Wall Street Blinks
For the past several years, Democrats and Republicans have joined in a chorus of self-congratulations about the ebullience of the economy. They’ve eschewed meddling with the market, busying themselves instead with dismantling New Deal regulations that aimed not only to put some checks on monopoly capital but also to set up a social safety net to protect vulnerable citizens against its inevitable ups and downs. This attitude has yielded a libertarian marketplace in which the average American is held hostage to the overheated risk-taking of speculators.
Under these conditions, the market becomes a kind of gigantic boiler-room operation. The speculators take advantage of easy margin rules to gamble other people’s money, grotesquely inflating the value of stocks. On the NASDAQ, the high-flying tech companies invest in each other, running the prices up like a wild pyramid scheme, which inevitably comes crashing down.
In this situation, the speculators get wrung out, but so do the rest of us. Today, much of the employed middle class has retirement earnings in 401(k)s, which are largely invested in mutual funds that ride the market. Now the money that they are counting on for their long-term security is being whipsawed around the world and used to jack up nonperforming dotcoms as the pumped-up twentysomethings who run the investment funds are dragged along in the market riptides. And riptides, like the one on Monday, are pretty much what’s in store for the foreseeable future as the market struggles against the bear.
Washington, D.C., host to the latest World Bank-IMF reunion, was for all practical purposes placed under martial law over the weekend and on Monday. In this city whose citizens are unrepresented in Congress and have few rights, the police and federal officials trampled on constitutional safeguards of freedom of speech. They raided and shut down the protesters’ headquarters for questionable fire-hazard violations, intimidated print shops, forced the weak-kneed universities to close their doors to debate, and threatened residents who allowed demonstrators to camp on their property.
On Monday, the government shut down 110 blocks of Washington with the help of armored vehicles, and closed three subway stops. Government workers were told to stay home if they desired. Holding the demonstrators at bay cost $1 million. Of course, the rain may have helped most in that regard.
But even if the demonstrators didn’t achieve their goal of shutting down the financiers’ meetings, it was worth it. The oh-so-smooth delegates being rushed through police lines with their large escorts seemed very much like the multinational influence-peddlers they are. They looked just like every other colonial administrator before the fall. And fall they will.
News that Microsoft had hired Ralph Reed, Washington’s head Christer, to convince George W. Bush to support Bill Gates’s company in its antitrust travail shouldn’t come as much of a surprise, since the big computer monopoly has its hooks into both Democrats and Republicans. The move is significant because it signifies what Bush’s Texas critics have been saying for years: namely, that you can have your way with Dubya if you’ve got the cash.
As for Reed, he is a true genius, deserving of a mention in The Guinness Book of World Records as a triple agent. First, he is a key adviser to Shrub. In addition, he has faithfully represented God and the Christian Soldiers on Earth, most notably by persuading Dubya to stand with the Christer right and identify Jesus as his philosopher-king. Third, he represents Gates. (For the record, the campaign says Reed never lobbied the governor but “generated” letters through his firm, Century Strategies. Late last week, Reed acknowledged this, and said it was a mistake.)
The Microsoft ruling set off a bidding war between Republicans and Democrats for tech-industry campaign funds, with GOP leaders on the Hill falling all over themselves to assist a seemingly chastened Gates, who trooped up to visit them two days after Judge Thomas Penfield Jackson’s decision. Expressing “disgust” for the ruling, Republicans reiterated their pro-business line, with some even promising to take a hard look at what they believe to be an outdated Sherman Antitrust Act.
“The whole basis of the suit is the Sherman Antitrust Act,” said Michael G. Oxley, a key Republican member of the House Commerce Committee. “But that was in 1890,” he added. “We’re basically applying an industrial age statute to the information age.” Oxley wants a new definition of antitrust. Others bleated on about how unfair it was for the Clinton administration to “penalize success.”
Then it got down to brass tacks. When Gates attended a meeting of House Republicans, Thomas M. Davis III of Virginia expressed his frustration that Microsoft had not given more political support to Republicans. According to Congressional Quarterly‘s report, Gates said he would “look into that.”
Because it’s illegal to directly solicit campaign funds on federal property, Vic Snyder, a Democratic congressman from Arkansas, wrote the House ethics committee asking whether Gates’s meeting with the GOP was proper. Patrick Kennedy (who spent the week brushing off reports that he had manhandled a female guard at Los Angeles International Airport) downplayed the decision, declaring, “We’ve gotten a lot of good support from Microsoft.”
In fact, Microsoft is all over Washington. The company’s PAC gave $278,499 to 149 congressional candidates during this election cycle, and reports that it plans to give out more than $1 million by the end of the cycle. Expenditures on lobbying have jumped to $4.66 million in 1999, up from $3.74 million the previous year. Microsoft’s D.C. office has expanded from four employees in 1994 to 14 today.
Microsoft’s roster of lobbyists reads like a Who’s Who of ex-Capitol Hill powerhouses: Vic Fazio, the former California congressman; Tom Downey, the former Long Island liberal; and former Republican National Committee chair Haley Barbour. Not to mention a nonmember of Congress, the ubiquitous Grover Norquist, who flits in and around Republican Hill leadership meetings like a mosquito carrying the West Nile virus.
The crass cynicism that pervades politics in Washington these days reached a new low last week with the House’s passage, by a vote of 358-60, of a bill to provide financial assistance to states that imprison anyone found guilty of using a gun to commit a crime for a mandatory five-year term.
Modeled on Project Exile, which was initiated by a Clinton-appointed U.S. attorney in Richmond, Virginia, the proposed law, which had bipartisan support from such widely disparate groups as the NRA and Handgun Control, would provide up to $100 million in grants. The president himself supports it. The bill now goes to the Senate. Said Bill McCollum, Florida Republican and the lead sponsor: “April 20 is the anniversary of Columbine. I think every one of us wants to see an end to gun violence in this country, and this legislation deals specifically with that purpose.”
Although Project Exile began as a federal effort, it has been taken over by the state. Last week, Governor Jim Gilmore testified before Congress that in the year since Virginia took control, only four offenders have been prosecuted under the act. Moreover, Congressman Robert Scott, a Democratic opponent of the legislation, said the state’s own statistics show crime fell more dramatically in areas not covered by Exile. Between 1994 and 1998, overall crime declined in Richmond by 21 percent, while in Alexandria it fell 33 percent and in Norfolk 27 percent. The murder rate declined in Richmond by 39 percent, while in Norfolk it fell 43 percent and in Virginia Beach 58 percent.
In short, this legislation is not a model gun law but a model for encouraging prosecutors to lock up more people. It is a jail-building law. And as for Columbine, the threat of five years in prison does not deter suicidal rampage killers.
Texas, under the leadership of George W. Bush, is ranked:
Always ready with an apt quip, Henry Hyde, the chief House prosecutor in Clinton’s impeachment, says he has no idea where the Senate is headed. “I have never had any relations with the Senate,” Hyde confided recently. “I mean, they are over there and we are over here. They are East Timor. We’re West Timor.”
Additional reporting: Kate Cortesi