October, 2001: Players

By Greg Rushford
Published in The Rushford Report

How Bush will get fast track
(if he does)

A thumbnail political sketch of what’s going on with President George W. Bush’s hopes to persuade Congress to give him fast-track trade negotiating authority:

This could happen in October, but Bush will have to go to the mat. He will have to make Congress understand that — unlike tax cuts or issues like whether to drill for oil in the Arctic, where people can reasonably disagree over the merits — fast track is directly and immediately linked to the coalition-building effort to fight terrorism (see the Yankee Trader column at page two for details). The same Congress that has trusted the president to wage war against terrorism will have to trust him to negotiate trade deals with America‘s trading partners and coalition allies — deals that will also be in our own economic interests. But without a serious, personal effort from the president, this likely won’t happen.

Federal Reserve Chairman Alan Greenspan understands how important this is. “In contrast to natural disasters, last week’s events are of far greater concern because they strike at the roots of our free society, one aspect of which is our market-driven economy,” Greenspan told the Senate’s banking committee on September 20. “As a consequence of the spontaneous and almost universal support that we received from around the world, an agreement on a new round of multilateral trade negotiations now seems more feasible.”

In case lawmakers missed his point (many did anyway), Greenspan stressed: “A successful round would not only significantly enhance world economic growth but also answer terrorism with a firm reaffirmation of our commitment to open and free societies.” Without fast-track negotiating authority for the president, America would remain a bystander.

U.S. Trade Representative Robert Zoellick, who has a diplomatic background, understands this linkage. House Ways and Means Chairman Bill Thomas (R-CA), also gets it, as does Sen. Charles Grassley (R-Iowa), the top Finance Committee Republican. Thomas has been negotiating with New Democrats like Cal Dooley (CA), John Tanner (TN), and Louisiana’s William Jefferson. Problem is, while these are first-raters in a Congress that has too many second-raters, the second-raters run things. By themselves, Republicans like Thomas and Democrats like Dooley, Jefferson and Tanner are still some 30-40 votes short. And in the Senate, protectionists like Max Baucus (D-MT) and Jay Rockefeller (D-Steel Lobby) call the shots.

All eyes are on New York’s Rep. Charles Rangel, the respected top Democrat on Ways and Means. Rangel is not owned by the steel or textile lobbies, nor by the AFL-CIO; he played a vital role in congressional passage of the Africa Growth Bill and the fight for legislation to ease China’s way into the World Trade Organization. Rangel is a canny legislator who always holds his best cards until the last hours, when it becomes apparent that a deal must be done. Bush has to hope that Rangel understands that that time came on the morning of September 11, 2001.

Is Treasury Secretary Paul O’Neill up to the job?

These are the classic difficult times when Washington’s traditional tolerance for second-raters is put to the test. And the perceptions are growing that Treasury Secretary Paul O’Neill is simply not up to the job. While O’Neill has the loyalty of some respected aides like Deputy Secretary Kenneth Dam and economist John Taylor, Treasury’s top official for international affairs, the secretary’s own words have drawn more ridicule than respect. When O’Neill speaks, financial markets tremble.

On September 17, the morning that the stock markets re-opened after the terrorist assaults of the previous Tuesday, O’Neill came off like a ditzy cheerleader. “If I could buy stock, I’d be buying a whole lot today,” he told ABC’s Good Morning America. That day the Dow Jones Industrial Average fell 684 points, its worst drop in history.

Leaders with a grasp of the nuances of politics know when to acknowledge truthfully that times are tough, and offer sage advice instead of boosterism. That’s what President Bush did last month, leveling with the American people that the war against terrorism would be long and difficult.

Wanting sage advice, House Majority Leader Richard Armey (R-TX), Minority Leader Richard Gephardt (D-MO) and other congressional leaders called in three men who they thought understood the economy best. On September 19 the lawmakers met with the Fed’s chairman, Alan Greenspan; White House economic adviser Lawrence Lindsey; and former Treasury Secretary Robert Rubin. “That the invitation went to the Democrat Rubin, rather than current Treasury Secretary Paul O’Neill, was both an effort at bipartisanship and a testament to Rubin’s mastery of financial markets,” observed the sharp-eyed Glenn Somerville of Reuters.

The September 11 tragedy: What’s in it for me?

The terrorist attacks in New York and the Pentagon that took the lives of more than 6,000 Americans and citizens of some 60 countries around the world brought out the best in this country. We who are living through these terrible days will never forget the deep emotions that are on display everywhere in the land — nor the sense of absolute determination to do whatever it takes to prevail over this evil. But human nature being human nature, and Washington being Washington, a lot of folks tended to tailor their views to their own agendas.
Scam artists quickly got busy on the Internet, seeking credit card numbers for a “charitable” donation to their favorite (nonexistent) charity to help the victims’ families.

Los Angeles syndicated radio talk-show creep Tom Leykis’s topic on September 20 was, “How to use the tragedy in New York to get laid.” The first thing that pops up on Leykis’ website is a photo of a sexy blonde wearing an American flag and nothing else. “America the beautiful,” the caption reads.
Lori Wallach, the shrill Naderite who runs the Public Citizen’s Global Trade Watch, accused House Republicans of seeking to “exploit the tragedy” by pressing for congressional approval of fast-track trade negotiating authority for President Bush. Wallach is so blinded by her hatred of capitalism and free trade that it would do no good to tell her that the president really needs such authority to negotiate trade deals with America’s allies as part of the coalition-building effort.

