The LOWDOWN on the ECONOMY Kevin Phillips doesn't look on the bright side, or see one

THE BALTIMORE SUN

TC Bethesdao-- So what did you think of my book, Kevin Phillips asks.

The most depressing thing I've read in a long time, he is told.

"I would think so," the author replies. And he smiles.

Success!

Getting his readers to think -- and upsetting them if necessary -- is something Kevin Phillips has done for a long time. He did it in 1968 as a young man of 28 with a keen interest in politics, writing "The Emerging Republican Majority," which accurately predicted the GOP's electoral successes of the 1970s and '80s. But partisan politics don't interest him anymore -- what does is the miserable state of the U.S. economy.

His 1990 book, "The Politics of Rich and Poor," decried the continuing concentration of wealth among the rich in this country as many others grew worse off -- primarily, he wrote, because of the Republican-induced "new political economics, intensifying inequality and pain for the poor." Now, in his seventh book, "Boiling Point," he describes the financial hits the American middle class has taken in the past few years, and how middle-class frustration contributed to the defeat of George Bush and the election of Bill Clinton.

Basically, here's the message of "Boiling Point" for all you people out there in the middle class: You've got it bad, and it won't be good again for some time -- because who knows who will fix it?

Mr. Phillips says certainly not the Republican Party, with which he was once closely aligned but which he now blames for much of the economic deterioration that occurred in the '80s. Bill Clinton and the Democrats? Mr. Phillips had hopes for them even as of November, but now he says of the new president: "He talked about renewal, but he's plugging back into the lawyers and interest groups."

Plain-talking Ross Perot, with his pledge to reduce the national debt and shake up the Washington establishment, intrigued Mr. Phillips, but the Texan's quirkiness put him off. So what are we left with?

"A lot of negative things really suggest the opportunity aspect for the middle class is closing down," Mr. Phillips, 52, says, and you sense the momentum building up for a thorough play-by-play. This is, after all, his job. He's been editor of the American Political Report since 1971, and he also analyzes the American political situation for CBS and National Public Radio. If the sentences are rambling at times, the words come out in the well-measured phrases of a confident, seasoned commentator.

"First of all, there's the loss of the old blue-collar jobs at unionized plants that were so terrific for people in the '40s and '50s and '60s -- ethnic families all over the Midwest, and for that matter Baltimore and New York and New England. Kids would go into the plant where their father worked, and they could look to be blue-collar middle class.

Shutting down

"But that's just shutting down all over the country, and there's very little of those [plants] left. It used to be you could get a middle-class job without a lot of education. Now education is the key -- but even educated people [are feeling the effects], as there are a lot of them in their 40s and 50s who are being laid off by corporations that want to skip the benefits and pensions. And then they are out there in the job market."

And there's more. It's going to be terrible for the next generation, too, he says.

"The young people in their late teens and 20s now are likely in 20 years to be stratified according to what they inherit from their parents, because the generation that has the money in the United States is the generation from about, say 45 to 80," Mr. Phillips goes on. "We're already seeing stratification coming from parents leaving money to their kids. More and more, the status and wealth of younger people will be dependent upon the wealth they inherit from their parents. And the problem is that many of the parents of the middle class don't have the money to save."

Mr. Phillips' message may not always be the most pleasant, but he sure knows how to deliver it. And he's frequently right. "The Emerging Republican Majority" was a stunning debut book, written by a middle-class young man from the Bronx who was only four years out of Harvard Law School. It described the emerging importance of the Sun Belt and the Southern vote, and urged the Republican Party to court the middle-class Americans who were disenchanted with liberal Democratic politics and concerned about such social issues as crime.

" 'The Emerging Republican Majority' really was a road map to electoral victory for the Republican Party," says Larry Sabato of the University of Virginia, a leading political scientist. "It was Phillips' seminal and probably most important work. Its overall theoretical construct proved to be stunningly accurate as American politics unfolded in the 1970s."

As for "The Politics of Rich and Poor," Mr. Sabato says, "it points up one of his special strengths -- the blending of politics and economics. There are people who write about politics well, and people who write about economics well, but very few who understand both well. Kevin Phillips does."

Many of the themes of "The Politics of Rich and Poor" were heard during the 1992 presidential campaign, something Mr. Phillips is not immodest about pointing out. "Most of the Democratic presidential hopefuls and contenders of 1991-'92 -- from Bill Clinton to Mario Cuomo, Lloyd Bentsen, Dick Gephardt, Tom Harkin, Douglas Wilder and Jerry Brown -- had read 'The Politics of Rich and Poor' or drawn on its theses," he writes in the preface to "Boiling Point."

