Rep. John Delaney recently explained, in a The Washington Post op-ed, “Why I’m running for president.” Delaney is the first Democrat to publicly announce his 2020 presidential quest. As such, he received some media attention. More is due.
It is mighty early to go off to the 2020 races. Yet there are important immediate implications.
Delaney’s could be an important emergence. He is the new “Six Trillion Dollar Man.” Follow along.
Delaney, my Congressman (with whom I have met occasionally over the years and interviewed for this column), is far to the left of me on social issues. I am a full-spectrum archconservative. Being to my left is neither unique to him nor especially hard to be.
That said, he’s right in my sweet spot on general prosperity. And, as I may be the only dues-paying member of the AFL-CIO in the leadership of the conservative movement, I lean toward labor. So does Delaney.
My union affiliation is not conservative heresy. Ronald Reagan and Jack Kemp were both union presidents.
Now, here is a shocking confession. I voted for Delaney, twice, casting my first vote for a Democratic Party candidate — for any office — in over 30 years. I trembled with fear at my heretical action. Yet lightning did not reduce me to ashes.
Why did God not strike me dead?
Delaney understands, as do few others in either party, the fact and the causes of the economic stagnation that is America’s most dire predicament. Stagnation is the real reason for our federal deficit, the real reason behind our crumbling roads, bridges, rail, subway systems, and airports. It also is the root cause of wage stagnation. Delaney gets this.
Even more important, Delaney is wired to create opportunity. His track record shows him a man who can take the decisive actions required to reverse stagnation and restore economic opportunity. He’s got the right stuff.
Don’t mistake Delaney’s suave for soft. He started up two companies and took them public. He was, at the time, the youngest CEO of a publicly traded company. He is the only former CEO of a publicly traded company serving in the House. Ernst and Young named him an Entrepreneur of the Year in 2004.
Fortune Magazine recently named Delaney one of the “World’s 50 Greatest Leaders,” along with Pope Francis, Jeff Bezos, Angela Merkel, and Melinda Gates, among others. Remarkable recognition for a fairly junior Congressman and member of the minority conference.
You probably haven’t heard of Delaney. Let’s change that.
Delaney is rumored to be personally worth around $100 million. Coming from working class roots, he earned this fortune the old-fashioned way. His is a classic American Dream Horatio Alger story.
Delaney possesses what Teddy Roosevelt called “the money touch.” Generating abundance from nothing — no inherited advantages, no grubstake — displays this gift. He also told me how he rescued his second public company from the teeth of the 2008 Panic, a harrowing story.
Not to be overlooked, that second company, CapitalSource, was voted by Washingtonian Magazine’s readers as among the “Best Places to Work” in the capital area. Delaney has created opportunity for workers as well as riches for himself. Nice.
Delaney spoke to me of his commitment to create economic conditions that will allow workers to “earn a bigger piece of a bigger pie.” This fuses the classically Democratic commitment to policies of economic justice — making sure workers can earn a bigger piece — with the classically Republican commitment to policies of economic growth — growing the pie. A rare combo.
Prosperity and justice are not antithetical values. The American Dream is one of “prosperity and justice for all.” America can be good — just — as well as great — prosperous. In fact, it has to be both or it stops being exceptional.
Can Delaney adapt his business instincts to the policy realm? I wrote about Delaney here, Happy Labor Day: How To Bring A Trillion Dollars, And Policy Sanity, Back To America, several years ago:
$1.4 trillion are “stranded” overseas. Seventy-five Congresspeople, and growing, from both parties, respectfully led by freshman Representative John Delaney (D-Md), are advancing a plan to retrieve that money.
Senate Minority Leader Everett Dirkson once reportedly said, “A billion here, a billion there, pretty soon, you’re talking real money.” A trillion is a thousand billion.
A million million dollars. $1.4 trillion is approximately seven times the value of the U.S. government’s gold held at the bullion depository inside Fort Knox. … That’s … real money.
Will Congress do this? Some Democrats consider it heretical. Some Republicans are dragging their feet.
Yet it’s beginning to look like a real possibility. The political implications of doing it are even bigger than the trillion, plus or minus, dollars at stake.
The idea of a tax rate reduction to repatriate profits now, several years later, has been adopted by the White House, by Congressional GOP leadership, and by the leading Supply-Side group, the Committee to Unleash Prosperity (Steve Forbes, Larry Kudlow, Art Laffer, and Steve Moore) of whose Supply Side Blog I serve as editor in chief.
Delaney was the key policy pioneer here. His ability to gather a bipartisan coalition of 75 Congressmen in support of repatriation implies an ability to herd political cats. Useful quality in a presidential aspirant.
Much more than a tax cut to directly repatriate capital is needed to get America moving again. Delaney is working on specific policy recipes. He has a long runway. The next presidential election is more than 3 years away.
Will Delaney come up with a Big Idea? My money says yes.
Delaney has the same kind of insatiable curiosity as did the late Jack Kemp, the last Member of Congress to pioneer economic transformation. In our interview, Delaney referenced one of the great classics on opportunity creation, Malcolm Gladwell’s Outliers. Asking the right question — How can we create equitable prosperity? — positions Delaney to discover the right answers while most other politicos are busily racing down box canyons.
