Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.natrev From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: The Unmaking of a President Date: Mon, 16 Nov 92 11:57:05 EST Message-ID: The Unmaking of a President WHY BUSH LOST George Bush never realized that he won as Reagan's heir in 1988, and so he spent the next four years dismantling the Reagan coalition. The result will be inaugurated January 20. JOHN O'SULLIVAN Mr. O'Sullivan is NR's Editor. ONE YEAR AGO, a group of leading conservative Republicans -- including William Bennett; Vin Weber, who subsequently became co-chairman of the Bush campaign; Pete du Pont; and Bill Kristol, chief of staff to Vice President Quayle -- met in Washington to discuss the approaching elec- tion. Although most politicians (most leading Democrats very much in- cluded) still assumed the inevitability of President Bush's re-election, these professionals were much less sanguine. The economy was entering the second trough of its double-dip recession; there was strong disaffection on the Right provoked by the President's directionless pragmatism; Pat Buchanan was threatening to enter the New Hampshire primary; and there was a restless, unhappy, pessimistic mood across the land. Yet the White House was oblivious not only to these less tangible threats, but even to Mr. Bush's alarming slide in the opinion polls. ''The President's approval rating has been halved in three months,'' said Ed Rollins, Reagan's 1984 campaign manager, who later served briefly in the Perot campaign. ''It hasn't stopped falling yet. It will hit the low thir- ties by New Hampshire -- unless the President signifies concern that the country is hurting and proposes to do something dramatic about it.'' Something dramatic was indeed proposed after this meeting. HUD Sec- retary Jack Kemp and Vice President Quayle fought strenuously in the White House to persuade the President to announce an anti-recessionary ''growth package'' of tax cuts betweeen Thanksgiving and Christmas. Their logic, like that of Ed Rollins, was that it would be easier to stop the slide right away than to regain the lost ground months later. But the President preferred the views of Budget Director Richard Darman and Treasury Secretary Nicholas Brady -- guardians of liberal Republican or- thodoxy and, not coincidentally, of the 1990 tax-raising budget compro- mise -- who advised waiting for the State of the Union address in January to unveil new policies. By then, however, the President was struggling against Pat Buchanan in New Hampshire and had, as Mr. Rollins predicted, fallen to the low thirties in the polls where, give or take a few brief surges, he remained to the end. Mr. Bush's Deconstruction IN RETROSPECT, this White House battle was the turning point in Mr. Bush's Presidency. It marked the final deconstruction of his political iden- tity as Reagan's heir. When Ronald Reagan retired four years ago, he left behind a conserva- tive coalition that was politically dominant and a liberal opposition con- fined in a fiscal straitjacket. Indeed, these two conditions were mutually reinforcing. Mr. Reagan's coalition was ideologically diverse, but he of- fered something to everyone in it. Blue-collar Reagan Democrats had op- position to racial and sexual quotas; foreign-policy conservatives had the firm prosecution of the cold war; the Religious right had ''family values'' and a pro-life position on abortion; and economic conservatives had dereg- ulation. And all of these groups were united by their opposition to higher taxes. The result was that by 1989 some 40 per cent of Americans described themselves as moderates, 38 per cent as conservatives, and only 18 per cent as liberals. Voters under the age of 35 identified with the Republi- cans by margins of between 3 and 12 per cent over the Democrats, who were concentrated among older voters. And there was the ''other gender gap'': men voted for Mr. Bush in 1988 by 58 to 42 per cent, and white men voted for him by 67 to 33 per cent. Moreover, liberal Democrats were unable to break up this conservative coalition by their usual methods of tax, spend, and elect because Reagan had left behind three fiscal mechanisms to hobble them. The elimination of ''indexing'' in 1981 had deprived the Federal Government of automatic increases in tax revenue due to inflation. The Gramm - Rudman deficit- reduction law automatically imposed spending cuts if Congress failed to enact them. And President Reagan credibly threatened to veto any legis- lated tax hikes. Contrary to the media myth of Reagan's fiscal reckless- ness, these arrangements put the U.S. federal deficit on a declining path (at 3 per cent of GNP in 1988) and cut the annual rate of spending growth from an average 11 per cent in the decade 1975 - 85 to an average 4 per cent in the period 1985 - 89. It became all but impossible for the Demo- crats to buy votes with spending programs. Acting almost like a Democratic ''mole'' in a Republican White House, Mr. Bush set out systematically to destroy a Reagan coalition that was already missing the fortifying unity provided by the Communist threat. He outraged economic conservatives by embarking on a vast re-regulation of the U.S. economy in banking, finance, transport, and the environment, and by allowing spending to rise more than any President since John F. Kennedy. He disturbed those conservatives who thought that the pur- poses of U.S. foreign policy should include encouraging either democracy or nationhood by upholding a brutal and unstable status quo in, succes- sively, Iraq, the Soviet Union, and Yugoslavia, and by describing the dis- mal results as a New World Order. He signed the civil-rights bill, which he had previously denounced as a ''quota bill,'' abandoning his political ap- peal to working-class Reagan Democrats, who in the midst of a recession had no economic reason to support him. He unsettled the Religious Right by taking both sides in the controversy over federal subsidies to obscene art. Above all, he agreed to raise taxes in the 1990 budget compromise. That proved a disaster, removing effective restraints on spending and doubling the deficit in a year. Its political effect was to replace a Republi- can question (''Do you want a tax hike?'') with a Democratic one (''What kind of tax hike do you want -- one designed merely to raise revenue or one designed to achieve fairness?''). And it removed the patrician Presi- dent's one major claim to be a populist opponent of the permanent govern- ment in Washington. Overnight, he became One of Them against Us. Identity Crisis WHEN Kemp and Quayle came to President Bush in November 1991 with their proposals for a ''growth package,'' they were offering him a last chance to restore his political identity along Reaganite lines. And when he refused, he set himself the existential task of creating a new and more au- thentic identity. But how? Mr. Bush could not easily find that personality within him- self. He has been a political schizophrenic since he first entered Texas pol- itics -- an ''other-directed man'' in a ten-gallon hat, a moderate Republican who supported Goldwater in 1964, a Connecticut Yankee at the court of King Ronnie. Does he know what he really believes? Is there a there there? Nor was it much easier to assemble a new identity cynically by appeal- ing to the ideas and prejudices of the voters. His record in government was an obstacle in almost every area. His flip-flop on taxes had alienated conservatives, who demanded an apology before they would listen to him again. (It took him until Super Tuesday to issue a graceless expression of cynical regret, and until the Convention to manage something that still blamed the Democrats for his apostasy -- and that was too late.) As for the voters generally, waking up after the cold-war victory to find a recession blighting the land, they were resentful, pessimistic, mystified and thus in- clined to blame their troubles on betrayal by various elites on both the Right (the rich, Wall Street) and the Left (the ''cultural elite,'' Hollywood). Politicians as various as Pat Buchanan and Jerry Brown were able to ex- ploit such resentments. But in the primaries, at the Convention, and in the campaign until the final fortnight, Mr. Bush seemed both aloof and as mystified as the voters. Underneath these superficial currents, however, a deeply felt national mood was not hard to discern: the public wanted someone who was not Mr. Bush but not a dangerous liberal either. Governor Clinton himself