Published on Monday, June 26, 2000 in USA Today
When It Comes To Economics, The Differences Are Hard To Find
by Susan Page
WASHINGTON -- George W. Bush and Al Gore have been campaigning for months, spotlighting the differences they offer voters. But when it comes to the policies they believe will keep Americans employed and the nation prosperous, they could just as well be running on the same ticket.

Both candidates generally embrace free trade, endorse a balanced budget and agree that a first-class education system is a critical federal priority in a high-tech Information Age. Both lobbied for the controversial China trade deal that passed the House and is now before the Senate.

The consequence of this new consensus is a dramatically changed American political scene in which some century-old economic debates appear to be settled. There are still stark differences between the candidates -- over how to bolster Social Security, for instance, whom to appoint to the Supreme Court and whether to develop an umbrella-like national missile defense system.

But on what is arguably the president's top foreign and domestic priority now that the Cold War is over -- maintaining a strong national economy in a globalized system -- the two candidates are in remarkable accord. That means they presumably would govern in similar ways in this arena as president because pursuing other policies would jeopardize the confidence of global investors and the fundamental health of the U.S. economy.

That has robbed this election of some of its drama and sense of high stakes. It may be costing Gore credit he hoped to gain for having the experience to continue the current strong economy. For some voters, it may even raise the question: Does it really matter who wins?

''It's very hard, extremely hard, to imagine either a Democratic or a Republican presidential candidate differing much on these issues,'' says Laura D'Andrea Tyson, dean of the business school at the University of California-Berkeley and an economic adviser to Gore.

''I would not say their views are identical, but there's a broad consensus in America, and they both reflect that consensus,'' says Larry Lindsey, a former Federal Reserve governor and the chief economic adviser to Bush.

There are naysayers to the general consensus that globalization not only is inevitable but also, all in all, a good thing for the country.

They include some conservative Republicans and liberal Democrats in Congress as well as the Reform Party's Pat Buchanan and the Green Party's Ralph Nader. Both third-party candidates warn of the impact of globalization on American workers and national sovereignty, but neither has managed to attract more than a few percentage points in national polls.

Embracing globalization

For the major-party contenders, an embrace of globalization, despite its complications and costs, has been dictated by the facts of life in the new economy.

''They realize that you can't fight the forces of globalization,'' says Robert Reischauer, a former director of the Congressional Budget Office who is now president of the Urban Institute. ''They're like the rising tide.''

In this new world, the discretionary powers of the presidency on some issues seem to be shrinking. Basic questions are settled regardless of the candidates' philosophical views on the size and role of government. The limitless global economy paradoxically has put the next and future presidents in a policy box.

That's a marked change from the big debates in other presidential elections over the past century, from the impassioned dispute over the gold standard in 1896 to the fevered clash on the perils and promises of the North American Free Trade Agreement (NAFTA)in 1992.

Gone is the sense of clear choices that characterized the 1932 election between Herbert Hoover and Franklin D. Roosevelt over tackling the Depression, or the stark contrast in world view between internationalist Lyndon Johnson and aggressive nationalist Barry Goldwater in 1964. Even in 1980, Jimmy Carter and Ronald Reagan offered voters dramatically different approaches to managing the economy and asserting the role of the United States in the world.

''This election reminds me of the elections in the late 19th century when nobody remembers who those candidates were and who those presidents were, when the parties looked more alike than they were different,'' says presidential historian Robert Dallek, author of Hail to the Chief: The Making and Unmaking of American Presidents. ''Of course, it's vastly different given the kind of global involvements the United States has and the enormous power of this country. But for all that, there are echoes of that time.''

Dallek adds, ''That's partly what makes this election so unexciting.'' A poll by The Associated Press last November found that 24% wanted a Democrat for the next president and 21% wanted a Republican. But the greatest number, 48%, said it made no difference who won the presidency this year.

1st 'new economy' election

This is the first presidential election of the new economy, the first national contest since both parties made significant adjustments to reflect the realities of the world in which most voters have access to the Internet, and satisfying global investors looms as one of a president's primary concerns.

