The Corner

McCain, Reagan, and Greatness

I found McCain’s acceptance speech to be dispiriting.

On one hand, it was hard not to be moved by his recitation of his ordeal in Vietnam. It was like some beautiful thing that had been made dirty from being handled by every K Street whore in Washington taking his 10% media commission for pitching it through 30-second TV spots. McCain reclaimed it from them, at least for one night. I can’t imagine that anybody could listen to that without asking themselves “Would I do that?” And if they were honest, answering: “Probably not”.

On the other hand, his proposals for what he intended to do as president were rambling and ineffective. As an example, I am a rabid supporter of school choice, but does anybody really believe that President McCain would successfully introduce this to America? Why was this suddenly a centerpiece of his program? How does it relate to his view of the overall challenges facing the country? How would he accomplish this when the federal government has such a limited role in funding and operating schools?

Or consider his proposals for energy policy:

My fellow Americans, when I’m president, we’re going to embark on the most ambitious national project in decades. We are going to stop sending $700 billion a year to countries that don’t like us very much. We will attack the problem on every front. We will produce more energy at home. We will drill new wells offshore, and we’ll drill them now. We will build more nuclear power plants. We will develop clean coal technology. We will increase the use of wind, tide, solar and natural gas. We will encourage the development and use of flex fuel, hybrid and electric automobiles.

… We must use all resources and develop all technologies necessary to rescue our economy from the damage caused by rising oil prices and to restore the health of our planet. It’s an ambitious plan, but Americans are ambitious by nature, and we have faced greater challenges. It’s time for us to show the world again how Americans lead.

This great national cause will create millions of new jobs, many in industries that will be the engine of our future prosperity; jobs that will be there when your children enter the workforce.

Compare this to what Obama had to say on the same topic in his acceptance speech a few days earlier:

I will set a clear goal as President: in ten years, we will finally end our dependence on oil from the Middle East. …

Now is the time to end this addiction, and to understand that drilling is a stop-gap measure, not a long-term solution. Not even close.

As President, I will tap our natural gas reserves, invest in clean coal technology, and find ways to safely harness nuclear power. I’ll help our auto companies re-tool, so that the fuel-efficient cars of the future are built right here in America. I’ll make it easier for the American people to afford these new cars. And I’ll invest 150 billion dollars over the next decade in affordable, renewable sources of energy – wind power and solar power and the next generation of biofuels; an investment that will lead to new industries and five million new jobs that pay well and can’t ever be outsourced.

While there are some differences in emphasis, it’s hard to tell one from the other. You could plausibly slot either of these sections into either speech without anything seeming out of place. What energy policy does one support and the other oppose?

Both plans are fantasies. While predicting the future is difficult, I will offer an even-money bet to anybody who wants it that the United States will have material imports of oil whose price is mostly determined by Middle Eastern producers in calendar year 2019, no matter who is elected president. It’s hard to listen to this kind of stuff from either candidate without feeling either infantilized or insulted.

In order to try to set my reaction to McCain’s speech in perspective, I spent some time reading through as many of the speeches as I could find that were made in and around the nominating conventions from the critical elections of 1980, 1932 and 1896. One observation from this is that it’s striking how the essential domestic policy issue has been the same for at least one hundred years: what degree of government intervention versus individual freedom of action is appropriate.

A second observation is the greatness of Reagan’s acceptance speech in 1980; not purely, or even predominantly, as rhetoric, but as an instrument of change. It is a conventional view among reform conservatives (and one that I share) that Reagan proposed solutions for the problems of his time, and that we need to develop creative solutions for the problems of our time. But the energy issue is one in which the debates of 2008 are eerily similar to those of 1980.

Here is Carter from his acceptance speech in 1980:

We Democrats fought hard to rally our Nation behind a comprehensive energy policy and a good program, a new foundation for challenging and exciting progress. Now, after 3 years of struggle, we have that program. …

And with our new energy policy now in place, we can discover more, produce more, create more, and conserve more energy, and we will use American resources, American technology, and millions of American workers to do it with.

Now, what do the Republicans propose? Basically, their energy program has two parts. The first part is to get rid of almost everything that we’ve done for the American public in the last 3 years. They want to reduce or abolish the synthetic fuels program. They want to slash the solar energy incentives, the conservation programs, aid to mass transit, aid to elderly Americans to help pay their fuel bills. They want to eliminate the 55-mile speed limit. And while they are at it, the Republicans would like to gut the Clean Air Act. They never liked it to begin with.

That’s one part of their program; the other part is worse. To replace what we have built, this is what they propose: to destroy the windfall profits tax and to “unleash” the oil companies and let them solve the energy problem for us. …

Here are just a few things we’ll rebuild together and build together:

—new industries to turn our own coal and shale and farm products into fuel for our cars and trucks and to turn the light of the sun into heat and electricity for our homes;

—a modern transportation system of railbeds and ports to make American coal into a powerful rival of OPEC oil; …

—and a whole new generation of American jobs to make homes and vehicles and buildings that will house us and move us in comfort with a lot less energy.

Welcome to the Obama / McCain school (or rather, the Obama / McCain / Carter school) of dealing with an energy crisis. This is exactly the speech that we can expect either McCain or Obama to give in 2012 if faced with a challenge.

