Rudy’s the One
Rudy’s the One
The free-market leader of the GOP field.
BY STEVE FORBES
Friday, March 30, 2007 12:01 a.m.
Rudy Giuliani is the real fiscal conservative in the 2008 presidential race. That’s why I’m endorsing him for president.
Most Americans know that Mr. Giuliani turned around America’s largest city. They know he cut crime and welfare in half; they know that he improved the quality of life from Times Square to Coney Island and everywhere in between. And they witnessed his Churchillian leadership following the terrorist attacks on 9/11.
Less well known is the mayor’s fiscal record. Nonetheless, conservatives will find it impressive. He built New York’s resurgence not just on fundamental police work, but also on a foundation of fiscal discipline. He cut taxes and the size of government and turned an inherited deficit into a multibillion dollar surplus.
Mr. Giuliani entered office in 1994 with a $2.3 billion budget deficit handed to him by his predecessor, Mayor David Dinkins. Liberal conventional wisdom held that the only way to close the gap was to raise taxes while cutting back on basic city services such as sanitation. The new mayor rejected this advice–in fact, he famously threw the report recommending tax hikes in the trash!
Instead, he set out to restore fiscal discipline to the “ungovernable city”–and achieved results that Reagan Republicans can applaud.
In his first budget address Mr. Giuliani explained that he would “cut taxes to attract jobs so our people can work.” While lots of politicians make promises about cutting taxes Mr. Giuliani delivered, overcoming the initial resistance of the overwhelmingly Democratic City Council. He ultimately prevailed 23 times, including cuts in sales, personal income, commercial rent and hotel occupancy taxes. He understood that these taxes were not revenue producers, but counterproductive job killers.
When he left office after eight years, New Yorkers had saved over $9 billion, while enjoying their lowest tax burden in decades. The private sector, which had been hemorrhaging hundreds of thousands of jobs in the years before he took office, produced over 423,000 new jobs. Meanwhile the unemployment rate was cut in half. Businesses responded to Mr. Giuliani’s reforms by returning to the center of city life.
So when he talks about his belief in supply-side economics, its not just theory, it’s a plan he has already succeeded at putting into action. He’s seen the results of supply-side economics first hand–higher revenues from lower taxes.
Controlling government spending is another pledge often made by politicians. Conservative voters now know to be skeptical of such claims. But Mr. Giuliani has a record they can have confidence in. His first budget cut spending for the first time in the city since the fiscal crisis of the 1970s–and over the course of his administration he controlled the city’s spending while federal government spending grew by over 40% and average state spending ballooned by over 60%. Mr. Giuliani always made fiscal discipline a priority: instructing city commissioners to cut agency budgets even when the deficits had turned to surpluses.
Mr. Giuliani set out to cut the size of city government, insisting that New York should live within its means. New Yorkers saw their quality of life improve with more effective delivery of services while the bureaucratic ranks were being thinned by nearly 20,000–a near 20% decrease in city headcount, excluding police officers and teachers. He increased the number of cops and teachers because he understood that public safety and quality education are what we expect in return for our tax dollars, not partisan job protection or union featherbedding. As mayor, he proved that government can be smaller and smarter–more efficient and more effective.
Rudy Giuliani can unite the Republican Party and restore our traditional claim as the party of fiscal conservatism. He has already proven he can stand up to liberal special interest groups and achieve tax cuts, even with a Democrat-controlled City Council. That’s the kind of leadership we need in Washington. That’s the kind of leadership that will inspire the next generation of the Reagan Revolution. And that’s why America’s Mayor should be America’s next president.
Free-Market Think Tanks in Europe
Giving Tanks
Across Europe, thinkers are promoting free-market ideals.
LONDON–The Heritage Foundation, the Cato Institute, the American Enterprise Institute and other free-market Washington think tanks are known to many Americans. What isn’t generally understood is that there has been an explosion of free-market think tanks around the world that are increasingly challenging the conventional view that government is the solution to society’s problems.
Last week the Stockholm Network, an umbrella organization for European free-market think tanks, held its first annual award ceremonies to honor the groups that have been most effective in informing policy makers and the general public about policies like school choice, portable pensions and decentralized approaches to delivering health care. The Wall Street Journal was a co-sponsor, in line with its adherence to an editorial philosophy of “free markets and free people.”
In 1997, the Stockholm Network had five members; it now boasts more than 130 affiliated groups, stretching from Iceland to Armenia. In Bulgaria, the Center for Market Economics has played a major role in building support for the country’s adoption of a 10% flat-rate income tax, effective Jan. 1. “Watch Bulgaria,” says Steve Masty, an economic development specialist based in London. “The intellectual light bulbs that have been switched on there are now having real-world results.”