Victoria Reggie Kennedy, the president of Common Sense about Kids and Guns, noted an increase in first-time gun buyers in the wake of the terrorist attacks — and an opportunity to advance her cause. “As all Americans struggle to find an appropriate response to the tragic events of last week, Common Sense about Kids and Guns strongly urges all adults to exercise caution and engage in an honest assessment of their own personal family situations before deciding to bring a gun into the home. The decision to keep a firearm in the home is a very serious one that comes with enormous responsibilities.”

The American Iron and Steel Institute put up on its website an article that ran in the September 12 American Metal Market. “The structural steel that supported the twin towers of the World Trade Center did what it was designed to do, saving thousands of lives that otherwise might have been lost in the terrorist attacks that hit the United States Tuesday morning,” the article reported. But when I called AISI spokesman Dan Snyder to ask if he knew that he was praising Japanese steel for helping save American lives (40 percent of the WTC’s structural steel was that of Nippon Steel), Snyder didn’t return the call. Meanwhile, AISI stepped up its campaign to link its demands for quotas and high tariffs on foreign steel to America’s response to terrorism.

You’ve already probably read that Jerry Falwell went on Pat Robertson’s television show, The 700 Club, to offer that God was displeased with America’s embrace of abortionists, gays and lesbians. The lesson of the September 11 tragedy, Falwell declared, was that the Lord “continues to lift the curtain and allow the enemies of America to give us probably what we deserve.” When “we destroy 40 million innocent babies, we make God mad.” I remember the days when Falwell would go on television to plead that viewers send him even a dollar or two from their social security checks, adding that they need not send the money if they really didn’t care about helping hungry little orphans.

Washington business lobbies saw the tragedy through their own prisms, which basically got down to corporate tax cuts. The conservative Small Business Survival Committee wanted first of all “an immediate and sizable cut in the capital gains tax.” The National Mining Association offered its help in assisting in the rescue efforts, which was followed by a plea for Congress to rescue it from the corporate alternative minimum tax, called AMT. This might be a hard sell, the association acknowledged on its web site. “Congressional action on tax issues this year are likely to only occur on politically popular ideas. Reducing corporate taxes is not one of them.” That didn’t stop (arch protectionist) W.R. Timken, Jr. who chairs the National Association of Manufacturers, and NAM President Jerry Jasinowski, from asking Uncle Sam for a list of goodies, including a request to “reduce corporate tax rates by 5 percentage points.” That actually might have merit, but Timken sense of political timing is about as nuanced as Paul O’Neill’s.

Zoellick speaks out

One man who found his voice last month was U.S. Trade Representative Robert Zoellick, who made perhaps the strongest speech on behalf of free trade that any USTR has ever had to make. On September 24, Zoellick spoke to the Institute for International Economics. Some brief excerpts illustrate the flavor better than I can summarize:

“Our enemy’s selection of targets — the White House, the Pentagon, and the World Trade Towers — recognizes that America’s might and light emanate from our political, security, and economic vitality. Our counteroffensive must advance U.S. leadership across all these fronts. So in addition to military actions we must thrust forward the values that define us against our adversary: openness, peaceful exchange, democracy, the rule of law, compassion, and tolerance. This is, as Chairman Greenspan said to me, a struggle between the producers and the destroyers; between those striving day in and day out to build better lives for their families and those who only know destruction, tearing down what others have created. On September 11, over 60 countries lost people to the hate of the destroyers.

“Trade is about more than economic efficiency. It promotes the values at the heart of this protracted struggle.

“Prior Americans recognized the role of economic ideas in overcoming international adversity. Congress granted Franklin D. Roosevelt the authority to employ free trade as a cure for the protectionism of the Great Depression and then to help Harry Truman revive a devastated world. Throughout the Cold War, Congress empowered Presidents with trade negotiating authority to open markets, promote private enterprise, and spur liberty around the world — complementing U.S. alliances and strengthening our nation…

“Erecting new barriers and closing old borders will not help the impoverished. It will not feed hundreds of millions struggling for subsistence. It will not liberate the persecuted. It will not improve the environment in developing nations or reverse the spread of AIDS. It will not help the railway orphans I visited in India. It will not improve the livelihoods of the union members I met in Latin America. It will not aid the committed Indonesians I visited who are trying to build a functioning, tolerant democracy in the largest Muslim nation in the world. And it certainly will not placate terrorists...

“We will not be intimidated by those who have taken to the streets to blame trade — and America — for the world’s ills. The global trading system has demonstrated — from Seoul to Santiago — that it is a pathway out of poverty and despair. As President Bush stated in July in a speech at the World Bank, the protestors against globalization, largely upper middle class and affluent young people, are ‘no friends of the poor.’ Or as former President Zedillo of Mexico said, the protestors ‘seem strangely determined to save the developing world from development.’”

Bring the WTO to The Big Apple

Here’s an idea that you can credit to Doral Cooper, formerly the USTR’s top woman on Asia who is now president of C&M International: Move the forthcoming World Trade Organization’s ministerial meetings in November from Doha, Qatar to Rudy Giuliani’s New York City. Let the terrorists who destroyed the World Trade Center — the world’s number one symbol of free trade — know that New Yorkers aren’t that easy to intimidate. The Big Apple’s got it all: hotel rooms, the United Nations, Rep. Charles Rangel’s Harlem, and, above all, spirit. And let the snotty, anti-capitalist protestors who hate the WTO — and have been full of their intolerant selves since trashing the WTO’s 1999 ministerial in Seattle — try to defy the (unionized) NYPD cops and FDNY firefighters.

TOP