Delaney is drawn to investment in people. We briefly discussed the Nobel Prize winning work of Gary Becker and Theodore Schultz, two pioneers in “human capitalism.” Theirs is a school of thought perfectly consistent with Delaney’s aspirations and one perfectly adapted to the challenges of the 21st century. Delaney also might profit from the work of Nobel Laureate Robert Lucas, who, in “On the Mechanics of Economic Development,” observed:
The consequences for human welfare involved in questions [of economic growth] are simply staggering: once one starts to think about them, it is hard to think about anything else.
It seems that Delaney has already been bitten by the same bug.
Delaney has the bankroll, brains, and belly fire to become formidable, and well before 2020 he just might begin to transform the national political discourse. He sets a high bar.
To become viable as a presidential candidate, though, Delaney must get better at projecting his message. Delaney’s greatest handicap is that he, to date, has been “all cattle and no hat,” all action and no talk. Delaney needs that 10-gallon hat on the campaign trail.
Delaney has an extraordinary track record of doing extraordinary things. Do I repeat myself? Very well, I repeat myself. He started, led, and took public, two companies. He captured a House seat from the Republicans. He got elected a president of his Democratic freshman Congressional class in 2012. He pioneered the proposed trillion dollar repatriation tax rate cut. He now announces that he will not run for re-election to the House in 2018 and will directly pursue the presidency, thus becoming the first declared Democratic presidential candidate for 2020. Big stuff.
Yet in his Washington Post campaign announcement op-ed, Delaney waxed technocratic:
This is why I am running for the Democratic nomination for President of the United States.
My focus is on preparing our country for the future. …
To do this, we need new infrastructure, which can be paid for using my bipartisan approach to infrastructure and international tax reform. We need to be smarter, fueled by more investment in science, education and research. We need new ideas on the future of jobs and work, one where we build a stronger and more vibrant middle class. We need to encourage a more just and inclusive form of capitalism and reduce barriers to small-business formation, start-ups, job creation, investment and growth. We need to strengthen our safety-net programs and create a new social contract. We need to reform the systems of education, health care and immigration, and encourage more volunteerism, impact investing and public service. And we need to take affirmative steps to reduce our security, fiscal and climate risks. This is what my campaign will be about.
Bipartisan approach to infrastructure? More volunteerism?
A presidential candidate needs to sling words as bold as his deeds. Americans do not crave a president to be Handyman-in-Chief, however competent. We want someone who appeals to our imagination and inspires us.
Will Delaney get out of his comfort zone and transform his altar-boy persona, and present himself to the wider political world as Superman rather than Clark Kent?
Eyes on JFK who set the standard for a great presidential campaign announcement:
I am announcing today my candidacy for the Presidency of the United States.
The Presidency is the most powerful office in the Free World. Through its leadership can come a more vital life for our people. In it are centered the hopes of the globe around us for freedom and a more secure life. For it is in the Executive Branch that the most crucial decisions of this century must be made in the next four years — how to end or alter the burdensome arms race, where Soviet gains already threaten our very existence — how to maintain freedom and order in the newly emerging nations — how to rebuild the stature of American science and education –how to prevent the collapse of our farm economy and the decay of our cities — how to achieve, without further inflation or unemployment, expanded economic growth benefiting all Americans — and how to give direction to our traditional moral purpose, awakening every American to the dangers and opportunities that confront us.
Kennedy’s words crackled with excitement.
So … what does our current predicament invite?
A General Prosperity Declaration, that’s what. That, in part, is what the voters heard in Donald Trump’s campaign theme “Make America Great Again.”
Greatness implies restoring dignity as well as prosperity. Giving people the opportunity to earn “a bigger piece of a bigger pie” carries dignity. Redistribution, not so much.
“Delaney: Prosperity And Dignity” bumper stickers? Why not?
I have called our economic predicament a “Little Dark Age.” The American Dream, precisely and concisely, is the ability of regular people to earn economic security and even affluence through merit and hard work.
That dream began faltering almost twenty years ago. The American economy began a die-off, growing at almost half its historic pace. The differential in annual growth of under 2% rather than 3.3% (or, as under Reagan and Clinton, close to 4%) may sound trivial.
It’s not. Everything Economics Turns On A Trifle.
A deficiency compounds over time. As Albert Einstein famously never said, compound interest is the strongest force in the universe. In simple terms, if the economy had been growing at historic rates, your paycheck and bank account would be 30% bigger today. If it had been growing at the heroic Reagan-Clinton rate, you’d be about 50% richer.
And America’s national income would be closer to $30 trillion than $20 trillion. That’s big.
How big? Going forward over the next decade, $6 trillion big.
As I wrote here several years ago, regarding Rep. Kevin Brady, now chairman of the House Ways and Means Committee:
[Charles] Kadlec formulated an insight in a Forbes.com column late last year that, little by little, is beginning to rock Washington. He found it hidden inside a footnote of a Congressional Budget Office report.
