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As the House of Representatives was about to begin debating a modest campaign finance reform bill, former Enron CEO Kenneth Lay was taking the Fifth before the Senate commerce committee. As the disgraced exec sat grim-faced at the witness table, Democratic Senator Fritz Hollings, chairman of the committee, used the nickname George W. Bush once conferred upon Lay, noting that there is "no better example than Kenny Boy of cash-and-carry government." Lay and Enron dumped millions of dollars into the political system--in hard-money contributions to candidates and soft-money donations to political parties--and spent millions more to hire politically wired lobbyists (including Republican Party chairman Marc Racicot) and to snag high-profile opinion leaders (like Bush economic adviser Lawrence Lindsey) as consultants. Executives were coerced to cut campaign checks to Bush and other politicians, Republican and Democrat. The goal was to game the system in Enron's favor--in regulatory agencies, in Congress, in state capitals, in the White House.

Enron, of course, was not unique in this regard. Why else would corporate executives invest millions in candidates and parties? If they're not receiving a return, shareholders should sue. (Enron may well have received favors from federal and state officials in the months and years before the company started collapsing and became too controversial to assist; the various Enron inquiries on Capitol Hill should be digging into this.) And the system seems to be working fine for most donors and the recipients, for the flow of money keeps increasing. In 2001 the two parties bagged $151 million in soft money--the large unlimited contributions given mainly by corporations, unions and millionaires--almost a 50 percent increase over 1999, the last nonelection year. The Republicans out-collected Democrats, $87.8 million to $63.1 million.

The Shays-Meehan bill, at the center of the latest House campaign finance debate, called for something of a ban on soft money for the national parties--a good move. But the legislation, similar to the McCain-Feingold bill in the Senate, still contained soft-money loopholes and, just as unfortunate, raised the limits on certain hard-money donations. If Shays-Meehan had been enacted years ago, it would have done little to slow down the Enron racketeers. That's why it's important for the debate to move beyond Shays-Meehan/McCain-Feingold. The long-term solution must be a system of public finance in which candidates can receive most of their campaign dollars in clean money, that is, funds that come from the no quid/no quo public till rather than the private pockets of the rent-a-politician crowd. The first run of clean-money systems in Maine and Arizona showed that such an alternative can work: There were more contested races, more women and minorities running and a more level playing field. The vast majority of both states' legislators and statewide officials will run "clean" this year, and it looks as though the Massachusetts Supreme Court will force the implementation of that state's clean election law for this year's election. Legislation is advancing in several other states.

In the past few years, the reform debate in Washington has been too modest. The authors of the reform bills deserve credit for pushing against a mighty tide of self-interest, but Enron shows how far special interests will go to rig the system. True reform has to go as far.

As January turned into February, the most important people in the world gathered themselves together in midtown Manhattan for the annual World Economic Forum. Normally held in Davos--the Swiss ski resort previously famous for being the site of Thomas Mann's The Magic Mountain--the meeting was shifted to New York this year as an act of solidarity with a city wounded on September 11.

Healing, though, wasn't much in evidence. To protect the 3,000 delegates--businesspeople, academics, journalists and random celebrities--the area around the Waldorf-Astoria was sealed off with metal fences, dump trucks filled with sand and 4,000 members of the NYPD. Of course, the intention was to keep out the thousands of activists who'd come to protest them, not to mention terrorists who might dream of taking out a good chunk of the global elite in one deadly action.

Thankfully, no mad bombers showed up. And though the protesters were kept well away from what was dubbed the Walled-Off-Astoria, their influence was nonetheless clearly felt. One attendee, Bill Gates, the richest person on earth, actually welcomed them, saying: "It's a healthy thing there are demonstrators in the streets. We need a discussion about whether the rich world is giving back what it should in the developing world. I think there is a legitimate question whether we are."

That Gates said something like that--leaving aside for a moment just what it means--is one sign of how the political environment has changed over the past few years. Another is the evolution of the WEF itself. The forum was founded in 1971 by Klaus Schwab, a Swiss professor of business, policy entrepreneur and social climber. At first it was a quiet and mostly European affair, with executives and a few intellectuals discussing the challenges of what was not yet called "globalization." But it grew over time, gaining visitors from North America and Asia, and by the 1990s had emerged as a de rigueur gathering of a global elite. In fact, it's been one of the ways by which that elite has constituted itself, learning to think, feel and act in common.

Corporate and financial bigwigs--who pay some $25,000 to come--dominate the guest list, but they also invite people who think for them, entertain them and publicize them, for whom the entrance fee is waived. Star academic economists were also on the list of invitees (bizarrely marked "confidential," so I had to swipe a copy), alongside some unexpected names: cultural theorist Homi Bhabha, columnist Arianna Huffington and model Naomi Campbell. And lots of religious figures, NGO officials and union leaders--who, to judge from their press conferences, didn't feel very well listened to. It seems not much communication goes on across the vocational lines; Berkeley economist Brad DeLong, a first-timer, theorized that "one reason that the princes of the corporate and political worlds are where they are is that they are very good at staying quiet when baited by intellectuals."

And DeLong was in the same room with them. Most journalists covering the event weren't so lucky. The WEF designated a handful of clubbable correspondents from places like the New York Times and CNBC as "participating press" and allowed them to mingle with the delegates at the Waldorf. But several hundred others, dubbed "the reporting press," were penned up in a couple of cramped "media centres" in a neighboring hotel. The terms are fascinating. Clearly the participating press participates in the inner workings of power and helps create its mystique. But the reporting press couldn't really report at all: We got to watch some of the sessions on closed-circuit TV (only the big, more formal ones--the intimate brainstorming sessions were strictly private), to read sanitized summaries distributed by the WEF staff and to view a few dignitaries at press conferences, which were generally too short to allow more than a few perfunctory questions.

