When you pick up a Bob Woodward book, you pretty much know what you're going to get.  You get a nearly novelistic approach to a political topic, allowing Woodward to show off how much he was able to ferret out--details of meetings and private conversations, entire dialogues reconstructed, players private thoughts presented, and, of course, a couple of flashy insider nuggets of info to make sure the book gins up enough publicity to hit the bestseller list.  The whole purpose of these books is to demonstrate that Woodward has unique access to the inner councils of government, and to then afford the reader a tantalizing glimpse at the normally hidden process of governing.  But I was surprised, in reading some of the reviews and profiles on the Web, at how often Woodward's books are dismissed, frequently by jealous peers, for being about merely the process.  Folks seem to feel that he fails to understand motives and ideals, concentrating too much on the ugly sausage making, rather than on the final tasty product.  I believe that they have missed the point entirely.  Woodward's cumulative body of work stands for the proposition that no one can control what emerges from the process.  In his own insidious way, he has constructed an indictment of centralized political power that is every bit as damning as the more revered works of FA Hayek or Milton Friedman or George Orwell.

The Agenda is an excellent example of his method.  The focus of the book is President Clinton's first year in office and his attempt mostly to pass an Economic Plan, but also NAFTA and Health Care.  Clinton had promised three main things as far as an economic plan was concerned, to cut the deficit, cut middle class taxes and to reinvest in social programs for the working and middle classes.  But they quickly jettisoned the tax cut and the spending programs followed shortly thereafter, so all they had left was a plan to cut $500 Billion from the deficit over five years.  This caused a huge rift in the inner circles of the Administration.  On the one hand were the deficit hawks--Vice President Gore, Leon Panetta, Robert Rubin, Alice Rivlin, Mac McLarty, Lloyd Bentsen, David Gergen, and then Alan Greenspan advising from without--mostly older white men, fairly conservative, some even Republican or ex-Republican, experienced in government and in Washington. They had mainly been brought into the Administration after the election and believed Bill Clinton to be a New Democrat.  On the other hand were the folks who wanted to emphasize tax cuts and spending programs--Robert Reich, George Stephanopoulos, Paul Begala, Gene Sperling, Mandy Grunwald, James Carville, and Hillary--they tended to be younger, more diverse, more liberal and more nakedly political. They had, many of them, worked on the campaign and believed that Bill Clinton shared their liberal views. The hawks had Wall Street, the bond market, Congress, Ross Perot, editorial writers, and public opinion on their side.  The doves had only political activists, special interest groups and the Left Wing of the Democratic Party.  Meanwhile, somewhere in the middle, leaning one way or another, depending on the day, was Bill Clinton.

This is where the concept of the Permanent Campaign, that David Maraniss writes about in First in His Class (see Orrin's review), got put to the test and where folks like Stephanopoulos had to face temptation (see Orrin's review).  Inherent in the Permanent Campaign was a schizophrenic desire to be all things to all people, perhaps even to one's self.  It was premised on the belief that Clinton could maintain personal popularity, electability and power by presenting himself as a Rorschach blot--both idealist and pragmatist, constantly trimming to follow public opinion, avoiding the defining power of the press in order to shape his own image.  And they did manage this throughout the actual Presidential Campaign, but governing on the national stage required Clinton to either take definite positions or let others dictate the agenda.   Further complicating maters was the fact that this dichotomy, (realist/pragmatist vs. idealist/liberal) reflected an apparently genuine split in Clinton's own psyche.  Thus, his wife and his friends and his most loyal aides were appealing to his very real desire to achieve great liberal ends, while the old pros were appealing to his pragmatic desire just to get something done.  Had he been able to make up his own mind more quickly, he might have been able to maintain the more leftist aspects of his plan, but by waiting, he yielded control to powerful institutional forces.

Here is where process comes into play.  A newly elected President, his party in control of both houses of Congress, with an announced plan, ends up sitting in a meeting, raging :

    I hope you're all aware we're all Eisenhower Republicans.  We're Eisenhower Republicans here, and
    we are fighting the Reagan Republicans.  We stand for lower deficits and free trade and the bond
    market.  Isn't that great?

Bill Clinton had been overtaken by the process of crafting legislation in a titanic modern Social Welfare State.  Every department, every cabinet official, every aide, every bureaucrat, every congressman, each had their own personal fiefdom to protect or constituency to kowtow to pet idea to propose.  They all wielded distinct forms of power and used them to their own ends, not to the President's end, and the bill that finally emerged from the process ended up looking very different from what the President had wanted.

But then the Permanent Campaign staged a comeback.  The true believers decided to go to war for the bill.  They wisely determined that, though they'd fight for their version, no matter what finally passed, they had to claim it as the President's and a triumph.  So by the end of the day, when Bob Kerrey was waffling over whether to give the President his 50th vote, it was not the pros who were apoplectic, rather it was the liberals, though they had loathed the bill themselves mere weeks earlier.

So that's the story of how little control anyone has over the process, the degree to which the process itself is actually in control.  Taken only at this level, the book is a success and reads almost like a thriller.

