If one looks beneath the surging political business cycle that -- along with the simple fact that the president is not Newt Gingrich -- has brought Bill Clinton back from the dead, signs of a remarkable and ominous new turn in American public life are visible everywhere. It is not just that both major party candidates now embrace the orthodoxy that we must eliminate the deficit and balance the budget (despite their noisy differences over how far taxes should be cut at the same time). Or that earlier this year Clinton renominated Republican Alan Greenspan as head of the Federal Reserve Board, without any opposition from Bob Dole.
What is extraordinary is that only months after Pat Buchanan shocked the political establishment by prying open the Pandora's box of slow growth, wage stagnation, globalization, and increasing inequality, the lid is back on again. All the Republicans want to talk about is cutting taxes and government. Clinton downplays questions of wage stagnation in favor of breathless encomia to the (cyclical) strength of the economy. And billionaire Ross Perot's "Reform Party" campaigns at public expense for even bigger budget cuts. The whole spectrum of policy debate is right back where it was before Buchanan's rebellion.
How to account for this miraculous inversion? Surely not by attributing it to the voters' will. The disdain that millions of them feel for all three candidates is apparent, as is their palpable frustration with the political system's continuing refusal to confront the economic uncertainties facing most Americans.
A much more compelling explanation is the power of money, or more precisely, what I call the "investment" theory of political parties. This view holds that in countries like the United States, where most voters are unorganized, desperately pressed for both time and money, and minimally informed or interested in politics, a political party's real market is defined by major political investors, who generally have good and clear reasons for giving money to control the state. Accordingly, in analyzing an election, the place to begin is with a systematic study of blocs of large investors. This requires a clear break with the usual media fixation on gross spending totals -- however stunning -- in favor of more subtle efforts to identify and dissect coalitions in politically significant terms. Like my other efforts to trace the workings of the "golden rule" in American elections, this essay relies extensively on my own analysis of Federal Election Commission data covering "early money" (i.e., all of 1995 and early 1996) in this year's presidential election.