re- alized this and crafted a campaign stressing welfare reform, the death penalty, and a ''middle class'' tax cut. But the public remained suspicious. Hence the rise of Ross Perot, who was less like Mr. Bush and less like a liberal than anyone else in the United States. Unfortunately, he was also sinister, paranoid, and impulsive. Hence he served mainly as transmission belt, taking votes from a floundering Mr. Bush when he entered the race, transferring them to Mr. Clinton (then surging at the Democratic Convention) when he left it, regaining some support on re-entering, and finally giving both candidates the chance to win over his supporters when he blew himself up on prime time by alleg- ing dark plots by the Bush campaign to disrupt his daughter's wedding. But by then, Mr. Bush, having failed to define himself, had been defined by his opponents and the media. He was, they said, the desperate general of ''the Incompatibles,'' a shrinking army of wealthy, self-indulgent, essen- tially liberal, country-club Republicans allied to resentful, lower-middle- class, fundamentalist Christians. The germ of truth in this was that since Mr. Bush had driven away other Reaganite conservatives, these two groups stood out. But a greater problem was that Mr. Bush had simply never contested the long-range liberal shaping of public opinion through the media which ultimately sets the terms of political debate. Moderate Republicanism, which animates (if that is the term) Mr. Bush and his closest friends, has a narrow definition of what constitutes a political issue. It does not con- cern itself with battles over remote and theoretical matters such as sup- ply-side economics. Yet as Clinton's chief pollster, Stan Greenberg, argued two years ago: ''To challenge the conservative hegemony, Democrats need to define the Reagan - Bush years -- to create an imagery of Reagan - Bush America that . . . impeaches the credibility of conservative governance for middle America.'' Because the Bush Administration never challenged the media's view of the Eighties as a Decade of Greed (indeed, his aides endorsed it), Mr. Bush fought as the representative of a failed economic era. This failure to shape the political environment hobbled the Bush Re- publicans everywhere. Because they never challenged the media depiction of the Republican Convention as a fiesta of ''hate'' that ''alienated'' Amer- ica (in fact, the Convention produced a bounce in the polls of between 9 and 15 points), Mr. Bush came to be seen as in thrall to outside-the-main- stream fundamentalists. Because they never contested the media's defini- tion of ''family values'' as exclusionary and thus bigoted (against gays, sin- gle mothers, etc.), he abandoned a potentially popular theme and ended up looking shamefaced into the bargain. Because they systematically de- nied themselves arguments from principle, he could only resort to nega- tive attacks against which Mr. Clinton had protected himself in advance by shouting not ''Wolf'' but ''Willie Horton.'' Because they never fought in the first ditch, Mr. Bush was defeated in the last. ************************************************************************* Echo Politics Mrs. O'Beirne, an NR Contributing Editor, is Vice President for Govern- ment Relations at the Heritage Foundation. A FEW days before the election I joined my eight-year-old Cub Scout at a slide show on bats and was struck with the similarity between George Bush's policy formulation and how a bat stalks prey -- echo location. Bats fly blind in the night, locating dinner by sending out a signal that bounces back. When it came to policy, Mr. Bush was blind as a bat and able to position himself only when signals bounced back from Hill Democrats, the elite media, or pollsters. (Maybe this is what he was trying to express when he confessed his problem with ''the vision thing.'') In highlighting the serious policy mistakes that were made, conserva- tives are not engaging in 20/20 hindsight. Across the spectrum of domestic issues, while the White House was stumbling around in the dark, there was a winning conservative initiative being ignored. In the spring of 1990, Bush hosted a series of meetings with supporters and opponents of the Kennedy-sponsored Civil Rights Act of 1990, to ex- plore how much room there was to compromise on the bill's quotas. The meetings were stacked with traditional ''civil rights'' leaders, who urged the President to sign the bill. Conservatives had been urging the White House to give prominence to alternative voices within the black commu- nity who opposed the standard set-asides and quotas and endorsed an al- ternative economic empowerment strategy. At one of the meetings, Robert Woodson, president of the National Center for Neighborhood Enterprise, categorized the pending civil-rights legislation as irrelevant to the plight of poor blacks. Mark Liedl, director of the Heritage Foundation's New Ma- jority Project, told the President that there was ''a growing sentiment for a new direction in civil rights,'' and argued that the agenda ought to be expansion of economic opportunities for the poor, not quotas for middle- class minorities. Despite interest on the part of Boyden Gray and a few others in the White House, the President elected to keep the civil-rights debate fo- cussed on job quotas. He vetoed the first version of the Kennedy bill, the quota debate dragged on for a year and a half, and the Civil Rights Act of 1991 was ultimately signed -- quotas and all. The opportunity to ad- vance a civil-rights strategy based on school choice, tenant management of public housing, enterprise zones, regulatory emancipation, and crime control was lost. A pro-family tax agenda was laid out by the Family Research Council in a series of memos to the White House in the autumn of 1990. The memos specifically warned that if Mr. Bush did not take the initiative on family tax relief ''the issue will be stolen by the President's opponents.'' The moderate Democrats at the Progressive Policy Institute had joined conservatives in proposing such tax relief, and a real opportunity to pass it existed. The White House expressed no interest. Early in 1991 Republican Representative Frank Wolf of Virginia took up the cause and introduced legislation to raise the personal exemption to $3,500. The proposal was intentionally modest in scope in order to win White House support. Mr. Wolf tirelessly lobbied the White House -- to no avail. His bill ultimately enjoyed the support of a large majority of his col- leagues, including 111 Democrats, but was never endorsed by the White House. When confronted with the Family and Medical Leave Act in the name of helping families, Mr. Bush could point to no alternative and was bludgeoned late in the campaign by a bill with no grassroots support, but great symbolism. On the education front, when Lamar Alexander was nominated to be Secretary of Education, he held a series of meetings with conservatives where he was consistently told that parental choice was the only issue that clearly defined the President as a reformer and put the Democrats on the defensive. Paul Weyrich, William Bennett, Pete du Pont, and Gary Bauer reiter- ated the central importance of choice to Alexander just before the Presi- dent's reform package was unveiled. In response to this conservative pres- sure, Alexander beefed up his rhetoric on choice, but kept the choice ini- tiative buried in the jumble of the package. And notwithstanding his rhe- torical commitment to radical reform, Alexander struck a deal with Sena- tor Kennedy to drop choice in exchange for his other proposals. The strug- gle for a reform package lasted until this fall, when the Democrats denied Mr. Alexander even a consensus bill in a partisan attempt to force the Ed- ucation President to veto education reform during the campaign -- a sce- nario conservatives had been warning about for over a year. On the values front, the public outcry over NEA-funded obscenity and sacrilege provided George Bush with a golden opportunity to force liber- als, and ultimately Bill Clinton, to defend Andres Serrano and Robert Mapplethorpe. Instead Mr. Bush wound up supporting NEA chief John Frohnmayer until Pat Buchanan's attacks during the primary campaign forced his ouster. A year after the Senate approved Jesse Helms's restrictions on the use of NEA funds, Mr. Bush declared at a press conference, ''I don't know of anybody in the government or a government agency that should be set up to censor what you write or what you