THE INSIDERS OUTSIDER

Alexander essentially began his campaign for president three years ago, when he moved back to Nashville after his tour of duty as the U. S. secretary of education and began to reinvent himself as a Perot-style “outsider.” Taking aim at a hidebound Democratic Congress, he chose “Cut their pay and send them home” as his rallying cry. With Congress under Republican rule, he has shifted to a “citizenship” agenda that would move practically every federal social program to the states. As a result, this mild-mannered establishmentarian is now custodian of the presidential campaign’s most radical message. Such a redefinition beggars credulity, and if Alexander is now far weaker than he has any right to be on paper, it may be because voters are picking up on something incongruous.

 

At least, it won’t do to search for an explanation of Alexander’s lagging campaign in either his career or his personality. He was arguably the great American governor of the 1980s. Under his leadership from 1979 to 1987, Tennessee gained a Triple-A bond rating and moved from fourth4owest per capita economy in the country to the middle of the pack. Alexander attracted Nissan and Saturn plants to the state, which became a mecca for new industries. He challenged powerful education unions to win merit pay for teachers.

Moreover, Alexander is kind, well-mannered, and likable. In Cedar Rapids, he laughs when the owner of a vintage car lot brings up the mid-life-crisis aspect of car collecting by pointing out that he sells more red cars than any other. “I know ten guys my age who’ll come out here and buy a car as soon as I tell them about this place,” Alexander replies. Yet there is a discomfiting, rehearsed patness to Alexander’s conversation, which he varies not a whir from lecture-hall oration to campaign pep talk to knee-to-knee private conversation. At an open breakfast meeting in the Apple River City Tavern in Waterloo, an angry Iowan stands up and asks about the Clinton administration’s $ 50 billion loan guarantees to Mexico. Alexander speaks about free trade for several minutes, veering into China and Japan. Then the questioner tries to raise his original subject again and Alexander says: “Oh . . . oh, yes. I don’t think we should be bailing out foreign countries.”

For all his fire-breathing doctrine, Alexander is visibly uncomfortable with the red-meat issues, which contradicts his stance as an “outsider.” No matter how radical his message, Alexander never sounds like a radical, which may be why word out of the White House is that Alexander is the candidate President Clinton would least like to face next fall. There’s an element of ideological self-aggrandizement in the Clintonites” appraisal. Alexander and Clinton entered offce as governors of neighboring states on the same day in 1979. They served together as chairman and vice chairman (respectively) of the National Governors Association, and worked together on a number of Southern education initiatives. “He knows what we’re up against,” an admiring Gov. Clinton told the New York Times when Alexander was nominated for education secretary. Although accusations of the president’s fakery fill Alexander’s stump speech and campaign video, Alexander says of the president: “I know him and like him.” He adds: “Bill Clinton’s best chance to win is to run against the Republican Congress, symbolized by the Republican leaders.”

That hardly sounds like a ringing endorsement of the new Congress, and many Iowa Republicans do view Alexander as the “liberal” alternative. “Social conservatives — the Christian right, if you will — have taken over most of the local [GOP] committee meetings in Iowa,” says a staffer for Iowa governor Terry Branstad. “I think Alexander appealed early on to a lot people dismayed by that takeover, and yet who couldn’t bring themselves to support [Arlen] Specter.” Alexander plays to this “kinder, gentler” Republican constituency. The highest praise he has given Newt Gingrich is to call him ” the most effective speaker in decades,” certainly a point of view that leaves some wiggle room. And he accuses Phil Gramm of”the politics of throwing people out of the wagon.”

On the other hand, Alexander says, “I’m more conservative [on welfare] than Phil Gramm is because I want to get it out of Washington.”

And that’s the heart of Alexander’s problem: His desire to be both the most radical and the least frightening Republican is leading him into all sorts of ideological inconsistency. Take welfare: It’s not lost on Iowa audiences that Alexander’s devolution will result in the same “race to the bottom” that he’s implicitly accusing Gramm of provoking — with the difference that in the Alexander plan, private non-profits are going to make a good deal of money.