“[T]he impact of growth on the deficits … can be found in Appendix B of The Budget and Economic Outlook: Fiscal Years 2012 to 2022: every one-tenth of one percent increase in the growth rate will reduce the federal budget deficit over the next 10 years by $314 billion.” [Emphasis added.]
Because real growth currently has been, and is, trending well below the CBO assumption of 2.8%, the scope of 4% growth should be considered $6, rather than $4, trillion in “enhanced” federal revenues.
$6 trillion in new federal revenues is just the byproduct of 4% economic growth. Of even greater importance: an economy generating more (and better) jobs than there are workers. That could cut the Gordian knot of immigration reform: America will be yearning for more immigrants, documented or not. 4% growth (somewhat less, actually) makes Social Security and Medicare solvent for as far as the eye can see. 4% growth is the key to the goal of Rep. Marsha Blackburn (R-TN) to rebrand the GOP as the Great Opportunity Party. It helps the Democrats, who are identified, in the popular imagination, with empathy for workers and have-nots. And 4% growth will create a climate for spending reform based on policy quality, rather than fiscal panic.
Delaney is the new $6 trillion man.
Why should you bother about what’s happening in the Democratic 2020 presidential primary? Because it would be a blessing, right now, for the Democratic Party to rediscover its sanity and focus on something like Delaney’s shrewd value proposition of general prosperity. And Delaney’s status as a declared presidential contender gives him new leverage.
As a decorated veteran of the Reagan Supply-Side Wars, I remember vividly how crucial it proved when Democrats opened to, and then competed for, prosperity policies. Remember when the Reagan Kemp-Roth 25%-cut in marginal tax rates passed the Democratic controlled House by a wide, bipartisan margin? It was a breakthrough for America.
I vividly recall how, thereafter, Democratic Senator Bill Bradley and Democratic Representative Dick Gephardt combined to spark the takedown of the top marginal tax rate to 28% (by a 97-3 margin in the Senate). As The Washington Post’s David Ignatius then wrote:
THE DEMOCRATS, who talk a great deal about “new ideas” but have difficulty turning them into winning political issues, might take a lesson from Sen. Bill Bradley of New Jersey.
Bradley is the man who launched the great tax-reform crusade of 1986. His ideas, which seemed revolutionary and impossible when he first proposed them four years ago, are now close to becoming law. He has plenty of company these days, from Sen. Bob Packwood to Ronald Reagan. But Bradley was out there first — and, for a while, nearly alone — with his proposal for rate-cutting, loophole-closing tax reform.
Bradley’s intellectual breakthrough on tax reform was to combine the traditional liberal approach — closing loopholes that benefit mainly the rich — with the supply-side conservatives’ demand for lower marginal tax rates. The result was Bradley’s 1982 “Fair Tax” plan, which proposed removing many tax preferences and simplifying the tax code with just three rates: 14 percent, 26 percent and 30 percent. Most subsequent reform plans, including the measure that passed the Senate Finance Committee this month, were modelled on Bradley’s.
“The thing he understood early on was that there had been a schism in the past,” says Bradley’s legislative aide, Gina Despres. “Liberals had talked about tax reform as soaking the rich and redistributing income. Conservatives wanted to use tax reform to improve the economy, by allowing markets to allocate resources. What Bradley understood was that you could merge the two.”
This does not imply that Delaney will, or should, focus primarily on tax rates. Dropping the top rate from 70% to 50% and then from 50% to 28% is qualitatively different from dropping it from 39.6% to 35%. The latter would be nice but not transformational.
Bernie Sanders voters take note. As Larry Kudlow and Brian Domitrovic remind us in their indispensable JFK and the Reagan Revolution: A Secret History of American Prosperity, Bill Bradley was a democratic socialist well before Sanders.
Sanders voters, very much including democratic socialists, ought to take a close look at John Delaney’s propensity to invest in people. They might like what they see: ways to overcome wage stagnation and establish economic equity without pretend magical money trees to fund it.
As for me, I headed up the Draft Mike Pence For President SuperPAC in 2012. Thus, of course, I would prefer to see Delaney succeed a wildly successful Pence presidency after a wildly successful Trump presidency, if they can pull it off, in 2032. Delaney is a youthful 54 years old and could afford to wait another 15 years.
Still, his current declaration has some great, immediate, spinoff benefits. We Pachyderms deserve smarter, tougher adversaries than the Donks have been offering. Maybe Delaney’s declaration will serve as a challenge that will put the fear of God into the Republicans, forcing us to find our misplaced smarts.
So, Delaney? Bring it on.
As Victor Hugo wrote in a letter to the publisher of the Italian translation of Les Miserables:
Social problems overstep frontiers. The sores of the human race, those great sores which cover the globe, do not halt at the red or blue lines traced upon the map.
Now as then, the great sores of the human race do not halt at the red or blue lines.
I happen to love hardball (but not dirtball) partisanship. I want our parties to compete over which has the will, and the smarter idea of how, to restore an economic climate where working people can once again “earn bigger pieces of a bigger pie.”
All eyes on John Delaney, whose presidential announcement holds the possibility of a watershed political development.