paint, or how you express your- selves.'' This statement put Mr. Bush squarely in the camp of those who refuse to see the difference between censorship and refusal to subsidize. The media reported that ''defenders of artistic expression picked up a strong supporter.'' In September of 1991, another Helms amendment applying the FCC standard of public decency to the NEA passed the Senate 68 to 28, still without White House backing, and Helms's office remains convinced that had Bush taken up the fight, a similar vote could have been forced in the House, and the NEA would today be out of the obscenity and sacrilege business. In October, John Frohnmayer endorsed Bill Clinton. Imagine if, in the wake of the L.A. riots, Mr. Bush had been inoculated against charges of having ignored the plight of troubled inner cities by his championship of an aggressive urban-policy agenda. At a White House meeting in October 1989, Stuart Butler of the Heritage Foundation ampli- fied on a memo he had written to White House staff, outlining policies aimed at attacking the root causes of poverty in the inner cities through empowerment, economic revitalization, and real welfare reform. Recogniz- ing the policy inertia even nine months into the Bush Administration, Butler recalls telling an offended presidential aide, ''Since it is the Bush Administration, maybe we should call it the 'Skirmish on Poverty.''' Had George Bush and his senior advisors seen fit to adopt these con- servative policies and strategies, the presidential debates would have been a forum for Bill Clinton to explain his opposition to economic em- powerment of the poor, full parental choice in education, tax relief for the beleaguered American family, and meaningful welfare reform. There was no need to fly blind. -- KATE WALSH O'BEIRNE ************************************************************************* The Bush - Baker Team THEY'D RATHER BE HUNTING Campaign wizard James Baker turned out to be his chief's never-presesnt help in time of trouble. PAUL BEDARD Mr. Bedard is White House correspondent for the Washington Times. IT'S AUGUST 21, the day after the Republican Convention, and President Bush is about to step onto the stage at a campaign rally in steamy Gulfport, Mississippi, when a television producer spots chief of staff Samuel Skinner moping around the press area. Ousted to make room for Bush's hunting buddy James A. Baker III, he is told that the President received a mighty Convention bounce and is within two points of Governor Clinton in the network's polls. ''You know what?'' said Skinner, according to a scribe who witnessed the talk. ''What that means is that Baker came in a week late. Now the elec- tion is his to lose.'' That was as close as the leader of the free world ever came to the Ozark daredevil in the polls, and plenty of Washington fingers are pointed accus- ingly at Baker. ''Baker and his team were arrogantly clueless,'' said an angry Administration official who has joined hundreds of colleagues in the parade to Panic Press, a resume shop two blocks from the White House. Teamed again to repeat their 1988 election victory, this time based on their smashing success in crushing Communism and driving Saddam Hussein's troops from Kuwait, Bush and Baker were outsmarted by a cou- ple of slick, Southern yuppies who convinced the nation it was time to throw the old fogies out. How could the Bush - Quayle campaign be beaten by Clinton, the candidate they most wanted to face? Simply put, Baker showed up minus his Midas Touch. He may have come too late in any case to revive the campaign for Bush, who had re- sisted every plea to hit the campaign trail. And he didn't really want to be there. ''The last thing he wanted to see was his picture next to James Carville on the cover of Time. He wanted to be remembered as the sec- retary of state who ended the cold war, got Saddam, and expanded democ- racy, not just some handler,'' said a White House official. When Baker arrived with his team, it quickly became clear that he wanted only to handle the big decisions, such as preparing major Bush speeches and scheduling the debates. Baker essentially went into seclu- sion, as he struggled to untangle the mess he had walked into. Meanwhile his deputy Robert Zoellick took over the day-to-day operations of the White House, Dennis Ross handled the policy shop, and Margaret Tut- wiler tried to figure out just why the Administration's communications network had failed for three years. If the past was prologue, Baker should have shone. But his two biggests tasks -- giving his chief an economic message and getting a favorable de- bate format -- were completed with only mixed success. While Mr. Bush delivered a strong economic speech in September at the Detroit Economic Club, spelling out a conservative ''Agenda for American Renewal,'' he seemed to forget almost immediately what he said there, shifting instead to a strategy heavy on attacks. As for the debates, by dickering over formats for weeks, Baker left the polls stuck in neutral as voters waited for the clashes to take place. ''We lost valuable time. Baker blew it,'' said a campaign official. When the debates finally came, it was Bush's turn to blow it. After he gave two lackluster performances, Dan Quayle skipped by Baker and in- vaded the Oval Office to lay it on the line to Bush. Stand up and fight or lose, he warned. Baker even lost his magic touch with the media, the asset that had helped create his image as one of the greatest secretaries of state in the nation's history. Instead, the media ganged up to thwart his campaign strategies, and the campaign let them do it. In the end, the campaign was left distributing bumperstickers and caps reading, ''Annoy the Media -- Re-elect Bush.'' Campaign without a Theme WHILE the Democrats built their campaign on a message of change, the Republicans lacked any theme or even a campaign slogan other than ''Four more years.'' Only rarely did top aides discuss the need for a theme or slogan, even in the final weeks when the Clinton campaign was turning up the heat on Bush for failing to present a vision for a second term. Noth- ing came forward because the Administration for three years had operated without ideology or philosophy, choosing instead to manage the status quo. Americans in the end picked the guy with the vision, even though half disagreed with that vision -- especially Clinton's plans to increase bu- reaucracy and taxes. ''The first thing to decide is who you are, and they never did that,'' said former Reagan and Bush Administration official Wil- liam Bennett. ''It's hard to comunicate if you've got nothing to communicate.'' No one was more frustrated than Dan Quayle. Seeing no direction com- ing from the West Wing or from campaign chairman Robert Teeter or campaign manager Fred Malek, Quayle took the role of 1988 campaign strategist Lee Atwater. While Bush sat in the Oval Office, Quayle pushed a reform agenda, targeting the legal system, welfare, and finally health care. ''We gave the campaign its only issues, but nobody followed them up,'' said a Quayle aide. When Quayle made headlines by attacking Murphy Brown and the Hollywood/media elite, Baker, shockingly, ordered him to drop the issue. Baker felt it was winning more press attention than the President's weak and belated attempt to fix the economy. That was enough for Quayle, who had pushed for the return of Baker even though, as manager of the 1988 campaign, he had treated Quayle shabbily. Quayle just hit the campaign trail on his own, picking his ven- ues and his agenda. Time after time Quayle delivered single-issue speeches that won wide national coverage, unlike the tiresome list speeches Bush delivered. Along the way, Quayle saw that key conservative groups were being ig- nored by Baker and the campaign. So he took it upon himself to woo con- servatives still angry with Bush's reneging on his tax pledge and evan- gelicals who were jumping ship because the Clinton - Gore campaign had done a better job selling their men as Christians. Thanks to Quayle alone, many evangelicals on the Sunday before the election distributed campaign packets supporting Bush. Meanwhile, back at Bush - Quayle headquarters, Teeter and Malek were in over their heads. Teeter the pollster and Malek the likable busi- nessman never had the influence to penetrate the Oval Office and demand that Bush start campaigning. Republican sources said that the duo had tried to get Bush to oust Budget Director Richard Darman and Treasury Secretary