Reagan went to them on traditional values issues, on the Second Amendment, on taxes, on spending, on a strong foreign policy, and said, "I know you think you're supposed to be a Democrat because of where you were born, or who your mother was, or where you were christened. But this issue I think is more important to you." And people said, "Well, it is." So people left the Democratic Party, as Reagan had … and joined a different party….
On the traditional values and religious stuff, most liberals believe that the Republicans don't want to be left alone. "They want to come into my bedroom and regulate my behavior in my bedroom."
The left's caricature of the religious right is that it wants to come and impose its religious values on others. This, from a secular left which has mandated that, for six or eight hours a day, no children are allowed to ever hear about God or religion in government schools paid for by parents. This, from the secular left which glorifies piss [on the image of] Christ and makes fun of other people's religious values with taxpayer dollars. This, from a secular left which runs around and hunts down the possibility that anybody might be discussing religion in a public school, or saying a prayer before a football game. For the secular left to suggest that the religious right is hounding them is a little bit odd. …
In point of fact, it's a myth that the religious right wishes to impose values on others.
The one area where somebody would perhaps might suggest with some reason that that was going on is the abortion question. There the question is how many people there are. If a woman and an unborn child are two people, they both have the right to be left alone.
If there's only one person, she has the right to have an abortion. That is a division which divides both parties -- secular as well as religious people.
You said that Bush is just perfectly in tune with where the Republican Party is. Can you talk a little more about that?
People learn their politics at a young age, and tend to stick with it. George Herbert Walker Bush, the 41st president, brought his understanding of what the Republican Party was and what it stood for, pre-Reagan. It would not have occurred to him that the Republican Party was reflexively anti-tax. This came after he became a Republican. He had no idea that the Republican Party was strongly against gun control.
When George W. Bush, the 43rd president, came of age and started focusing on politics, it was during the Reagan presidency--of course, you're against gun control, and for lower taxes, and less spending, and for the Strategic Defense Initiative, and skeptical of sending prophylactics all around the world....
…George Herbert Walker Bush was almost the quintessential pre-Reagan elected official. His son is a perfect Reagan Republican, just right in the middle of where the Reagan Republican Party was; so perfect that he edged out all competitors who had slight variations on the Reagan theme. George W. Bush was the one who had perfect pitch with the Reagan theme.
From what you can tell, is Bush, as president, getting this sort of fine-grained feel for Republican politics himself? Or is he getting it from Karl Rove, as many people think?
I think Karl Rove and President Bush both understand the nature of the Republican Party. I've talked to both, separately. They get the nature of the modern Republican Party. They understand it. So if one or the other sees something, the other doesn't disagree, they go, "Oh, yes. That's right." There's a reason they've worked together well for so long.
Can you give an example that comes to mind of dealing with Bush that makes you think, "Yes, he gets it?"
My first meeting with him, 10 days after the 1998 [Texas gubernatorial] election, I had five major issues that I wanted to talk to him about. I felt that a governor who acted on these five would be demonstrating to the conservative movement and the Republican base that he got it.
One was moving from defined benefit to defined contribution pensions for the state pension system, which foreshadows Social Security reform. Bush immediately understood it, and got it passed through one half of his legislature. The other half was run by Democrats.
Tort reform, that Bush had already led on, but that I thought was important. School choice, where he had staked out a position, but also then fought for it. He understood the arguments as to why it was important. Tax limitation, requiring a super-majority to raise taxes. Then, tax cuts in general. Another issue was paycheck protection -- something he enacted once [he was] president, saying that labor unions couldn't take union dues and spend them on politics without written permission from workers.
Each of these issues I considered central to the conservative movement, to the Republican Party, to building the base of the Republican Party; and all being sound and good public policy.
Bush understood both the political importance of them and the policy importance of them, and shared my view of their relevance and importance. It's not, "Oh, yes, it's a good idea." … He moved on all of those issues. Social Security reform, faster by about five years than I had expected.
I remember once we were having lunch, and you reached into your wallet and pulled out this piece of paper that had a list of sort of what was going to happen, and when.
It's a list of issues. They're listed from when they were introduced, or when I thought they would be introduced, to when they were actually enacted. So some of these are five-, 10-, 20- and 30-year time cycles.
We've introduced the idea of getting rid of the death tax, and then how long it would take. Social Security reform being a key one, that I thought we were still five years away from introducing. State pension reform, which Bush has been a leader in, moving from defined benefit to defined contribution. So people owning their own pensions from state government is something that started about six years ago. I think it'll take us 20 years to get the states all moved over.
Then there are ones that we haven't started yet, like privatizing the post office, or other goals that I would like to see started. But the real introduction of the idea hasn't yet happened.
If you were to be sitting around in an assisted-living facility some years from now, dangling your grandchildren on your knee, and they say, "Grandpa, what happened in the first Bush term?" --what would you say?
The first Bush term gave you three tax cuts in the first three years and saw the beginning of serious governmental reform, that, if Bush has a second term, will yield tremendous benefits to military base reduction and realignment commission. If enacted in 2005, 2006, and not stopped by a president, [it] will save us about $8 billion a year, and close down 20 percent of our bases internationally -- a tremendous step forward.