Or take abortion: Alexander describes himself as pro-life, and favors turning over all responsibility for making abortion law to the states. Yet he would take no steps to overturn Roe v. Wade, the main obstacle to restoring state responsibility.

Or federalism: His radical devolutionary message relies on a number of big, new national programs: a “GI Bill for Kids,” which would offer subsidies to the poor to attend schools outside their district; and Robert Reichian “Job Training Vouchers” for workers changing jobs. He also supports tax credits that would allow voters to send welfare funding to the private non-profit social program of their choice, rather than to the federal government. When asked the difference between these and Great Society programs, Alexander counters that the recipients themselves get to decide how they spend the money — which differentiates the programs from food stamps, but not from, say, Aid to Families with Dependent Children. These are complicated issues to sort through, but where Alexander puts forward a simple conservatism — eliminating the capital gains tax, for example — he’s not offering voters anything they can’t get elsewhere.

It’s symptomatic that, on January 5, when Alexander sought to revivify his flagging campaign by recasting the “outsider” message as a “citizenship” message, he did so at the Heritage Foundation, headquarters of Washington’s conservative establishment, to a crowd of 100 made up primarily of journalists. The speech itself, which he had been testing out in Iowa for the past week, had been written with advice from a number of Washington thinkers, including WEEKLY STANDARD editor and publisher William Kristol and Gingrich intimates Arianna Huffington and Jeffrey Eisenach. On December 21, Alexander had gathered 20 thinkers on citizenship issues at the Capitol Hill Club for a brainstorming session on how to hone his new points.

Some of them are very good ones: His is a mature worldview that demands a great deal of personal responsibility from people. “It’s difficult in the sense that you’re telling people the truth,” Alexander admits. “When [voters] say to you, What are you going to do about my kid who running around at 3 o’clock in the morning?, the answer is, “I’m going to suggest that you go get him.'” Alexander frequently says that the primary and general elections should be a “vision contest,” and this is indeed a positive vision. But half of his Heritage speech — the half that got the most attention — was given over to a purely negative idea: that Bob Dole can’t beat Bill Clinton.

 

A certain incoherence on the issues is ound up with the implausibility of Alexander’s “outsider” persona. Not only was Alexander a two-term governor: He worked three stints in Washington, first as an aide to Sen. Howard Baker, his political mentor; then as an aide to powerful Nixon congressional liaison Bryce Harlow; and finally as the head of the Bush education department — a department he now campaigns in favor of abolishing. Under Bush, he was an early foe of centering the administration’s education policy on school choice — a plan of which he is now the most radical Republican proponent.

Potentially more damaging is that he has taken advantage of financial opportunities unavailable to other “outsiders.” “Let’s talk about jobs,” Alexander likes to tell audiences. “Unlike the other candidates, I’ve had one outside of government.” That is a stretch. To put it in the language he always uses on the stump, “After I was governor, I went out and, under the same rules I created, I started a company from scratch.” The company is Corporate Childcare, Inc., which he and his wife Honey founded with former Tennessee state offcial Marguerite Sallee and Bob Keeshan, television’s Captain Kangaroo. The business now employs 2,800 and has been on Inc. magazine’s list of fastest-growing businesses three years in a row. An initial investment of $ 6,600 is now worth $ 1.1 million. Alexander is quick to note that he and his wife have not realized a penny from the investment. ” We hope we do!” he says. “I plead guilty to being a capitalist.” Though he was in Australia on a six-month vacation during much of the start-up work in 1987, Alexander points to it as a badge of his entrepreneurial expertise: ” I’d like for that to be Exhibit A-Number-One, for anyone who wants to look at me as a presidential candidate.”