Nicholas Brady, but failed. Nor did they succeed in getting Brady and Darman to wake up and produce a new post-cold-war economic plan. Into October, state and county Republican chairmen were complaining that they hadn't heard from the Bush - Quayle campaign and were giving up the effort for dead. South Carolina Republican Governor Carroll Campbell, for example, said the party had gotten too fat during its days in power and had forgotten the importance of keeping the party base strong. The Spoiler THAT EROSION of the GOP base led to a desperate Electoral College vote strategy that had Baker writing off California, New York, and New England and depending on just enough states to carry the President over the 270 mark. But Ross Perot ruined that scheme. In many states, Bush came close to Clinton and would have won had he done a better job of woo- ing Perot's volunteer army. That was a joint failure by Baker and Bush dating back to when Perot initially pulled out of the race on the last day of the Democratic Convention. Recall that Bush was fishing on Baker's Wyoming ranch and had to be pushed by campaign aides to leave a trout stream and go before TV cameras to ask for the support of Perot's volunteers. Even on key issues, such as attacking Clinton's management of Arkan- sas, the campaign fumbled. That's all the more surprising when one con- siders that the re-election campaign had been praying last February that Clinton would win the Democratic nomination. Mary Matalin would sali- vate at the thought of comparing Arkansas to the ''Massachusetts Mira- cle.'' But when it came time to roll out the attacks, Teeter made brief men- tion at a jammed press conference and then went on to other topics. When in doubt, why not run on your record? Bush aides said polls showed Americans didn't care any longer about the President's role in crushing Communism, his leadership in the Gulf War, or even his roots in the Reagan Administration. ''Those kinds of things became irrelevant to people around the nation when they began to blame us for screwing up the ecnomy,'' said a Bush advisor. Who would believe polls discrediting Reagan? The Bush White House did. Indeed, they started trying to rub out memories of the Reagan Revo- lution the day they took power. Bush only campaigned once with the Gip- per after the Republican Convention. Why? ''The Bushies didn't believe in him or his revolution. At the end, they thought Carter was more popular,'' said a White House official. Bush seemed the absent player in this mess. He didn't want to cam- paign, but realized in the end that he had to to keep his job. ''The cam- paign was George Bush's to win or lose,'' said Gary Bauer, a former Re- agan Administration official who now heads the Family Research Council. ''The President is a big boy.'' With that as a backdrop, and the economy in the tank, defeat ''was pre- ordained,'' said Malek. ''The outcome of this election was decided before Baker arrived on the scene.'' It's now October 26. Skinner is long gone and Baker is hanging around the Melody bar at the Billings, Montana, Holiday Inn. Reporters for weeks had kept a ''Baker watch'' going because he had remained so elusive. Now he was in public and sipping a drink. Confident the campaign was coming on strong, Baker predicted success. ''You've got to know that's the truth because it's well known I never associate myself with losers,'' one of his barmates recalls Baker saying. Eight days later, when a defeated Bush returned to a tearful welcome staged by all the White House staffers, Baker was missing in action. He had skipped out the day before to go bird hunting in Texas. ************************************************************************* Toppled by Tax Reform ECONOMIC DOMINOES The seeds of Bush's defeat were sown under Reagan -- but not in the way the media think. PAUL CRAIG ROBERTS Mr. Roberts, who was assistant secretary of the Treasury for economic pol- icy in 1981 - 82, currently holds the William E. Simon chair at the Center for Strategic and International Studies. MANY factors contributed to George Bush's defeat, but polls report that the economy played the biggest role. In the end, the Bush Presidency was destroyed by economic dominoes toppled by the Tax Reform Act of 1986. Ironically, this disastrous legislation was the work of Bush advisors James A. Baker III and Richard Darman, who were running the Treasury Department at that time. As experts such as George Washington University professor John W. Kendrick have concluded, the 1986 Act raised the cost of capital, thus re- ducing productivity growth and taking out a lot of the juice that Reagan had put in the economy. Its biggest effect, however, was in destroying a tremendous amount of real-estate wealth, thereby collapsing savings & loan associations and commercial banks. The legislation greatly lengthened the depreciation period for commer- cial real estate. The longer payback period substantially reduced the val- ues of properties. Simultaneously, the act took away the normal tax de- ductions from most real-estate investors, resulting in negative cash flow, which caused investors to walk away from their investments. A third blow was the 40 per cent hike in the capital-gains tax rate. This made it certain that no investor would hold on for the long haul. The gratuitous destruction of $1 trillion or more in wealth was a politi- cal fiasco in itself. However, the Bush Administration greatly magnified the destructive effects with the 1989 S&L act, which destroyed the value of thrift charters. With the deposit-insurance fund exhausted, the cost of bailing out the depositors was shifted to taxpayers. Fearful of what their stupidity had wrought, the policymakers hid behind allegations of private real-estate fraud, and this is when Mr. Bush's political troubles began in earnest. In towns and cities all over the country, it had been a mark of local prominence to serve on the board of the bank or S&L. Now these business people, doctors, and lawyers -- the backbone of the Republican Party -- are being ruined by government suits alleging breach of fiduciary duty for ap- proving real-estate loans that later declined in value because of the 1986 Tax Reform Act! It is not the fault of these board members that federal legislation thoughtlessly destroyed the value of real-estate projects that their institu- tions had financed. But the Federal Government could not care less. The Resolution Trust Corporation and the Federal Deposit Insurance Corpora- tion have set in motion a powerful mechanism for a total miscarriage of justice. They have hired private law firms that bill by the hour to try to recover from thrift and commercial-bank executives and board members, and from their accountants, legal advisors, and insurance companies, as much of the cost of the deposit-insurance bailout as possible -- regardless of any real malfeasance. The lawyers, thus, have an incentive to sue anyone ever connected with a failed financial institution. As Gretchen Morgenson shows in the Sep- tember 28 issue of Forbes, the government's lawsuits are terrorizing in- nocent people. In one instance, an allegedly negligent director had been comatose in a hospital bed at the time the allegedly negligent loan was approved. In another instance, the estate of a dead man is being sued -- thereby disrupting the education of his children -- because of real-estate evaluations that were perfectly sound before the 1986 Act. The RTC makes the incredible claim that 81 per cent of S&L failures involved fraud and misdealings. As Forbes says, ''That simply isn't so.'' Scarcely any of the 2,100 financial institutions that have been closed would have failed had it not been for the 1986 Act. The persecution of the private credit system by the FTC and the FDIC -- permitted by the Bush Administration -- has disrupted local business throughout the country and put the economy on hold. Recently, Alfred J. T. Byrne, general counsel of the FDIC, bragged in the Wall Street Journal that ''the FDIC's current litigation load numbers some 34,000 cases, and non-litigation items add 10,000 matters to our legal responsibilities.'' To handle all the work, he has ''a staff of 850 attorneys and 1,200 support personnel'' together with ''more than 1,400 outside law firms.'' Democrats on the Senate Banking Committee have encouraged the large number of frivolous lawsuits precisely because the targets are Republican business men and women. Deficit Phobia THE STUPIDITY of the Bush Administration's approach to