Money Is Still Dominate Our Morality -- 3/1/00
Big Money - Low Moral -- 3/7/00
It is not necessary to be a rocket scientist to figure out who has been the
embodiment of "moral authority" in America for the past ten years. A recent
survey of fifty-eight historians by C-Span showed that Bill Clinton is somewhere
in the middle of the pool of the presidents on job performance and the last
among them on moral authority. However, the methodology of this kind of surveys
would be much better if they reflected not only a pack of political leaders
(state bureaucrats), but also a pack of business leaders (corporate
bureaucrats). In that bigger picture, Bill Gates would definitely considered as
the No.1 in job performance and in moral authority, because the economy has been
prevailing over morality in our society for the past ten years.
History shows that the ruling majority rarely changes its horses in the middle
of a stream unless the society has simultaneous economic and moral crises on its
hands. After the Virginia, North Dakota, and Washington primaries of the
Republican party, it is likely that Bill Gates will keep the real No.1 moral
authority, while leaving Al Gore with the appearance of No.1. It is likely that
for the next four years, the latter will be the surrogate keeper of our economy
and decency.
Bush assumed that it would be enough to say that, "When I raise my hand to take
the oath of office, I will promise to bring honor and dignity to the office, so
help me God!" However, he missed an opportunity to offer the ruling majority his
promise not to rock the boat of economy by middle-class tax cuts while saving
Social Security. By embracing the economical and moral platform of the extreme
conservatives after his defeat in New Hampshire, Bush was forced to employ the
Christian Coalition. Running to the religious right won him two-thirds of the
GOP vote in non-Bible Belt Michigan, but that will not be helpful in the
national arena against Al Gore.
By using such nasty tactics as telephone banks, mail, and nasty charges by the
"independent" allies of the Christian Coalition, Bush forced McCain to respond
with the same means. Using such tactics shows the majority that the goals of
both candidates are not so clean and clear as they preach. Negative campaigning
on non-issues "works" for a while, but it always spirals out of control. Instead
of comparing candidates on the issues, the voters now comb over every
association and every statement each candidate has ever made.
McCain has been in Washington for 18 years and is surrounded by some of the most
suvviest advisers in the election business, who used some nasty tactics of their
own in Michigan. This cycle of abuse and response of the same kind is why
politics is getting increasingly dishonest and manipulative, and why fewer and
fewer people trust any politician. Thus, McCain has blotted his moral reform
banner and, at least for now, substituted substance for form. Will it help him
to win the GOP nomination?
Roughly speaking, McCain has a Clintonesque economic plan that should not rock
the boat. Therefore, Bush's people can mock it, saying that, "It is not
Reaganesque to support a tax plan that is Clintonesque in nature.'' Therefore,
McCain has yet to convince the GOP voters that he is a real moral authority of
the free world. It is very hard to sell to the Californians and New-Yorkers, the
majority of whom prefer business leaders as figures of moral authority and
expect politicians to be liars and cheaters. He has to begin picking off some
establishment GOP types, becoming not only the Outsider but also the Insider
Candidate; thus, showing to the rest of the Republican pack that he is not going
to seek vengeance on the establishment.
However, before all else, he has to make the case that he is the true heir to
Ronald Reagan, in spirit and in form. To that end, he would be better off if he
transfers his attention from Bush. The latter is ducking on issues because he
can wait, because he has money and the Christian preachers behind him.
Therefore, McCain must concentrate on Alan Keyes, who is the real messenger of
those conservative Christians. That is why, despite his fallacies in the
abortion and other issues, Keyes was a clear victor for the majority of
Christian listeners in every presidential debate. Why? Because he is not ducking
the hot issues, though he has no real solutions. However, that is precisely
McCain's job to highlight the fallacies of his opponent in each debatable issue.
Reagan would paper the fissures in the party and, with a sunny smile, would
allow the public to resolve them. He would not duck the issues, and he debated
them with humor and energy. That is why he was attractive to many Democrats and
independents. California is the obvious place for candidates to show their
leadership skills, which include the knowledge of the majority values and
interests and a vision of their solution in the near future.