Among the changes:

* Just eight years ago, in 1992, candidates Bill Clinton and Al Gore promised to ''re-evaluate'' whether to continue supporting most-favored-nation trading status with China because of human-rights concerns. They didn't mention balancing the budget in their 32-chapter campaign bible, Putting People First.

Now President Clinton sees extending normal trade relations to Beijing as a major achievement of his presidency. Gore pledges to fund campaign promises within the newly balanced budget.

* Just four years ago, in 1996, Buchanan made the second of two significant GOP presidential bids by denouncing the impact of NAFTA on manufacturing workers and decrying the loss of sovereignty to institutions such as the World Trade Organization. Congressional Republicans a year earlier tried to dismantle the Department of Education.

Now Bush has become the first Republican candidate since the Education Department was created to propose expanding its mission in financing local education programs and demanding accountability from them. Buchanan has bolted the Republican Party to take his message of economic nationalism to the Reform Party.

* In the past, the machinations of the chairman of the Federal Reserve Board often have been the source of griping by one candidate or the other. But this year, Bush and Gore have lavished praise on chairman Alan Greenspan, a celebrity of the new economy, and joined in urging his reappointment.

In an interview with USA TODAY in his West Wing office, Gore said a new ''Global Age'' was being shaped by the Internet and the jet plane, satellite television and worldwide telephone service. The vice president called it the successor to the Cold War era.

''The world is much more connected than ever before,'' Bush said in a separate interview just after delivering a speech at Boeing in Seattle on the importance of trade. ''I think we are in a new era.''

Both candidates looked to the next generation of issues on the new economy with similar philosophies. Bush took a more laissez-faire approach than Gore on some issues, and Gore ruminated in greater detail on the challenges ahead from technological advances. However, both said the private sector should be allowed to develop with minimal regulation while the government addressed issues including the ''digital divide'' between rich and poor and concerns about smut and privacy on the Internet.

One problem: The public isn't so sure about the path both major candidates have decided to follow.

Signs of hesitancy

A USA TODAY/CNN/Gallup Poll conducted this month found that an overwhelming 78% said the ''new economy'' has been good for the nation, compared with 15% who said it had been bad.

But another USA TODAY poll conducted this spring asked, ''Do you think free trade would be good for the United States because it helps the U.S. economy, or free trade would be bad because it costs the U.S. jobs?''

In response, 43% said good and 45% bad -- a remarkable finding, given the almost universal view of economists that free trade has been an underpinning of the nation's current prosperity.

The responses presumably would be more negative if there were an economic downturn. A recession would fan fears that globalization means U.S. jobs will be shipped overseas and U.S. markets flooded with foreign-made goods. At the end of a recessionary period in 1992, Reform Party nominee Ross Perot managed to win 19% of the vote with a call to arms against NAFTA. In a strong economy four years later, he received just 8%.

''The oil that's spread on the rough sea of the global economy is prosperity,'' says Benjamin Barber, director of Rutgers' Walt Whitman Center for the Culture and Politics of Democracy. He has studied the societal effects of globalization in such books as Jihad vs. McWorld: How Globalism and Tribalism Are Reshaping the World. ''If the economy goes south or the speculative bubble on Wall Street bursts, you can be sure that could change very fast.''

In today's poll-driven politics, on no other major issue is there such a disconnect between the public and the major parties. That divide has created a political opening for Buchanan and Nader and become a rallying cry for organized labor. Opposition to globalization sparked angry protests last fall in Seattle and this spring in Washington, D.C., when the WTO and the World Bank held meetings.

''If we can protect the international financial institutions, we can certainly find a way to protect the workers, and that's what our bottom line is,'' AFL-CIO President John Sweeney, who helped lead the protests, said in an interview. But Buchanan and others acknowledge that their message isn't likely to resonate with many voters at a time of unprecedented prosperity, even if some are uneasy.

The USA TODAY survey that found such ambivalence about free trade also showed that one of five of those polled said they or someone in their household held a job that depended on trade. A separate survey by Democratic pollster Mark Penn found that 46% said they considered their work part of the ''new economy.''

