Diatribes of Jay: Ross Perot’s Lessons for Pols and Tom Steyer

For brief analysis of the House’s censure of the President, click here. For reasons not to watch Trump’s empty shows, click here. For a discussion about reparations for the descendants of slaves, click here. For three things the Dems must do to win, click here. For suggestions on how Dems can improve their multi-candidate debates, click here and here. For an assessment of how bad the first two debates really were, click here for the first debate and here for the second. For brief descriptions of and links to recent posts, click here. For an inverse-chronological list with links to all posts after January 23, 2017, click here. For a subject-matter index to posts before that date, click here.

Ross Perot, who died last Tuesday, ran for president as third-party candidate in 1992 and 1996. He lost both times. His first run began about 27 years ago, before many of today’s voters were born. So his impact as a political figure may seem ancient.

But Perot’s foray into politics has had a lever arm of enormous consequence. Its reach extends right up to today. It helps explain why Donald Trump is president. So Perot is not someone whom we as a nation want to forget.

Perot was, first and foremost, a successful businessman and an old-fashioned patriot. After serving in our Navy, he worked as a salesman for IBM. There he came to see the potential of IBM’s big computers not just for science and engineering—their principal uses at the time—but for the routine operations of big business.

So with friends from his military service, Perot started a company called Electronic Data Systems (“EDS”). Its role was to help mostly large businesses exploit the speed and accuracy of big computers for greater efficiency in handling routine things like payroll, employees’ taxes and deductions, and health insurance.

EDS became a huge success, and its business spread nationwide. After Perot sold his share and became a billionaire, he began looking for other ways to exploit his fine mind and sharp wit.

What got Perot into politics was not mere ego, but genuine concern about two real issues. The first was federal debt. The second was jobs.

At that time, the Republican party had begun to move away from its traditional fiscal conservatism. Until Ronald Reagan, the GOP had been not just wary of debt, but allergic to it. As president, Reagan broke that mold. As Dick Cheney whispered (much later) in Dubya’s ear, “Reagan proved that deficits don’t matter.”

Perot, who had grown up poor during the Depression, disagreed. He saw increasing federal deficits and rising national debt as existential threats to our nation’s health. So he went into politics in an effort to reduce and perhaps eliminate them.

By 1992, President George Herbert Walker Bush (“Dubya’s” father) had signed NAFTA, as had the leaders of Canada and Mexico. But the big trade treaty had not yet been ratified, and some aspects were still under discussion.

Perot was rich, but no member of the elite. He distrusted the elite’s sales pitch for NAFTA—that opening the spigots wide for trade among the Americas would bring more jobs home than it would export to Canada and Mexico.

Perot was a clever man with a good turn of phrase. In debates and on TV, he warned that we would all soon hear a “giant sucking sound” as jobs flowed to Mexico. He understood that Wall Street was really after lower wages, weaker unions and less costly working conditions, not some abstract Nirvana of theoretically optimal trade.

In the end, Perot was wrong on the first issue (debt) and right on the second (jobs). After another generation of experience and economic analysis, we understand that federal deficits and debt are useful economic tools like many others. As long as not pushed to extremes, they can help ameliorate boom-bust business cycles, mitigate the effects of recessions on ordinary people, and help finance necessary public investment.

More recently, a Nobel-Prize-winning economist wrote a column explaining why debt is not normally dangerous. My favorite opinion journalist wrote another column, with facts and figures showing that the Democrats have been the party of fiscal responsibility since 1977—a fact that Perot had recognized and that motivated his presidential runs.

So Perot was too pessimistic on his first signature issue, debt. Yet on the other issue—jobs—he got it dead right. He was our modern Cassandra, the ancient Greek prophet condemned by the gods to speak the truth but to have no one listen.

Perot got it wrong only in geographical detail: the most devastating drain of jobs has flowed not to Mexico, but to China. Yet he was right about the social, economic and political effects of a “free-trade” policy that allowed Wall Street to sell our jobs, factories and industrial base abroad in search of greater “efficiency,” aka “profit.”

That’s why Perot’s life and brief foray into politics have had such a long lever arm. If he had succeeded in bringing more voters around to his point of view on jobs, we might not have Trump as President. We might not have a large, union-less, mostly party-less, dispirited and bitter class of skilled workers. If we had influenced the Brits in the same way, they might not be contemplating Brexit.