The competitive sourcing idea of taking 800,000 government jobs, half of all federal, civilian, government jobs, and competitively sourcing them -- every three years, the people who mowed the lawn at the Pentagon compete to keep their jobs with the people who mow the lawn at the Marriott Hotel down the street. Where this has been done in the Pentagon, it has saved 30 percent for all jobs that have been competitively sourced. This is a $25 billion savings every year, as it gets phased in.
Phasing out farm subsidies, replacing them with free and open trade -- tremendous savings for American taxpayers. So that I think getting those things moving forward -- more free trade, bilateral and multilateral free trade agreements with Singapore, Morocco, Chile--
Your grandchild says, "But Grandpa, I thought the most important thing that happened was 9/11, the war on terror, the war in Afghanistan, the war in Iraq. You left those out."
I don't think, 20 years from now, those will be viewed as having been that important.
Reforming Social Security, so that every America retires with control of their own retirement. We're now up to 38 states that have conceal-and-carry laws that have passed at the state level. … It tremendously reduces crime in those states where people have this, because you don't mug people if they might have a gun.
So those kinds of changes change the nature of the country. Sept. 11 was a terrible tragedy. But the only part of that that would change the nature of America that would be noticeable 20 and 30 years from now might be the Patriotic Act [sic], if that's over-used.
Now let's say, in this hypothetical -- the child says, "But now, Grandpa, tell me what happened in the second Bush term."
A second Bush term will see more tax reduction, greater expansion of the ownership society, allowing people to take some of their Social Security -- FICA taxes -- and put them into a 401(k) personal savings account. Separate from that, allowing people to have health savings accounts that will eventually, I believe, displace Medicare, because people will have enough money in health savings accounts that they'll be in control of their own health needs when they're older. The same thing with more retirement savings accounts and lifetime savings accounts -- two ideas the Bush people introduced in their first term.
The second term will see the base reduction commission enacted. We'll see competitive sourcing sweep, not only the federal government, but out into the 50 states. We'll see dramatic expansion of free trade throughout the hemisphere and worldwide. I think we'll see reform of immigration, as Bush had started the discussion with Mexico prior to Sept. 11, which derailed that, unfortunately, for almost four years now.
What about more preemptive war, more spreading of democracy through the Arab world, et cetera?
My sense of what has happened with Iraq and Afghanistan is not that there was great shame or wrong with those people who advocated the attack on Iraq. However, those people who suggested that it would be easy, and let's have five more, probably have the humility themselves that Bush talked about the country having in 2000.
The challenge and the downside of having attacked Iraq on the theory that they soon would, or soon might have nuclear, biological or chemical weapons, is the same problem you have with the boy who cried, "Wolf." … If there was a cost to the preemptive war in Iraq, it is that there may be a time when a preemptive war, not only looked necessary, but really, really is necessary. That'll be more difficult to sell to the American people than the Iraq invasion was. …
…The handful of people who had a theory that this would be a great idea have yet to come back and kind of explain themselves in terms of why this wasn't working out the way they had said it was going to.
So I tend to think that a second term will see a focus on some of the Middle East peace process efforts that perhaps have been pooh-poohed by folks in the past. But I doubt you'll see more invasions.
Why did Bush agree, fundamentally?
I think Bush agreed to attack Iraq because people came to him and said, "This is a man with a history of lunging out, including at us; oh, and by the way, including trying to kill your father. We know that he had chemical weapons, and must, therefore, have the capacity to make them."
One of the real fears we have is that a small group of people like Al Qaeda could do a lot of damage -- not just with planes, but with chemical or biological weapons, certainly with nuclear weapons. So take him out as a lesson for others. I guess, to a certain extent, Libya's decision to get rid of its chemical weapons is one of the benefits of having gone after Iraq.
In the secret world of secret stuff, you never know whether other countries have come forward, and said, "Let's talk." One hears that Syria has been very helpful on various things, and going after terrorists in other countries, no doubt to curry favor. [Syria] may have waited after Sept. 11 to see how our reaction was. When we said, "We are really going to be unhappy with people who don't help," a lot of help came in -- some of which may not be talked about a lot.
What do you say to the view that the administration was drifting and lost until Sept. 11 gave it a mission, which was to be foreign policy hawks, basically?
The suggestion that the attack on Sept. 11 and the war was a boon to President Bush or his administration is obscenely stupid. … The Bush administration started off extremely successfully. It got its first major tax cut through. It made it clear that there'd be a series of tax cuts. On principle, we abolished the death tax. We got the capital gains tax reduced. We expanded IRAs. We cut back the alternative minimum tax. We reduced marginal tax rates. We took five steps towards a flat-rate income tax. We clearly laid down the markers of moving towards a single rate tax, a taxed income, one time.
We began the negotiations on regional, bilateral and multilateral free trade agreements. Work was done to prepare for immigration reform, first with Mexico, and then with other nations. The base closings bill was put forward. The reforms for the Pentagon were begun, and the competitive sourcing efforts were rolled out.
