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Jewish World Review Dec. 21, 1999 /12 Teves, 5760

Morton Kondracke

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Bush improves, everyone panders -- AMID THE JOKES and sparring in this week's Republican debate in Iowa -- and Texas Gov. George W. Bush's uptick in performance -- the phrase I kept hearing in my head was "industrial policy."

Huh? It's a term from a bygone era, the 1980s, when liberal Democrats promoted Japanese-style government subsidies to help specific industries such as steel, autos and electronics. Republicans dumped on the idea, claiming government shouldn't pick "winners and losers," but should let the free market decide which industries prospered or failed.

GOP dogma seemed to carry the day when Japan bet big on high-definition analog television while U.S. private-sector companies leapfrogged to digital TV. At about the same time, the Japanese "miracle" evaporated and the U.S. economy soared.

So why, then, did the Republican presidential candidates -- except for Sen. John McCain (Ariz.) -- fall all over themselves to support government subsides for ethanol, the corn-derived additive for gasoline?

By subsidizing ethanol, the government is giving it a boost as a fuel in comparison with ordinary gasoline and liquefied natural gas. That's picking winners and losers. How come?

"A renewable resource that helps farmers," said Sen. Orrin Hatch (Utah). "Let's have a few years of a fair test... till 2007," said that near-free-market absolutist, Steve Forbes. "It's good for our air (and) reduces our dependency on foreign oil," said Bush.

You know, if ethanol were a Democratic policy invention -- such as solar power or geothermal energy -- Republicans would denounce the $3.8 billion, seven-year subsidy for it as "industrial policy."

Of course, Democratic candidates Al Gore and Bill Bradley also endorse ethanol subsidies -- Bradley only after he decided to run for president.

In the GOP debate, McCain declared -- truthfully -- that "everybody on this stage, if it wasn't for the fact that Iowa is the first caucus state, would share my view that we don't need ethanol subsidies. It doesn't help anybody." Except corn farmers, of course.

McCain is dissing Iowa, but he's also consistent in opposing other subsidies for gas, oil and sugar, which together total about $6 billion a year.

But wait. McCain, too, favors industrial policy: a permanent ban on taxation of Internet commerce, which means that people selling on the Internet will enjoy a competitive advantage over those who sell in high-overhead shopping malls or street-corner shops.

You could argue -- as Bush does, for instance -- that the Internet should get a temporary boost like the United States once gave canals, railroads, airlines and -- through highway construction -- the auto industry and suburban home builders.

But McCain favors a permanent Internet tax ban, which is a form of "corporate welfare" for America Online or that McCain would abhor if someone tried to give it to The Dow Chemical Company or Archer Daniels Midland Company.

Besides the various panders on display, the next most significant thing happening in the Iowa debate was Bush's improved performance. The front-runner dropped rote recitations from his stump speech in answer to every question and mixed it up on tax policy and campaign finance with McCain, his neck-and-neck rival in New Hampshire.

On a visit to Washington last week, Bush campaign manager Karl Rove pointed out that Bush's first two GOP debates, in New Hampshire and Arizona, "doubled his entire debate experience," alluding to two Texas gubernatorial debates in 1994 and 1998.

Bush is far from being able to handle Gore in general election debates, but he's stopped looking over-rehearsed and "light."

As Rove pointed out, Bush is also in a commanding position in the GOP race, if history is any guide. Since 1959, in contested open races for the GOP nomination, no candidate with a Gallup poll lead of 10 percent or more going into an election year has failed to win the nomination.

Bush's lead nationally is 40 points. Moreover, Rove declared, Bush is waging an all-out effort in all states and territories holding primaries or caucuses between Jan. 24 and Feb. 29, whereas McCain and Forbes are competing only in two or three each.

McCain is edging Bush right now in New Hampshire, but if Bush beats him there on Feb. 1, that race is over. If Bush pummels Forbes in Iowa Jan. 24, he's probably through. "We look at every state as a fire wall," says Rove.

The Bush team's confidence is probably justified as pertains to the GOP nomination race. But the general election is another matter. Rove thinks the country is eager for change, that Gore is vulnerable as the tarnished heir to President Clinton and that Bradley is vulnerable because he's liberal and because Clinton wouldn't pull out all the federal stops to elect him.

The Bush camp also thinks that because Bush beat popular Democratic incumbent Ann Richards in Texas in 1994 after Richards tried to make his inexperience the issue, it can do the same with the Democrat in 2000.

But that's a false analogy. Richards attacked Bush in 1994. Gore or Bradley will attack not only Bush, his Texas record and his proposals, but also House Republicans and their ties to him.

Bush should hope he doesn't win the GOP nomination too quickly. He needs more sparring to get ready for the title fight.

JWR contributor Morton Kondracke is executive editor of Roll Call, the newspaper of Capitol Hill. Send your comments to him by clicking here.


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