SEVERAL YEARS AGO an obscure Democratic governor from the politically inconsequential state of Vermont was the guest speaker at a Cato Institute lunch. His name was Howard Dean. He had been awarded one of the highest grades among all Democrats (and a better grade than at least half of the Republicans) in the annual Cato Fiscal Report Card on the Governors. We were curious about his views because we had heard that he harbored political ambitions beyond the governorship.
Dean charmed nearly everyone in the boardroom. He came across as erudite, policy savvy, and, believe it or not, a friend of free markets--at least by the standards of the Tom Daschle-Dick Gephardt axis of the Democratic party. Even when challenged on issues like environmentalism, where he favored a large centralized mass of intrusive regulations, Dean remained affable.
"You folks at Cato," he told us, "should really like my views because I'm economically conservative and socially laissez-faire." Then he continued: "Believe me, I'm no big-government liberal. I believe in balanced budgets, markets, and deregulation. Look at my record in Vermont." He was scathing in his indictment of the "hyper-enthusiasm for taxes" among Democrats in Washington.
He left--and I will never forget the nearly hypnotic reaction. The charismatic doctor had made believers of several hardened cynics. Nearly everyone agreed that we had finally found a Democrat we could work with. Since then, I've watched Dean's career with more than a little interest and we chat from time to time on the phone.
This all may come as a shock to those following Dean's sudden and unexpected leap-frog over the other Democratic presidential candidates. Running sharply to the left, he's become the darling of the angry liberal intelligentsia. For now at least, he seems to have disavowed his credentials as a free-market enthusiast, a tax cutter, and an enemy of big-government excess. Among the real contenders, he favors the most radical governmental takeover of the health care system, and he supports the biggest tax increase. Also, he was the most vocal opponent of the war in Iraq, verging on pacifism. One thing about Dean, however, remains exactly as I remember it from the day I met him--his unapologetic leftist stands on social issues. As a candidate, he boasts of his support as governor for gay marriages, but as one longtime observer of Vermont politics says, "The one issue he cares most passionately about is pro-choice on abortion, even to the point of holding pro-lifers in total contempt."
The media have celebrated Dean's eclectic economic views. The Washington Post gushed on its front page: "As Governor, Dean Was a Fiscal Conservative." Business Week ap-plauds his pro-business credentials. Hammering George W. Bush almost hourly for his big deficits, Dean himself contends he is still an advocate of "fiscal stability" and a leader who will promote a balanced budget . . . "because I balanced my budget every year in Vermont."
Not so fast. This is, after all, the former governor of the state that gave us Ben & Jerry's Rainforest Crunch and the nation's only self-proclaimed socialist congressman, Bernie Sanders. In Vermont, Euro-style tax-and-spend governmental activism is still in vogue and politicians like Senator Jim Jeffords pass as moderates. This is the second-highest taxing-and-spending state in the country, with collections about $600 per person above the national average. The state's regulatory climate, says John McClaughry of the Ethan Allen Institute, Vermont's sole dispenser of free-market views, "almost seems intentionally designed to chase employers away." Dean has boasted that he was "the most fiscally conservative governor in Vermont in decades," but that's like saying you were the most chaste woman in a Texas whorehouse.
Indeed, Dean has taken many positions that should make life easy for the Republicans' opposition research team. As governor, he supported and successfully enacted a whole menu of dimwitted liberal causes: a state-funded universal health care system (which as president he would take nationwide), government-subsidized child care (even for the rich), a higher minimum wage, a mega-generous prescription drug benefit for seniors with incomes up to four times the poverty level, one of the nation's most liberal mandatory family-leave laws, and taxpayer-funded campaigns. It's no wonder the "Almanac of American Politics" calls Dean "one of the four or five most liberal governors in America."
At one time or another, Dean raised just about every tax he could get his hands on. During his 12 years as governor, he upped the corporate income tax rate by 1.5 percentage points, the sales tax by 1 percentage point, the cigarette tax by 50 cents a pack, and the gas tax by 5 cents a gallon. Sure he balanced the budget every year--by digging deeper into Vermonters' wallets.
