Irrational Exuberance

Photo by Anne Fishbein

Move over, Amazon.com. Yield, Yahoo. There’s a new start-up out there that makes you guys look as old-school, blue-chip and safe as GE, GM and GTE. Price-to-earnings ratio? All the "earnings" are projections — and yet, this is the hottest stock in years.

To be sure, there’s an establishment ring to the name — George W. Bush — and to his résumé. Son of a president. Yale. Oil bidness. Texas governor going on four and a half years now. Centrist. Smiley fella.

But in truth, these are modest bona fides. Texas has done well during the current national economic boom, but so have Mississippi, Maine and the Dakotas. Both the Democratic presidential aspirants and any number of the Republicans have far more experience with national and international affairs than the governor (who, to distinguish him from his father, is increasingly referred to as W., or Dub for short). Almost all the other candidates have more platform than Dub, who’s still in a kind of position-free zone. But Dub has one thing that none of the others can even approach: $36 million in campaign contributions, raised in just four short months.

The figure, unveiled last week during Bush’s first campaign swing through California, is breathtaking. By way of comparison, it is twice what Al Gore, the sitting vice president, has been able to raise over a far longer period of time. It is $4 million more than Republican nominee Bob Dole was able to raise throughout all of 1995-96. And it is around three times the combined total of what all of Bush’s current GOP opponents have raised.

Moreover, the Dub bandwagon is just starting to roll. He hasn’t even held any fund-raisers yet in New York or Chicago or in much of his New South base. Unless Dub implodes somewhere down the campaign trail, we may be looking at the first $100 million candidate. A great deal has gone into the making of such a phenomenon — and Dub himself may be the least of it.

Any attempt to explain the Dub Bubble must begin with the Republicans’ propensity to anoint their presidential front-runner. Historically, the modern GOP nominates its establishment’s choice: There hasn’t been a come-from-behind outsider nominee since Barry Goldwater in ’64, and Goldwater’s performance at the polls that November — he carried six states — ended whatever appeal the cult of the outsider held for Republican presidential voters. (By contrast, the Democrats have had three outsider nominees — George McGovern, Jimmy Carter, Bill Clinton — during this period.)

And Dub is nothing if not the establishment’s chosen one. Over 20 Republican governors and over half the GOP delegation in the House have already endorsed him. The governors’ support was the sine qua non. Fresh off their impeachment debacle, congressional Republicans lacked the political or moral authority either to provide a credible candidate of their own or even to instruct their own troops. Fortunately, the governors were insulated from the impeachment follies by the genius of the federal system. Dub, for one, ducked the whole controversy, never weighing in on the question of whether or not Clinton should be driven from office.

As a consequence of the GOP landslide of ’94, there are a lot of Republican governors — 31, to be exact — and one of them was likely to emerge as the establishment choice. Some, like New York’s George Pataki, come from large states that aren’t going to vote Republican on the presidential line for the foreseeable future. Some, like Dub, come from solidly Republican big states. Almost all the big swing states of the Midwest have GOP governors, but the only govs with track records — Michigan’s John Engler and Wisconsin’s Tommy Thompson — combine a parochial perspective with the charisma quotient of creamed spinach. Which refocused the governors’ attention — and that of their fund-raising networks — back on Dub.

The Dub Bubble is also the result of the economy, stupid. With presidential contributions statutorily limited to $1,000 per person, it takes a huge number of people with ample discretionary incomes to amass $36 million in a few months. In fact, by last week, 75,000 people had coughed up an average of $480 to the Bush campaign.

What a fitting farewell salute this gusher of greenbacks was for outgoing Clinton administration Treasury Secretary Bob Rubin, who left office last Friday. In his six and one-half years running Clinton’s economic shop, Rubin was adamant that the administration never do anything to forfeit the trust or betray the interests of the financial community. Deflating the deficit, fostering free trade, Rubin oversaw the creation of immense wealth for the richest 10 percent of Americans, while producing considerably more modest gains for those further down the economic ladder. And over the past two years, that 10 percent has had enough money to fuel a boom in speculative stocks.

Of which the hottest, and most speculative, is Dub.

At first listen, Dub doesn’t seem the kind of candidate that the zealots of the GOP would warm to. His stump speech is filled with references to compassion, to the nonwhite poor that society needs to educate, to the value of immigrants. Jack Kemp campaigned across the GOP for decades on these themes and never got anywhere. But Kemp sounded more than a little obsessional on these topics (and on a few other lulus, like going back to the gold standard). Dub, whatever his faults, is nobody’s obsessive — even as a fund-raiser. Word is, he hasn’t even had to make any fund-raising calls himself; his buds do it all for him.