If McCain will duck on the issues he will not win big on the first Super
Tuesday, March 7. He needs to win a bunch to cushion the blows in the big
Southern states likely to befall on him the following week. To do so, he must
win between him and Keyes, not between him and Bush, who is a pale background
for a real debate.
After his victory in Michigan, everyone expected John McCain to tack a little
bit right in order to court the Christian conservative Republicans that had
previously eluded him, because he had not convinced them on the abortion issue.
He could have done that in a series of debates with Alan Keyes, but he missed
the opportunity. Moreover, he did just the opposite, assaulting religious-right
leaders Jerry Falwell and Pat Robertson in a speech on Monday morning in
Virginia Beach.
I understand McCain's frustration and anger at Pat Robertson and Ralph Reed for
the nasty tactics they used against him in South Carolina. Nevertheless, he also
must understand that the Christian Coalition invested too much money in Bush
that it would be unrealistic to think they will lose the campaign as gentlemen.
McCain seems to realize that he is not going to be nominated without impairing
the GOP's reliance on the Christian Coalition for a strong voting block.
Although Christian conservatives are formidable allies, they have become a
liability to the GOP in a sense that they scare away potential GOP voters with
their intolerance and bigotry.
The Christian conservatives have helped the GOP in electing candidates in some
states. However, they will not tip the balance on the federal level because the
real majority of this country does not want to go in the direction of more fear,
intolerance, bigotry, and inability to respect individual freedoms. McCain's
team seems to understand that; that is why it is waging a war within the GOP and
forcing the moderate Republicans to see McCain as more popular and elective than
Bush. By creating a backlash against the "agents of intolerance," McCain hoped
to sweep the relatively moderate states of California, New York, Ohio,
Massachusetts, and Connecticut. However, this planned backlash on his Virginia
Beach speech turned out to be unplanned so far in North Dakota and Washington.
McCain's strategy essentially wrote off the entire South. Therefore, a
single-digit loss there can be interpreted as a better than expected
performance. However, McCain's strategy absolutely required him to win the state
of Washington. He needed not only the Washington delegates, but also the moral
victory before Super Tuesday. The moral victory was probably of more importance
because Washington is close to California culturally and politically and because
Seattle is the liberal Mecca of the world. The lack of a boost from the
moderate-Republican state voting yesterday indicates the fatal flaw of McCain's
strategy of ducking the debates regarding real issues.
I did not understand why McCain was not taking Alan Keys and the Washington
primary more seriously. He should have recognized the pivotal role of the
serious debates on the formation of a figure of moral authority. He is a
merchant at the market of ideas, and he should act like the one who allocated
60% of his assets to advertise his product. Instead, McCain made a pledge never
to tax the Internet and confined his recent campaigning there to two fleeting
visits. He was not there enough to make himself a visible figure in the state's
life. However, only his neglect toward the debates with Alan Keyes can fully
explain his not only blowing the Republican vote in Washington by 20 points but
also losing the "blanket" primary that includes the non-determinative ballots
cast by unaffiliated voters.
If McCain will continue to follow Bush's strategy of ducking the real debates,
he will lose either New York or California next week. Thereafter, simple
arithmetic will work against him, because he needs the 1,034 delegates required
to win the GOP nomination. According to the latest Los Angeles Times poll,
McCain is behind Bush by about 21 points in California. It is likely that if
McCain does not adjust his strategy, he will not attract enough Democrats and
independents to have even a moral victory in California, where, as in
Washington, it is only GOP votes that count in determining which candidate gets
all of the state's 162 delegates.
