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How to "privatize" a country and make millions.
Nothing deepens your cynicism quicker than the power of money in
Challenging the right's powerhouse.
September 11 showed us true American heroes. Now let's build on their strength.
The Bush Administration is relying on falsehoods when making its case for opening up Alaska to drilling.
As soon as George W. Bush and Dick Cheney take up the reins of government, they'll give a big boost to waging war in and from space. Under their leadership, right-wing advocates of US global dominance and corporations eager for contracts will join forces with a military eager to make space the battleground of the twenty-first century.
Indeed, Star Wars--"missile defense" in current Newspeak--is emerging as a central goal of the new Bush Administration. It is "an essential part of our strategic system," declared Colin Powell upon being named Secretary of State.
"I wrote the Republican Party's foreign policy platform," claimed Bruce Jackson, vice president of corporate strategy and development at Lockheed Martin, the world's largest weapons manufacturer [see William D. Hartung and Michelle Ciarrocca, "Star Wars II," June 19, 2000], which is deeply involved in space military programs. In a recent interview, Jackson said that although he was "the overall chairman of the Foreign Policy Platform Committee" at the Republican convention, he hasn't led the advocacy for the full development of Star Wars because "that would be an implicit conflict of interest with my day job" at Lockheed Martin.
Such advocacy, he said, has fallen to Stephen Hadley, George W. Bush's pick for deputy director of the National Security Council. Hadley, Bush Senior's assistant secretary of defense for international security policy and a member of his National Security Council, is a proud member of the Vulcans, an eight-person foreign policy team formed during the Bush campaign that includes future National Security Council director Condoleezza Rice and Reagan Administration superhawk Richard Perle. The Vulcans named themselves after the Roman god of fire and metallurgy, and for a statue in Rice's hometown, Birmingham, Alabama, commemorating its steelmaking history.
Besides being a Vulcan, Hadley is a partner in Shea & Gardner, the Washington law firm representing Lockheed Martin. Hadley has also worked closely with Bruce Jackson on the Committee to Expand NATO--based in the offices of the right-wing American Enterprise Institute--Jackson as president, Hadley as secretary. The committee sought to enlist Eastern European countries in NATO--which would, of course, build the client base for Lockheed Martin weapons.
"Space is going to be important. It has a great future in the military," Hadley told the Air Force Association Convention in a September 11 speech. Introduced as an "adviser to Governor George W. Bush," Hadley said that Bush's "concern has been that the [Clinton] Administration...doesn't reflect a real commitment to missile defense.... This is an Administration that has delayed on that issue and is not moving as fast as he thinks we could."
To remedy that, Bush has named as Defense Secretary Donald Rumsfeld, whom the Washington Post calls the "leading proponent not only of national missile defenses, but also of U.S. efforts to take control of outer space" [see Michael T. Klare, page 14]. In 1998 Rumsfeld's commission reversed a 1995 finding by the nation's intelligence agencies that the country was not in imminent danger from ballistic missiles acquired by new powers, declaring that "rogue states" did pose such a threat. The answer? Missile defense. Trusted adviser to and financial supporter of the right-wing Center for Security Policy, Rumsfeld has been awarded its Keeper of the Flame prize. On the center's advisory board are such Star Wars promoters as Edward Teller--and Lockheed Martin executives, including Bruce Jackson.
"This so-called election was a victory for putting weapons in space, at enormous cost to world stability and to US taxpayers," declares Bruce Gagnon of the Global Network Against Weapons & Nuclear Power in Space (www.space4peace.org). He points to Bush campaign statements about deploying "quantum leap weapons" and about Los Alamos and Sandia National Laboratories playing a major role in the development of "weapons that will allow America to redefine how wars are fought." Both labs have been deeply involved in space-based lasers, an integral part of Star Wars. In 1998 the Defense Department signed a multimillion-dollar contract for a "Space-Based Laser Readiness Demonstrator" and this past November solicited final comments on development of the program, estimated to cost $20-$30 billion. Lockheed Martin, TRW and Boeing are the contractors. (Lynne Cheney has just resigned from the board of Lockheed Martin. Dick Cheney has been on the board of TRW.)
The military's would-be space warriors, meanwhile, are bullish. The US Space Command's top general, Ralph "Ed" Eberhart, exhorts the Air Force to "be the space warfighters our nation needs today...and will need even more tomorrow." The Air Force command's Almanac 2000 touts "defending America through the control and exploitation of space." The Air Force in the twenty-first century must be "globally dominant--Tomorrow's Air Force will likely dominate the air and space around the world."
The Vulcans, Keepers of the Flame and Lockheed Martin et al. will be cheering them on.
