Around March 1991 President George Bush was looking so invincible, with the end of the Cold War and a successful Gulf War campaign with an 89% approval rating, that many legitimate Democratic contenders, like 1988 VP nominee Lloyd Bentsen and Dick Gephardt, took themselves out of the running. However, Bush was vulnerable on a couple of fronts: the 1990-91 recession and an earlier budget deal where Bush was forced to renege on his infamous 2008 "read my lips" pledge not to raise taxes.
Because of a softening economy at the end of the 1980's, federal revenues were unable to keep up with spending; the Gramm-Rudding-Hollings Balanced Budget Act meant that without a budget compromise, Draconian cuts in entitlements and defense were inevitable. Bush presented a budget with no new taxes, but it was dead on arrival. Bush was faced with a choice of vetoing budgets and risking a government shutdown or putting taxes on the table.
Bush never used his post-war mandate to drive a domestic agenda; he was seen as indifferent or aloof as the recession, perhaps sparked by the higher taxes and higher energy costs, also hit white-collar workers (including myself). Even though the Fed started cutting rates in the summer of 1991, Bush's approval ratings steadily dropped heading into the primaries.
Public disgust with bipartisan bickering and fear of deficits provided a unique opportunity for Ross Perot to make a serious third-party bid as an outsider, outdistancing both Bush and Clinton, when he dropped out in the summer, convinced he had no shot in the election if it got decided in the House of Representatives with no one getting a clear majority of electoral votes. A Southern centrist governor with no military or foreign policy experience, Bill Clinton, won the Democratic nomination.
In the meanwhile, the unpopular tax increases agitated conservative Republicans (despite the fact that Reagan also had to give back tax increases during his first term). Pat Buchanan waged enough of a battle against Bush to win a favorable slot for a speech and concessions for conservative planks in the platform.
In essence, the Buchanan effect forced Bush to the right of where he wanted to be for the election, and Clinton took Al Gore, also a Southern moderate, which broadened the ticket's appeal to independents. Clinton got a huge bounce out of the convention, but even with Perot's reentry into the race, and the effects of interest rate cuts improving the economy, Bush was never able to close the distance on Clinton, as the Clinton campaign ran a predictable Washington-outsider campaign, argued for a change from 12 years of Reagan and Bush and blasted Bush as untrustworthy on domestic issues and out of touch with the middle class. This was despite Clinton's "finger-in-the-wind" philosophy of political expediency, his migration to social and cultural liberalism, and obvious deep character flaws.
Barack Obama already shows a keen interest in symbolism, wanting to emulate Jack Kennedy's appearance at Brandenburg Gate and nomination speech in a stadium. He is also trying to assume the mantle of outsider and a vacuous rhetoric of change. [My response to "Change You Can Believe in" is what you get from a Republican teller.]
Barack Obama and the Democrats have seized on John McCain's earlier candid admission that he's not a trained economist, and they're desperately trying to tie McCain to George W. Bush's unpopularity and impugning his integrity with regards to his populist rhetoric in voting against the 2001 and 2003 tax cuts and his recent change of mind on offshore drilling.
There are some obvious lessons that can be taken from the 1992 election, especially the fact that Clinton was elected DESPITE a lack of military and foreign policy expertise. Second, the Iraq occupation, even though the surge has been successful, is still very unpopular. I think McCain has to back off simply reminding people he was right and Obama was--and continues to be--wrong. Most people feel we've been there too long, and for John to convince the people against the occupation, he needs to reach across to them, instead of letting Barack to lead them to believe he is looking for excuse to remain in Iraq. I would recommend he commit himself to a large pullback within 6 months of the new Iraq government taking power after elections. Third, the pick for the Vice President is important. I believe, as I mentioned in a past post, that McCain has to pick someone with solid economic credentials, has dealt with a topical issue (like health care), has more of an outsider reputation (in conjunction with the change from Bush), and has appeal to disaffected conservatives, i.e., Mitt Romney.
Fourth, McCain has to deal with G.H.W. Bush's perhaps biggest vulnerability: his so-called "vision thing". John needs to explain, in a sweeping bold picture, why he wants to be President. He needs to tie in issues like foreign energy and lack of border security to national defense. He needs to talk about replenishing military hardware and recruiting more soldiers. He needs to talk about a North American trading block, legal entry for seasonal workers maintaining home country citizenship, and diversifying foreign suppliers. He needs to take the higher road on jobs, focusing not on minimum wages but better paying jobs elsewhere because India and China graduate more engineers by a multiple factor. He should do something dramatic to spur savings and investment by offering, say, a flat $5000 exemption on interest and dividend income. He should consider resurrecting Bob Dole's former catastrophic health care plan. On social security: consider something bold like allowing diversification of social security/Medicare reserves into real assets, maybe even something like government revenues from ANWR reserves and/or new oil drilling to shore up. Consider future tax cuts in the form of credits or reduction of employee contributions to payroll taxes.
Finally, consider adaptation of Democratic "instant response" tactics. For instance, I saw of a glimpse of a materially false Obama job tonight claiming John McCain is against alternative fuels; the record shows that John opposed dropping CAFE standards (2002), voted for ethanol mixture with gasoline (1994), favored hydrogen car buildout (2003), voted for alternative fuels (1998), and voted for a nuclear waste repository (1997)
