Al Gore and the 'Wicked Project': Aboard The Resentment Special - tax and economic policies target rich

National Review, Sept 25, 2000 by Michael Novak

If Al Gore ever gets a campaign bus, he should name it The Resentment Special. He is trying to erect his presidency on the shameful act of teaching resentment of "the rich and powerful" to "working families."

But of course, the rich are working families. More members of rich families work, by far, than members of poor families. On average, the wealthiest 20 percent of families have two or more full-time workers per family. Only about a third of the bottom 20 percent have even one full-time worker. The more the workers, the higher the income. And at least in America, higher-income families work hard.

Al Gore's hypocrisy is pretty rank, too. His convention was paid for (as was the GOP's) by "the rich and powerful": "the corporations," "the big pharmaceutical companies, oil companies, and tobacco companies." Gore refrained from attacking the big movie and television companies, from whom his presidential patron and past running mate raised $12 million in two days for the Democratic party.

Finally, "the rich and powerful" are the very people of daring, imagination, and talent the country will need if prosperity and invention are to continue as they have, ever since Ronald Reagan's tax cuts took hold in 1982. Who else is going to create the new industries of the future?

Just think of all the industries that didn't even exist when Reagan became president, that now spearhead our economy, thanks to lower capital-gains taxes, incentives, less regulation, and much lower income-tax rates (down from 70 percent in 1981 to 39.6 percent today). Personal computers, faxes, fiber optics, cell phones, the Internet, e-mail, bandwidth communications, superb private mail carriers, biotechnology-it goes on and on.

When Reagan took office, autos were the largest industry. No more. In those days, autos were still mostly mechanical, too, not electronic. As Reagan foresaw, the U.S. economy has grown to be nearly twice the size it was in 1980. He said "America's best days are yet to come." And he was right. The total personal income of the people of America has leapt from $2.3 trillion in 1980 to $7.8 trillion in 1999.

"The rich and powerful" few led the way to those achievements, by the industries, wealth, and jobs they created. Of course, when they started out in pursuit of their dreams, a lot of them were not rich and powerful, just ordinary Joes, but restless with ideas. If they are rich and powerful now, it's because they created even greater wealth for others. They didn't get rich alone-our system doesn't work like that. The good fortune of one man comes only if he has brought good fortune to others. The guy who invents the most brilliant new gizmo in the world doesn't get rich if no one else likes or wants his gizmo, and no one buys it. He either gives value to others or he goes bust.

Reagan promised two things in his campaign twenty years ago. He promised that if tax rates were lowered, the actual tax revenues to the IRS would soar. And they did. And he promised, but a little more sotto voce, that the rich would actually pay larger amounts in federal income tax and a larger share of all taxes paid. And they did both.

Furthermore, Reagan said that the government would have to learn to live within its means-even with higher revenues from the tax-rate cuts. And it did, after 1994, when the people finally put in a Republican Congress after forty years of tax-and-spend. The budget at last got balanced. Welfare at last got reformed. Kicking and screaming, the most left-wing Democrats were obliged to bow to reality. But without ever even dimly understanding how reality works. Reluctantly. Uncomprehendingly.

Reagan predicted that tax cuts would produce growth so incredible-just think, doubling the whole U.S. economy in under twenty years-that budget deficits would be overcome, with just a little patience. If Tip O'Neill had curtailed merely the rate of growth of spending, as Reagan pleaded, the deficits would have been far easier to overpower. The Democrats wouldn't do that. And everything they spent the money on got worse-education, the underclass, inner cities. They didn't only waste the money. They did harm. By 1994, the country had had enough of it.

"Third Way Democrats" tried to learn from their party's errors. Without ever admitting to error-being on the left means never having to say you're sorry-the New Democrats adopted Reaganism by another name. That is, they adjusted to reality. But not Al Gore. Al Gore is no Tony Blair. No Third Way for him. It's back to the Second Way. Back to The Resentment Special.

For Al Gore, alas, hasn't learned the basic economic lessons that even George McGovern finally learned-by going into business for the first time in his life, running a bed-and-breakfast. The regulations and the taxes were awfully wearing and expensive, McGovern found. He hadn't known; hadn't even imagined. He also learned that you can't have employees without employers. Democrats in general need to learn that.

It would be a lot easier for rich people to live on accumulated capital than to invest that capital in risky enterprises that make jobs for others. But most of America's rich don't want a useless life, thank God. They prefer the headaches of creating new businesses to la dolce vita in the Mediterranean. Even when you catch a rich man on a yacht, it's only on his annual three-week vacation, cut short by an office emergency. The American rich haven't yet learned how to relax.