Alexander’s (and his wife’s) other investments have earned suspiciously massive returns, which have raised their net worth from $ 151,000 when Alexander took office in 1978 to several million dollars now. In 1981, he put up $ 1 for an option to buy the Knoxville Journal (along with Howard Baker and other investors), an option he later traded for Gannett stock, which he sold for $ 620,000. In 1984, his wife put $ 8,900 into Corrections Corp. of America through Kentucky Fried Chicken founder Jack Massey — and after some complicated transactions, made a $ 142,000 profit on the investment five years later. A $ 140,000 investment in Processed Foods of Knoxville, Tenn., is now worth over $ 1 million and has yielded $ 707,000, according to the Wall Street Journal. The Journal also notes that in 1992 Alexander realized $ 262,000 and retains $ 126,000 in stock (held in trust for his children) from a $ 93,000 investment in PhyCor made in 1987 with the help of KFC’s Massey.

In 1987, Alexander gave education innovator Chris Whittle $ 10,000 to purchase stock in Whittle Communications. When Whittle sold a portion of the company two months later, Alexander got $ 330,000 back on his investment. That is not to mention the $ 125,000 Whittle paid Alexander the same year for consulting on a magazine that was never launched, or the $ 393,000 in consulting fees the Wall Street Journal says Alexander received from Processed Foods between 1988 and 1991. What’s more, he has been paid $ 295, 000 per annum since 1993 by a Tennessee law firm fully aware that he is campaigning full-time.

Two things should be noted: First, Alexander has been unusually forthcoming in revealing his financial records, releasing his tax returns for every year since 1978. Second, not even Lisa Schiffren, whose chronicling of his investments in the September 1995 American Spectator Alexander calls “the most negative thing ever written about me,” has accused him of any illegalities.

“I’ve never presented myself as outside the world,” Alexander retorts. ” I said I’m outside Washington.” But the pattern that has clearly emerged is an insider one: Go into politics, do your job well, and your friends will take care of you. Alexander notes that he passed through a Senate confirmation process for secretary of education, during which Senators Kennedy and Harkin grilled him relentlessly on the investments. But it is safe to say that Alexander’s Republican rivals have allowed the voting public to ignore his investment record only thanks to his low standing in the polls.

Alexander is a behind-the-scenes political organizer to rival any in the campaign. Last year he succeeded in a quiet effort to change Tennessee’s primary rules to award delegates to the Republican National Convention on a winner-take-all basis. Five of the last six Republican National Committee chairmen, Alexander says, are helping him raise money. Within two weeks of leaving the Bush administration he had set up the Republican Exchange Satellite Network, a “town meeting” non-profit that allowed him to tap 255 future donors and hire an organizer for Iowa. Many veterans of the network would go on to play a role in his campaign. (The Washington Post ran a page-one story about the organization on December 30 that implied a violation of the spirit of the election laws. In fact, RESN is merely a highly successful example of a common structure; others include Bob Dole’s disbanded Better America Foundation and Newt Gingrich’s GOPAC.)

Then there are the virtuoso election turns: During the run-up to Florida’s Presidency III straw poll in November, a dry run for the primaries in which Alexander finished third, every potential P3 delegate received a hand-written letter from a resident of Maryville, Tenn., Alexander’s hometown. In recent months, he has secured the backing of a long roster of New Hampshire state legislators. In Iowa, he claims to have the endorsement of 26 Iowa legislators to Dole’s 24.

But none of this frenzied political activity has translated into grassroots support. The Omaha World-Herald revealed that Alexander had only 279 donors in Iowa (versus 649 for Gramm, 1,446 for Buchanan, and 4,991 for Dole), an ominous indicator of lagging street backing. Alexander’s advisers note that he is the candidate didate who — with name recognition only around 65 percent — has more “room to grow.” That’s putting a brave face on a candidate who has spent more time in Iowa than anyone else.

Alexander raised far less money in the second half of 1995 than he did in the first, which raises the question of what he’s going to grow with. Alexander rightly points out that the same is true of all of the candidates except Bob Dole. The difference is that Alexander’s matching funds from the federal government will be an inadequate $ 3,2 million, which poses both a logistical and a symbolic problem. The federal government matches only contributions of $ 250 or less: Alexander, the “outsider,” got such a low match because he is heavier on big-money contributors than any of his Republican rivals. Add to that the roster of Washington heavy hitters who are helping shape his message, and it is not for nothing that Alexander’s detractors call his campaign an outsider message that you have to be an insider to believe in.