''The same people who express those opinions (of concern about trade) say 'goodbye' to the pollster and then turn off their Yamaha hi-fi and get into their Toyota and drive to the store to buy some French cheese,'' Reischauer said. ''Then they pick up their clothing, which has been made in China, Jamaica and India, from the cleaners.''

Harder to act?

Bush and Gore say they see divisions in the country and within their parties that could bedevil the next president. Clinton could tell them how frustrating that can be: He failed to win ''fast-track'' negotiating authority for trade deals and had to engage in hand-to-hand combat to win on NAFTA and the China trade proposals. His 1993 economic package passed each house of Congress by a single vote.

''It's all too easy for those of us who feel that that logic is so compelling to feel that it's irresistible to the point where there's now a new national consensus on this,'' Gore said. ''I don't think there is.''

Bush agreed. ''There are some obviously in my party and some in the Democrat Party, particularly the unions, trying to turn back the clock,'' he said, adding, ''I don't think they'll be able to do so.''

In The Lexus and the Olive Tree, his best-selling book on globalization, New York Times columnist Thomas Friedman says leaders around the world are constrained by what he dubs ''the Golden Straitjacket,'' the one-size-fits-all policy prescription for free-market economies. That prescription includes free trade, budget discipline and minimal regulation. ''As your country puts on a Golden Straitjacket, two things tend to happen: your economy grows and your politics shrinks,'' he wrote. Policy choices are limited within prescribed parameters.

''The confidence of global investors has become enormously important to domestic policy,'' says Robert Reich, a former Labor secretary who is a professor of economics and social policy at Brandeis University. ''Every world leader is now a carnival barker, seeking to attract investors to that leader's own nation, and every leader is potentially worried that investors will suddenly get up and leave.''

Promises within budget

That line of reasoning helped sway Clinton during the first days of his first term as the requirements of the new economy were beginning to become clear. He reluctantly proposed an economic package that raised taxes and focused on trimming the deficit at the expense of new spending on social programs that he had promised during the 1992 campaign.

Now both major-party candidates promise to make their campaign promises fit within a balanced budget. Bush argues the surplus can support his $1.3 trillion, 10-year tax cut without deficit spending. Gore makes the same argument for his proposed domestic spending programs.

''Because of the kind of globalized economy that we are now in, presidents don't have the kind of arbitrary decision-making power that they used to,'' presidential scholar Michael Beschloss says.

Economists warn that a president who dares to step outside the new policy consensus risks spooking global investors and souring the nation's economy. Why?

* A budget deficit of any significant amount -- say, when it reaches the levels of the mid-1980s, around 5% of the gross domestic product -- would drive down the value of the dollar and drive up interest rates. That would slow growth and cost jobs. What's more, a drop in investment would curb gains in productivity, the main engine of the current prosperity.

* Tariffs or other barriers to protect U.S. industry would limit competition, resulting in higher prices and less choice for consumers. If the barriers violated WTO rules, sanctions could be imposed or retaliatory measures taken by other countries against U.S. industries, hurting economic growth.

* A second-rate education system could limit the availability of skilled workers for expanding e-commerce and other high-tech businesses. That would cost the USA the edge in innovation that has made it the capital of the new economy.

''In a global economy, investment capital and psychological confidence flow in the direction of countries that are willing to accept responsibility for making hard-nosed decisions: balancing their budgets, paying down their debt, investing in the future, investing in their people and harmonizing their fiscal and monetary policies,'' Gore says. ''The principles are not new, but they have a new power in the global economy that increasingly characterizes this global age.''

Bush insists that the vigor of the U.S. economy means that a president's choices aren't limited, at least not yet.

''Our economy is so strong now and we can attract capital because we are the most entrepreneurial and one of the most efficient markets in the world,'' the Texas governor says. ''For the short term, I think the United States still has got pretty good leeway as to how we conduct our fiscal matters.''

But as to whether future presidents will face policy constraints imposed by the new economy, he adds, ''Maybe for the long term, that may be right.''

Copyright 2000 USA TODAY