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On this occasion, Gore is half-right in his attacks against the president. That's a far higher batting average than we're used to from the former vice president.
Gore is correct that George W. needs to get back to a pro-investor economic message of growth and wealth creation. That was the message that helped defeat Gore. Instead, what we get now from the White House are daily pronouncements of "don't worry, be happy." These pep talks are starting to infuriate investors, who are watching their wealth disappear on an hourly basis. Instead, investors want positive policy initiatives to reverse the market skid. Bush's lack of a positive growth agenda suggests that this administration just doesn't appreciate the fact that we are in the midst of a real honest-to-goodness financial crisis of major proportions. A major contributor to the market meltdown is the fact that the policy environment in Washington has turned ferociously bearish. Since President Bush's tax cut was enacted some 18 months ago, almost everything the Congress has done to the economy has been harmful. Case in point: the budget is up nearly 20% in just two years. Another more immediate example is the Sen. Paul Sarbanes corporate-responsibility act, which was supposed to soothe investor fears of runaway corporate criminal behavior. Instead, this bill has sent the market into a tailspin. The market will collapse even further if Bush signs the bill. The Sarbanes bill must be amended to omit the civil-litigation provisions, which would create a massive windfall gain for trial lawyers at the expense of every one of the 90 million American shareholders. Morris Mark of Mark Investments in New York calls the Sarbanes bill "a disaster in waiting for the markets. Corporate CEOs will spend most of their days fending off frivolous, but costly lawsuits." What a bonus for the financial markets. But here is where Al Gore is all wet. (And it's not just from the polar ice caps melting.) Gore believes in the cockeyed theory that the Bush tax cut should be canceled because it isn't working. Message to Al: It is not working because we are not living in 2005 or 2006 when the tax cut starts to take real effect. Bush should not scuttle his tax cut, he should speed it up so the economy gets relief now. The Bush tax reductions are phased in over 10 years — which in political terms is eons from now. The big supply-side shot of adrenaline from the Bush tax cuts doesn't occur until around 2005 and thereafter. The top income-tax rate has been reduced only by 1 measly percentage point. The anti-tax-cutters in the Democratic leadership insisted on a gradual phase in of the tax cuts. We now know that the crafty team of Tom Daschle and Dick Gephardt had two objectives here: First, limit the short-run financial impact of the tax cuts in order to damage President Bush's economic record. And second, Daschle et al have always harbored hopes of canceling future tax cuts before they ever see the light of day. But here is the paradox: It is precisely this uncertainty about whether the president's future tax-rate cuts will eventually become the law of the land that has limited the anti-recession effectiveness of the package. No one is willing to bank their fortunes on whether Daschle will scrounge up the votes to cancel the tax cuts tomorrow. Republicans are correct when they argue for tax-cut permanence. And the investor class of voters are solidly behind them. But there is even a higher economic priority to making the tax cuts permanent. Bush's tax cuts need to be made effective immediately. Under this proposal, the top income-tax rate would be immediately reduced to 35% from the current 39%. (If I had my druthers the top rate would come down to 25% or less, and the revenue losses would be minimal. In any case, 35% would be a start.) And the estate tax should be terminated right now. (Through a freakish accident in the tax bill, the estate-tax burden will actually be higher, not lower in 2003, '04, and '05 in nearly half the states.) The Democrats will certainly howl in protest against this plan, but so what? How will pro-tax-cut Senate Democrats in tight races this year — including Senators Carnahan of Missouri, Johnson of South Dakota, and Baucus of Montana — respond to this proposal of fast-forwarding tax cuts? We suspect that the congressional leadership could peal off enough Democrat votes to enact precisely this anti-recession tax-cut measure. After all, if lower tax rates make sense in 2006, why don't they make sense now with the economy wobbling along as it is. So Gore is right that the Republicans need a new plan — but not the disastrous one he is endorsing. Republicans have drifted off into dangerous territory: passing disgraceful farm bills, a pork-barrel emergency-spending bill, steel tariffs, and now a $350 billion new entitlement for prescription drugs. Now they want to over-regulate businesses and give expensive treats to the trial lawyers. If this agenda sounds familiar, it should. It is Al Gore's presidential agenda. No wonder it isn't working. — Stephen Moore is president of the Club for Growth. |
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market losses now approaching $1.5 trillion this year, along comes a clean-shaven
Al Gore advising President Bush to scrap his economic agenda and start
over. 
