BOSTON/ROME: Any reader of non-US newspapers could draw two conclusions about America’s electoral campaign: 1. that there is little difference between the two candidates; 2. that a mere detail – a slip of the tongue, a false step, a piece of gossip – could decide the election.
Both conclusions are wrong. Start with the first. Differences between Bush and Gore on economic policy are as deep as those between the right and left in France or Italy. The cleavage lies in a very different visions about the state and it goes beyond questions about how to divide America’s budget surplus between increased spending or cutting taxes.
Bush’s Republicans favor increasing disposable family income (by reducing taxes) and more often leaving to the market, the production of goods and services now publicly provided and paid for by the taxpayer, rather than the user. Gore’s Democrats prefer more traditional public management and control.
In public education, Bush favors a system of vouchers administered by individual states. Through such vouchers, citizens are given a subsidy with which they “purchase” education either from a public or private school. The idea is that market competition among different educational institutions will increase the quality of education. Democrats oppose vouchers and prefer major federal investments in order to improve the quality of public schools.
On pensions, Bush advocates a mixed system of pensions, with a private component. The idea is to create more freedom for taxpayers to manage their pension funds, bringing incentives for the allocation of these monies into stocks and bonds. Gore prefers to maintain the system essentially as it is and to use the budget surplus to eliminate the deficit in the pension system that will open in the second decade of this century, when a wave of baby boomers reaches retirement age. In other words, Gore sees the pension system as a means to redistribute between rich and poor; Bush sees it more as a “private” system to accumulate individual pension savings.
A similar difference exists in health policy: Bush prefers fiscal relief for taxpayers so that they can buy private medical insurance; Gore prefers public management with more public intervention. In sum, Americans are confronting fundamental differences about the right type of school, pension, and healthcare for the future.
The fact that in the weeks before the elections the candidates court undecided voters by trying to appear as centrist as possible should surprise no one. The only area where there doesn’t seem to be much difference between the two candidates is foreign policy, and this is a good sign for the world, because it portends stability in America’s posture and, above all, cooperation between the two parties even if one of them were to control Congress and the other the Presidency. Still, there are differences: Gore is more “interventionist”; Bush more cautious and less eager to engage American troops abroad.
The second point regards the way in which the vote will be decided. The story of presidential elections in the twentieth century goes like this: if a foreign observer had only the following two pieces of data: 1. economic growth during the electoral year and 2. the name of the incumbent president, the observer could foresee with precision the results of presidential elections, independently of the entire campaign. An incumbent president running for a second term (like Clinton in 1996) has an advantage; beyond that, strong economic growth in the electoral year favors the party of the incumbent president. All the rest – scandals large and small, marijuana smoke, and errors of grammar – divert journalists but influence the results little.
Why, then, do candidates spend enormous amounts on campaigning? For the same reason that Coca-Cola and Pepsi spend millions to compete – if both stopped advertising, their market shares would not change much, even if, obviously, it would change if only one of the two engaged in publicity. In other words, conservative vote for Republicans and those on the left vote for Democrats on the basis of differences in the party programs, those in the middle go from one side to the other on the basis of the state of the economy and perceptions about the “competence” of the incumbent administration.
After WWII the only two incumbent presidents not reelected were Carter in 1980, who ran in the middle of a recession, and Bush (the father) in 1992, who paid for mediocre economic growth in 1990-1992. (Had America’s economy come out of recession six months earlier, Clinton would probably not have won in 1992.) It took the Watergate scandal in 1974 and Nixon’s resignation to make Gerald Ford (who became President upon Nixon’s resignation) lose in 1976. Eisenhower in 1956, Johnson in 1964, Reagan in 1984, Bush in 1990, and Clinton 1996 (all incumbent presidents or vice presidents) with an economy in good shape would have won even if they hadn’t opened their mouth for the whole electoral campaign.
If this is so, given strong growth in America, Vice President Gore should win easily. Instead Bush is holding his own. Two factors work to Gore’s disadvantage. Many think that the benefits of the “new economy” have little to do with who was in office. If this is really a “new” economy maybe the economy’s impact on electoral results is also “new”. The second factor is that the Republicans who control Congress are relatively “extremist” and might lose the legislative elections. American voter tend to prefer a system that balances the President and Congress. The expected new power of Democrats in Congress puts Gore at a disadvantage.
Having said all this, if Gore loses on November 7 he will confirm that he is one of the least liked politicians of the 20th century. Note, indeed, that this is no “Clinton effect”: many polls indicate that Clinton would easily beat Bush. In sum, an incumbent vice president who loses with an economy such as exists in America today should retire to private life. If he wins by a hair’s breath, he better work very hard to have any hope in 2004.