the made-in- Washington S&L debacle reflects the Republican establishment's deficit phobia -- it blindly destroys its own in pursuing a smaller deficit. Indeed, the real-estate crash that brought down the S&Ls was itself a product of the same deficit phobia. The 1986 Tax Reform Act was constructed on the rotten basis of static revenue estimates, which mistakenly assumed that taking away real-estate ''tax preferences'' would raise revenues to pay for lower tax rates. Instead, we got a $200- to $500-billion (depending on how it is measured) taxpayer bailout of federal deposit insurance caused by the collapse in real-estate values. It should have been obvious to policymakers that real-estate prices, already under pressure from unexpected disinflation, could not absorb the massive change in tax treatment. And yet the Treasury Department, Congress's Joint Committee on Taxation, and the Congressional Budget Office still employ the people who assumed that they would. Once the huge costs of the deposit-insurance bailout were in the picture, Budget Director Richard Darman used them to pursue his own agenda. The bailout was a one-time affair of acquiring and disposing of assets, un- related to the ongoing taxing-and-spending operations of the budget, and conventional accounting practices would have kept the bailout off budget. However, by putting it on budget, Darman gained an additional $300 bil- lion in estimated red ink with which to panic President Bush into break- ing his ''no new taxes'' pledge. This let Darman negotiate the disastrous 1990 budget agreement, a deal in which higher taxes were the price for promised spending cuts and a promised $500-billion reduction in the multi-year deficit forecast. Predictably, Congress spent the projected revenue increase -- but the taxes helped to kill the economy, and the revenues did not materialize. The Congressional Budget Office's latest estimates of federal outlays for 1990 - 93 are $226 billion higher than its estimates prior to the 1990 budget deal, and federal revenues are $363 billion lower. Consequently, the deficit widened by $589 billion over the four-year period -- a swing of $1.089 trillion from the promised reduction. Ironically, interest rates fell despite the massive swelling of the deficit -- a big blow to Bush's economic team, which had supported the budget deal on the grounds that the path to lower interest rates was through a lower deficit. Thus, the failure of the Republican establishment's economic policy and theory is total and complete. It is to be hoped that we will never hear an- other word from the architects of Bushonomics -- who delivered the coun- try to Bill and Hillary Clinton -- about how big deficits cause high interest rates. The Bush team doubled the deficit that President Reagan left, and we have the lowest interest rates in three decades, together with an econ- omy that is dead in the water. Jobs, investment, and productivity growth did immeasurably better in Mr. Reagan's high-interest-rate economy. This doesn't prove that high interest rates are the source of economic boom, but it does show that interest rates are not the driving force that the Bush Administration assumed them to be. Michael Boskin and Nicholas Brady put all the eggs in one basket, and it wasn't the right one. Tax, Spend, Regulate THE FAILURE of the Bush Administration's macroeconomic policy was compounded by the explosion in regulatory costs and federal outlays. If Americans wanted a tax-spend-and-regulate President for the next four years, they could just as well have re-elected Mr. Bush. Federal regulation prospered under his Administration, gaining control over whole new areas of the economy and private life. The Clean Air Act is vastly inefficient, costing the economy two dollars for every dollar of benefits. The Ameri- cans with Disabilities Act has imposed massive costs that make no earthly sense. For example, until recently the underground garage in which I have parked for the past 11 years had one parking space reserved for the handicapped. Never in the 11 years have I observed a car parked in that space. Now, based on an arbitrary formula devised by an unaccountable regulatory bureaucrat, the garage has six permanently empty reserved spaces. At the going price, this is an annual tax on the garage of $14,400. That's just the cost to one garage of one regulation. George Bush's biggest legislative debacle is the 1991 Civil Rights Act. Worse than a quota bill, the act overturned the 1989 Supreme Court deci- sion that gave white males access to the courts in cases of reverse discrim- ination. Thus, equality before the law has been breached, and the U.S. now has two separate legal classes: preferred minorities and white males. The ultimate consequences of this development extend far beyond eco- nomic and budgetary concerns. At the very least, by turning every hiring and promotion decision into a potential lawsuit, the 1991 Act has greatly raised the costs of employment. When federal outlays are measured as a ratio of GNP, Mr. Bush's record on government spending looks even worse than it is, because the slow growth in GNP boosts the ratio. Measured in real terms, the compound annual growth rate of federal expenditures under Bush was 3.2 per cent, higher than Reagan's 2.5 per cent or Nixon - Ford's 2.7 per cent, but below Carter's 4.0 per cent and Kennedy - Johnson's 4.8 per cent. If the cost of the deposit-insurance bailout is excluded, Bush's figure drops to 2.6 per cent. In these comparisons, it is important to note that Reagan's figure in- cludes a defense buildup that helped to bring down the Soviet empire, while Bush's includes a defense builddown. Bush is no Reagan, and liberal pundits who speak of the Reagan - Bush record are dishonestly combining apples and oranges. Indeed, Mr. Bush lost because he abandoned Re- aganomics and, like President Carter, made the government grow instead of the economy. If Bill Clinton intends positive change, it will mean going back to President Reagan's policies for making the economy grow instead of the government. George Bush let Reaganomics go, relying instead on lower interest rates to work magic. When the Republican establishment's favorite elixir failed to deliver, Mr. Bush could have boosted the economy and public confidence by using his regulatory authority to index the cost basis of capital gains for inflation. He even had in his hand a ninety-page legal brief by former Assistant Attorney General Charles Cooper attesting to the appropriate- ness of the measure. George Bush, however, could not bring himself to use the powers of his office to help the economy, leaving a majority of voters wondering how he could be any better in a second term. ************************************************************************* Some Domestic Lowlights of the Bush Administration Mr. Rockwell is president of the Ludwig von Mises Institute in Auburn, Ala. CONSERVATIVES woke up on the morning of November 4, 1992, not to a ''mandate'' or a ''landslide,'' for Plurality Bill got only 43 per cent of the vote. But reality doesn't matter in Washington, D.C. The Democratic Congress will pass the Clinton agenda, and much of the fault will lie with George Bush. Rather than dismantle or even hold steady the machinery of big government, he vastly expanded it. Whenever a pressure group raised its voice, liberty and property rights were deemed expendable. For example, Bush gave us the Americans with Disabilities Act, order- ing employers to pretend we're all physically and mentally equal, and to spend to make it so. A small, money-losing company may have to widen its corridors, install elevators, and redo its bathrooms. Another firm can be forced to hire a blind lawyer, and a second employee to read to him. Discrimination against those who have trouble learning, reasoning, and remembering is now illegal, as is discrimination against former (and ''for- mer'') crack addicts. Another bill George Bush signed -- the Civil Rights Act of 1991 -- is the quota bill he claimed it wasn't. Companies now have to make their workforces at all levels ''representative of the community,'' or prove to the EEOC that they aren't racist. No hiring standard with a racially ''disparate impact'' can be used, from screening out ex-cons to requiring a high-school diploma. Should mugging someone because he's Cambodian be a more serious crime than mugging him because he has a gold watch? No, according to our entire Anglo-Saxon legal tradition. But, thanks to the Bush Admin- istration's ''hate crimes'' legislation, it now is. Mr. Bush also took the side of speeding drunk and felon Rodney King over the policemen who had to arrest him. Before he had time to learn the facts, Mr. Bush claimed on national television to be ''sickened,'' thereby injecting himself into a matter properly left to the jury. When the jury made its correct decision, Bush ordered the Justice De- partment to bring the four impoverished LAPD cops up on double-jeop- ardy civil-rights charges (as the criminal King prepared to collect a mil- lion dollars from the taxpayers of Los Angeles). Liberal reporters at the American Lawyer, who watched the whole trial on Court TV, agreed with the jury, but by then the damage had been done. When South Central Angelenos started their spree of murder, mugging, looting, and burning, Mr. Bush waffled. In one speech, he called for law and order; in another, he implied that lack of welfare was to blame. But not to worry, he would speed along more ''aid to the cities.'' When Mr. Bush was politically forced to deploy federal troops, he did not empower them to protect property; that was left to armed residents. After the riots, Bush instructed his banking regulators to go easy on bad loans made to minority enterprises. This was consonant with his stepped- up enforcement of the Community Reinvestment Act. The CRA orders banks to meet de facto racial quotas in mortgage lending, and President Bush's 1989 S&L bailout bill ordered the Federal Reserve to release an annual study on percentages of loans approved for different groups (but it ignores credit ratings, job histories, assets, and other very relevant fac- tors in loan making). The Fed's finding that blacks and Hispanics get fewer loans than whites is highly publicized, but not its note that Asians get more loans than whites. Bush's ''National Goals for Education'' was the most centralist and mil- lenarian plan since John Dewey. The Federal Government is to make sure that ''all children will start school ready to learn''; that ''the high-school graduation rate will increase to at least 90 per cent''; and that ''every adult American will be literate and possess the knowledge and skills nec- essary to compete in a global economy'' (emphasis added). Since the cen- tral government has constitutional responsibility only for the public schools in Washington, D.C., let's see those shaped up, and then we can think about putting the Department of Education in charge of Alabama and Wyoming. The labor policies of the Bush Administration were left-liberal across the board -- increasing the minimum wage, extending idleness-inducing unemployment benefits, empowering the EEOC -- but his crackdown on ''child labor'' was especially bothersome. At the behest of labor unions, his Labor Secretary set up a sting operation and fined businesses $100,000 for employing 15-year-old kids for more than 3 hours a day or 18 hours a week. What was wrong with work as opposed to hanging around, and why the government rather than parents should be making decisions about what children do with their time, we were never told. It may be that the Administration just didn't understand the price sys- tem. Before the Gulf War, oil prices went up, as they should have, in an- ticipation of lower supplies. But the White House threatened price con- trols, and the press secretary complained about ''gouging.'' Oil companies were forced to lower their prices and take a loss. In the past, consumers and producers determined what went on product labels. But under George Bush's HHS Secretary, Louis Sullivan, more than twenty thousand food items had to have expensive new nutritional labeling. Several natural disasters took place under Bush (as distinguished from the artificial disaster of his Administration), including Hurricanes Hugo and Andrew. His response was always the same: send in the bureaucrats from the Federal Emergency Management Agency to bungle everything, and spend billions. There was also the Exxon Valdez oil spill in Prince William Sound. Even though Exxon was the victim, losing billions of dollars, the Bush Administration pursued the company as if the spill were deliberate. Exxon cannot be allowed to get away with an ''environmental crime,'' said Bush's attorney general. But the disaster, though real, was temporary. As with all spills, the oil disappeared, since it is, if you will excuse the expression, natural, organic, and biodegradable. John Pozsgai is another case in point. An emigrant from Communist Hungary, he bought a former junkyard and cleaned it up, covering it with clean topsoil. Because cattails grew on it, his dry land was ''wetlands'' to the Feds, and for improving it, he was jailed and fined $200,000. The U.S. Attorney said he wanted to ''send a message to the private landowners, corporations, and developers of this country about President Bush's wet-lands policy.'' Pozsgai got the message. ''I thought this was a free country,'' he said. Finally, Mr. Bush violated a campaign promise and banned importation of most semi-automatic rifles. He also promised to support the Brady bill, which requires a waiting period -- similar to the California law that pre- vented homeowners in Los Angeles from buying guns to protect them- selves. The banned rifles are stigmatized as ''assault weapons,'' but the only real assault is on the Second Amendment. These are far from the only domestic lowlights of the Bush Administra- tion, but John O'Sullivan refused to allow me this entire issue of NR for a complete list. They are sufficient, however, to show that the President smoothed the way for Clintonian socialism. Thanks, George, we needed that. -- LLEWELLYN H. ROCKWELL JR. ************************************************************************* The Foreign-Policy President GOOD-BYE TO THE NEW WORLD ORDER Even in his strongest area, George Bush was all action and no talk. ELLIOTT ABRAMS Mr. Abrams -- whose Undue Process, just out from Free Press, is reviewed in this issue -- is currently with the Hudson Institute. THE Bush White House never managed to sound very enthusiastic about domestic affairs. Foreign policy was its forte, we were told. With a Presi- dent well schooled in international affairs, the stolid Brent Scowcroft at his elbow, and his closest buddy, Jim Baker, at State, the Administration preferred to rest its reputation on what happened beyond our borders. How does the scorecard look today? There are major plusses. To begin with this hemisphere, the President bit the bullet on Panama, reasserting America's ultimate security role in the hemisphere and striking a blow against drug trafficking. He built the best relationship with Mexico in U.S. history. The North American Free Trade Agreement was negotiated and signed, with a domestic consensus behind it wide enough to include Bill Clinton. The Initiative for the Amer- icas has helped end the Latin debt crisis and move the Latins to free-mar- ket economics and freer trade. Latin America is now our fastest-growing foreign market: exports to Mexico, for example, rose 31 per cent in the first six months of this year. Cementing American security, and political and economic leadership in this hemisphere, is a little-noted but im- mensely valuable achievement. In Europe, the Administration showed a deft hand regarding German unification, preserving a healthy tone in bilateral relations that will serve Mr. Clinton well. Moreover, Mr. Bush appreciated the importance of the GATT negotiations and kept at the Europeans to try for a successful out- come. In Africa, Mr. Bush helped along the immensely difficult task of re- forming South Africa by refusing to genuflect to the African National Con- gress. In Asia, he may have leaned over too far in keeping up ties with the Chinese regime, but at least he understood the importance of the relation- ship. Similarly, he never succumbed to the Japan-bashing that so many American politicians could not resist. Again, he leaves his successor much to work with. His Finest Hour AND THEN, of course, there was Bush's supreme moment: Desert Storm. George Bush will have much to be thankful for if he is best remembered for his decision to reverse the Iraqi takeover of Kuwait. The decision should not be diminished in retrospect: Democrats in Congress were against it (with Governor Clinton carefully sitting on the fence), military experts predicted huge casualties and a long war, and editorialists as well as professors urged the President to give peace a chance by waiting months and months ''for the