Gideon's Blog

In direct contravention of my wife's explicit instructions, herewith I inaugurate my first blog. Long may it prosper.

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Wednesday, March 03, 2004
Veepstakes everyone, get your hot, juicy . . . well, actually kind of limp and old veepstakes. Sorry.

Six names everyone is mentioning:

Bayh: He could deliver Indiana and/or Ohio, which would give the election to Kerry for sure. Relatively conservative, and hence would balance the ticket. But unpalatable to party liberals, and I'm not sure he wants the job. Unlikely.

Clinton: Hillary'd sure excite the base and would be a fund-raising juggernaut, but (a) she'd overshadow Kerry, and (b) why would she take the spot? Does she actually want Kerry to win? Does she really need a boost into '08 if he loses? No chance.

Edwards: Could he put any Southern state into play? I doubt it. I don't think he'd bring North Carolina, for instance. Kerry doesn't need to pick him to unite the party; Edwards doesn't stand for any particular faction, unless you count Mickey Kaus. On the other hand, he plainly wants the job. I suppose he's on the short list, but I don't think he gets asked.

Gephardt: He could deliver Missouri, which would probably mean the election if it's at all close. Seasoned, well-vetted, won't embarrass. But it would make for a tired, all-Washington ticket. He's on the short list, but I don't see it.

Richardson: Hispanic, Governor, Westerner, former diplomat - he balances the ticket in a bunch of ways, and wouldn't overshadow his boss. Would definitely deliver New Mexico and put Arizona, Nevada, Colorado into striking range. Definitely on the short list.

Rubin: An interesting pick that would potentially put Florida in play and generally strengthen the Democratic ticket with upper-income voters (and donors). Acceptable to all party factions except (possibly) labor. A Rubin pick would be roughly equivalent to Gore's Lieberman pick: a creative choice that gives the ticket a boost at a crucial time. Back-to-back Lieberman/Rubin picks would raise suspicions that the #2 spot is reserved for Jews, though.

It seems to me Kerry has a couple of fundamental decisions to make as a candidate before making his pick. He's already decided how to run on foreign policy, so the Veep pick won't figure in that regard. (Sorry, Wesley.) He doesn't need to unite disparate party factions, so the Veep pick won't figure in that regard either. (Sorry, Howard.) He's got no chance of cracking the South, and I don't think personality or issues "balancing" - a la Dukakis-Bentsen - will figure much either, though I can't entirely rule it out as a consideration. (Does Kerry really benefit much from having a smooth-talking Southern boy on the ticket, or does the contrast point up his weaknesses?)

No, the big fundamental decision for Kerry to make is how to relate to Clintonomics.

(Let me take this opportunity to digress. Clinton presided over what was, essentially, a Wall Street-centered Grover Cleveland-type economic policy. He raised taxes on upper-income taxpayers, but cut taxes on capital gains. Spending was remarkably restrained and the budget went into surplus. Deregulation and merger mania were the order of the day, but with a focus on large, capital-intensive industries like utilities and telecommunications; regulations that hamstrung small businesses were below the radar screen, and increased substantially under Clinton. Clinton promoted free trade, signing NAFTA and refusing to support steel tariffs. The dollar and the stock market were strong for most of his presidency, to the point where a dangerous bubble developed in the stock market. Inflation declined and income inequality increased. International financial crises were managed with a particular view to protecting Wall Street investors; this is the subtext behind the Mexican bailout and the IMF's raise-interest-rates-and-float-your-currency advice for developing countries during the period, as both Phil Graham on the right and Joe Stiglitz on the left recognized. There's lots of room for debate about how much credit to assign to Newt Gingrinch and how much to Bill Clinton for these results, but this is, I think, a pretty good picture of what economic policy looked like during the Clinton years.