So the entire progress of a Bush campaign, and Social Security reform -- the commission -- was put together. All the things Bush campaigned on and said he was going to do were either passed, enacted or begun in the first six months of the Bush term.
Several people, including Republicans, make the argument [that] the Democratic Party is a juggernaut, a sort of naturally growing party, because the country is getting more Hispanic and so on and so forth. What do you think is the state of the Democratic Party? Is it a growing party? A shrinking party?
Pollsters who divide the American people up by gender, by income and by race or ethnic group, see everything in the country along those three divides, because that's what they measure. In point of fact, the Democratic Party is shrinking for a couple of reasons: one, age. The most Democratic age cohort in American history are those people that turned 21 between 1932 to 1952, during FDR and Truman.
Those people looked around and saw "One size fits all" pension reform. "One size fits all" labor law, the draft, the war, the New Deal. They are now 70 to 90, and every year 2.4 million of them disappear. For the next 15 years, we have dying Democrats, just as between 60 and 75, we had 15 years of dying Republicans, the previous age cohort.
You have, in addition to that, immigrant groups, many of which are very available to the Republican Party, including Hispanics. There's a lot of work to be done. But many of the other immigrant communities are easily Republican -- Iranian-Americans, Pakistani-Americans, Indian-Americans are trending there as well. Asian-Americans. These are all tremendous opportunities for the Republican Party.
The biggest change is the investor class, the number of Americans who own shares of stock. Twenty percent of Americans owned stock when Reagan got elected in 1980. Today, it's 60 percent of adults. Scott Rasmussen's polling says, if you have $5,000 worth of stock, you're 18 percent more Republican and less Democrat. This is true of all demographics.
As more and more Americans own shares of stock, more and more Americans understand that taxing businesses is taxing them. Regulating businesses is taxing them. They ought to be thinking long-term about their ownership, not just their income, and that they should pay taxes on capital, as well as taxes on labor. And it drives them towards the Republican position, even if not immediately towards the Republican Party.
So what's at stake, in this election in particular, as against the sort of long-term trends? What happens if Kerry wins, versus if Bush wins?
If Bush wins, it will speed up all of the trends that are problematic for the Democrats: the de-funding of the trial lawyers through tort reform; the de-funding of labor unions through just allowing them to continue to reduce in size, power and scope. Bush's winning doesn't have anything to do with this. But over time, the older Democrats continue to move on. Also, younger Republicans, the 21-year-olds coming up, will look up, and a successful Bush administration [will] creates young Republicans that'll start voting in five, 10, and 15 years on a regular basis.
Should Kerry win, he could come in and stop any tort reforms, so the trial lawyers can continue to make money. He will try and change the rules by executive order to force people into unionization, paying $500 per person for the right to work, with card check as a way to avoid actual elections in various labor drives.
So there are a number of things, a number of problems that Kerry can arrest their deterioration. Although when you think about it, Clinton did not arrest the deterioration of the Democratic Party except by his aggressive outreach to some immigrant groups. That was important in helping the Democratic Party.
How does President Bush think about talking, not so much these policy issues, but pure politics? How does he strategize?
I think Bush understands that the modern Republican Party is such that, the more independent people you have, the more Republicans you've created. The more savers and investors and owners of homes and shares -- the more Republicans. The more gun owners, the more Republicans. The more self-employed people -- the more Republicans.
On the other hand, the more government workers, the more trial lawyers, the more Democrats. So it is a virtuous cycle, where sound policy from a Reagan Republican standpoint is sound politics. There is no conflict.
You don't ever say, "Well, we ought to do this, but that would create more Democrats." Smaller government, more individual responsibility, more individual control creates more Republicans. More state power and ownership and control and top-down decision-making creates more Democrats. So your politics and your policy flow together.
There is the conventional wisdom, I would say, which is, Bush was a moderate governor of Texas, who ran as a moderate in 2000, and now we see that he's a real conservative. Did he change?
Bush in Texas was hampered by the Democratic House of Representatives. You had a Republican Senate, Democratic House of Representatives. He fought for concealed carry laws to allow everybody to carry a gun, and he won those. He fought for school choice, and didn't win because of the Democrats. He fought for tax cuts. He fought for deregulation. He fought for tort reform.
Everything that you see in his presidential administration were issues he fought for publicly and repeatedly -- sometimes winning, sometimes thwarted at the state level. His campaign was as transparent and as clear about where he was going as it could possibly be.
Now there were some on the left who said, "Well, he's talking about compassionate conservative as if he was distancing himself from conservatism." What conservatives always knew was that he was saying, "Conservatism is compassionate, which we demonstrated when we did welfare reform, and proved that we helped poor people more than all the liberals did with their stupid welfare policies that killed people and destroyed families."
So conservatives heard the assertion that he wanted to be a compassionate conservative to be, "Yes, of course. That's who we are." This is sticking a finger in the eye of the liberals who don't understand that conservatism, with its policies of growth and creating more independent people, is, in fact, compassionate. And liberal dependency is certainly not compassionate.
But … it's like an overwritten novel. Everything that happened in the first four years was foreshadowed in the  campaign, in terms of where he was going, and what he wanted to do.