of course, Larry King's audience isn't likely to be aware that those foreign leaders have budget deficits of their own that are as bad as or worse than ours. And if Larry King were aware of that, he still wouldn't be likely to call attention to it and bite the presidential hand that's feeding him.
Pushing Down Interest Rates Up
And, of course, Mr. Clinton bragged about having brought interest rates down. To hear him tell the story, you'd think that interest rates had been rising steadily for the past well, 144 months until they suddenly started plunging last November when the world realized that "change" was in the air.
But the downward trend in long-term rates was in motion long before last November and a 12-year downward trend in short-term rates came to a halt when it became apparent in October that Mr. Clinton had the election sewn up.
With his patented abandon, a few minutes later Mr. Clinton flip-flopped and took credit for the fact that short-term rates aren't falling. Thanks to his "serious efforts" to do you-know-what after you-know-how-long, short-term rates have stopped falling allowing long-term rates to come down to join them. Apparently, economic Nirvana means having no gap between short and long rates.
Figuring out your Tax Increase
And, lastly, in his latest installment in the continuing evolution of "how little the tax increase will cost you," he said that you'll pay only $1 a week in higher gasoline taxes. The rest will come from soaking the rich. The preceding week on the same show, a Democratic flack had said it was $25 a year. In his State of the Union address, it had been $17 a month. Tomorrow's figure is likely to be 38¢ a day.
The current campaign to sell the budget deal is focused on the idea that those who oppose it have the crazy idea that a tax increase will cost them something. Administration spokesmen, starting with Mr. Bill and supported by journalistic sycophants like Larry King, run around asking people how much they earn and then reassuring them that they won't be touched by the tax increase.
After all, the deficit is going to be reduced entirely through spending cuts that are guaranteed to take effect the day after the Messiah returns, and by taxing the filthy rich retroactively from the time of the Messiah's first visit.
Who Are the Rich?
In whatever Mr. Clinton says, the unspoken assumption is that it's okay to soak the rich because they don't do anything to deserve what they have.
And this is perhaps the biggest lie of all.
There are some "idle rich" in this country. But almost all of them earned the money they have. The irony is that these "plutocrats" as well as the inherited wealthy aren't the ones who will be taxed to death.
The idle rich live mostly on their investment income. And investment income is far, far easier than employment income to shelter from taxes. For example, you could draw a return from the Permanent Portfolio Fund's Treasury Bill Portfolio or the Versatile Bond Portfolio for years while paying very little in taxes on the interest earned. Those who are really rich will see practically no change in their status from the tax increase.
The people who will be hurt most by the new taxes are those who are trying to become rich those who are working 12 hours a day providing products, services, and employment for their fellow men in the hope of earning a fortune. Current tax rates already make fortune-building very, very difficult. But the Clinton program will make it virtually impossible.
In Bill Clinton's Brave New World, only someone like Michael Jordan, Bill Gates, or Madonna will earn so much money that he can still retain a fortune after taxes. Of those who are working so hard now, some will continue to do so hopeful that they'll be among the chosen few to make so much money that the awful tax rates will be incidental. And some others will continue to work hard because money isn't the motivation.
But a great many will throw in the towel because the chance of success will become so remote. And when they throw in the towel, they will throw out their innovations, their services, the good jobs they provide, and the inspiration they offer to young people.
I figure that, in any society, roughly 10% will work hard no matter how little they're rewarded, and another 10% won't work no matter how much they're offered. But the rest 80% or so of the population are very sensitive to rewards. Hold out enough carrots and you unleash their creativity and energy. Take away monetary incentives and they'll use their talents instead to discover ways to avoid work.
When the Clinton program dampens the incentives of the prime movers of the economy, the effect could be devastating.
So is it true that the average person won't be hurt by the new taxes? Hardly. We are all affected by high taxes and regulations no matter whom they're aimed at.
The beauty of government programs is that when someone loses his job because his employer can no longer support both him and his government the Clinton crowd can label the event a "failure of the free market system."
And if the reduced economic activity causes tax receipts to be much smaller than projected, they'll be back again for another dip into our pockets.
Jekyll & Hyde, Together Again
Meanwhile, back in the present, Bill Clinton continues to project his unique combination of apparent dedication and total deceit. He will speak about some cause as though he's been fighting for it all his life even if it's completely contrary to what he advocated passionately two months ago.
But the deceit is catching up with him. To offer a platitude myself, he who tries to be all things to all people eventually has the gratitude of none. He promised the homosexuals he would end the military ban with "a stroke of the pen," while assuring Congressional Democrats he wouldn't let social issues get in the way of raising more money for them to spend. He spoke as a "New Democrat" against quotas, while promising Lady McClinton's friends that Quota-Queen Lani Guinier would get an important job in the Justice Department.
And on it goes whether the topic is tax breaks, appointments, MIAs, Bosnia, anything. On one thing after another, he's taken both sides. As the current joke goes, "They're adding two new faces to Mount Rushmore Bill Clinton's."
Such duplicity is considered essential in a political campaign. But most politicians drop a large part of it once they're elected. They may not believe the stories they tell, but at least they usually stick to one side of the story. Mr. Clinton, however, still goes around telling all people he's on their side. More and more, he has backed himself into a corner.
How Does He Do It?
By now he would have been laughed out of office if it weren't for the press constantly reminding us how much we need him.
What's that you say? "Everyone knows the press has been highly critical of the president"?
Think about it. The journalists have criticized his $200 haircut, his waffling, his poor management, his foot-dragging on appointments, his failure to sell his programs, and so forth. But the one area they don't criticize is his policies. They accept at face value and repeat faithfully his every assumption about the economy; about the free ride of the rich; about interest rates falling because of his proposals; about $4 in spending cuts for every $1 in tax increase or $3 in spending cuts or $2 or $1 or whatever the line is today; and about (ta-da!) "the last 12 years."
The press has given legitimacy to the inconsistencies, the lies, and the absurdities. If the press truly were against him, if they questioned even half his sloganeering assumptions, his approval rating would be zero.
But the amazing thing is that, despite the support of the press and despite the fact that Mr. Clinton may be the most persuasive president ever, his program has practically no public support. While his arguments go virtually unchallenged by the press, very few people are buying his ideas.
Part of the reason may be that this time around there is an army of people fighting hard against the Clinton plan, which is good news. But the bad news is that the army is the Republican Party.
It's nice to see such weak-kneed types as Robert Dole, [Senator] John Chafee, and [House Minority Leader] Robert Michel fighting against tax increases for a change. But I can't help feeling that a large part of this army is going to go on furlough before the battle is over.
By the time you read this, the tax plan may have passed both houses of Congress. But it also may be delayed because the Democratic leaders weren't sure they had the votes.
And, Doctor, I keep having this recurring nightmare. In it, Mr. Clinton realizes he's going to have to negotiate with the Republicans. The leaders of both parties meet with the president and hammer out a compromise raising the top income tax rate to only, say, 36%, instead of 39.6% (from today's 31%), and adding another $100 billion in spending cuts (scheduled for 1997, meaning they'll never occur). Nearly all the Democrats and half the Republicans vote for the bill, putting it over the top, the Republicans take bows for having saved the country from that awful "tax and spend" package, and America goes down the tubes.
Tell me, Doctor, am I paranoid?