Nation Topics - Economy | The Nation

Multinationals, their intellectual coverings shredded, are love-bombing labor while hunting for new fig leaves.

President George W. Bush's effort to repeal the estate tax has revealed contradictions in the nonprofit sector and confusion about what it values and where it stands.

The loudest applause during George W. Bush's first budget address to Congress--a thumping, shouting, jump-to-your-feet outpouring of enthusiasm--erupted in response to his first mention of his proposed $1.6 trillion tax cut. Coming at the end of a masterful but deceitful description, with more concealed trapdoors than a funhouse ride (they have the fun and we get taken for a ride), of how he could do everything from funding Social Security to paying down the debt and have money "still left over," Bush's proposal argued for returning that money "to the people who earned it in the first place."

The country is not buying. The latest Pew Research Center poll finds that only 19 percent of Americans think the current budget surplus should be used for a tax cut, and 79 percent believe the proposed Bush tax cut will most benefit the wealthy. Meanwhile, 60 percent want any surplus used for domestic programs as well as Social Security and Medicare.

Why, then, was the response to Bush's tax cut proposal so enthusiastic? Perhaps for the same reason that the words "campaign finance reform" never crossed Bush's lips, an omission Senator John McCain wryly noted in a CNN interview. The Wall Street Journal reported the morning after the speech that industry groups have formed a coalition to push the tax cuts in what one White House adviser described as "the largest PR campaign this party has ever conducted." The same adviser went on to say that the effort "will test if we can use the power of the White House and congressional control and the lobbying world to work our will."

With the cat thus out of the bag, Bush's budget should be pronounced dead on arrival. Now is the moment for the minority party to put forth a sensible alternative: No new tax breaks for the wealthy. An earlier, bigger check--either in the form of a tax credit or a "prosperity dividend"--for middle- and low-income earners, to jump-start the economy. Prescription drug coverage for seniors and affordable healthcare for all. Investment in schools and teachers' salaries. Investment to combat the growing shortage of affordable rental housing. Electoral reforms that will insure that every vote is counted.

In opposition, Democrats find it difficult to speak with one voice. A few have already thrown in their lot with Bush. Others are looking to deal. Still others seem stuck on paying down the debt as their prime concern. Thus it is vital that progressives in the party--and the increasingly vibrant base of the party that is central to its electoral hopes--speak out independently to force the debate. Here the Progressive Caucus has done well by pushing its prosperity dividend, which would give every American a $300 check in contrast to Bush's tax giveaway to the rich. Responsible Wealth has done remarkable work organizing the statement by about 120 of America's richest men and women against estate-tax repeal. The large coalition of groups convened to fight the tax cuts--under the leadership of progressive unions, civil rights groups and the public interest community--will help stiffen the backbone of faltering legislators. The Campaign for America's Future's plan for creating a progressive leadership organization will help define and broadcast the choice we face.

Bush has benefited, of course, from the continuing press focus on former President Clinton's tawdry unpardonables and his legacy of political timidity and tactical retreat. Now, progressives must force Democrats to shed that defensiveness. The country did not vote for the Bush agenda, and the vast majority will not benefit from it. Time to go on the attack. This is a fight that can be won.

At Brazil's "counter-Davos," democracy was in; elitism, corporations were out.

When it comes to oil politics and Alaska the Bush Administration and the environmental movement are already treading the measures of a familiar dance. President Bush is insisting on the urgency of drilling for oil in the Arctic National Wildlife Refuge. He points to a supposed oil shortage that has somehow darkened homes and businesses up and down the West Coast. The environmental movement is already ramping up its national mail campaign rallying supporters for the battle to save the Refuge.

The actual game is bigger and more sinister.

Let's start by disposing of some myths. Start with the ludicrous claim of the Bush crowd that California's energy crisis can be solved by oil drilling in Alaska. Nationwide, oil provides only 3 percent of the source fuel used to generate electricity. In California the figure is less than 1 percent.

Bush is offering California exemptions from its supposedly onerous clean-air rules, claiming that once freed from such red tape the state's utilities and power producers could build a new generation of plants powered by fossil fuels. The Wildlife Refuge's oil won't be of much help here, since government officials estimate that even on an expedited schedule, oil couldn't flow from the Refuge until the year 2015.

Nor is the oil companies' problem in Alaska a shortage. Recall that back in 1995 British Petroleum, ARCO and Chevron entreated President Clinton to cancel the twenty-two-year ban on export of crude oil from Alaska to other countries. Congress had made such a ban a condition for permitting construction of the Alaska pipeline. The intent of the ban was to insure that Alaska's oil would help stave off any West Coast oil shortage. The companies wanted the ban lifted because they had a glut on their hands and required new markets.

Clinton dutifully assented, and the oil companies began exporting Alaskan crude forthwith to Japan, South Korea and China. The extremes to which they went in using Clinton's waiver to bilk US consumers came to light in January when The Oregonian won a Freedom of Information Act lawsuit, gaining access to 4,000 pages of documents in the Federal Trade Commission's files concerning the merger of BP-Amoco with ARCO.