But there is a problem with Woodward's failure to reckon with larger ideas.  Because his perspective is so narrow, always looking down into the details, he misses the big picture.  And the big picture here is how insignificant this bill was.  In truth, it represented mostly a triumph of psychology.  As Clinton said, it marked the point where Democrats became Eisenhower Republicans.  This should not be underestimated; in any conflict, once one side says it is willing to negotiate on the other side's terms, the battle is essentially over.  Democrat willingness to accept the ideas of fiscal discipline and balanced budgets truly marked the end of the Era of Big Government.

But the bill itself was intended to cut the deficit by $500 over 5 years.  At the time it was passed, Republicans predicted that it's tax increases would trigger a recession.  In retrospect, Democrats like to claim that it succeeded even beyond these expectations.  Actually, it seems unlikely that it had much effect at all, or perhaps a slight negative effect.  What both Republicans and Democrats fail to understand is that they were tinkering on the margins of the budget, while fundamental change was overtaking the nation.

Apparently unbeknownst to the two parties, the Cold War ended in the late 1980's, early 1990's.  This allowed for staggering cuts in the Defense budget. I've had trouble finding specific numbers and I'm neither a mathematician nor an economist so I'll have to speak in generalities, but here's what we can find out:

    *  The deficit fell from $290 billion in 1992 to a surplus of $124 billion in 1999

    *  Total Federal expenditures went from $1.02 Trillion in 1992 to $1.76 Trillion in 1999

    *  Here's the Department of Defense Budget from 1991 to 2000
        DOD
        1991-319B
        1992-302B
        1993  292B
        1994  282B
        1995  273B
        1996  266B
        1997  271B
        1998  270B
        1999  275B

What do these numbers tell us?  Even as the Federal Budget increased by about 50%, Defense spending plummeted.  Taking 1991's $319B as a baseline, we saved $311B on Defense (in real dollars) from 1992 to 1999.  Take into account the fact that these declines occurred while the rest of the budget was increasing at a 50% rate, and it's apparent that virtually the entire surplus can be accounted for just by Defense cuts.

Then consider that the past five years have been a period of deflation, that besides this normal Peace Dividend, the economy has also benefited from incredible rises in productivity, thanks to computers and the Internet, and that the booming economy has resulted in tremendous increases in how much money the government collects in taxes.  Given all of those huge Macroeconomic factors, it is awfully hard to see how much effect the microeconomic tinkering in this package could possibly have had.  Moreover, the entire argument for moving towards balanced budgets was that the brief bit of belt-tightening it would require would be more than paid back by lower interest rates.  Instead, interest rates have risen steadily even as the surplus has grown.  Indeed, given the zero inflation or even deflationary climate in which we now find ourselves, these may be the highest real interest rates in our nation's history.

One possible explanation for this would be that we've reached balance at too high a rate of spending.  The tax load being borne by the American people today is as high as it was during WWII.  Why?  it is typical in such times of crisis to boost spending and taxes in order to meet a short term threat, but then both typically fall.  Why has there been no similar decrease in overall spending and taxes after the long and costly Cold War?  And isn't it likely that the government is currently drawing too much of our wealth out of our pockets and then using it inefficiently on wasteful government programs?  It is long past time to return this cash to the Free Market system, where consumers relentlessly enforce  efficiencies.

Bill Clinton deserves great credit for changing the psychology of his party; he made them believers in and defenders of the idea of Balanced Budgets and Fiscal Responsibity after the party's 60 year vacation from economic reality.  This accomplishment, the Eisenhowerization of the Democrats, may well be his greatest achievement as President (NAFTA and GATT are more concrete but are truly Republican initiatives, passed by overwhelmingly Republican votes in Congress).  It represents a triumph for the New Democrats in their effort to rid the party of the worst vestiges of Big Government liberalism.  But Bill Clinton has another side to him; the side which wants to be seen as an equal of FDR, Truman and LBJ in terms of defending and extending the Social Welfare state.  He has therefore been inflexible on issues like reforming Social Security, though he did bite the bullet and go along with the politically easy Welfare reform bill.  He even tried passing the Health Care bill, which would have seen a government takeover of 14% of the economy and would likely have been a sufficient counterweight to undo even the massive favorable economic trends which we are currently benefiting from.

Bob Woodward does an excellent job of portraying the machinations which went into passing the Economic Plan and defeating the Health Care Plan.  The book conveys a fly-on-the-wall perspective and the struggle is thrilling.  But, if he even understands the bigger picture, which seems unlikely, he has failed to provide a context in which to place these struggles.  Within the four corners of his viewpoint, passage of the one is simply a victory, failure of the other is simply a defeat.  Perhaps this limited perspective is the inevitable shortsightedness of the daily journalist.  We will probably have to wait for the historians to provide the grand vision.  But it is not too early to declare that passage of his Economic Plan was a victory, but mostly a symbolic one, and the failure of the Health Care Plan was a defeat, and probably the best thing ever to happen to him and one of the better things to happen to the country in recent years.  The final verdict on Bill Clinton's agenda must be that that its achievements were minor, its failures major.  The final verdict on Bob Woodward's Agenda, is that it suffers from some significant myopia on the specific issues, but as a portrait of how little control a President has over his own administration and the government, it fits neatly into the ongoing chronicle he is weaving of the impossibility of governing rationally in the bloated post-New Deal state.

(Reviewed:20-Aug-00)

Grade: (B) Orrin C. Judd

Tweet