3/1/00
On Monday, March 6, Federal Reserve Chairman Alan Greenspan renewed his pledge
to increase interest rates in the coming months to slow the red-hot economy. He
expressed new worries about an over-heated economy and warned that the interest
rates may be increased more frequently or steeply if the economy does not slow
before March 21. Nevertheless, Greenspan said that Americans are living through
the remarkable economic times with a strong surge in workers' productivity,
which boosted their incomes and kept inflation from being a problem to the
government. The current expansion became the longest in U.S. history for 107
months in a row. Greenspan also said that the goal of the Federal Reserve
"should be to encourage the economic and financial conditions that will best
foster technological innovation and investment that spur structural productivity
growth."
Consequently, investors are in a rush to withdraw their capital from Blue chip
stocks (like Proctor & Gamble) and reinvest them in high-tech stocks at the
NASDAQ. Therefore, Dow has been plunging for a second day in a row - today it
fell 374 points. Such irrationally exuberant investors will be severely punished
soon, because millions of people need the consumer products such as soap and
toothpaste everyday. While the Internet stocks promise "pie in the sky," Proctor
& Gamble delivers stable profits right now.
On Tuesday, March 7, the federal government reported that the efficiency of
American workers surged at a 6.4 percent rate in the fourth quarter of 1999.
The Labor Department defined "productivity" as the amount of output for each
hour of work. The Labor Department reported that it is the highest jump in
productivity growth since a 7.4% rate of increase at the end of 1992.
Consequently, the revised estimate of productivity growth for the past year was
the 3%. Only in 1992 the workers' efficiency better - 4.1%.
Economists consider healthy productivity gains the key to prosperity and rising
living standards of the middle and lower classes. Sizable profits means
employers can pay more to their employees.
After booming in the 1950s and 1960s, productivity went down into a two-decade
stagnation, which culminated in the first oil embargo by the Organization of
Petroleum Exporting Countries (OPEC) in 1973. Some economists believe that huge
business investments in high-tech industries in the 1980s and 1990s reversed the
trend in productivity and finally started to pay off from 1996. These economists
credit the high-tech industries for boosting workers' productivity.
An essential indicator of inflationary trends is the cost of a labor unit, which
shows the major part of the cost of producing a particular piece of merchandise.
The bulk of US-based companies' expenses include wages, benefits and other
labor-related expenses. The cost of a labor unit fell in the 3Q by a 0.3
percentage rate; however, in the 4Q of 1999 it fell by a 2.5% rate. In the 4Q of
1992 this indicator declined by a 3.9% rate. Nevertheless, for the entire 1999,
the cost of a labor unit rose 1.7%. It was the lowest level since 1997, when
this indicator was increasing only at a 1.6% pace, indicating the continuation
of economic growth without severe inflation.
Such a rosy picture of our economy should be cause for a celebration in the
White House. Indeed, the sweeping victory of Gore over Bradley in today's
primaries indicates that the lower class gave all the credit to the present
Clinton-Gore administration for the good performance of our economy. Moreover,
the dirty victory of Bush over McCain, left the moderate Republicans no hope for
meaningful reforms "from above" in the near four years. Consequently, the reform
longings of the moderates will probably lead them into the camp of Pat Buchanan,
who can take 20% of the electoral vote in this year and be a plausible contender
in the year 2004.
Taking into consideration a good economy, the split of the Republican Party, and
the general peace around the globe, the Democratic establishment can hope on
easy victory in the autumn election. However, there are some flaky spots on that
rosy picture, and they may generate some problems to Al Gore. And those problems
are coming from the world economy.
Two weeks ago, the World Trade Organization (WTO) upheld a decision banning
offshore tax shelters that are a corporate welfare for the American exporters,
who drew billions of dollars a year of the tax-payers' money into their own
pockets.
The WTO ruled in October that the foreign sales corporations are akin to illegal
export subsidies, whereas a nation is free to set any tax rates it wants. This
move of the European Union (EU) could force the U.S. to scrap the tax breaks for
the American exporters or face sanctions, which can total more than $30 billion.