In order to understand Reagan’s take on this problem, it’s important to see it in the context of his overall address. He is specific about the problems the country faces, and is able to prioritize down to a list of three:

Never before in our history have Americans been called upon to face three grave threats to our very existence, any one of which could destroy us. We face a disintegrating economy, a weakened defense and an energy policy based on the sharing of scarcity.

He’s then clear and practical about what he intends to do about each. Consider his tax proposals, which he presents as a centerpiece of how he intends to attack the first problem:

I have long advocated a 30 percent reduction in income tax rates over a period of three years. This phased tax reduction would begin with a 10 percent “down payment” tax cut in 1981, which the Republicans and Congress and I have already proposed.

A phased reduction of tax rates would go a long way toward easing the heavy burden on the American people. But, we should not stop here.

Within the context of economic conditions and appropriate budget priorities during each fiscal year of my presidency, I would strive to go further. This would include improvement in business depreciation taxes so we can stimulate investment in order to get plants and equipment replaced, put more Americans back to work and put our nation back on the road to being competitive in world commerce. We will also work to reduce the cost of government as a percentage of our gross national product.

Reagan here avoids the political dodges that we normally see in such speeches. He neither speaks in non-falsifiable generalities, nor provides a laundry list of so many priorities that there are really no priorities. He does not wave his hand at detailed plans which are too complicated to be explained in his speech – which is really just the fancy-talk version of “trust me because I’m so smart”. He has not sprung some surprise with this proposal (“I have long advocated…”), so that we can have confidence that he means this, and it will not go down the memory hole as some other new ideas come to the fore. He lays out a short list of measurable goals and timetables against which he can be held accountable. He doesn’t say the words “vote for me because I have executive experience” or tell stories of his success as Governor of California; he demonstrates executive skill in the act.

When he then comes to his proposals for dealing with the energy crisis of his time, Reagan’s views are qualitatively different than Carter’s, Obama’s and McCain’s. After clearing his throat with the point that conservation is obviously desirable in that waste is bad, his proposed approach is like a thunderclap of clarity and honesty:

America must get to work producing more energy. The Republican program for solving economic problems is based on growth and productivity.

Large amounts of oil and natural gas lay beneath our land and off our shores, untouched because the present administration seems to believe the American people would rather see more regulation, taxes and controls than more energy.

Coal offers great potential. So does nuclear energy produced under rigorous safety standards. It could supply electricity for thousands of industries and millions of jobs and homes. It must not be thwarted by a tiny minority opposed to economic growth which often finds friendly ears in regulatory agencies for its obstructionist campaigns.

Note that he does not say “I” will exploit various energy sources, nor does he propose a government crusade to make America energy independent. Note also that, in this case, he makes no absolute promises about results. He puts forward the views that: (1) energy is a means to the end of economic growth; (2) we want more of it, not less of it; and (3) deregulated markets are the best means for getting as much of it as feasible at the lowest price possible. This is energy policy for grown-ups.

This isn’t a theoretical proposal by a dork like me in a blog post. This is the acceptance speech of the man who went on to win that election, and subsequently become the most successful president of the last half-century. Consider his actual results in addressing the three priorities he established in that speech: “a disintegrating economy, a weakened defense and an energy policy based on the sharing of scarcity.”

1. Real economic growth averaged 3.2 percent during the Reagan years versus 2.8 percent during the Ford-Carter years and 2.1 percent during the Bush-Clinton years. Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years; it experienced a loss of almost $1,500 in the post-Reagan years. Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency.

2. In 1980 the Soviet Union was on the march militarily, and was seen as the peer competitor to the U.S. By 1988, it was imploding. America has now had about 20 years of global strategic dominance.

3. In 1980 the U.S. spent about 8% of GDP on oil. By 1988 it had been roughly halved to about 4%. As Reagan predicted, this wasn’t achieved by some kind of Apollo program, but by a combination of reduced general inflation, “growth and productivity” of the economy that accelerated its evolution to services that are less energy intensive than manufacturing, expanded energy production, intelligent geopolitical management to influence OPEC, and so on.

Not bad for a simpleton.

McCain faces a different landscape than did Reagan, but this is no excuse.

To return to the energy question as an example, McCain’s energy policy is incoherent. He is for drilling off the coasts of heavily populated states, but not in a small, unattractive Alaskan wilderness visited by about 1,500 people per year. He wants energy independence, which would require massively increased use of coal, but wants to restrict carbon emissions, which would require rapid reduction in coal use. He “believes in open markets” and a “government that doesn’t make choices for you”, but wants to control the evolution of the energy sector of the economy. He wants nuclear power, but is unwilling to force the changes that would be required to rapidly expand it.

McCain is in favor of tax reductions in the abstract, and has a complicated set of proposals for reducing them. Marginal income tax rates are not the economic or political problem that they were in 1980. There are many creative conservative proposals to reduce taxes that focus on contemporary tax problems. What if he had thought through them, found the one that he was convinced was most leveraged, and then really championed it over and over and over again, daring Obama to argue directly against it?

Quick: state the practical elements of McCain’s health care plan and how they differ from Obama’s? If you are reading this, you are far more likely to know the answer to this than are about 90% of American voters.

In the end, what his speech indicated is that McCain just doesn’t think or act like an effective executive. Unfortunately for America, there is no good evidence that Obama does either.

Jim Manzi is CEO of Applied Predictive Technologies (APT), an applied artificial intelligence software company.

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