boycott to work.'' Mr. Bush swept these argu- ments aside with courage and decisiveness, and we are all in his debt for it. Jimmy Carter would not have done it; Bill Clinton would not have done it; and there is good reason to think Ronald Reagan would not have done it either. Without Desert Storm, we would now face a nuclear-armed Iraq controlling Kuwait's oil revenue and holding the Saudis hostage to his eco- nomic and political goals. Violence and aggression would have been certi- fied as sensible, profitable policies for any dictator with the stomach to kill. President Bush greatly enhanced our nation's security with Desert Storm, and restored to our military the reputation for competence and the public esteem so tarnished in Vietnam. And what of the cold war? Mr. Bush presided over the tearing down of the Berlin Wall, the reunification of Germany, the collapse of the USSR, and what the Sovietologist Ken Jowitt called ''the Leninist extinction'' throughout the former Soviet camp. Taken together these constitute the greatest event in world politics since the Second World War and maybe since the First. No doubt Mr. Bush deserves some credit, although unre- constructed Reaganites (such as I) will wish to reserve much more of it for his predecessor. Thus the positive; but the negative side of the ledger is lengthy as well. The Administration was quick to celebrate its efforts in the Middle East, but the festivities are at best premature. Bush and Baker engi- neered an extremely sharp deterioration in U.S. - Israel relations, aimed in no small part at unseating the Likud government. No doubt Mr. Rabin appreciates it, but whether the current talks will bring real concessions from the Arab states -- on an issue like the Arab boycott or non-recogni- tion of Israel -- remains to be seen. Concerning what the press calls ''Iraqgate,'' the Democrats are likely to start a witchhunt, once again trying to criminalize policy disputes. The madness of such prosecutions aside, the record will probably show that Mr. Baker badly mishandled relations with Iraq, allowing Saddam to build his military and leaving him with the impression that Kuwait was his for the taking. Moreover, future misbehavior by Saddam Hussein -- in- cluding efforts to acquire nuclear weapons and longer-range missiles -- will only deepen the view that President Bush was mistaken to end the war when he did rather than permit destruction of more Iraqi forces and of the regime itself. Saddam's survival inevitably diminishes the Presi- dent's achievement. In this hemisphere, the Administration fell down in managing several neuralgic issues. In Haiti, it pursued a policy of backing the extreme left- ist president, Father Aristide, that has produced only a wave of refugees. In Nicaragua, the Sandinistas' defeat has turned into something very like victory as they maintain a stranglehold on the country. This is Mrs. Chamorro's fault, not ours, but the Administration made it clear early on that it would do nothing that might cause Democrats on Capitol Hill to flare up. And even on Panama, the invasion followed a series of missteps that made it an inevitable last resort. Panamanian efforts against Nori- ega got little or no U.S. support, and so no one was left to topple him but the 82nd Airborne. The Administration's general approach to relations with Latin America was excellent, but management of these sensitive is- sues was deficient. Elsewhere it was the reverse: while technical handling of issues was good, vision -- yes, the word is unavoidable -- was lacking. Nowhere was this more evident than in Central Europe and the USSR, where early Bush - Baker policy was to enshrine the status quo. Yugoslavian unity was made an American policy goal despite its unattainability -- and its unpopularity in Yugoslavia -- and the Administration's only actual inter- vention was the embargo that keeps Bosnia unarmed while Serbia attacks it. Worse yet was the backing for Soviet unity and for Mikhail Gorbachev, which reached its apogee when President Bush visited Kiev and lectured democrats there on why the Ukraine needed to remain under Soviet dom- ination. The Administration argued that only Gorbachev could produce re- forms, and never grasped that an empire held together by force cannot possibly loosen up the reins enough to reform. The President appeared to view the breakup of the Soviet empire, and then of the Soviet Union itself, with suspicion rather than joy. Three Fatal Flaws THIS colossal error was the product of three flaws in Bush foreign policy that were identifiable early on. First was the ''world politics as boys' club'' problem -- the sense that international affairs were properly left to serious men like Bush, Baker, and Scowcroft, and their pals overseas. Bush's personal relationships sometimes were valuable, as in stitching together the Desert Storm coalition. But at other times the personalities seemed to substitute, in the President's mind, for the real countries they led. It often seemed that, to the President, the ''valiant little King'' was more real than Jordan's perfidy during Desert Storm, and the victory of his glamorous friend Gorbachev over the uncouth Yeltsin was more important than real events on the streets of Moscow. Second was the Administration's blindness to ideology, and to human rights and democracy. Ideology was, to Mr. Bush and his top advisors, a Reaganite deviation, one of the many pieces of California baggage they could not wait to move out of the White House. The Bushmen thought themselves supreme pragmatists, but failed to understand that -- in America at least -- foreign policy will not gain public support unless it re- flects the country's idealism. After Tiananmen Square, the White House seemed to be more annoyed at the young troublemakers whose demon- strations had screwed up relations with Peking, than angry with Deng and his colleagues for their bloody act of repression. The Administration's long, pre - Gulf War coddling of Iraq, driven by commercial motives, sim- ply overlooked Saddam's despicable human-rights record. And the Presi- dent's own ''New World Order'' was almost oblivious to human rights, even omitting the two words from speeches. The ''New World Order'' was a worthy attempt to describe a pattern for relations between states, but altogether lacking was an effort to make the end of the cold war a great victory for freedom. Mr. Bush suggested that we not gloat at the Soviet collapse, when gloating and rejoicing were precisely what the country, and the Bush campaign, needed. And third was the complaint the President resented most: the lack of vision. The beginning of the cold war saw a burst of creativity in the con- ception of new institutions to meet new challenges, including the World Bank and IMF on the financial side and NATO for security. When the cold war ended, a New World Order was indeed needed. What was to be Amer- ica's role now? Policeman? Paladin of democracy? Would there need to be a structure of peace, or was that a fancy phrase diplomats used to justify their endless bustle? Would the world be safer now, or would a series of regional conflicts break out? If they did, would we have to intervene in all of them, as we did in Iraq, or could we stand aloof, as we are doing in Bosnia? What could we expect, and what principles would govern our actions? The President provided no persuasive answers. If he had ideas, he did not communicate them. To face today's new problems, no new institutions were built, or even proposed; worse yet, the most valuable older one -- NATO -- was left to weaken. During the campaign Mr. Bush's concern about world politics seemed old-fashioned, and he himself seemed like an old soldier telling war stories, instead of a leader warning of dangers and inspiring citizens with his account of the better world that might lie ahead. Mr. Bush's only Churchillian moment came, alas, when he appeared as a wartime leader unable to satisfy demands for change in peace-time. Unfortunately for Mr. Bush, even as voters granted his advantage over Mr. Clinton in the national-security area, they minimized it. But in a sense, so did he: he trumpeted his experience, but voters know that expe- rience can be acquired, or they would not have voted for a former governor over an incumbent President in 1980. What Ronald Reagan did in 1980 was to link his foreign-policy ideas convincingly to the nation's and the voters' fortunes, and to explain what principles should guide American conduct in a dangerous world. When