WASHINGTON- The Democratic platform that the party faithful endorsed in New York with so little controversy offers an important blueprint in economic policy-making that deserves a close look.
The Democrats are seeking a broad mandate for using government in new ways to reshape domestic priorities and revive U.S. economic growth.
This is an issue of crucial importance to bond market participants concerned that a new crew of government managers may end up in Washington with well-intentioned fiscal initiatives that end up reviving inflation.
The obvious point is that the platform is laced with new policies developed by Bill Clinton and his lieutenants. And now, with the selection of Al Gore for the vice presidential slot, the Democrats stand before the voters with two candidates who are smart, youthful, and moderate. At this point, they look like a formidable threat to President Bush.
The more interesting issue is how Mr. Clinton and the Democrats plant to use the federal budget, tax policy, and other levers of government to try to drive the U.S. economy onto higher ground.
The plan has the input of some highly sophisticated people who have given years of thought to formulating a response to the decade-plus of policies crafted by Ronald Reagan and Mr. Bush.
The top Clinton economic advisers include Robert Shapiro, vice president of the Progressive Policy Institute, which is a Democratic-leaning think tank, as well as Robbert Rubin, co-chairman of Goldman Sachs & Co., and Roger Altman, vice chairman of the Blackstone Group.
Other top aides include Robert Reich, an economics professor at Harvard, and Ira Magaziner, a consultant who advises corporations on strategy in overseas markets.
These men know all about how government spending can soak up private investment, how the annual budge deficits require rising interest payments on debt, how changes in the tax code can skew investment decisions, and how bond market rates influence Federal Reserve policy. They are not native, and they know that any major policy missteps will be quickly found wanting in financial markets.
Still, the platform that Mr. Clinton is now running on does not shrink from the idea that government can still be a useful and important tool in U.S. economic life. Indeed, it attempts to shape policy to take into account the U.S. role as an international competitor in tough global markets.
The new dogma seeks to draw Democrats back into the graces of the business community at large. The platform rejects "the big government theory that says we can hamstring business and tax and spend our way to prosperity." At another point, it says, "we honor business as a noble endeavor." Businessess that are willing to make long-time investments are promised tax credits and a capital gains cut.
The platform calls for a national public works program, but the rationale is an alluring one stressing a partnership with private capital and the need to provide jobs, rebuild the cities, and improve U.S. productivity. There is a call for urban enterprise zones and investment breaks for housing.
The Democrats also say they are committed to bringing down the budget deficit "by putting everything on the table," They call for more cuts in defense, reform of health-care entitlement programs, and cutting the administrative budgets of federal agencies by 3% a year.
Republicans have been quick to jump on the Clinton program as a cleverly disguised agenda for the usual Democratic lust for new spending programs that will eat up most, if not all, of the promised budget savings. And they point out that the Democrats are committed to taxing the wealthy to help pay for everything.
Perhaps the Democratic platform is a modern-day Trojan Horse that is really a ploy for another round of fiscal recklessness. But the Democrats have come up with some new ideas in economic policy that deserve a rational response from Republicans. To tar and feather Mr. Clinton and his program as a successor to past Democratic economic plans does it a disservice and muddies the debate.