If politics got real...the debate over costly prescription drugs would turn to more fundamental solutions like breaking up the pharmaceutical industry's patent monopolies, which generate soaring drug prices, and rewarding consumers for the billions of tax dollars spent to develop new medicines. As a business proposition, that sounds radical, but it would actually eliminate outrageous profit-skimming at taxpayers' expense and liberate lifesaving medicines from inflated prices so millions of people worldwide could afford the health benefits.
At present, the government picks up the bill for nearly all basic research and development, mainly through the National Institutes of Health. Then private industry spends about $25 billion a year on more R&D--essentially taking NIH discoveries the rest of the way to market. The companies mostly do the clinical testing of new compounds for safety and effectiveness, then win regulatory approval for the new applications. This is one instance where a bigger role for government, by taking charge of the scandalous pricing system, could produce vast savings for the public--as much as $50 billion to $75 billion a year.
The National Institutes of Health and independent scientists working with NIH grants generally do the hard part and take the biggest risks, yet there is no system for sharing the drug companies' subsequent profits with the public treasury or for setting moderate prices that don't gouge consumers. Instead, the drug industry reaps revenues of $106 billion a year, claiming that it needs its extraordinary profit levels in order to invest heavily in research. The companies are granted exclusive patents on new products for seventeen years (or longer if drug-company lobbyists persuade Congress to extend them). Meanwhile, the manufacturers collect royalties (and less profit) on the very same drugs under licensing agreements with Europe, Canada and other advanced nations where the governments do impose price limits. Thus, Americans pay the inflated prices for new medicines their own tax dollars helped to discover--while foreign consumers get the break.
Years ago, although reform was mandated by law, NIH abandoned its efforts to work out a system for moderating US drug prices--mainly because the industry refused to cooperate and had the muscle in Congress to get away with it. Now that soaring prices have inflamed public opinion again, Dean Baker of the Center for Economic and Policy Research proposes a more radical solution. NIH should be given control over all drug-research policy, Baker suggests, and Congress should put up public money to cover the industry's spending (probably less than $25 billion because marketing costs get mixed into the research budgets as well as money spent to develop copycat drugs, which are medically unimportant). The exclusive patent system would be phased out, perhaps starting with cancer drugs and other desperately needed medicines whose prices are too high for poor nations to afford. For $25 billion or less in new public spending, brand-name drugs would largely disappear, but, Baker estimates, prescription costs for Americans would shrink by as much as 75 percent overall.
A less drastic solution, suggested by James Love of Ralph Nader's Consumer Project on Technology, would limit use of exclusive patent rights and, if needed, compel drug-makers to grant royalty licenses to other US companies to make and sell the same medicines, thus fostering price competition. Competing companies would be required to contribute a minimum percentage of revenues to R&D to maintain research spending levels. The government could also require companies to help fund government or university research.
The prescription-drug debate of Election 2000 is a long way from either of these visions for reform, but events may lead the public to take them seriously. Drug prices are inflating enormously. If Congress fails to make it legal, the bootlegging of cheaper medicines from Canada and other countries where the prices are controlled is bound to escalate, and the present system might break down from its own lopsided design. As a matter of public values, the discovery of new health-enhancing medicines ought to be shared as widely--and inexpensively--as possible, especially since public money helped pave the way to these discoveries. Jonas Salk never sought to patent his polio vaccine. He thought his reward was knowing how greatly his work had advanced all of humanity.
Who says this is a do-nothing Congress? Sure, it can't agree on expanding the childcare tax credit or approve an increase in the minimum wage. Yet, as Congress prepares to adjourn, legislators were rushing to protect and expand tax subsidies for some of the largest, most profitable corporations in the world. Under current law, US exporters can set up largely paper presences in foreign tax havens like Barbados. The exporters can then exempt between 15 and 30 percent of their export income from taxes by routing products through these entities, called Foreign Sales Corporations. In a recent case filed by the European Union, however, the World Trade Organization ruled that the FSC tax break was an illegal subsidy.
Precedent has shown the United States more than willing to bend to the will of the WTO. For example, when the WTO ruled against an Endangered Species Act protecting sea turtles, the United States quickly eased its regulations. Yet when a multibillion-dollar tax incentive is at stake, Washington falls all over itself to protect corporate welfare.
Immediately after the WTO ruling against FSCs, the Clinton Administration, a few members of Congress and the business community began meeting in secret to work out a bill that eliminates FSC in name only while actually expanding export subsidies for a total cost to taxpayers of about $4 billion a year. The beneficiaries? General Electric, Boeing, Raytheon, Cisco Systems, Archer Daniels Midland and others. The House approved this bill with only forty minutes of debate and no amendments allowed, by a vote of 315 to 109. The bill was held up in the Senate because some objected to the tax break for arms manufacturers and subsidies for tobacco exports. Despite the objections, the bill is expected to be tacked onto a must-pass budget bill and signed by the President.