Other sources

John White, who helped shape Ross Perot's deficit-reduction plan and later served as an economic adviser to the Clinton campaign, calls Mr. Phillips "a very perceptive observer of what has been going on in this period, and the kinds of things that have happened to the society in the increased distance between the rich and poor, and the implications it has." Still, he says, he drew more from several other books for his work with Mr. Clinton and Mr. Perot.

"It ['The Politics of Rich and Poor'] didn't loom large in my deliberations," says Mr. White, director of the Center for Business and Government at the John F. Kennedy School of Government at Harvard University. "I would point much more to books by [economist] Lester Thurow and Benjamin Friedman [a Harvard economist who wrote the influential 1998 book 'Day of Reckoning']. We did read through all of it -- it's a good book -- but it wouldn't have been high on any list.

"As for my work with Clinton -- I don't remember any time when I would talk back and forth with Clinton people that anybody specifically mentioned that book."

Mr. Sabato discounts Mr. Phillips' notion that the 1992 presidential election was marked by an unusual populist revolt born of middle-class discontent. "In many ways, it was a very traditional year," Mr. Sabato says. "Yes, the impact of the talk shows was new, and Ross Perot was fascinating. But in the end it was characterized by the fundamental forces that drove all presidential campaigns."

There are many conservatives and Republicans, too, who don't think much of Mr. Phillips' harsh indictment of Reagan-Bush economics, and question whether he should continue to pass himself off as a member of the GOP.

"He seems to have achieved most of his notoriety as a conservative, but somewhere along the line he's lost his pedigree," observes William F. Buckley, founder of the conservative magazine National Review and a leading figure on the right for the past four decades. "He's uncomfortable with the conservative movement, so he's glad to talk about it to any member of the press. And it's always useful to the liberal establishment to have someone [of whom] they can say, 'Even renowned conservative Kevin Phillips feels the way we do.' "

Although Mr. Phillips remains a registered Republican, he readily concedes he's been unhappy with the party's drift for some years, saying, "I'm still up in the air" about remaining a Republican. And he makes no secret of his distaste for Mr. Bush, taking frequent jabs at the former president.

'Captain Clueless'

"George Bush was Captain Clueless -- he didn't know what was going on," Mr. Phillips says derisively. "He gets his economic analysis from [former treasury secretary] Nick Brady, who is one of these guys whose driveway is so long his mailbox has never seen his house." And this: "Bush brought an absolutely unique sense of arrogance and irrelevance to bear on the handling of economic policy."

So it doesn't bother him, he says, to be considered a traitor by some Republican loyalists -- "well, in the exit polls, 27 percent of Republicans say they did not vote for Bush." Mr. Phillips acknowledges he was among the 27 percent, though he won't say for whom he voted.

Right now, though, he's focusing not on Mr. Bush but the current president, and his disillusionment with Mr. Clinton is apparent.

"You have to deal with the interest groups, because if you don't you can't deal with the debt -- those two go hand in hand," Mr. Phillips says. "You have to purge government and get rid of old entities that have outlived their usefulness, get rid of duplicative bureaucracies.

"The notion of a [Commerce Secretary] Ron Brown-led reform or a [Treasury Secretary] Lloyd Bentsen purge of established Washington business lobbies is kind of a joke. Both of them are quite competent and I have a lot of respect for them, but they represent what's already been here."

Mr. Phillips agrees all this sounds pretty bad.

"It does, but that's not my concern," he says with a disarming smile. "I would guess that sometime in the last 10 to 12 years, and certainly within the last four to six years, I decided that any role I would play would be by analyzing, by dissecting, by spotlighting these things, [rather] than by doing anything directly political."

A few minutes later, he apologetically ends the interview. A television crew is waiting outside his door, and somebody has to deliver the bad news.

THE PHILLIPS FILE

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Occupation: Political analyst.

Born: Nov. 30, 1940; Manhattan, N.Y.

Educated: B.A. political science in 1961 from Colgate University in Hamilton, N.Y.; law degree from Harvard University, 1964.

Current home: f,tem Bethesda.

Marital status: Wife, Martha; twin sons Alexander and Andrew, 16.

On conservatism: "I was for deficit- and debt-reduction as opposed to a pie-in-the-sky tax cut -- I always thought that was conservative. I was always for the people out in the boondocks and not some abstractions of economics. But I won't get into that debate game -- I have so little to do with what is regarded as the conservative movement."

On the Republican and Democratic parties: "I think that both parties represent so much of institutionalized and entrenched Washington in different ways, and neither one is capable of doing anything. . . . The party leaders don't want to look under the surface and ask themselves: What was it that made 40 percent of the people want to dump the two-party system for a guy [Ross Perot] who had no experience in Washington?"

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