More than one guest at the Stockholm Network dinner commented that several countries in Europe that escaped the Soviet bloc less than two decades ago are now pursuing reforms that would be regarded as too radical for Western European electorates. In Slovakia, the introduction of a profit-based health system has led to the entry of two private health-insurance companies that have helped drop the state share of the health-care market to 65% from 80% in just two years.
Some of the think tank presidents attending the dinner have suffered more than criticism for their work. Prof. Atilla Yayla, the president of the Association for Liberal Thinking in Turkey, gave a speech last year in which he stated that the single-party secular rule imposed by Kemal Ataturk in the 1920s “appears backward rather than progressive.” He said he found it difficult to explain to visitors to Turkey why statues and pictures of Ataturk appear in almost every public space.
Mr. Yayla was viciously attacked in the media and subjected to criminal prosecution for his comments. Now teaching on a yearlong sabbatical in England, he plans to return to Turkey to continue his fight for a truly liberal society that represents a third way between Islamism and Ataturk’s state-imposed secularism. He has more than 500 Turkish academics and intellectuals on his mailing list.
While the Stockholm Network focuses on Europe, that doesn’t mean that free-market think tanks in developing countries are being ignored. This week the Cato Institute is launching a series of international Web sites to build support for the ideas of liberty and to promote the work of local think tanks. Web sites in French, Portuguese, Chinese, Kurdish, African languages and Persian will join existing Cato Web sites in Russian, Spanish and Arabic.The project is the work of Tom Palmer, who 20 years ago as a young libertarian scholar smuggled photocopiers into the Soviet Bloc so dissidents could produce their own samizdat publications. “In many countries there is a clear need for private efforts not subject to or tied to any government entity,” he told me. “Clearly, the government-led efforts aren’t doing such a hot job of promoting the ideas of liberty at the moment.”
John Blundell, president of Britain’s Institute for Economic Affairs, says an increasing emphasis on promoting liberty in developing nations and among immigrants from those nations is appropriate. At IEA’s annual conference for up-and-coming free-market scholars in October, white men were a distinct minority of the 100 students attending. The children of Indian and Chinese immigrants won almost half of the prizes and honorable mentions in IEA’s annual student essay contest.
The original inspiration for much of the worldwide growth in free-market ideas was a slender volume written by F.A. Hayek, obscure professor at the London School of Economics, in 1944. As World War II was winding down and postwar planning for growing welfare states was under way, Hayek’s “The Road to Serfdom,” made a powerful case that the collectivist ideas then gaining ground would almost inevitably lead to a loss of liberty in all its forms.
Hayek also made a positive case that the venerable ideas expounded by thinkers like Adam Smith, David Hume and Edmund Burke, who promoted limited government and the rule of law, could prove a powerful antidote to socialism. Hayek urged proponents of liberty to build on the example of socialists, who built a network of theorists and philosophers that later helped them gain political power. He called for a “a truly liberal radicalism (in the European meaning of that term) . . . which does not confine itself to what appears today as politically possible.”
A few years after publication of “The Road to Serfdom,” a young entrepreneur named Anthony Fisher met with Hayek and started IEA. It spent 20 years building the case for a freer society until its ally, Margaret Thatcher, became prime minister in 1979.
While the Stockholm Network dinner was held in a celebratory mood, several speakers reminded the audience illiberal notions like protectionism are making a comeback in many countries, and that global warming has become a pretext for those advocating draconian limits on economic growth.Such wrongheaded ideas are also on the march in America. Everyone seems focused on which party will control the White House and Congress after next November’s election. But regardless of who wins, real changes in the public-policy landscape are likely to come only if those who hold political power also have won the battle for their ideas. That’s why, despite the hundreds of millions of dollars being spent on the 2008 election, advocates on both the left and right are also pouring money into think tanks. They are preparing for the day when those ideas can be taken off the shelf and put to the test.
Churchill and the Jews
Saving Civilization From Itself
Churchill understood that the Jews are the bedrock of Western tradition.
“Why should we Anglo-Saxons apologize for being superior?” Winston Churchill once growled in exasperation. “We are superior.” Certainly Churchill’s views of what he and other late Victorians called the “lesser races,” such as blacks and East Indians, are very different from ours today. One might easily assume that a self-described reactionary like Churchill, holding such views, shared the anti-Semitism prevalent among Europe’s ruling elites before the Holocaust.
But he did not, as Martin Gilbert vividly shows in “Churchill and the Jews.” By chronicling Churchill’s warm dealings with English and European Jews throughout his long career, and his heartfelt support of Zionism, Mr. Gilbert conveys Churchill’s deep admiration for the Jewish people and captures his crucial role in creating the state of Israel. Churchill offers the powerful example of a Western statesman who–unlike other statesmen in his own time and ours–understood the malignant nature of anti-Semitism and did what he could to oppose its toxic effects.