The proponents of this giveaway claim it will promote US jobs. However, the Congressional Budget Office, whose director was appointed by Republicans, has written, "Export subsidies do not increase the overall level of domestic investment and domestic employment.... In the long run, export subsidies increase imports as much as exports." The nonpartisan Congressional Research Service reached a similar conclusion.
It gets worse. The tax break may actually subsidize moving US jobs overseas. There is no requirement that a substantial portion of a product covered by the subsidies be made with US content or with US labor. An Administration official said that an eligible product could have "little or no US content" and still qualify.
Not only is the legislation not economically justifiable, it is not likely to comply with the WTO ruling. The EU has already stated that the changes aren't adequate, and it intends to seek authority to retaliate by imposing 100 percent tariffs on some $4 billion worth of US goods.
I am not a fan of the WTO. It is an unaccountable, secretive, undemocratic bureaucracy that looks out for the interests of multinational corporations and investors at the expense of human rights, labor standards, national sovereignty and the environment. But by pointing out that export subsidies like FSCs are corporate welfare, the WTO has done US taxpayers a favor. It has once again highlighted the fact that US trade policy is written by and for corporations, with no concern for workers, human rights or environmental protection.
Only months after a major victory on China trade, Big Business is again scavenging for cheap labor. This time, the high-tech industry is pressuring Congress to allow additional foreign technicians--particularly computer programmers and engineers--to work temporarily for US corporations. Congress, with the President's blessing, is poised to deliver a sweet deal to the industry, at the expense of US and foreign workers.
The 1990 Immigration Act set aside 65,000 H-1B visas each year to allow "the best and the brightest" from around the world to work in the United States for up to six years. In 1998, when the high-tech industry complained about an unbearable shortage of skilled US workers, Congress raised the annual H-1B ceiling to 115,000. The industry promised it was a one-time solution. But tech companies devoured the visas. Now their Washington lobbyists claim they are still starving for qualified workers.
Such evidence as exists, however, casts doubt on the alleged labor shortage. A recent study by the IT Workforce Data Project concluded that over the past fifty years, "there is no evidence that any serious shortages of technical professionals--engineers in the past, information technology specialists now--have ever occurred." If the industry faces a tight labor market, it's self-imposed. The industry has largely ignored its vast underrepresentation of women and minorities. Few tech firms recruit at African-American job fairs, and less than 1 percent of blacks with high-tech degrees have Silicon Valley jobs. The corporations also often shun older workers, who might require retraining or better pay.
The tech industry craves cheap labor, not skilled workers. H-1Bs, which are temporary and prohibit the holder from switching employers, fill the bill. H-1B workers cannot unionize, are likely to accept uncompetitive wages and do not receive the employment benefits that similarly skilled Americans would demand. Many companies reportedly force their foreign employees to work in factorylike conditions and routinely withhold wages and violate contracts. Foreign workers, dependent on their jobs for legal residence in the United States, are defenseless: If they complain, they risk being fired; if they quit, their employer can sue them. Their only legal remedy is a bureaucratic federal complaint process with few enforcement options. These foreign temps--indentured servants of the new economy--can either put up or go home.
Nonetheless, Bill Clinton, Congress, Al Gore and George W. Bush support raising the H-1B ceiling to approximately 200,000. Why? The computer industry alone has pumped more than $72 million into federal campaigns. Orrin Hatch and Spencer Abraham, sponsors of the Senate's leading H-1B bill, have received nearly $1 million in high-tech campaign contributions. David Dreier and Zoe Lofgren, authors of the industry-endorsed House legislation, each enjoy tens of thousands in Silicon Valley funding. Other powerful legislators have also profited handsomely from cooperating with Big Technology.
The industry is reminding its political welfare recipients that expanding the H-1B program is a top priority for the nation's tech firms. Their lobbyists are meeting one-on-one with politicians and are barraging Capitol Hill with daily "fact sheets." Chairmen of House and Senate campaign committees have received letters explicitly warning that tech companies will not support legislators who dawdle on H-1B. With control of Congress up for grabs, opposing the industry hardly seems worth the risk.
Representative Tom Davis, who chairs a GOP campaign committee and supports raising the H-1B ceiling, acknowledged, "This is not a popular bill with the public. It's popular with the CEOs." Once again, powerful corporations and unprincipled politicians are preparing to take advantage of vulnerable foreign labor, while many US workers are left out in the cold.
"Master of Space"--a motto of the United States Space Command, a joint Air Force, Army and Navy command set up by the Pentagon in 1985--says it all.
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