He was a charismatic guy with big ears and an important message that resonated with the American people. No, it wasn’t Barack Obama. (He had fuzzy words and no message.) It was Ross Perot 20 years ago.
In 1992, using charts and graphs on 30-minute infomercials funded out of his personal fortune, Perot ran the most successful third-party bid for the presidency in a century and received 19 percent of the vote. His message was simple: The country is going broke. We have made too many promises we can’t keep. Our level of spending cannot be sustained. This has to stop!
Unfortunately, there was a major flaw in his show-and-tell that kept those who interpret the numbers churned out by the government from getting on board and taking him seriously. Some believed he was playing the old political game of “envy and greed” in an effort to win votes. Others thought it an honest mistake.
The government computes average incomes and puts them in quintiles. Perot used some of those charts to show what he believed proved that the rich got richer and the poor got poorer over the last (Reagan) decade. However, what Perot failed to take into account was that the so-called inequity didn’t occur because the wages of the poor and middle class stagnated or declined. In fact, household incomes in every income class grew substantially.
Another point Perot failed to grasp was the upward mobility that occurred during that time period. A Treasury Department study from 1979 to 1987 showed that 86 percent of those in the bottom quintile in 1979, and 60 percent in the next quintile had moved to a higher quintile by 1988. Even more amazing, a larger share of those in the bottom quintile in 1979 had moved into the top quintile by 1988 than those who remained at the bottom.
Yes, Ronald Reagan proved, as did JFK before him, supply-side economics work. “A rising tide lifts all boats.”
Another important lesson from the Reagan decade is that lowering taxes benefitted those Americans who traditionally had not enjoyed the fruits of the country’s prosperity. Under Reagan, inflation-adjusted median household income for black Americans jumped by 16.5 percent, and the median income of women climbed by more than 28 percent.
At one point during the Perot campaign, Rep. William Dannemeyer, R-Calif., who served during the ’80s and was an expert on the budget, sat down privately with Perot to explain those facts.
Unfortunately, Perot never admitted the mistake and hung in there with the same old misleading charts. Nevertheless, he was right about the motivation of most politicians, the deficit and the national debt.
When Perot first ran for office, our debt was around $4 trillion and the budget deficit $290 billion. Today the debt is more than $16 trillion and the deficit more than $1 trillion.
Perot resurfaced this week and sat down with David Walker, the truth-teller who served as comptroller general of the United States and head of the Government Accountability Office from 1998 to 2008, for a lengthy interview on C-SPAN. Thankfully, he ditched the politics of “envy and greed” and concentrated on that fiscal cliff we are approaching.
Now, Perot has a plain-spoken message that everyone can understand, “If we don’t change our ways, some nation is going to head over here to take us.”
While Perot spoke in generalities, Walker dotted the i’s and crossed the t’s. Countries are buying U.S. debt short-term. Interest rates are historically low and are not locked in. Every 1 percent increase in the rate will cost us another $160 billion in interest a year for which we get zilch, or, as Perot put it, “Shinola.” That is scary stuff!
There is a reunion planned for Oct. 12-14 in Dallas for the volunteers who worked on Perot’s 1992 and 1996 campaigns. He is currently putting the finishing touches on an autobiography with updated charts and graphs. With Walker by his side, he should get it right this time. Perot deserves a lot of credit for getting the electorate to focus on the debt and turning up the pressure on those who represented us. As a result, Congress and Bill Clinton began to put the brakes on. Unfortunately, the effort was short-lived.
When the economy improved and revenues increased, everyone began to “party hearty” and spend as never before. That spending increased with each passing year.
Perot and Walker make a good team. I encourage everyone to spend an hour watching that C-SPAN interview. We need to heed their message before it’s too late.
Welcome back, Ross!