An FTC economist had concluded that BP-Amoco was selling oil to Asian refineries at prices lower than it could sell to US refineries on the West Coast, in order to manufacture a US shortage. As evidence the FTC had e-mail traffic passing between BP managers who talked about "shorting the West Coast market" in order to "leverage up" the prices there. Another BP manager gloated that this scheme was a "no brainer." The FTC reckoned that this ploy allowed BP to hike prices at West Coast pumps by as much as 3 cents a gallon.

So the oil companies' strategy is to exploit the electricity crisis to seize at last a number of long-sought objectives: not just access to the Arctic National Wildlife Refuge, which would be a great symbolic victory, but also tax breaks worth billions for oil and gas extraction from wells across the country.

The big prize for the oil companies in North America isn't the Refuge but sites off the Alaska coast and the Gulf of Mexico: "Deepwater," says Geoff Kieburtz of Salomon Smith Barney, "is where the real pure exploration activity is going on in this country." Here we come to one of the lesser-known legacies of the Clinton era. Under the encouragement of Bruce Babbitt's Interior Department, deepwater drilling operations nearly doubled in the Gulf of Mexico in the year 2000 alone.

Among those roaring their protests at this activity is Governor Jeb Bush of Florida, who three days after his brother's inauguration implored the new team to place a moratorium on deepwater wells in the eastern Gulf of Mexico, saying that "Florida's economy is based upon tourism and other activities that depend on a clean and healthy environment."

Right now the Interior Department is looking at 688 lease applications that piled up in the Clinton years for new offshore oil development in the Beaufort Sea, and from the Gulf of Alaska's Copper River Delta (perhaps the greatest remaining salmon fishery in the world), the Cook Inlet (flanked by the Katmai National Park and the Kenai Peninsula), Bristol Bay and the Chukchi Sea up by Point Hope, the entire coast of Alaska is in play.

At the national level the big environmental groups are focused entirely on the Arctic National Wildlife Refuge, which is indeed in peril. But they would be advised to learn the history of that very Refuge. It was originally set aside in 1957 by President Eisenhower. In the same package Ike's Interior Secretary, Fred Seaton, opened up 20 million acres of Arctic coastline to oil development.

There are local groups--from the Gwich'in trying to save the Refuge and the National Petroleum Reserve west of Prudhoe Bay, to the Inupiat Eskimos defending their whale hunting grounds against oil derricks in the Beaufort Sea, to the Northern Alaska Environmental Center in Fairbanks--taking on the oil companies' grand plan. They understand the stakes more clearly than the national green groups, with the laudable exception of Greenpeace.

As for the Wilderness Society, National Audubon and the others, rapt in their fixation on the Refuge, they seem to be ceding without a fight the rest of the Alaska coast, the Gulf of Mexico and maybe even the Rocky Mountain front. Just listen to Deborah Williams, executive director of the lavishly funded Alaska Conservation Foundation. She recently journeyed to the Refuge with Lesley Stahl of CBS's 60 Minutes and vowed that not one oil rig would ever rise on the plains of the Refuge.

But at the same time Williams told the New York Times that she supports oil drilling in the National Petroleum Reserve, which is eight times as large and just as pristine as the Refuge, because "I drive a car and use petroleum products. We all have to be responsible and balanced." Williams, it should be added, was working for Bruce Babbitt at the Interior Department as his Alaska specialist when he OK'd test drilling in that very part of the Alaskan tundra.

His dream is an open northern border. But first, he must end southern poverty.

As proven by this pardon,
Two facts of life prevail:

The rich have got the money

And everything's for sale.

As the proverbial curtain rises on the Bush era in national politics, it's hard to know just how pessimistic progressives should be about the new President's aims and intentions. On a rhetorical level, we were greeted with an inaugural address that with a few minor adjustments could have been given by an incoming president of the NAACP. Look at the substance, however, and we find nominees at the Justice and Interior departments who could have been vetted by the John Birch Society, if not the Army of the Confederacy. The two warring sides of the Republican psyche were neatly illustrated recently at a dinner sponsored by the Philanthropy Roundtable at the Regency Hotel in New York, where two current stars of the Republican rubber-chicken circuit, Weekly Standard editor David Brooks and American Enterprise Institute "research scholar" and Olin fellow Dinesh D'Souza, held forth after a nicely Republican red-meat repast.

Brooks is still riding the wave of his bestselling work of "comic sociology" about America's new elite, Bobos in Paradise: The New Upper Class and How They Got There. His talk, like the book, is mostly affectionate ribbing of this class for its bourgeois consumption habits and bohemian self-image. Though he'd be loath to admit it, Brooks is an old-fashioned liberal Republican, not unlike Poppy Bush before he got the bit of presidential ambition in his teeth and found his principles run over by a Reagan landslide. (Just what Brooks is doing in a party dominated not by Prescott Bush and Elliot Richardson but Dick Armey and Tom DeLay is a question for another day.) A self-confessed Bobo, Brooks has only one problem with this tolerant, secular-minded and self-satisfied elite--its lack of civic consciousness.

