Presidential Politics Jude Wanniski September 11, 2003

Those of you who read The Way the World Works might remember the “chicken-duck-parrot political model” I presented in the first chapter. It is a reliable way of analyzing presidential elections and I’ll employ it here in regard to 2004 after a quick refresher about it. First, the political marketplace is as efficient as the financial marketplace; as long as voters have access to all the available information about the candidates, they will always choose the best in the field. Just as you think the market makes a mistake when it does not bid up the price of shares you hold, you may resist the idea that “the best man always wins.” In the financial markets we can trace the idea to Francis Galton, Charles Darwin’s cousin, who came up with the concept of the “reversion to the mean.” In politics, the idea goes back at least to Aristotle, who believed the opinions of the masses cancel each other out on either side of an issue until it is decided by those few left at the margin. The 2000 election was a perfect example of a 50-50 contest, with a handful of voters in Florida giving the race to Bush, with a little help from the U.S. Supreme Court (which I agreed with).

Most political prognosticators use the horserace model, which makes heavy use of polling to predict. Polls are useful, especially if the pollster asks the right questions of the right people. In the end they are often wrong, as most voters will give uninformed opinions until they get to the homestretch. In 2000, Bush was clearly leading by a safe margin on the Friday before the Tuesday election. The lead evaporated over the weekend – I believed at the time he should not have spent the last few days traveling with Paul Wolfowitz promoting his national missile defense system. That’s what came across on the radio networks and in the news clips. Bob Novak, who was on the campaign plane, told me that at every stop Bush encountered cheering audiences who suddenly went cold when he promoted the neo-con boondoggle. 

This is where the chicken-duck-parrot model is more useful. It posits the game of charade instead of a horserace. The electorate tries its best at gesturing to the candidates that it wants a “chicken.” If, on Election Day when the game ends, the candidate who thinks he hears “duck” will defeat the candidate who thinks he hears “parrot.” Duck is closer to chicken than parrot. There can also be eagles and vultures -- who lose in landslides. The voters also take into account the background and experience of the candidates. In 1992, it did the elder George Bush no good to apologize for raising taxes after swearing he would not as he pledged in ’88,“read my lips.” He could not be trusted as much. When Steve Forbes broke into the front in 1995 with his flat tax proposal, making the covers of Time, Newsweek and US News in the same week, it seemed he could go all the way. John Sears, Reagan’s strategist in 1980, told me at the time Forbes would lose because of his negative campaign against Bob Dole. The voters saw “chicken” in his economic agenda, but “vulture” in his personality. He never recovered from that first impression of how he would have behaved as President.

At this stage of the presidential campaign, former Vermont governor Howard Dean is getting the Forbes treatment. In the early primary states of Iowa and New Hampshire he’s connecting with straight talk that voters place a premium on and is way ahead in the polls. Voters need not wonder if Dean means what he says, or is only mouthing ideas pre-cooked by high-priced advisors. This doesn’t mean straight talk will take him all the way. Barry Goldwater, George McGovern, Ross Perot and Ronald Reagan were the most open in stating their true beliefs. Only Reagan made the final cut, the others losing on their true beliefs. 

President Bush is now seen for the first time as being genuinely vulnerable in 2004, with the horserace analysts saying he has been losing ground on both national security and economic issues. When asked the question “Does Bush deserve re-election?” a clear majority say he does not. This only means the voters would prefer someone closer to “chicken.” In match-ups with likely opponents, he wins because he is still closer to the yet unknown positions of the Democrats going forward. In this early assessment, I do think Dean will win the Democratic nomination, primarily because I see his straight talk moving in new directions that I believe can get closer to “chicken." I saw this quality in late June and wrote about it in an open memo to him. Unlike Forbes and Perot, who had no experience in politics and were misled by inept advisors, Dean is a season political leader and was a popular governor. He can also win in 2004, especially if Bush errs more than he has so far. 

President Bush’s main problem is that conditions in Iraq and the Middle East are not likely to greatly improve unless he makes some big changes in the national security team that led him into the “quagmire.” In his syndicated column today, Bob Novak says the buzz in Washington is that Donald Rumsfeld will be gone early next year. That would be a good start. In late 1991, I warned then-President Bush that he would probably lose in ’92 unless he fired Treasury Secretary Nick Brady, who had encouraged higher taxes. That would have meant more than an apology. Today, the President’s greatest asset on the national security front is Secretary of State Colin Powell, who did not exactly cover himself with glory in the run-up to war, but still has sufficient credibility as a diplomat to work the global problems that have piled up. Mr. Bush’s greatest assets on the domestic front are Treasury Secretary John Snow, who will not advise higher taxes to deal with the skyrocking budget deficits, and House Ways and Means Chairman Bill Thomas, who is probably the smartest real supply-sider in Washington, and one with real power.

On the Democratic side, there is still time for either Sen. John Kerry of Massachusetts or Rep. Richard Gephardt of Missouri to overtake Dean. They have watched him surge on the antiwar issue, where they failed to see the obvious pitfalls. They might make the case Sen. Joe Lieberman of Connecticut has explored: “The Bush recession will become the Dean Depression” if Dean follows through on his promise to eliminate the Bush tax cuts. But their tax plans are no better and seem pre-cooked. Even their flashes of “passion” seem rehearsed, making them seem like cardboard candidates. Lieberman has high name identification because of exposure on the Gore ticket in 2000, but where he looked like “parrot” in the charade game, he now seems like “vulture.” He has become more strident in defending the blunderings into war. Worse, in the Baltimore debate Tuesday, he actually attacked Howard Dean for arguing the President should be even-handed in trying to bring about a peaceful resolution between Arabs and Israelis. In his <i>New York Times</i> column today, Thomas L. Friedman practically says peace will require more pressure from the White House on Israel than on the Palestinians. Lieberman, desperate for campaign contributions and seeing the Jewish community as the likeliest source, chose to “demagogue,” as Dean put it. It’s hard to see him making it to the primaries now that he has painted himself into this corner. For a variety of reasons, I don’t see the other candidates as serious contenders, whatever positions they take.

Dean's greatest strength, I think, is that he clearly has an analytical mind that is both powerful and flexible. He has thought things out for himself instead of swallowing canned positions and as a result will change his mind if he hears better arguments. In the limited contact I’ve had with his staff, I’ve told them voters do not mind a candidate changing his mind as long as he gets closer to what they want. Dean’s greatest weakness is his economic agenda, although he has now committed himself to a reform of the tax system. He does not really have to reverse himself on taxes to win in November, as the electorate can arrange to give him a solidly Republican Congress that would make tax hikes impossible. In any case, it appears the voters will have plenty to choose from as they shape next year’s outcome. 

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