Perot lost the general election to Bill Clinton. But he got almost 19% of the popular vote. That was the greatest achievement of any third-party candidate since Teddy Roosevelt in 1912, after he had already been president!

So what lessons can we learn from Perot’s third-party run? What lessons are relevant today? I think there are three.

The first and most important lesson is not to put the eggs of important policy into a third-party basket. Perot’s third-party run failed to advance either of his preferred policies.

Perot’s low-debt policy had previously been the Republican Party’s standard preference. The elder Bush, toward the end of his presidency, had helped lower the debt and deficits by agreeing with Democrats to raise taxes and lower spending. This fiscal discipline later had the effect of securing “Bill Clinton’s” famous government surpluses at the same time as the general economy boomed. The public, heedless of the long time lag between cause and effect in national economics, gave Clinton, not the elder Bush, credit for both the surpluses and the boom.

So Perot’s pushing low debt as a third-party candidate, rather than as a Republican, had two perverse effects. First, it caused the party most closely identified with that policy to lose the presidential election and the other party, which then didn’t really care much about debt, to win. Second, that loss caused the other party to get credit for the business boom that debt hawks could attribute (erroneously) to the debt reduction.

Perot’s second policy was to limit job drains by limiting the kind of “trade” that sells jobs, factories and our industrial base abroad. The political problem with this policy was that neither party then supported it.

At that time, both parties were in Wall Street’s pocket on this point. Both believed wholeheartedly in the comforting myth that doing things Wall Street’s way would improve “economic efficiency” and make everyone better off. (As I’ve analyzed earlier, this extra-scientific belief was much like the “best of all possible worlds” philosophy that the French aristocracy held before the French Revolution, and that Voltaire ridiculed in his classic satire Candide.)

Here Perot had had a tough decision. Should he push the issue as a third-party candidate, when neither major party wanted to touch it? Or should he try to find the party that, at least in theory, should have been receptive to his views, and use his millions to influence it?

Of course Perot chose the first course, the third party. And we know what happened. Once he lost, his big issue (jobs) died with his two losing campaigns, in 1992 and 1996. It didn’t arise again until 24 years later, during Bernie Sanders’ losing 2016 primary campaign. Then Trump co-opted the issue and won the presidency.

Although he lost, Bernie (unlike Perot) had made the right choice. He had long been known as an “independent” from Vermont, who caucused with the Democrats on key matters. He could easily have run as an independent, as had Perot. But he didn’t because the Democratic Party was the natural home for his views on the “rigged economy.” He didn’t risk splitting the Democratic vote as Perot had done the Republican vote (certainly on the deficit, less clearly on jobs).

So Bernie let Hillary lose, all by herself, with Bernie’s endorsement and support. And the Dems and the nation now owe Bernie a huge debt of gratitude for doing the right and most effective thing and keeping his big issue with the Dems.

The second lesson from Ross Perot is that, if one party picks up a new issue, the other party can, too. Or at least the other party can use it as a source of confusion and demagoguery.

That’s precisely what Trump did, to “traditional” Republicans’ confusion and chagrin, in 2016. He copied Bernie’s “rigged economy” pitch, using different words and avoiding pointing fingers at the elite or the rich (including himself!). Instead of blaming it all on the real architects of the sale of our jobs, factories and industrial base, namely, Wall Street and its academic enablers, Trump blamed it all on the foreigners, the “others,” namely, the Chinese.

This ploy worked and got Trump elected. His promises to reverse the outward job flows were and are preposterous. His prescriptions for stemming future jobs flows, including massive tariffs, are improbable, except for keeping key American technologies at home on the ground “national security.” But still he has his “base.”

Trump’s lack of competence and even the utter failure of his policies may not matter. He has stolen Bernie‘s big issue from the Dems and has a huge “base” that believes he’s on their side. The 2020 election is now mostly about whether the Dems can pull the wool from over the eyes of some part of that base and give them reasons to switch parties again.

The third lesson from Perot’s foray into politics is timing. As in investing, in politics timing is everything. If Bernie had won the Democratic primary in 2016, he might be president today. I think he would.

But he lost to Hillary, and Hillary hadn’t a clue how far Wall Street’s theory of industrial-base-selling “free trade” was off the mark. So Hillary and the Dems lost the presidency because Trump had stolen the most important issue from them: the massive, generational drain of jobs for skilled workers to China.