danger threatened, Mr. Bush acted bravely, but he gave citizens no vision of America's place in the world to inspire confidence or elicit enthusiasm -- or votes. ************************************************************************* Anatomy of a Defeat HE WAS WARNED Mr. Bush's defeat was predictable but not inevitable. All he needed was a change of heart -- and mind. WILLIAM MCGURN Mr. McGurn, formerly NR's Washington Bureau Chief, is now a senior ed- itor of the Far Eastern Economic Review. HONG KONG -- Here in this last great outpost of British colonialism, five thousand or so expatriate sons of America gathered at the Marriott Hotel to watch the election returns. As the reality of the Clinton victory flashed across the two large-screen TVs -- images of a jubilant Little Rock, George Bush's concession speech, and the talking heads intoning ''change'' -- it began to approach what Augustine must have felt when news of the sack of Rome reached North Africa in 410. Although it would be presumptuous to liken the end of the Bush Administration with the fall of Rome, Hillary makes a more than passable Alaric. I never subscribed to the form of political Manicheanism that held that conservatives would best be served by a Bush defeat that brought us worse policies rather than bad ones. Perhaps it is an Irish disposition, but no matter how bad things are I always hold out the possibility that they may get worse, and I expect full vindication from President Bill Clinton. Those conservatives now celebrating the Bush defeat would do well to sober up with a copy of Grover Norquist's masterly ''The Coming Clinton Dynasty'' in the November American Spectator. More than this, I thought -- and still think -- that almost until the last month Bush could have won re-election had he, even at that late stage, given people a real reason to vote for him. Never did I dream that the Bush campaign would attempt to promote its candidate solely along the lines of his opponent's untrustworthiness (especially given his own prob- lems with credibility). In many ways it amounted to yet another broken promise: far from doing ''whatever it takes to win,'' President Bush re- tained the architect of all his miserable domestic policies, Richard Dar- man; squelched Republican efforts at the congressional level for a genuine growth package; and continued to argue about hypothetical emergencies overseas while the media were screaming about the recession at home. For all these reasons, while everyone was counting Bush out in the sum- mer I thought he had a chance, and while he was gaining on Clinton in the last weeks I became more pessimistic, because there appeared to be nothing of substance to put him over the hump. From the Wreckage IN THE midst of the encircling gloom, I have nonetheless been deter- mined to find such few silver linings as may exist. The first is the most obvious: my departure from the nation's capital for this far-flung outpost of the British Empire well in advance of the Occupation. The second, if I may toot my own horn, is what in hindsight now appears to be an excel- lent estimation of the Bush Administration. Back when Mr. Bush's popu- larity was hovering at 80 to 90 per cent and no less than Newt Gingrich was insisting that NATIONAL REVIEW was too hard on the President, I was there, about as welcome as Banquo's ghost, writing that those who live by the polls die by the polls. As the magazine pointed out at the time of the now-infamous budget agreement, the problem with pragmatism is that it doesn't leave you anything to fall back on when you hit hard times. Wasn't that old wizard Bob Teeter talking about ''shoring up the Republi- can base'' as late as October 31? From overseas, accurate information on American politics is difficult to come by. But from what I read in the International Herald Tribune -- a handy compendium of the worst of both the New York Times and the Washington Post -- it appears recriminations have already started, and all the fingers are pointing at the campaign team. Again, I have to confess to a certain pride here, in that while everyone was hailing Robert Mosbacher, Fred Malek, Mary Matalin, Charles Black and Co. as the Dream Team of campaigns, we ran a piece in NATIONAL REVIEW claiming that there wasn't an idea among the lot of them. At the same time, when everyone else was treating the return of Jim Baker (whose campaign credentials included the Jerry Ford effort) as the Second Coming, it wasn't clear to this reporter how better flow charts and sharper meetings and all-night strategy sessions (dutifully leaked to the press) were going to substitute for clear policy. It was clear that the essence of the Baker plan was to try to destroy Bill Clinton personally. George Bush had character. That was never enough for an ordinary presidential candidate, much less an incumbent who had burned bridges with virtually all sections of his base. Judging from the victor, it wasn't even essential. I don't think that there exists any doubt, even among most of the people who voted against him, that George Bush is a better man than Bill Clinton will ever hope to be: as a patriot, as a husband, as a father, as a friend. The prob- lem is that voters don't think this has much to do with being President. On top of that, all this harping on what George Bush did as a Navy pilot fifty years ago only underscored that he had no program for tomorrow. President Bush never seemed to grasp that politics is about ideas -- not during his stint in Congress, not during his time in the Reagan Adminis- tration, not even in the Oval Office. His approach to politics was essen- tially Old Boy, as if he were the high-school quarterback running for stu- dent-body president: Vote for me because I'm a good guy. And perhaps be- cause his politics were so intensely personal, he tended to take disagree- ment among fellow party members as betrayal. Republicans in both the Senate and the House who did not go along with, for example, the 1990 tax accord were treated far more viciously than the Democratic leadership that had been at war with the Administration from day one. Had President Bush waffled as much as he did on other points but kept his tax pledge, probably he would have had little trouble dispatching Gov- ernor Clinton. We will never know. As personally as he took politics, he never appreciated the grave damage he did not only to himself but also to the entire Republican Party, and especially the decade of Reaganism, by going back on his word. In his heart of hearts, George Bush doubtless still believes he did the right thing and was unfairly punished for it. This came through even in his apologies, both of which appeared timed to make him look as opportunistic as possible. The first came to the Atlanta Jour- nal Constitution on the day of the Georgia primary, after Pat Buchanan's strong showing in New Hampshire. The second didn't come until the Re- publican Convention in Houston, when it was tucked in toward the end of an otherwise ho-hum speech. In the end, what this all points back to is a lack of substance. The day after I arrived in Hong Kong, I read a wire-service story quoting Repre- sentative Vin Weber to the effect that the President needed a genuine growth bill. Mr. Weber was right, but he had been saying that for almost two years, and was as thoroughly ignored in the last week of the cam- paign as he was in the first weeks of the tax summit. It was not just the campaign's failure to articulate a policy. It was that George Bush didn't have any policy. Me Too, but Less HIS WAS the same failed Republicanism that characterized Nixon as well as Ford: a me-too-but-less approach that leaves the direction to be estab- lished by one's political opponents. A primary ingredient in Ronald Re- agan's success was that he refused to debate his principles on his oppo- nents' terms, knowing that he would lose a debate on ''affirmative action'' but win on ''opportunity,'' lose on ''fairness'' but win on ''growth,'' and so on. In sharp contrast, throughout his entire career George Bush has de- fined himself by what he was not: in this election he was not Bill Clinton; in the primaries he was not Pat Buchanan; in 1988 he was not Michael Dukakis; and from the ''Wake me, shake me,'' comment at the outset of his Administration (a reference to his predecessor's sleeping when U.S. pi- lots shot down two Libyan fighters), he was not going to be Ronald Reagan II. And he was as good as his word. 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