Wilsonianism: the transmogrification of Pete Wilson

National Review, Sept 1, 1998 by John O'Sullivan

Pete Wilson, the conservative candidate for President in 2000? Don't count out the Comeback Kid.

SACRAMENTO, CALIF.

At the hot start of a hot August, Governor Pete Wilson reached agreement with legislative leaders on the largest tax cut in California's history -- a $1.4-billion cut next year, rising to $3.6 billion over four years -- and breathed a sigh of relief. With the full tax cut under his belt, Wilson claims an overall tax reduction of about $2 billion in his two terms. With only the first installment, he would still be a net tax-cutter -- just. Without it, his record would be that of a man who had raised taxes net by more than $1 billion. Not a reputation to brandish in GOP presidential primaries. So the tax cut is the final but indispensable stage in the careful transmogrification of Pete Wilson from GOP moderate to conservative warrior.

Surprised? Don't be. Wilson's quiet revolution has received little attention outside California. He is now rarely mentioned among potential GOP candidates for 2000. Yet he will be leaving office on a high note. The California economy is in its 62nd month of economic expansion. A large budget surplus allows him to have both tax cuts and hikes in spending -- e.g., to cut class sizes in the public schools. He has won his major political battles, notably the initiatives opposing illegal immigration, quotas, and bilingual education. And most watchers think he would be easily re-elected if he ran in November.

Given California's electoral importance, this record should entitle him to glowing media profiles as GOP front-runner. Why his present obscurity?

The answer appears to be that he has succeeded deplorably -- at least from a media standpoint. Republicans are supposed to start on the Right and move to the Center, even perhaps a few yards to the Left. Wilson has done just the reverse. He started in the Center and moved Right. Instead of "growing," he has shrunk. By all the rules, he ought now to be an unpopular failure. And there is little appetite in the media for addressing his current embarrassing success. It is worth examining nonetheless.

It is hard to recall today just how disastrously liberal -- with equal emphasis on adverb and adjective -- Pete Wilson was at the beginning of his first term. He arrived in Sacramento apparently determined to transform the conservative California GOP into a socially liberal, good-government, public-interest group; an aide said at the time that he aimed to purify the party "as if 1964 [i.e., Goldwater and Reagan] had never happened." In the 1992 Assembly primaries, he even supported moderate clones of himself against the now alienated conservatives. (His people mostly lost.) But his decision to compromise with the majority Democrats and raise taxes in his first budget by $7 billion -- the largest single tax hike in California history -- did most damage, turning off the voters and making him a pariah in his own party

Wilson reluctantly defended the tax hike in an interview with NR [available on www.nationalreview.com] as a case of fiscal necessity: "I hated doing it at the time . . . [But] we closed a gap of $14.3 billion. . . . That amounted to a third of the General Fund."

Whatever its merits as good government, the tax hike was bad economics. Imposed as the California economy was being led by the defense industry into a recession, it deepened the misery and retarded the recovery even as neighboring states like Arizona rebounded.

In the run-up to the 1994 election, Wilson's poll numbers collapsed. Kathleen Brown, his likely Democratic opponent, was 23 points ahead. And an unknown millionaire, Ron K. Unz, won a third of the votes with a shoestring campaign in the GOP primary.

This was a near-death experience and it produced a dramatic reformation. Wilson reprogrammed himself as a tough fiscal and social conservative. He began to prune government, to cut taxes, and to make California a more business-friendly environment. Some of the tax cuts were less than met the eye, but he had signalled a change of direction in economic policy -- and it got results. Wilson himself deadpans that California today is so prosperous that "even a penniless Buddhist monk can afford to give thousands of dollars to Al Gore." He is especially proud that the state has one-fifth of America's spending on R&D. By various tests, the relative burden of government has fallen modestly under Wilson. Per $1,000 of personal income, for instance, tax revenue has gone from $72.45 to $71.47. And California employs 107 state workers per 10,000 people against a U.S. average of 151.

Such figures explain why many conservatives now take a favorable view of Wilson. The Hoover Institution's George Shultz chairs his Council of Economic Advisors. Martin Anderson, President Reagan's domestic-policy advisor, says Wilson has instituted important social reforms -- notably "opportunity scholarships." These are education vouchers for children at poor-performing schools. (A post-mortem conversion, since Wilson opposed the 1992 initiative on school choice -- the loss of which causes Milton Friedman to make his verdict a qualified "broadly favorable.")