I think that there is a consensus of intelligent people in the country who, if they were to tell you the truth as they understand it -- Republicans or Democrats -- would come very close to the agenda I have put together, a whole plan.
There is nothing terribly clever about it. People hear what I have to say, whether they are Republican businessmen at [the American Stock Exchange or the Securities Industry Association]. Well, you were at SIA. Nobody objected to it. They didn't like it. They didn't like the part where they heard maybe at some point you have to get to the wealthiest people in the country and ask them to give a little more. You heard them groan -- "ohhhh." You know, they don't want to do that. I don't blame them. It's like going to middle-class people and telling them, "Gee, maybe you have to pay more tuition at SUNY." They'd groan, too.
So, the real question is not, "What should you do?" The real question is, "Will this country have the will that is aroused by a political leadership that has the will to say the hard and right things?" There is a great deal of evidence right now that there is not that will, either among the Democrats or the Republicans. That's why you're settling at this moment for a child-care program -- 300 bucks. Tax for consumer incentives -- nice, 300. You're not going to do it with 300. And the other guy is saying, capital gains tax cuts, worth $9 billion. You're not going to do it with a capital gains tax cut. Everybody knows that! And yet, there is a pretense ...
My prediction -- this if fun, especially since nobody remembers -- by next spring the Republicans and the Democrats will both be talking about a lot of the things that we're talking about now.
... President Bush will have to come up with an economic growth program that has at least the following in it -- please write it down so that when they do it I can take some credit for it -- net investment tax credit or something like it; R and D credits; maybe, at some point down the line, accelerated depreciation; a different capital gains treatment than the one he's talking about; I'm talking about one that is prospective, not retroactive, reaches the middle class, and that is tied, as President Bush once suggested he would tie it, to an increase in the rates on the richest people.
... The distinction between my own approach to economics and supply-side and Republican conservative failures is that they stop with capital. They say that all you need for a strong economy is to free up wealth in the hands of the wealthy. They will invest it discreetly, intelligently; it will become capital through investment.
That didn't happen. We gave them 16 to 28 tax cuts, billions and billions and billions of dollars, back in the hands of the wealthy; perhaps the middle class got some and the poor, too, but, you know, the basic piece went to the rich. And they bought shoes in Spain. They moved factories to Taiwan. They bought junk bonds. They ate it. They drank it. And they did not put it into factories ...
The last eight years have not only been startlingly low in term s of growth of gross national product and jobs. They have also been devastatingly weak in terms of investment and savings. We all know that.
So supply-side failed because the theory was, all you needed to do was to give the rich people the money. "They'll do the right thing." It's the ultimate arrogance of the elite in this country. Always has been that way. "They know what to do." Sometimes they do, sometimes they don't ... They didn't know what to do with savings and loans. They didn't know what to do with banks generally. And they didn't know what to do with the economy for the last eight years.
So first thing. Find a better way to do capital. That is, by targeted investment ... I'm going to say, "When you put your money into a plan, I'll give you a break. When you put it into research and development, I'll give you a tax break. When you do something real and productive, that's number one."
Now, the Republicans have always stopped there. They have always stopped with capital. Children? Naah, children's nice. They're Pelagians, I told the group the other day. Pelagians is a wonderful word because they can't nail you with it. They don't know the spelling so they can't look it up.
... But as to things like drugs and the homeless and kids in trouble -- "They aren't really our concern. You know Mario, that's not really a national concern, that's what you're supposed to deal with at home, in the neighborhood, in the street, in city hall,' they'll argue, 'or maybe at the state capital."
That's all part of economic development. You can't compete with the Japanese when they are going to school 220, 230, 240 [days a year] and they are producing scientists, chemists, engineers, and you're producing dropouts. Forget about it. You lose.
Eighty percent of the increase in the work force in the 21st century are women, Latino, black, etc. With that population -- our most vulnerable and undernourished -- if that population doesn't get stronger, we can't make it in the economy.
So they'll put some money there. They'll put all the money I told you about in capital. They'll put some money into kids, maybe a Decade of the Child program, ... which we did here for the first time in the United States. Liberty Scholarships, which we started here -- they now have a bill in force.
You'll find infrastructure money. Remember my "New New York City" plan? You'll find them talking more and more about billions of dollars of transportation-related infrastructure ...
All of this will be matured and pushed hard by Bush by the spring. And the net result will be -- and I predicted this -- there will be a competition between the Democrats and the Republicans. A lot of ideas we're already talking about will be agreed to by both parties and there'll be a struggle over whose ideas they really are.