Memo to Editors Jude Wanniski October 18, 1996

Memo To: Editors
From: Jude Wanniski
Re: A Big Story You Are Missing

On Monday in Anaheim, Jack Kemp told the California League of Cities convention of 3,000 mayors that at the start of the new administration, President Dole would sign an executive order instructing the Treasury Secretary to index capital gains for tax purposes. This action instantly would relieve American taxpayers of potential tax liabilities of $2 trillion on the estimated $7 trillion of unrealized capital gains now in the economy. That is, $2,000,000,000,000, just to remind you how big a number that is. Kemp spent several minutes explaining how this would expand the economy and cause unexpected revenues to flow into the coffers of every political subdivision in the state and nation. He cited Ted Forstmann, one of the most creative financiers on Wall Street, as one of the biggest supporters of this idea. Mr. Forstmann believes that once ordinary people realize how dramatically this will affect their lives in a positive way, they will respond favorably to it. In the days since Kemp spoke on Monday, he has given the same speech to several groups, always with reporters in attendance, and yet there has not been a single word written about it. This is not a liberal bias I am complaining about. It is a breakdown in the entire delivery system of the free press that is supported by the 1st Amendment. As a journalist by profession, a former Associate Editor of The Wall Street Journal, I am completely mystified at this breakdown. I’ve called several financial writers at the major newspapers, all of whom expressed surprise at the news, saying they had not heard it. I’ve communicated this information to several writers, editors and columnists at Dow Jones, but when I ask if they will do anything about it, they say they will not unless Bob Dole says it himself.

Editors, let me remind you how stories of the magnitude of $2,000,000,000,000 in tax relief should be covered when the Vice Presidential nominee of one of the major political parties announces it before 3,000 elected officials of the nation’s most populous state. They ask: Is Jack Kemp making this up? Is he pulling our leg? If so, we will write a story about how Kemp has committed Bob Dole to doing something that Bob Dole knows nothing about.

Let me put it another way, editors: Jack Kemp did not say Dole was thinking about signing this executive order. He said Bob Dole would do it. Yes, at 60 years of age, I am of the old school of journalism. This new generation of financial writers and political editors may not understand how easy it is to pick up a telephone and call Dole headquarters, and ask if the candidate really did promise to sign this executive order on the first day of his new administration. Either way, you have a story. Either Dole has agreed to do this Enormous thing. Or Kemp has been naughty in saying so. If he was naughty in California in putting words in Dole’s mouth, he was naughty again this morning in New York City, speaking at a Better New York conference where he devoted much of his speech to Dole’s executive order.

By the way, Dole is a man of his word. In the 27 years I have known him, he has never broken his word. He does not give it lightly, but when he does, he sticks to it. If you noticed in his debate Wednesday, he did mention the number $7,000,000,000,000, which is the amount of unrealized capital gains in the economy that is purely inflation, subject to the 28% capital gains tax (which is where the $2,000,000,000,000 number comes from). Alas, Senator Dole, who had planned to discuss the executive order, got distracted at that point and never returned to it -- which is why as time ran out he said, in exasperation at the format, that there should be another debate on the economy.

It is important, editors, that you convey this news for two reasons: As time is running out, it will require several days for the people to realize how important it is that this be done. Also, it will give the President time to react, if he wishes to. It should not be seen as a last-minute move, which it would not have been if it had been reported Monday. It had taken Kemp three months to have the idea vetted by the campaign, to Senator Dole’s satisfaction, with legal questions being resolved last week.

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Note to clients: In my report to you last Friday on Louis Farrakhan, I noted that his positive response to Jack Kemp’s appeal that he renounce anti-Semitism, bigotry and racism, once and for all, had not been reported in the national press. My assumption, based on old-fashioned principles of journalism, was that the few national reporters in St. Louis did not understand the significance of Farrakhan’s answer to the challenge by the Vice Presidential candidate, who has been seeking to bridge the racial divide in our national family. I assured you that when Farrakhan spoke in New York City on the first anniversary of the Million Man March that his remarks would not go unnoticed, as NYC is the nation’s communication center. I was wrong. Prior to his Day of Atonement speech at the UN Plaza, before (at least) the 38,000 people who came to hear him, Farrakhan went beyond the renunciation of anti-Semitism he delivered in St. Louis. He personally made calls to Abe Foxman of the Anti-Defamation League and to an officer of the American Jewish Committee, offering to begin a process of reconciliation. Those offers were rejected. This news was not reported by the major media, except in comments denouncing him for making the offer by columnists and editorialists of The New York Times and the New York Post. No major paper or tv news outlet went to the trouble of pointing out that Farrakhan had done everything and more that Kemp had asked of him. In addition, on "Nightline" Tuesday, Farrakhan told Ted Koppel that neither political party deserved their vote for President. He did not call for abstention, but it was clear to those political reporters who heard the comment that he is making at least an inferential endorsement of the Dole/Kemp ticket. By the way, C-SPAN, which normally covers such political gatherings as the UN Plaza event, chose not to cover this one at all. The Farrakhan people insist that at least 200,000 people were in the square, not the 38,000 estimated. They tried to hire helicopters to photograph the square, but the city denied them permission to have the ‘copters fly over the site.

On Monday evening in New York, my wife and I had dinner with Leonard Farrakhan Muhammad, chief of staff at the Nation of Islam’s headquarters in Chicago, and his lovely wife, the Minister’s daughter, Donna. He expressed genuine frustration in their failure to understand why they have been unable for several years to open a process of reconciliation with the ADL and spoke of his father-in-law’s deep appreciation of Kemp’s initiative. It is not only that their offers have been spurned, but also that the ADL has campaigned throughout this period to get federal and state governments to break contracts with the Nation of Islam for their security maintenance at public housing projects. They thus see Farrakhan’s offers of reconciliation met not only with rejection, but also with hatred and attempts to destroy him and his movement financially. He agreed with my thought that the Jewish leadership is understandably driven by a fear of losing political support for the state of Israel, which Farrakhan seems to threaten. He believes a process of reconciliation would reveal this fear to be unfounded. My suggestion was that because this has all now become entwined with the power politics of the presidential campaign, another effort at seeking reconciliation need be picked up after November 5.