Karl Rove appeared on Friday for the fourth time in front of a federal grand jury, as prosecutors attempt to get to the bottom of who said what to whom and when in the "outing" of Valerie Plame as a CIA "operative." Once again, the neck of the president's top advisor is on the line, with many corners of Washington calling for his resignation before all the facts are known.
Media reports all seem to agree that it would be a huge blow to the Bush administration if Rove were forced to step down. Not only because it would come at a time when the president's approval ratings are at an all-time low, but because Rove has meant so much to the White House's political apparatus. I hold, however, that the removal of the deputy chief of staff would come at the detriment of pro-growth economic policies, and quite conceivably the stock market and the economy overall.
What the mainstream media have been missing in this story is that the influential Rove is not simply a political advisor, he is a key supply-side economic voice in the Bush administration. In fact, many hold that Rove is President Bush's top economic advisor.
Most political insiders believe that Rove was instrumental in persuading Bush to stay with personal-saving-account-type Social Security reform in both the 2000 and 2004 election races. In my interview with Rove last winter, he was the first senior Bush official to come down against raising the Social Security tax wage cap. He also referred to the United States as an IRA/investor-class nation that will never look back.
Rove knows full well that roughly three-fifths of all voters come from the investor class. That is why he was a strong supporter in 2003 of reducing tax rates on investor dividends and capital gains, a strategy that has helped propel the U.S. economy at a 4.5 percent annual rate over the past two years.
Not surprisingly, Rove is a longtime admirer of Ronald Reagan. Earlier this year, during a speech at the Reagan Library in California, he praised the Gipper as a champion of free markets and entrepreneurship. In particular, he noted Reagan's view "that government's duty is to remove roadblocks to economic growth ... end regressive taxation and regulatory policies that penalize hard working men and women ... and help encourage small business and enterprise to flourish."
Rove went on to quote the great classical free-market thinker Ludwig von Mises, who said that "capitalism has raised the standard of living among the masses to a level which our ancestors could not have imagined." Rove also said that because of Ronald Reagan, the debate over the merits of capitalism versus a command-and-control economy has been settled, that the free market has won in a rout, and that economic growth and prosperity have followed in its path.
This is weighty stuff for someone generally thought of simply as a political organizer.
In a hard-hitting speech to the New York Conservative Party a few months back, Rove told the audience that "conservatives believe in lower taxes; liberals believe in higher taxes. We want few regulations; they want more. We believe in curbing the size of government; they believe in expanding the size of government."
That same night, he emphasized the conservative reform agenda where ownership replaces entitlement, welfare reform supersedes government dependence and Social Security reform benefits ordinary working people by tapping into the markets. He added that conservatives must always and everywhere oppose job-killing tax hikes.
In the hurly burly of Washington politics and punditry, Rove's supply-side investor-class approach to economic policy is nearly always overlooked. While media mavens are constantly searching for "gotcha" political points, they seldom take the time to read the words that truly reveal the underlying philosophies and policies of our major figures. Anyone who takes the time to comb through Rove's work will discover a deep policy thinker who has consistently given the president sound advice based on an optimistic worldview of growth and prosperity.
Indeed, Rove is the rare political advisor who understands that good pro-growth policies lead to successful politics. There's no question that Rove is, in fact, a brilliant political strategist, but he is also an uncommon thinker who understands the economic underpinning of winning elections.
I don't think there's anything to the case against Rove, but that must be left to the special prosecutor and the grand jury. My point is the economic content in this controversy. Let's hope we don't lose the strong pro-growth advocate we have in Karl Rove.