There are no poor people in the Bobo world--even illegal Guatemalan nannies are treated as if they are taking care of your children and cleaning your bathroom as a lifestyle choice rather than out of economic necessity. "The new elite," as Brooks explained to the assembled philanthropists, "has no ethic of chivalry." Charitable giving as a percentage of assets has not remotely kept up with the unprecedented explosion of wealth in the United States during the past decade.

The virtues of such selfishness, on the other hand, have never escaped Dinesh D'Souza. The young Indian immigrant made his name in this country giving eloquent voice to the most morally repugnant aspects of Reagan-era Republicanism. He began his career as an obnoxious Dartmouth undergrad, publishing crude racist attacks in the off-campus conservative newspaper, followed by a stint at a Princeton magazine where he delighted in exposing details of female undergrads' sex lives. His first book was a loving appreciation of aspiring ayatollah Jerry Falwell.

D'Souza became a national phenomenon with a book attacking PC culture at universities, which was defensible, if overstated, and an apologia for American racism, which he termed "rational discrimination." With its pseudointellectual patina, D'Souza's work, even more than Charles Murray's, seems designed to offer solace to those who miss the good old days of Jim Crow laws and late-night cross burnings. Segregation, he argued, was designed to protect African-Americans and "to assure that [they], like the handicapped, would be...permitted to perform to the capacity of their arrested development." It would end when "blacks as a group can show that they are capable of performing competitively in schools and the work force."

D'Souza is touring for a new work, The Virtue of Prosperity: Finding Values in an Age of Techno-Affluence. (It is a measure of how well-funded are right-wing arguments that I have so far received four unrequested copies.) The thrust of his argument is the opposite of that of Brooks. Simply put, wealth has no obligations to poverty except to avoid it. As he once argued for the logic of racism, he now speaks for the morality of parsimony. The United States, he asserts, is "probably the best society that now exists or has ever existed."

D'Souza is the kind of moral philosopher who pays more attention to the musings of the Ayn Rand-spouting entrepreneur T.J. Rodgers, who races his BMW over speed bumps while attacking the moral probings of the clergy, than he does to the combined works of John Rawls and Richard Rorty. (Terming the latter "Rip Van Rorty" is what passes for wit in these pages.) Reinhold Niebuhr receives no mention at all.

Of course, it's not exactly hard to find billionaires who think of themselves as altruists regardless of the obscene amounts of wealth they accumulate. But it is much more cost-effective to induce "intellectuals" to say it for them. D'Souza fills this purpose not only by celebrating mass wealth but by abolishing poverty. "Poverty," he argues, "understood as the absence of food, clothing, and shelter, is no longer a significant problem in America." His evidence for this breathtaking claim is that even poor people have refrigerators these days, and many of them are fat. That 30 million Americans still struggle beneath the poverty line and 42 million lack the benefit of health insurance represent, to D'Souza, mere speed bumps on our highway to capitalist utopia.

When Bush père was inaugurated, he too made a great show of what was not yet called "compassionate conservatism." He acknowledged that poor people exist and that somebody should do something about it, but as a society, he warned, we had "more will than wallet." (And anyway, his contributors were demanding a cut in the tax on capital gains.) Dubya closed his inaugural with a similar flourish, in which he promised to work "to make our country more just and generous."

To show that Dubya is even remotely serious about his agenda for the poor, he and his Administration will have to ponder the kinds of questions raised by Brooks about the moral obligations of wealth. That is, after all, about the best one can expect from Republicans. But to the degree that he wishes to prove what his enemies insist to be true--that all this compassionate conservatism is simply a frilly frock in which to clothe the Reaganite Republican values of top-down class war--expect to hear plenty more from Dinesh D'Souza.

For more than two years, the antisweatshop movement has been the hottest political thing on campus [see Featherstone, "The New Student Movement," May 15, 2000]. Students have used sit-ins, rallies, hunger strikes and political theater to demand that garments bearing their institution's logo be made under half-decent working conditions.

From the beginning, the major players were students and administrators. While some progressive faculty members--mostly from sociology departments--offered the students early support, economists, who like to think of their discipline as the queen of the social sciences, kept fairly quiet.

That changed this past July. After colleges and universities made a number of visible concessions to the students over the spring, a group of some 250 economists and lawyers released a letter to administrators, basically complaining that they hadn't been consulted. The letter, initially drafted by Jagdish Bhagwati of Columbia University and burnished to perfection by a collective of free-trade zealots calling themselves the Academic Consortium on International Trade (ACIT), reproached administrators for making concessions "without seeking the views of scholars" in relevant disciplines. Judging from their letter, the views of these scholars might not have been terribly enlightening. On page 24 of the magazine, the ACIT missive appears with some comments (see "Special" box, right).