In 1997 his political career looked to be careening out of control. Dean signed into law a Robin Hood school refinancing scheme called Act 60, which guaranteed that every school would spend at least $5,000 per student. To pay for it, dollars would be extracted from wealthy school districts and channeled to the poorer ones. Local property tax assessments, which paid for community schools, were replaced with one uniform statewide property tax. But Vermont's highbrow liberals weren't so interested in redistribution schemes in which they were the ones to be gouged and their own children's schools would lose out. The class warfare plan spontaneously combusted into a thunderous tax revolt across the state. Three donor towns defiantly refused to send their taxes to Montpelier. Vermonter and bestselling author John Irving, a self-described liberal Democrat, famously lambasted the plan as an exercise in "Marxism." In November, voters took their rage out on Dean, who narrowly escaped a career-ending loss by only a few hundred votes.
But he weathered the storm. Dean is nothing if not a survivor--as well as an iconoclast. Even as he pursued wild-eyed social experiments, Dean carefully nurtured a reputation as a "business-friendly" governor. On numerous occasions he pragmatically swept aside onerous environmental regulations and last-use restrictions (this is the greenest state of all) to make room for business expansion and jobs, jobs, jobs. He supported electricity deregulation to take monopolistic pricing power away from big utilities. He even launched one of the nation's most progressive voucher programs for high school students.
The word Vermonters use most often to describe Dean is "frugal." Coming into office amidst the early 1990s recession, he cut formerly sacrosanct welfare spending to keep the state out of debt. The Cato analysis shows that during Dean's first four years in office, Vermont's budget grew much more slowly than other states'. He cut income tax rates across the board (much as President Bush did). Although he raised overall business taxes, he approved millions of dollars' worth of incentives to lure smoke stacks back into the Green Mountain State. It was during these early years that the head of the state's powerful Progressive party called him "a very right-wing Democrat." And during a time when President Bush has been piling up mountains of debt in Washington and 47 governors face record budget deficits of their own, Dean admirably left Vermont with a $10.4 million surplus when he left office this past January--which would certainly be one of his trump cards against Bush. If Dean were ever elected president, I'm convinced he would be monomaniacal about balancing the budget--though certainly not in ways that would please conservatives.
Part of Dean's star appeal has been the refreshing genuineness of his campaign rhetoric, even when his ideas are cockeyed. By pledging to repeal the entire Bush tax cut--a move that would raise the average tax burden on middle income families with three kids by about $2,500 a year, Dean is attempting to prove that voters will swallow higher taxes to get more government largesse. In a recent debate, he confidently asserted that when working class voters saw his universal government-run health care plan, they would gladly pay for it. "If we're going to have a system of universal health care in America, we will have to pay more taxes," he said.
Of course, these are the kinds of unavoidable tough fiscal choices that voters should be asked to make, but that most politicians refuse to acknowledge. God save the country if voters actually buy into Dean's health care socialism, but at least he is honest about the sacrifices required. This is not a man who believes in the mythical free lunch.
Ever since that first meeting with Howard Dean some five years ago, I've been trying to think of what politician he most resembles. The former governor of a small state, he is charismatic, good looking, wonkish, craving of the spotlight, and capable of telling a room full of people precisely what they want to hear. The obvious answer recently hit me: Dean is Bill Clinton, but without the skirt-chasing.
Republicans are said to be salivating over the prospect of a Bush-Dean match-up. They shouldn't get carried away. Howard Dean, warns John McClaughry, has been "underestimated throughout his political career. He has an uncanny knack for finding where the political capital is stored and walking off with it." The trick for Dean is to ensure that the ultra-liberal positions he has taken in the primaries, which contradict his sometimes centrist record, don't cripple his ability to reach out to Middle American voters in a general election--should he make it that far. If he does, and then finds a way to zig-zag back toward the center, Howard Dean could be George W. Bush's worst nightmare.
Stephen Moore is president of the Club for Growth and a senior fellow at the Cato Institute.