His father, Lord Randolph Churchill, had been a close friend and ally to many wealthy British Jews, almost notoriously so, given the rancid snobbery of his circles. The son rarely failed to follow his father’s inclinations, in this matter as in others. Jews like the Rothschilds and the banker Sir Ernest Cassel helped to advance Winston Churchill’s early career (including watching over his finances after his father’s death), and he repaid their support in part by publicly condemning the kind of anti-Semitism that was all too common in England’s upper classes. But his actions were not merely an expression of personal thanks.
A student of history, Churchill came to feel that Judaism was the bedrock of traditional Western moral and political principles–and Churchill was of a generation that preferred to talk about principles instead of “values.” For Europeans to turn against the Jew, he argued, was for them to strike at their own roots and reject an essential part of their civilization–”that corporate strength, that personal and special driving power” that Jews had brought for hundreds of years to Europe’s arts, sciences and institutions.
To deny Jews a national homeland was therefore an act of ingratitude. Churchill became a keen backer of the Balfour Declaration of 1917, which broached the idea of creating a Jewish homeland in Palestine. As a friend to Zionist leader Chaim Weizman, and as colonial secretary after World War I, Churchill made establishing such a homeland a matter of urgency. “The hope of your race for so many centuries will be gradually realized here,” Churchill told a Jewish audience in Jerusalem during his visit in March 1921, “not only for your own good, but for the good of all the world.”
By “all the world” Churchill most pointedly meant to include Palestine’s Arabs. As Mr. Gilbert recounts, Churchill was dismayed and disgusted by Arab resistance to Jewish immigration and settlement in Palestine. “The Jews have a far more difficult task than you,” he told Arab representatives, since “you only have to enjoy your own possessions,” while the Jewish emigrants from Europe and elsewhere would have to carve a society out of a barren wilderness.
Yet Churchill was convinced that Arab civilization would benefit from contact with an entrepreneurial and morally centered people. “Speaking entirely as a non-Jew,” he wrote, “I look on the Jews as the natural importers of western leaven so necessary for countries in the Near East.” At the same time, Churchill tried to ensure that Palestinian Arabs got their own national homeland. It was Churchill who, as colonial secretary, decided to separate Transjordan (modern-day Jordan) from the rest of Palestine, assuming that Transjordan would become the site of the Arabs’ future state and that other parts of Palestine (including the West Bank of the Jordan River) would be open to Jewish settlement.
Churchill was to be disappointed by the results of his Middle Eastern efforts, as Arabs hunted down and murdered Jewish settlers by the hundreds in the 1920s and 1930s–just at the time when Adolf Hitler was building his own regime around the persecution of the Jews in Germany. As early as 1930 Churchill realized that the Nazis’ anti-Jewish policies carried the stench of an ancient evil. “Tell your boss from me,” he said to a Hitler acquaintance in the late summer of 1932, as the Nazi Party was on the verge of power, “that anti-Semitism may be a good starter but it is a bad finisher.”
In December 1942, Churchill–now prime minister–learned from a Roman Catholic member of the Polish resistance, a man named Jan Karsky, that thousands of Jews were being rounded up and sent by cattle cars to what turned out to be the death camp at Belzec, in eastern Poland. Churchill used the Karsky report to compel the Allies, including the Russians, to condemn “a bestial policy of cold-blooded extermination” in Germany–although he understood that the best way to halt the slaughter would be the speedy destruction of Hitler’s empire. The chief of Britain’s air staff, Sir Charles Portal, warned that any air raids “avowedly conducted on account of the Jews would be an asset to enemy propaganda,” and Churchill reluctantly bowed to his advice. Nonetheless, in 1943 he wanted a film that documented the atrocities committed against the Jews to be shown to every American serviceman before the invasion of Europe.
After the war, Churchill felt that the most fitting response to the Holocaust would be to punish those guilty of the most horrific crimes against the Jews and to fulfill the promise of a Jewish homeland that he and Britain had made almost 30 years earlier. When Ernest Bevin, Britain’s Labour Party foreign minister, hesitated to recognize Israel nine months after its founding, for fear of inflaming Arab opinion, Churchill swung back hard: “Whether the Right Honorable Gentleman likes it or not, the coming into being of a Jewish State in Palestine is an event in world history to be viewed in the perspective, not of a generation or a century, but in the perspective of a thousand, two thousand, or even three thousand years.” Israel was just recompense, Churchill felt, not only for what the Jews of Europe had lost but for what they had given to civilization over the centuries.
This view, of course, no longer prevails. Today the existence of Israel is apparently something to be regretted, even deplored, not only in Arab capitals but in European ones and on American university campuses. Paradoxically, such feelings intensified after 9/11, an event that should have made us all aware of who the friends of Western civilization really are–and who its enemies. Martin Gilbert’s book reminds us that anti-Semitism is the dark turn of the modern mind against itself, and a form of cultural patricide.
Mr. Herman’s “Gandhi & Churchill” will be published by Bantam in April.
