THE BRIBING OF AMERICA

Irwin Stelzer on the corruption of

a supopower a year after Bill Clinton's election

Washington ONE YEAR AGO, Americans decided to turn their government over to Bill and Hillary Clinton. (`Vote for one, and you get two,' the Arkansas Governor, as he then was, promised the electorate.) It seemed to American voters to be time for a change. But to what? At first the promise was a i simple one — a middle-class tax cut n return for middle-class votes. In the event, the trusting middle class delivered but Clinton didn't.

Now we have a new offer: surrender, says Clinton, and I will give you the one gift you covet above all others — security. In this rapidly changing world, he added sotto voce, such a trade is absolutely essential if I am to accomplish my basic goal of enlarg- ing the state, of reversing the revolution of individualism foisted upon American voters and, indeed, most of the world by the com- bined efforts of a genial American actor and a tough-minded British grocer's daughter.

For Bill Clinton, shaper of America's domestic agenda, is not the Bill Clinton Whose foreign policy antics are the despair of democratic governments the world over. It is easy to conclude from Clinton's for- eign policy misadventures that he is a prag- matist devoid of ideology. However, when it comes to domestic affairs, Clinton is a president with a clear, consistent agenda. He has seen the past — Probably while at Oxford — and believes that it works. At precisely the time when some of the British are coming to realise that their welfare state is economically unsustainable, Clinton is launching the largest increase in the scope of America's welfare system since Franklin Roosevelt's New Deal. Just as Germany discovers that its use of an apprenticeship system to restrict entry into the workforce has helped to make its industry uncompetitive, Clinton is attempting to put such a system in place In America. And just when the lethal mix- ture of high taxes, excessive regulation and protectionism has produced a sclerotic Europe — no new private sector jobs in a decade and a half — Clinton has raised taxes, increased regulatory burdens and introduced that euphemism for protectionism, 'managed trade'. Clinton has little time for the exaltation of the self-reliant individual that was cen- tral to the philosophies of Margaret Thatcher and Ronald Reagan. So he must persuade the middle class, which has the votes he needs and the money he must have if he is to finance the bloating of the state, to abandon the individualism that has provided the thrust and entrepreneurialism of modern America.

The Clinton era, we are told by Senator Ted Kennedy, the sybaritic consumer of wine, women and other people's tax money, 'marks the end of the "me" era in our national life'. But substituting the state for `me' as the star player in life's drama is no easy chore, especially in a country born of a revolt against central 'authority and bred on tales of rugged individualism and John Wayne films. Margaret Thatcher tells us, in her memoirs, that the former Labour cabinet minister Douglas Jay once said that 'the gentleman in Whitehall really does know better what is good for the people than the people know themselves'. Clin- ton's Oxford chum, guru and now labour secretary, Robert Reich, is of a like mind: The core responsibility of ... elected offi- cials. . is not simply to discover. . . what people want for themselves.' It is, instead, to override these 'pre-existing selfish pref- erences' and do 'what is good for society'.

Clinton has already taken the first step in persuading the middle class to surrender itself to government: he has rescued the politics of envy from the dustbin of history. Inheritance taxes are up, as are tax rates on high earners; the wages of executives the government decides are overpaid will no longer be treated by the tax authorities as legitimately deductible business expenses. The whispers in Washington are that the President's treasury secretary, Lloyd Bentsen, has warned that these measures, and the still higher taxes needed to finance health care 'reform', will seriously stifle job creation. Indeed, at one point there was talk that Bentsen would resign, a move he apparently abandoned when he realised that former treasury secretaries don't get invited to sumptuous G-7 dinners in the world's pleasure palaces.

His credentials for 'fairness' established by his soak-the-rich taxes, Clinton's next task was to overcome middle-class scepti- cism about the ability of government to deliver its promises. Otherwise, ordinary folk might zip their wallets when asked to pay for the cost of the benefits that Clinton is intent on bestowing on them. So he set Vice-president Al Gore the task of 'rein- venting government'. In Britain, this same chore is accomplished •by conducting a widely publicised and agonising search for government efficiencies, preferably led by a true believer in limited government, only to find that none is possible: each and every 'Sometimes I wonder whether I'm cut out for the academic environment.' civil servant is a key employee — and underpaid, at that Finally, Clinton argues that new taxes will not end up in the pockets of the unde- serving poor — welfare mothers, immi- grants, dole fiddlers and job-dodgers — but will be used for deficit reduction. This is, of course, easier for Bill Clinton than for Kenneth Clarke — the former can blame Reagan for his inheritance of red ink, while the latter, less plausibly but with equal fer- vour, is reduced to pointing his finger at the Bundesbank, or at poor Norman Lamont.

If the state is to recapture the command- ing heights of the economy, it must promise the middle class something more than modest reforms. And Clinton has found that promise — 'security', the rubric under which all of his policies are hence- forth to be grouped. Security against unem- ployment; security in the streets and homes of America; most of all, security against ill- ness, or at least against its costs. Credit for the idea of using 'security' to seduce the middle class goes entirely to the President. 'It was something evolved by him, not something pasted together by his staff or by his advisers,' we are assured by David Ger- gen, his chief spin doctor.

