Clinton's Democrats Are in for a Rude Awakening

WASHINGTON. — Washington. -- Robert Reich, a Clinton adviser from Harvard and a prototypical revved-up professor determined to make reality rational, says: "There is so much to do that has been left undone. The task ahead is daunting."

Please, professor, do us all a favor. Feel free to be daunted (synonym: intimidated).


Here they come, high-stepping, high-spirited Democrats who think the federal government -- the government that permeates American life, that subsidizes or otherwise regulates almost everything from beekeeping to the importation of Mexican bras (only 36,292 allowed in a year, with subquotas for different cup sizes) -- is guilty of sloth, of leaving things "undone."

Bruce Reed, a Clinton issues man, says Mr. Clinton "looks forward to the most ambitious 100 days of a president since Roosevelt."


Look out. This is going to be a learning experience, not least for Mr. Clinton's legions, who will learn how different government -- and problems -- are in 1993 than in 1933.

On day two of FDR's famous first 100 days he ordered a national bank holiday. On day five, Congress passed his banking bill almost unanimously. On day seven, in spite of a revolt by 90 Democrats, the House passed his bill cutting veterans' benefits and federal employees' pay.

On day 12, he submitted a farm bill that presaged many of the subsequent follies of federal agriculture programs. The House passed it on day 18. On day 17, he proposed the Civilian Conservation Corps. It became law three weeks later. On day 36, he proposed the Tennessee Valley Authority. He signed it into law on day 76.

Michael Barone, in "Our Country: The Shaping of America from Roosevelt to Reagan," notes that on Nov. 2, 1933, FDR was given the proposal for a Civil Works Administration to employ people on such public works as street repair and digging sewers. By Nov. 23, 800,000 people were employed; five weeks later, 4.25 million -- 8 percent of the nation's labor force. (Today it might take months just to negotiate the racial set-asides.)

In his January 1935 State of the Union address, FDR proposed a work relief program costing $4.8 billion -- more than all the government's revenues the year before, all but $800 million to be borrowed.

In April Congress passed it, putting almost no restraints on the executive branch's discretion in spending it. Today Congress micromanages.

Today government is not so nimble (which probably is good). Today's problems are not comparable to those of the Depression. Today government can be quickly brought to heel by autonomous economic forces. And government cannot get a grasp on many problems.

A Rooseveltian burst of activism beginning Jan. 20 might produce, by April 20, a Mitterrand experience. When in 1981 Francois Mitterrand began his presidency with a burst of socialism, world economic forces recoiled and Mr. Mitterrand retreated.


This year, in mid-October, there were reports that Mr. Clinton contemplated a quick stimulus package. Instantly, fears of inflation caused long-term interest rates to surge. Mr. Clinton had to send out soothers. Bond traders cannot be ignored, particularly by a government that borrows a billion dollars a day.

Furthermore, many of the conditions Democrats complain about cannot be dented by Democrats' approaches.

For example, Democrats have done well, if not good, by dwelling, often tendentiously, on statistics about income disparities and promising to improve them by means of redistributionist policies. But income statistics reflect statistics like these: 16 percent of white children are born out of wedlock; 66 percent of black children are. Government does not know how to change those numbers.

It was serendipitous that Election Day newspapers reported that, the day before, the world's largest corporation, General Motors, had undergone a far-reaching change of regimes. This underscored how much of America's vitality depends on private-sector decisions.

"A large proportion of our positive actions," wrote John Maynard Keynes, "depend on spontaneous optimism rather than mathematical expectations."

Such actions are "a result of animal spirits -- of a spontaneous urge to action." Good things happen when people feel good. They stay in school, have children, buy homes, invest. This is what one scholar calls "a psychological multiplier." Ronald Reagan understood this, having studied his hero FDR.


Mr. Clinton could unleash animal spirits immediately with an act much more potent than his banal proposal to stimulate our $6 trillion economy with an extra $20 billion of infrastructure spending.

He could index capital gains retroactively, exempting from taxation the component of capital gains caused by inflation (that government causes). This would be a powerful incentive for people to put into economic play a significant portion of the $7 trillion of unrealized capital gains, thereby easing the credit shortage, increasing the value of capital assets and triggering a gusher of economic activity.

If Mr. Clinton does index capital gains, Republicans will know he is serious about keeping power by using it. If he lets the ideology of "fairness" deter him, Republicans can take heart.

George F. Will is a syndicated columnist.