Bush has continued some aspects of this policy mix and abandoned others. He's been much more willing to play the protectionist card on trade, and seems frankly uninterested in trans-Atlantic trade liberalization. He's presided over a collapse in the dollar largely caused by the drastic interest-rate cuts necessary to cushion the economy from the effects of the bursting of the Clinton financial bubble. Low interest-rates also underwrote massive mortgage refinancings and a massive appreciation in housing prices; homeowners rather than shareholders have been the big winners in the Bush years. Bush has raised domestic spending dramatically while cutting taxes across the board which, in combination with a slower economy, has resulted in a breathtaking rise in the deficit. The regulatory picture is mixed as well; Bush has presided over an increase in financial-markets regulation (pushed by Democrats in Congress, it's true) while simultaneously championing a more deregulatory spirit in some environmental and other regulations. If I had to compare and contrast the two Presidents, I'd say that both were business-friendly Presidencies but Clinton's policies were very financial-markets oriented while Bush's are more corporate-boardroom oriented. Clinton figured what was good for the NASDAQ was good for America; Bush figures what's good for Boeing is good for America.)

How does this play into the veepstakes? Well, picking Rubin (or Hillary) would be a clear indication that Kerry intends to run and govern as Clinton did in economic policy. He'll be basically a free-trader and will be attentive to the interests of the financial markets. By contrast, picking Gephardt (or Edwards) would be a clear indication that Kerry intends to run and govern differently from Clinton, taking a jaundiced view of free trade and focusing on how to shore up high-wage manufacturing employment. If he picks Rubin, Kerry will be signalling that the deficit really matters to him, and he'll both raise taxes and restrain spending to reduce it. If he picks Gephardt, he's signalling the opposite: that what we need tax hikes for is to expand middle-class entitlements like Medicare. The choice has implications for Electoral College geography: Rubin would be more appealing to bondholders and industries that depend on trade, while Gephardt would be more appealing to unionized employees. If Kerry wants to make a play for Florida's retirees or Virginia's yuppies, he should pick Rubin; if he wants to make a play for Ohio's or West Virginia's steelworkers, he should pick Gephardt.

This is not an easy choice for Kerry to make. Signalling too strongly that he'd be a pro-Wall-Street Democrat could allow Bush to position himself as a populist, and pick off Pennsylvania. Signalling too strongly that he'd repudiate free trade could scare the markets and make it possible for Bush to position himself as a moderate, capable steward of the American economy. Kerry's going to want to straddle this one, if he can. But a straddle muddies his message. This is a real, fundamental fight inside the Democratic Party, the only one I can think of that'll be hard to paper over.

The other, lesser decision Kerry needs to make is how important the white male vote is to him. A "diversity" pick like Richardson would boost Hispanic turnout and put a whole section of the American Southwest that usually goes Republican into play in a close election (just as Lieberman, the first Jewish Veep nominee, put Florida into play). But if Richardson ties Kerry's hands on cultural issues, that'll increase Bush's share of the white male vote (all else being equal, which it isn't). Kerry would benefit from a "sister Souljah" moment. A Richardson pick would make it hard for Kerry to engineer one vis-a-vis African Americans; it'd be kind of a one-two punch to have a Hispanic Veep nominee rather than a black one and then get Souljahed. So that rules out affirmative action. But would Richardson let Kerry say something "surprising" about immigration? Or bilingual education? If he would, Richardson's a home run pick. If not, he's a double-edged sword. By contrast, a guy like Gephardt should make the ticket more palatable to downmarket white males, but he isn't going to excite anybody. He doesn't threaten, but by the same token an all-white-guy ticket doesn't leave Kerry with a lot of room to pick a "sister Souljah" type fight.

As with the trade question, the choice here is whether to play offense or defense. A Rubin or Richardson (or Hillary) pick would, each in a different way, be a play to strengthen the "Emerging Democratic Majority" coalition of upscale liberals, minority groups, public-sector workers, singles, secularists, etc. - the McGovern coalition, basically, which is a lot bigger now than it was in McGovern's day. A Gephardt or Edwards (or Bayh) pick would be more defensive one, trying to stop the bleeding among downscale white men, private-sector union voters, Southerners, etc. I think playing offense is generally a better strategy, so if I were in Kerry's shoes I'd pick Rubin or Richardson. But Kerry's a pretty defensive player, so he probably won't listen to me.