Trump stole the issue awkwardly, incompetently and with lies. Sometimes his theft was laughable. But steal it he did. The Dems will win in 2020 only if they can take it back.

These three lessons from Ross Perot have special resonance today. For we have a would-be Ross Perot ready two sweep into the Democratic Party from the wings: Tom Steyer.

Like Perot, Steyer is a successful businessman and a billionaire. Like Perot, Steyer is ready and able to finance his own campaign, whatever it takes. Like Perot, Steyer made his billions in a business related to computers. He launched his candidacy so close to the day of Ross Perot’s death that the juxtaposition seems no coincidence.

Fortunately, Steyer has not (yet) made Perot’s mistake of running as a third-party candidate. If he did that, he would inevitably draw votes away from Democrats. Anyway, he seemed already to have declared his party, in effect, by devoting millions to his earlier “Need to Impeach” campaign.

For those who saw Ross Perot in action, he was an admirable if inexperienced pol. He didn’t get involved in “hot-button” issues like gay marriage, racial or religious conflict, or even abortion. (He was reportedly pro-choice.) During debates and in his self-financed, 30-minute TV “infomercials,” Perot kept the focus relentlessly on his two key issues: debt and the job drains he predicted would come from NAFTA. His narrow focus on those two issues—the second of which may still lose us our Republic—was the nearest thing to a pure, honest, issue-oriented campaign that I’ve seen in my 74 years.

If Tom Steyer can lead the Dems onto this path, his primary campaign can do some good. God knows the Dems have lost their way, as I’ve outlined in several earlier posts. (See this post, this post and this post on substance, and this post and this post on the debating process.)

With the help of some very bad (and perhaps inimical) moderators, the Dems’ first two debates raised such nationally existential issues as health-care for undocumented immigrants, the treatment of transgender people, and taking private health insurance away from more than half of those insured now. If these issues would attract any voters at all (besides transgender folk), they would attract only those who have nowhere else to go but to the Dems. It would be hard to find any less strategic issues to discuss in a nationally televised debate.

So if Tom Steyer acts like a more strategic Ross Perot and gets the Dems back on track, his millions could do good work. For example, Steyer might finance television “infomercials” like Perot’s, explaining why a big infrastructure rebuilding program is the only short-term way to bring lots of jobs for skilled workers back to America. All the other ways are risky and long-term, including Trump’s “Hail Mary” pass of forcing China to change the development strategy that it developed over decades, and that has succeeded brilliantly. Even if Trump’s crude “bash ’em and they’ll holler uncle” ploy ultimately works—a doubtful prospect at best—most of a decade will pass before laid-off skilled workers see jobs anything like the ones they lost. A big infrastructure program could have similar jobs on shore within six months.

If Steyer uses his billions to explain the facts of life to Americans, as Perot did the facts of NAFTA, he could make a big difference. But if Steyer uses Trump as a punching bag and tries to out-demagogue him, I fear the result of his late entry into the primaries will be to cheapen the whole political process and bring us closer to nationally televised food fights, not farther away.

Steyer is not going to be president. He can do some good only if he focuses relentlessly on the key issues in the current presidential campaign, just as Ross Perot did in 1992. This time, the big issues are three: (1) jobs for skilled workers, how to stop their drain and create new ones, (2) health insurance, including saving the gains of “Obamacare,” and (3) stopping or reversing the obscene economic inequality of our Second Gilded Age. Betting heavily on anything else will be playing on Trump’s turf and gambling along with him. Good leaders don’t gamble; they plan.

Links to Popular Recent Posts

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For three things the Dems must do to win the White House, click here.
For an assessment of how the second debate propels the Dems toward losing, click here.
For suggestions on how to improve multi-candidate debates, click here.
For a more general discussion of how to improve debates, click here.
For a review of the first Democratic Debate, click here.
For a third, simpler look at why Trump won in 2016, click here.
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For an analysis why Nancy Pelosi is right on impeachment, click here.
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For analysis of the Virginia blackface debacle, click here. For an update on how Twitter subverts politics, click here.
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Diatribes of Jay

21 July 2019

Ross Perot’s Lessons for Pols and Tom Steyer

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Links to Posts since January 23, 2017

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