The EU charged that the 16-year-old shelters amount to illegal export subsidies
that gave U.S. companies like Boeing Co., Caterpillar Inc., Walt Disney Co., and
General Motors Corp. a $3.6 billion windfall in 1999 alone. The EU says the U.S.
should cut corporate taxes if it thinks its companies are at a disadvantage,
rather than subsidize exports. It means that the American corporations can dump
their merchandise onto the European market, while preventing such dumping of
Belgian or Russian steel and other products onto the American market.
This tariff-war was masqueraded for the past 16 years as so-called offshore tax
shelters -- the U.S. foreign sales corporations, which are our virtual
subsidiaries. These American exporting corporations operate mostly from the U.S.
Virgin Islands, Barbados and Guam, taking advantage of tax exemptions on much of
their export income. The federal government neither taxes the income of these
corporations nor does it tax the dividends paid by these shell corporations to
their American parent corporations.
The EU claims that about 50% of all U.S. exports passes through such "shelters,"
shaving between 15 and 30% off the tax bills of U.S. exporters each year. In
1998, through "sheltering" its merchandise, Boeing Co. drew $130 million from
the pockets of the American taxpayers . According to Boeing's annual report, the
sum was about 10% of its net earnings. And it means that each of us pays a tithe
to Boeing and other exporting corporations.
And what was the Clinton-Gore administration doing about this corporate welfare?
Politics as usual. The U.S. officials could not confirm those numbers of the EU
officials. Moreover, the U.S. representative in the WTO, Barshefsky, said in a
statement that, "Our view remains that the (present "sheltering" tax system) is
completely consistent with U.S. obligations to WTO" and "We strongly disagree
with the appellate body's ruling.''
Fred Murray, a lobbyist for saving the shelters, said the ruling of the WTO was
a "major setback for U.S. workers, farmers and the shareholders of U.S.
companies.'' Murray said the appellate body, which upheld an October decision by
a WTO panel, was not yet clear when the U.S. would have to comply with the
ruling. The WTO gave time to the U.S. until October 1 to scrap offshore tax
shelters; however, the EU officials last week said they have no immediate plans
to impose penalties on the U.S. It means that our corporations can prolong their
kleptomania for a year or two.
If the U.S. refuses to change its laws, any sanctions imposed by the EU could be
considerably higher than the $300 million in duties the U.S. annually slaps on
the EU goods, in such disputes as over bananas and beef. The sanctions would
probably raise Trans-Atlantic trade tension, because the U.S. has been already
living on credit for more than a decade and virtually has a permanent trade
deficit with the EU. It means that the younger generations of the Americans will
soon have to pay for the sins of their baby-boomer parents.
The loss of $30-40 billion would be a considerable punch to the Gore campaign,
but it is a small potato in comparison with those losses, which America will
grappling during the Gore administration, when the world trade politics
crystallizes from the moral erosion of the American Dream of the Open Global
Market.
Today you can feel the decay of our moral when you approach to a gas station.
Nowadays, the majority of the economists and propagandists are trying to
convince you that $20 per a barrel of the crude oil is a "fair" price to pay and
the $30 price-tag on a barrel is too much for us. However, why were we not
paying $20 for a barrel a year ago, when its price drop to the $10-level? Rush
Limbaugh would immediately jump on you, crying that was the necessary outcome of
the law of 'supply and demand.' Then why are we forgetting about this law now
and are whining that the $30 price tag is "unfair"?
Greed, greed, and greed, that is what the international community sees from our
corporations. After all this mess, should we really hope to be the moral leaders
of the world? When we finally lose our moral leadership in the world, then, the
domestic economic problems start to mount like an avalanche, because other
countries will lose their trust in our ability to repay our debts. Only then,
the conscious politics will prevail over the subconscious economy, and the
reformists, like McCain or Buchanan, will be able to say from the Oval Office
that morality is better than money.
However, for the next four years, we will live by the laws of the subconscious
economy, because we are not yet enlightened enough to act consciously in our
politics.
3/7/00
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Victor J. Serge created this page and revised it on 04/10/03