 

The campaign appears unready to make its final push into tactical organizing in Iowa, a transition that other campaigns have already made. According to one Washington insider who attended Alexander’s December 21 citizenship brainstorming session, “Look, this is crunch-time in the campaign. Everybody’s ramping up. The fact that he’s still flailing about with think-tank people, looking for a message, convinces me that this is not a serious campaign.” At a luncheon meeting in Cedar Rapids, Alexander turns the floor over to a sweet and portly middle-aged organizer, who asks the assembled crowd, “If you know of anyone who wants to be a precinct captain, please let us know.”

By contrast, Dole’s Iowa headquarters, which takes up the floor of an offce building next to a tattoo parlor on Des Moines’s Locust St., looks like something out of The Man.from U.N.C.L.E., with pin maps, nearly full rosters of point-men precinct by precinct, reams of campaign literature and buttons lining the shelves, and a full staff of two dozen workers at the phones after 9 p.m. Dole Iowa coordinator Darrell Kearney is now telling his organizers, “We’ve shaken all the fruit out of the tree; now it’s time to pick it up.” Alexander’s campaign has bought $ 1 million worth of advertising time in New Hampshire and Iowa for the remainder of the campaign. There is little doubt that Alexander’s communications wizard Mike Murphy will be able to add several points to his polls. First indications are that the ads will stress the same outsider message (“This campaign isn’t about Washington”). But even if Dole were to stumble, and Alexander to emerge from the pack, that would only leave Alexander in a position analogous to that of Richard Gephardt in 1988.

Gephardt entered the new year at 4 percent in the polls. Thanks to a brilliant television effort, he won Iowa with 31 percent of the delegates and ran a strong and surprising second in New Hampshire. He was leading in two- thirds of the Super Tuesday states six days before those primaries, but then Michael Dukakis launched an attack campaign on several fronts and Gephardt had no money to respond.

Alexander claims that won’t happen to him. “We have a superb fund-raising organization,” he says. But insiders claim he is fairly well tapped out in his home state of Tennessee and will need to go back to the weaker names on his donor lists to scrape together what funds he can. According to a Nashville source close to Alexander’s campaign offce, the campaign is now running into dire money problems, and has ordered no stationery or other supplies for after the New Hampshire primary.

 

The reason this is not Alexander’s year is that he — more so even than many Democrats — has not come to terms with the Republican Congress. Alexander is using federalism, as Jack Kemp used supply-side economics, at least partly to avoid confrontations on hard social issues. He is heir to the cheery side of Ronald Reagan but not the equally important divisive side, and hence he has unwittingly assimilated an idea of Reagan beloved of his foes: that Reagan won by basically lulling American voters into a kind of dopey optimism. And this year Alexander is using the federalist issues to run away from taking a stand on the Gingrich revolution.

“I’m delighted by his citizenship message, says one Washingtoian who met with him recently. “But if he really wants to speak for the Republicans this year, he has to show how that message fits into the great budget struggle that we’re going through. On issues like welfare, he’s taking a strong position, but it’s one that takes him out of the current debate. It’s not enough to say “Look beyond the budget.” Maybe he has identified the central theme for conservatism for the next generation, but this election is a referendum on this Congress and where we’re going next.”

In a sense, Alexander has been the victim of bad luck. Candidates, whether out of vanity or for some other reason, develop a vested interest in the plot lines of their candidacies. Alexander is trapped by amessage that was developed long before November 1994, which now strikes voters as a downright imposture. When the political landscape changed, he was confronted with the need either to come up with a new message or to adapt the old one to the new Congress. Alexander chose the latter course. He may be on the verge of proving H. L. Mencken wrong by suffering a humiliating loss that will result from underestimating the intelligence of the American people.

By Christopher Caldwell