November 2001 - VOLUME 22 - NUMBER 11
E D I T O R I A L
The tragedy of September 11 has put to an end to the ridiculous notion,
popular especially in the United States, that the best government is the
least government. Public sector fire fighters, police and health workers responded heroically
to the violence of September 11. The anthrax spread took the lives of
several public sector postal workers. The privatized carry-on bag screening
process is widely acknowledged to be a disaster. With the economy rapidly
unraveling, virtually everyone is looking to the government for a stimulus
package. Industries from airlines to hotels to insurance are looking
for government bailouts and props. And, of course, the military is part
of the public sector. September 11 and its aftermath has made clear that there are some functions
that uniquely belong in the public sector; that private sector profit
motives may lead to shoddier performance than that of the public sector;
and that the government has a vital role in managing and directing the
economy. The debate now is not over whether there should be government, or whether
it should intervene in the economy, but how, on what terms, and for what
purpose. For now, the wartime opportunists are winning this debate, funneling
government resources to narrow corporate and elite interests. The first obligation is for government intervention to be egalitarian
in nature. When performing services, extracting obligations or conferring
benefits, government should work to ensure benefits and burdens are distributed
evenly across the citizenry, with a bias to favor lower-income groups. The House of Representatives so-called economic stimulus package
is an exact contradiction of this most fundamental of principles. Rather
than a carefully calibrated spur to the economy, it is a handout to the
rich and powerful. Three quarters of the 2002 tax cuts in the package
would go to the richest 10 percent of taxpayers, according to Citizens
for Tax Justice, with only 7 percent going to the bottom three fifths
of taxpayers. The package showers tax breaks and even rebates on corporations
including IBM, General Motors and General Electric. Little of this will work to stimulate the economy and counteract recessionary
pressures. More sensible measures would deliver benefits (like increased
and extended unemployment benefits) and tax breaks to lower-income groups,
who are more likely to spend than the rich; and would involve government
spending on vital public infrastructure like railways and schools
to create demand in the economy (as well as provide needed public
services). A second principle that should control government intervention in the
economy is the principle of reciprocity. If the government is going to
bail out and provide supports to private businesses, then it should get
something in return. Partly, this reciprocity should be measured financially
with corporations paying back loans when they can, or paying for
ongoing government services. Reciprocity should also be demanded in policy terms. By way of counterexample,
the recent U.S. government airline bailout required nothing of the airlines.
There were no conditions attached on how the airlines should treat employees.
There was no obligation for the airlines to facilitate the formation of
independent passenger groups. Third, and especially because the private market on its own is unable
to factor in such considerations, the government must consciously direct
the economy toward ecological sustainability. No area is more important in this regard than energy. If the U.S. government
had invested even modestly 20 years ago in solar and renewables, or created
modest incentives for private sector investment, the world might be a
very different place. It didnt, and the United States remains oil
and fossil fuel dependent. Given the persistent threat of war due to U.S. oil dependence and the
now-obvious terrorist threat to nuclear power plants, not to mention the
genuine international security threat posed by global warming, it is now
past time for a major government commitment to solar energy. Unfortunately,
the Bush-Cheney plan envisions ongoing reliance on fossil fuels and nuclear,
and the oil barons have sought to use September 11 as an excuse to open
the Arctic National Wildlife Refuge for drilling. Finally, the principle that government has a vital and significant role
to play in both directing and participating in the economy must be applied
equally to developing countries. While the United States is responding
to September 11 and its aftermath with everything from renationalization
of airport baggage screening (though final agreement on the proposal remains
logjammed at press time) to abandonment of previous budget limits, the
old rules still apply to poor countries. The International Monetary Fund
(IMF) and World Bank are continuing to sing their one-note song about
the virtues of scaling back government and relying on markets, and continuing
to impose their unreconstructed market fundamentalism on poor countries.
That must change. The public-minded spirit of the day has evinced a political climate hospitable to pushing forward with public interest agendas in many areas. But, so far, it has been the corporate lobby shops and their allies that have responded most effectively to the political moment, with narrow interests looting the treasury and working people and the long-term environmental concerns ignored. |