The Democrats' Crash


What has this bunch of Democrats ever done or said that would make you have any confidence that they could run the world? --Thomas T. Nettles,

a 49-year-old Democrat, as quoted in The New York Times

TRADITIONAL Democratic voters don't have much confidence in the party. And the Democratic herd of presidential hopefuls hasn't done much to instill any. A New York Times-CBS News poll taken during the week following the market plunge showed that while the Republican candidates lost some popularity, Democratic candidates gained no ground.

According to conventional political wisdom, a major economic disaster such as the crash should hurt the party in power and catapult the opposition in the polls. The crash, by brutally demonstrating the volatility of the American economy under Reagan, would seem to be a perfect chance for the Democrats to show Reaganomics as the goat it is, while offering the American people an alternative for a more stable future. Instead, Democrats have concerned themselves with being more Republican than the Republicans.

LIKE the Republicans, the Democratic leadership has accepted the fantasy that pumping-up the market is preferable to addressing the economic realities the market's fall reflects. That's why the Democratic presidential hopefuls have been talking about nothing but spending cuts, which--it is hoped--would drive down the deficit and create a climate in which speculators would reenter the market. The purpose? Simply to drive up the Dow Index which it is so comforting to misconstrue as a measure of general economic prosperity.

Some Democrats have even tried to top the Republicans by worrying that the $23 billion deficit reduction required by the Gramm-Rudman-Hollings bill would not be adequate to restore Wall Street's confidence. Rep. Tony Coelho, a Democrat of California, has urged his colleagues to "talk about something real"--by which he means cutting $40 to $50 billion dollar from the deficit.

It doesn't seem to matter that economists across the political spectrum agree that drastic steps to reduce the deficit will, ultimately, weaken the economy. Liberal economists say that spending cuts and increased taxes in the present state of the economy would only exacerbate recessionary tendencies. Robert Eisner, president-elect of the American Economic Association, says that budget cutting would be a "mindless throwback to the economics of Herbert Hoover."

The Keynsians are in agreement with conservative economists, including some of Reagan's staunchest supply-siders, such as Jude Wanniski. They fear that increasing taxes would only stifle private spending and decrease tax revenues, thereby increasing the deficit.

IT'S a sure sign that true answers aren't easy to come by when the far right and the far left agree. This, though, doesn't excuse the Democrat's failure to provide alternatives to the Republican agenda.

The best would-be Democratic presidents have managed so far is more talk of the welfare state and social insurance than has been heard in quite a while. After all, the safety net such programs provide did much to prevent the general panic which turned an earlier, smaller crash into a decade-long depression.

In FDR's spirit, Paul Simon has been calling for the Federal government to be more aggressive in dealing with unemployment, adult illiteracy, health care costs and job opportunity programs. Such proposals are bound to be politically attractive. But they are not really an alternative to Reagan's failed program for prosperity; they are merely expressions of the belief that the program has failed. Those who would lead the country should have more hope.