Not only were we barred from newsworthy events--we weren't even told they were happening. In one of them, Treasury Secretary Paul O'Neill explained bluntly that the Bush Administration let Argentina sink into total crisis rather than engineer a bailout because "they just didn't reform," apparently forgetting that the country was once praised as a model of economic orthodoxy. In another, Colin Powell asserted the right of the United States to go after "evil regimes" as it sees fit--harsh language from the Administration's resident dove. Neither speech went down well with a good bit of the audience; anxiety at Washington's unilateralism was one of the recurrent themes among non-US delegates.

The gathering's mood was clearly troubled. Back in the 1990s, when the US economy was booming, trade barriers were falling and the New Economy was still new, the temper of the gatherings was reportedly pretty giddy. Now, the headlines are full of bad news--Enron, Argentina, recession, terrorism, protest. And the conference reflected it.

Businesspeople and academics mused on how to deal with new risks--you can't hedge against bioterrorism in the futures markets. Economists debated which letter would best describe the US economy--a V (sharp fall followed by a quick recovery), a U with a saggy right tail (long stagnation, weak recovery) or, most appropriate, a W (false recovery followed by a fresh downdraft). The consensus leaned away from the V toward the saggy U, with the W not to be ruled out.

But there were things more profound than the business cycle to worry about. As the Washington Post noted with apparent surprise, "The titles of workshops read like headlines in The Nation: 'Understanding Global Anger,' 'Bridging the Digital Divide' and 'The Politics of Apology.'" Most prominent among those concerned with poverty were the duo of Gates and his new friend Bono, the lead singer of U2. Bono--who identified himself on opening day as a "spoiled-rotten rock star" who loves cake, champagne and the world's poor--hammered at the need for debt relief. (It's easy to make fun of him, but activists are quick to point out that his influence is much to the good.) Gates kept reminding everyone that about 2 billion people live in miserable poverty. Of course, no one was rude enough to point out that Gates's personal fortune alone could retire the debts of about ten African countries.

It's hard to believe this is much more than talk, however. Addressing poverty and exclusion would require WEF attendees to surrender some of their wealth and power, and they're hardly prepared to do that. Stanley Fischer, formerly the second in command at the IMF and now a vice chairman of Citigroup, expressed "profound sympathy" for the people of Argentina but then worried about "political contagion"--the risk that other countries, seeing the crisis there, might reject economic orthodoxy.

Further insight into the WEF mindset was provided by Fischer's panelmate, South African Finance Minister Trevor Manuel. According to Manuel, during the (private) WEF discussions, "poverty was defined...as the absence of access to information," which would be news for anyone struggling to pay the rent. More urgently, he pointed out that "uprisings occur because ordinary people don't feel that they have voice and representation." To ward off that danger, policy-makers must worry about "equity"--which he carefully distinguished from "equality." When I asked him to expand on this distinction, Manuel said, "There are different conceptions of equality to start with. There's equality of opportunity and equality of outcome. But equity is about creating stakeholders. For example, both employers and employees have a stake in good labor practices." When I said that that sounded like it was more about changing perceptions rather than material reality, he said, "It's all those things. It's all those things." Manuel also revealed that the participants had "interesting, interesting debates on whether we should ask business, in the conduct of business, to act ethically or whether it's OK for business to be unethical in the conduct of business and then have some spare cash to do good with." No wonder people pay $25,000 to play this game.

And it's no wonder that on the closing day, a panel of union leaders--five out of some forty who were there, including AFL-CIO president John Sweeney--gave a very downbeat assessment of the forum's dedication to a real adjustment of policy. Sweeney, the most moderate of the group, said that the world economy doesn't have an image problem--its problems are structural. Others spoke of CEOs being "in denial," of hearing but not listening.

Unfortunately, though, there were very few union people--leaders or rank-and-filers--demonstrating in the streets that weekend. That would have made quite an impression on the great and good. But Gates's appreciation of the protesters points to what was doubtless the best thing about this year's forum: The 12,000 who marched through midtown Manhattan on February 2 proved that the so-called antiglobalization movement, a global movement if there ever was one, was not put out of business by September 11. It's alive and well--so alive and well that it set much of the WEF's agenda.

The Texas company has been a scandal in other countries for a long time.

(A Houston version of the Irish folk song)

Oh, Kenny Boy, your friends are disappearing.
They don't know you, much less your kvetchy wife.
Yes, it's sad when pols that you've been shmeering
Now hope that you'll get twenty years to life.
They sang your song: They passed deregulation.
They passed your laws. They bent the regs your way.
But now they track your every obfuscation.
Old Kenny Boy, their Kenny Boy's now Mr. Lay.

Enron, maker of big promises and big donations, stands revealed as a four-flusher.

Is the Enron story one of outrageous mendacity or stupefying ignorance?

Pôrto Alegre, Brazil--In US living rooms, talk about such policy measures as the White House's proposed Free Trade Area of the Americas (FTAA) is likely to elicit clueless shrugs.

Having simmered on the back burner through the aftermath of September
11, Congress's effort to obtain records from Vice President Dick
Cheney's energy task force has now reached the boiling p

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