WHEN STEVE FORBES STARTS A SENTENCE, you now for a fact that he’s going to finish it on me. The language is straight Reagan — America is “the last best hope on earth,” our “greatest days are just ahead” — but there’s no Reaganesque dallying for a lump in the throat, no misty-eyed gaze into the distance. Watching Steve Forbes give a supply-side speech is like watching a German Elvis impersonator; what he lacks in soul he makes up in earnest efficiency.
You can’t help wondering why all Republicans haven’t drawn more from the Reagan supply-side gospel of limitless opportunity and high aspiration. It’s still an intellectually coherent vision with serious practical side-effects. Even expressed prosaically, it still inspires. But the efforts by establishment Republicans to co-opt supply-side ideas seem to have been abandoned in favor of deficit reduction above all else. That has reopened a hole between the root-canal Republicans and the disenchanted growth wing, a hole big enough for Steve Forbes to drive a Range Rover through.
The conventional reporting on Forbes begins with the fact that he inherited several hundred million dollars from Dad and ends with him spending large chunks of it on air-time in early primary states. But there’s more to Forbes than huge media buys. He wouldn’t be spending the money if not for the supply- side message. His is the rare candidacy in which the message is bigger than the man.
Last week, nearly 1,500 people jammed into the ballroom of the Waldorf Astoria for a $ 1,000-a-plate Forbes fundraiser. Giving money to Steve Forbes is like arranging dates for Madonna. But there are a lot of people so intrigued by the supply-side cause they are willing to see their money trickle up. Staffers say that Forbes’s campaign was pulling in over $ 70,000 a day even before the special event. And the December 13 fund-raiser was quite impressive. It was supported not only by some old Reaganites like Arthur Laffer, but also by business heavyweights: Ace Greenberg of Bear Stearns, cosmetics magnate Leonard Lauder, and former American Express chief James D. Robinson III. Comedienne Joan Rivers, whose devotion to the gold standard was heretofore unrevealed, raved: “Steve’s not in the race for ego. He’s not in it for self-indulgence. Steve is a serious man.” The event bumped Forbes up another notch on the credibility scale.
His advantage is that his message has a fully developed intellectual pedigree, a record of political success, and a following among many of the 800,000 or so readers of Forbes and a chunk of the 1.8 million readers of the Wall Street Journal. In his speeches Forbes goes directly at those who make deficit-cutting their centerpiece. “The old-style Washington politicians hide behind the deficit,” he says. He scoffs at revenue-neutral tax reform. At the Waldorf Astoria he delivered a distillation of the supply- side sensibility while parrying Phil Gramm’s line that it’s time for those who have been riding in the wagon to get out and help pull. “The genius of America,” Forbes said, “is that we have entrepreneurs to design and build engines to pull wagons, so people don’t have to.”
Forbes’s latest TV commercial is an attack on the 1990 budget deal. The visual shows Robert Dole and Phil Gramm at the budget meeting, while a voice intones: “The budget summit. Bob Dole dispatches Phil Gramm to negotiate. Gramm helps negotiate a staggering $ 100 billion tax increase. Dole calls it ‘a good agreement.’ Gramm says, ‘It will balance the budget in 1994.’ It didn’t. . . . Bob Dole. Phil Gramm. Washington politicians. It’s time for a change.”
The Gramm camp is apoplectic about the ad, not least because Gramm ended up voting against the budget deal. But Forbes is right that Dole and Gramm do put budget balancing first and tax relief second. Forbes derides this year’s budget fight as “a lot of sound and fury signifying very little,” and he denigrates the GOP capital-gains rate cut as small beer.
It’s a daring approach, since the conventional view is that the Laffer Curve belongs in a jar with the Dead Sea Scrolls. There’s lots of evidence that the Reagan cuts did stimulate growth and produce extra revenue. But it’s generally held that the supply siders lost the propaganda war, so that even Republican voters no longer trust politicians who promise tax cuts.
Forbes says this consensus is wrong, and with his massive media blitz in primary states, he seems to be right. His staffers crow about up-near-Dole numbers in the minor league primaries in Arizona and Delaware, and second place showings in Iowa and New Hampshire polls (around 10 to 14 percent). He does best among those with incomes under $ 36,000 and among those who say the economy is their top concern.
That is interesting, especially since his major policy idea — the flat tax — is a problematic one for middle-class Americans. They will lose their home mortgage deduction under the Forbes plan, and most economists predict their taxes will rise. Therefore, Forbes is careful to characterize his policy as ” a flat tax that is a tax cut.” Forbes claims he can exempt the first $ 36,000 of a couple’s income, lower the rate on everything else to 17 percent, eliminate all those other taxes on business and investment, and still generate enough growth so that the Treasury will only lose $ 40 billion a year. Apparently, he’s winning some converts.
It’s important to recall, amidst these buoyant poll numbers, what a joke Steve Forbes was when he first announced his candidacy. He opened that first press conference practically trying to persuade everybody that he hadn’t lost his mind, and not quite succeeding. But now the anxiety is all in Washington and Nashville, at the headquarters of Dole’s more plausible rivals, Gramm and Lamar Alexander. It’s hard to see how either of these contenders can pick up enough support to make a run at Dole while Forbes is still standing in the way with 14 percent and willing to go on the air in all the key primary states.
The other campaigns are reluctant to run negative ads against Forbes — though Gramm did go up last week in New Hampshire with an ad responding to Forbes’s accusation about the 1990 budget deal. But why would you get in an advertising battle with somebody who can outspend you in his sleep? Instead, the Alexander campaign in particular is hoping the media will tear apart Forbes’s flat tax proposals. “The only thing interesting about Forbes is money,” says Alexander campaign guru Mike Murphy. “I could run a sack of potatoes on a tax cut platform and win 10 percent in the polls, probably 14 percent.”
The deeper case from the Alexander camp is this: Forbes is running to do two things, to stop Dole and promote the flat tax. But he’ll end up guaranteeing Dole’s nomination by blocking Alexander (or Gramm), and he’ll poison the flat tax by associating it so closely with a multi-multi- millionaire. The argument that he helps Dole is more persuasive. It’s significant that the Dole people don’t seem terribly upset by him.
Forbes’s crucial test comes in Iowa. Though polling second, he’ll have trouble getting voters to the caucuses since he has little organization. The veterans of Jack Kemp’s 1988 campaign worry that if you tank in Iowa, then New Hampshire voters decide you’re not plausible and dump you. But other candidates have survived Iowa setbacks, and Forbes won’t have to worry about running out of money.
Then he can hope to come in second or third in New Hampshire and second in Delaware. The big question is New York, where he is making a major effort to get on the ballot — right now, only Dole’s name will appear on the New York Republican ballot. A strong showing in New York sets Forbes up as the Jerry Brown of the race, the gadfly who dogs the front runner all the way to the end. And then if Dole stumbles late, who knows? Stranger things have happened. . . . Well, actually, stranger things haven’t happened, but that doesn’t mean a Forbes nomination is impossible.
The central message of Forbes’s relative and early success is that the Republican party drifted too cavalierly away from the supply-side vision of Ronald Reagan. It might not have done so consciously, but enshrining deficit reduction and devolution to the states as the Holy Grails leaves plenty of room for a candidate who can draw on ready-made supply-side rhetoric and partisans. The old-time religion lives.
by David Brooks
