Page 1


A JOURNAL OF FREE VOICES We will serve no group or party but will hew hard to the truth as we find it and the right as we see it. We are dedicated to the whole truth, to human values above all interests, to the rights of humankind as the foundation of democracy; we will take orders from none but our own conscience, and never will we overlook or misrepresent the truth to serve the interests of the powerful or cater to the ignoble in the human spirit. Writers are responsible for their own work, but not for anything they have not themselves written, and in publishing them we do not necessarily imply that we agree with them because this is a journal of free voices. SINCE 1954 Publisher: Ronnie Dugger Editor: Dave Denison Associate Editor: Louis Dubose Editorial Assistant: Kathleen Fitzgerald Editorial Intern: Doug Anderson Calendar: Kathleen Fitzgerald Washington Correspondent: Richard Ryan Contributing Writers: Bill Adler, Betty Brink, Warren Burnett, Jo Clifton, Craig Clifford, John Henry Faulk, Terry FitzPatrick, Gregg Franzwa, Bill Helmer, James Harrington, Amy Johnson, Michael King, Dana Loy, Rick Piltz, Gary Pomerantz, Susan Raleigh, John Schwartz, Michael Ventura, Lawrence Walsh Editorial Advisory Board: Frances Barton, Austin; Elroy Bode, Kerrville; Chandler Davidson, Houston; Bob Eckhardt, Washington, D.C.; Sissy Farenthold, Houston; Ruperto Garcia, Austin; John Kenneth Galbraith, Cambridge, Mass.; Lawrence Goodwyn, Durham, N.C.; George Hendrick, Urbana, Ill.; Molly Ivins, Austin; Larry L. King, Washington, D.C.; Maury Maverick, Jr., San Antonio; Willie Morris, Oxford, Miss.; Kaye Northcott, Austin; James Presley, Texarkana; Susan Reid, Austin; Geoffrey Fred Schmidt, Fredericksburg; Robert Sherrill, Tallahassee, Fla. Layout and Design: Layne Jackson Typesetter: Becky Willard Contributing Photographers: Vic Hinterlang, Bill Leissner, Alan Pogue. Contributing Artists: Eric Avery, Tom Ballenger, Richard Bartholomew, Jeff Danziger, Beth Epstein, Dan Hubig, Pat Johnson, Kevin Kreneck, Carlos Lowry, Ben Sargent, Dan Thibodeau, Gail Woods. Managing Publisher: Cliff Olofson Subscription Manager: Stefan Wanstrom Publishing Consultant: Frances Barton Development Consultant: Hanno T. Beck for a three-week interval between issues in January and July \(25 issues per postage paid at Austin, Texas. POSTMASTER: Send form 3579 to P.O. Box 49019, Austin, Texas 78765 SUBSCRIPTIONS: One year S27, two years $48, three years S69. Fulltime students 515 per year. Back issues S3 prepaid. Airmail, foreign, group, and bulk rates on request. Microfilm editions available from University subscriber who finds the price a burden should say so at renewal time; no one need forgo reading the Observer simply because of the cost. Address all correspondence to: The Texas Observer, 307 West 7th Street, Austin, Texas 78701. TE TEXAS b H server DIALOGUE Jackson Detraction Hats off to Richard Ryan for his recent article entitled “The Jackson Mystique” which appeared in The Texas Observer \(TO, Presidential candidate Jesse Jackson was refreshingly to the point and free of the flaptrap nonsense that is so frequently an everyday trademark in the Pro-Jackson news media hype. But then, in all likelihood, ProJackson media and campaign supporters alike have suffered quantum doses of toxic, charismatic, mind-numbing Jackson Juice which, in the end, reduces one to repeatedly babble Rainbow Coalition poppycock like “Multinational Banks and Corporations have forged a new global order which has replaced unionized labor at home with slave labor abroad.” The only comfort here, of course, is knowing that nature and fate being what they are inevitably had to produce a reverend Jesse Jackson, opposite bipolar cosmic counterpart to the insufferable reverend Jerry Falwell. Especially perturbing and contradictory, even for a politician, are Jackson’s views on the United States role with developing countries of the so-called Third World. A Jackson Presidency would fail to see a beneficial cause and effect relationship in doing business abroad. Jesse’s linear world is made up of United States Robber Baron Corporation Monsters who manifest their willful power with the macho agenda of inflicting “exploitation,” “economic violence,” “slave labor,” and general suffering on our foreign neighbors. He fails to see even a hint of socioeconomic and cultural exchange in promoting business and trade with the world community at large. Blind of the fruits of a global economy, be assured that a Jackson Foreign Policy would be a romantic charade of show boating and U.S. bad mouthing with the likes of Castro of Cuba and Ortega of Nicaragua, at the expense of laying waste to numerous fragile semidemocratic sovereignties. In fact, upon close examination of Jackson’s platform with respect to U.S. business abroad, one concludes that Jackson’s views are molded of the stuff of spy novels and tempered with the gobbly gook slime of Mother Jones Comic Books. In closing, many thanks go out to the brilliant Richard Ryan for his shining Jackson Mystique article. Norm Worthington Las Cruces, New Mexico Economic Fault Lines Your editorial, “Something Happens” \(TO, why voters are not blindly accepting the statistics that say the U.S. is in an unprecedented period of economic expansion. The magnitude of the bank and S&L failures eclipses those of the Great Depression. There is an unprecedented number of business bankruptcies and home foreclosures. Hundreds of thousands of workers have been removed from the labor market due to forced early retirement at ages that make finding meaningful employment virtually impossible. They are receiving retirement pay that is far less than they had planned to receive. Thus, low unemployment figures do not tell the whole story. The bank and S&L failures were the result of greed theiis and the developers. The lenders apparently never asked for market studies to determine if a building or an apartment complex were needed. All they cared about was high-interest income. The developers were lured by the ill-advised 15year depreciation schedule that was allowed by Reagan’s 1981 tax law and the ability to use paper losses to offset other tax liabilities. The unneeded properties were sold to unsuspecting investors in limited partnerships who were seeking tax shelters through paper losses. Ironically, they also ended up with real losses of capital. The taxpayers now face a monstrous federal deficit caused by the huge tax writeoffs claimed by the developers, tax writeoffs claimed through the limited partnerships, and in the subsequent capital losses the investors claimed, and the losses claimed by banks and S&Ls related to the defaults on these properties. Now, the taxpayer must fund the huge FDIC and FSLIC payments that are needed to bail out the banks and S&Ls. If that were not enough, the public is seeing commercial property values plunge, which in turn causes the individual’s ad valorem taxes to increase. The final irony is that most of the failed projects were financed with no-recourse loans that absolved the developers of any personal financial liability and with a few exceptions the developers have been able to protect their ill-gotten gains. The American public may be forgiving, but there is no way they can forgive an administration that has permitted this travesty to occur. There was a total lack of regulatory oversight of the vast banking and real estate industries. This is the classic example of hands-off government carried too far and unrealistic tax loopholes that spawned gross abuse and the resulting disaster. Blake Cowden Dallas 2 JULY 29, 1988