Naturally, greater security requires an expansion of the state. Take jobs. Reich has let it be known that he thinks too many youngsters are training to be hairdressers, and too few to be computer programmers. Reich also wants unions to be 'empowered' to help run their companies. And, if William Gould IV (Clinton's new head of the National Labour Relations Board) has his way, unions won't need a majority vote of workers to win the right to represent them: 20 per cent or 30 per cent will do. This policy bent explains why David Hunt, Secretary of State for Employment, received a chilly reception when he went to Washington to enlist Clinton's aid in selling the virtues of labour market deregulation to the EEC's dirigistes.

Jobs will also supposedly be saved by what one Commerce Department official calls 'a new era of pragmatic partnerships between government and industry', part- nerships of the sort that would put bounce back into the step of Michael Heseltine. Never mind that in America more than half of the $1.2 billion lent in the past 20 years by the Commerce Department to ventures it thought would be 'winners' is in default. The government is determined to continue to pick technology winners.

Security in the streets and homes will also require government action; action along the lines preferred by Britain's judi- ciary and churchmen. These include `understanding' the root causes of crime; substituting education and job training for prison terms, even for multiple offenders; and making it more difficult for honest citi- zens to buy and use the guns that criminals can easily acquire and wantonly fire. There will also be new government-run jobs pro- grammes, and higher pay for teachers

regardless of performance. But so far none of the 100,000 new police that Candidate Clinton promised a crime-weary America has materialised.

The piece de resistance is a national health care system that will transfer control of 14 per cent of the US economy from the private to the public sector. Bill and Hillary Clinton think the universal health care cov- erage provided by the NHS can only be obtained by scrapping America's techno- logically advanced health care system, and replacing it with a huge government-oper- ated cartel featuring price controls of med- ical procedures and pharmaceuticals.

The motive behind the health care plan goes far beyond matters of physical well- being. Clintonistas in Washington have qui- etly been telling their friends that all their plans for an expanded state depend crucial- ly on the successful establishment of a mas- sive new middle-class entitlements programme, one that can be expanded eas- ily in future years. Stan Greenberg, Clin- ton's principal pollster, has made this explicit. He has been telling the Democrats that they have no future as the party of the poor. Instead, the middle class must be wedded to the Democrats. That, says William Kristol, chairman of the newly launched Project for the Republican Future, makes health care the Democrats' 'magic bullet'. Just as Roosevelt's social security system attached the elderly more or less permanently to the Democratic Party, government-managed health care can attract the middle class to it for genera- tions to come by playing on the insecurity arising from the current health care system, which attaches insurance coverage to the job. That insecurity can be eliminated in other ways, of course. But the President is hostile to any reform plan built around individual insurance, with the insured free to select their own doctors and their own course of treatment. Instead, every citizen will have a government-issued plastic card, usable at a government-created collective of health providers, for a government- approved course of treatment, with rationing by a government board that will determine everything from the frequency of mammograms to the number of days of hospitalisation allowed for each illness.

As Britain's experience proves, depen- dency is an easy trap into which to fall and a difficult one from which to escape, even for the relatively affluent. Ensnared, the American middle class will come to look to ministers, rather than markets, for solu- tions to their problems. Then, and only then, will America be launched on the col- lectivist road that Britain and Europe so disastrously chose some 50 years ago, and from which Ronald Reagan and Margaret Thatcher so successfully turned in the Eighties.

As for Hillary Clinton, she has approved her husband's seduction of the middle class — she has, after all, apparently tolerated other seductions — and has worked so hard on its key enticement, his health care programme, because she knows that it is the sugar that will help the bitter pill of her radical social agenda go down.

The 'security' programme is a coherent one, backed by workable political strategy. If realised, it will produce a redistribution of resources from the private to the public sector; a redistribution of income from higher earners and the middle class to the poor; an increase in government regulation of economic life including, at least in the case of health care, price controls and rationing; an increase in the costs imposed on businesses, with a parallel increase in efforts to protect them from international competition; a change in societal attitudes towards groups now only marginally acceptable, and towards so-called 'alterna- tive lifestyles'; and, most of all, a middle class dependent on government for access to health care, job training and education.

In short, it is a social programme closely linked to Clintonomics, and as radical in its way as the contemplated rolling forward of the frontiers of the state. This vision of America is terrifying to those of us who

know that smallish, middle-class entrepreneurs provided all of the new jobs in the Eighties, and that America has flour- ished because of its tradition of individual- ism and self-reliance. Replace those vigorous virtues with reliance on the state, and you infect the American body politic with both the British disease and Euro- sclerosis, a double malady which it may take decades to diagnose and from which it may take 50 years to recover.

Irwin Stelzer is a columnist for the Sunday Times