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including Tyson Foods; Murphy Oil; Wal-Mart \(where his wife sits on the board and whose owners, the Walton family, are almost all heavy Enterprises, a large private provider of health care; and the investment banking, oil and gas interests associated with the Stephens family. . It may be sheer coincidence that back in 1976 the last named was also close to Jimmy Carter as he began his run for the White House. But the Clinton campaign’s striking resemblance to the earlier Carter effort in which a moderate conservative free trader from the South with some well disciplined center-left humanitarian impulses runs from the periphery of America supported by internationally-oriented investment bankers and their allies onWall Street, in Washington and in the press is certainly not accidental. In 1992, however, most of American business is far more conservative than it was in 1976 \(when, it should be recalled, the much more liberal Morris Udall could still attract important business supporters in addition to his labor backcy is centered far more on investment bankers \(and to some extent, communications companies and even retailers, whose biggest enterprises now bulk larger in the economy than they nent investment bankers contributing to the campaign are the Blackstone Group’s Roger Altman and Peter Peterson \(who has also given to Bush and whose views about the appropriate level of consumption for average Americans are well partners at Goldman, Sachs \(including Robert Rubin, perhaps the firm’s leading figure, who once, only half in jest, compared F.D.R.’s Glass-Steagall Act, which separated investment Greenwich Capital Markets; and other large houses. Such interests differ only marginally from the internationalists at the core of the Bush coalition with respect to either foreign or domestic policy. Virtually all now now work closely with Japanese firms to help invest the fabled trade surplus. Indeed, some, such as Blackstone and Goldman, have Japanese partners, while others, for example Greenwich Capital Markets, are actually subsidiaries of prominent Japanese enterprises. This practically guarantees what is in any case obvious from a close study of the campaign’s policy pronouncements: that for all the election-year posturing about “change” a Clinton administration would not depart radically from the Bush team’s policies, particularly in regard to the critical questions of international trade and finance. At most, there would be more investment in “human capital” and some small programs targeting investment in civilian technology. A Clinton Administration is also likely to strike a different tone on race relations even as it declines to spend money on cities. It would also nominate different kinds of judges to all levels of the federal bench and take a slightly softer line than the Bush Administration on the Israeli settlements issue. What a Clinton Administration almost cer tainly will not do, however, to put forward a sweeping health insurance reform. If anything is clear from the F.E.C. roster of contributors, it is that the Arkansas Governor’s lack of clarity about his plans for medical insurance is strategic. The lists are full of contributions from various parts of the medical-industrial complex, whose interest in blocking major reform is all too apparent. Trial lawyers are also abundant, suggesting that a Clinton Administration will not soon be tampering with the fabulously costly laws on liability or otherwise attempting to regulate expensive lawsuits \(a cause the Bush administration is now taking up, both to strike a populist pose and to Because Jerry Brown has a message, but no interesting money and remains in the race long after most people thought he would be gone there remains only one campaign whose political economy still requires comment: that of former Massachusetts Senator Paul Tsongas, the latest to run out of funds and withdraw. If one wanted a tag line for this effort, one could do worse than to sum it up as the Route 128 view of American politics. Both the campaign’s definition of America’s economic problem and the most controversial parts of its proposed solutions \(along with much of its early money that wasn’t raised from ethnic Greek high-technology highway. The principal intellectual sources were two: the work on “strategic trade” theory pioneered at M.I.T. a university with a very special orientation to industrial manufacturing and a series of essays written in the mid-1980s that identified the “cost of capital” as a key problem of American industry. These essays were written by George Hatsopoulos, a Greek-American M.I.T. graduate who now runs the highly-regarded Thermo Electron and is curently vice chairman of the American Business Conference. “Strategic trade” theory is essentially a hightech version of nineteenth-century German economist Friedrich List’s “National Economics,” It tries to reconcile orthodox economic theory’s stress on the merits of free trade with the fact which around Route 128 is increasingly difficult not to notice that current trade policies aren’t working so well. After performing the customary ritual dance of purity to the international invisible hand, this school concedes that in some carefully defined instances a cautious policy of government intervention may well prove beneficial. Hatsopolous’ efforts essentially began as an attempt to develop a stragegy for hard-pressed American businesses particularly manufacturers squeezed by the high interest half. The argument, which was advanced carefully and subtly, is that manufacturing in the United States could be rescued by lowering the cost of capital to a level more comparable with that of America’s leading competitors. Tsongas has served as a director of a Thermo Electron subsidiary, and as Jerry Brown glancingly noted early in the campaign, Hatsopoulos and many associates contributed to Tsongas’ campaign. In addition, the former Senator indi cated often enough that he took the capital problem very seriously. His proposals for a capital gains tax cut for long-term holdings were the primary remedy he proposed, along with a further tilt by government in the direction of business, plus, of course, a sharp reduction in the federal deficit and sweeping education reforms. But if Tsongas performed a real service by drawing attention to Tocqueville’s rumblings, his proposed solutions are another matter entirely. The fundamental problem is simply this: The world’s economy has changed. After the dramatic recent decline in U.S. interest rates, the fall in the Tokyo stock market and the spike in German interest rates following reunification, there is certainly no warrant for claiming that American companies now face uniquely high capital costs. The evidence instead as the recent controversy over corporate compensation illustrates so vividly is that American management practices the economy’s long-term problems. Bloated, inflexible and frequently disdainful of the workforce \(Tocqueville, as we saw, chose different words to describe the ancien regime’s oligarchy but the underlying thought is much being outperformed by foreign-owned companies operating within the United States using American workers as for example in the auto industry. This, alas, is not a problem that can be attacked by cutting capital gains taxes again or by revising anti-trust laws, as Tsongas also suggested. The firms’ executives would simply add these and any other subsidies a “pro-business liberal” government granted them to their salaries. Then, while presidential campaigns like Tsongas’ languished for lack of funds, they would proceed with business as usual. In the end, if competitive pressures become overwhelming, all save perhaps a plucky minority around Route 128 will avail themselves though not, of course, their workforce of the easiest alternative to serious restructuring and the strenuous life envisioned for them by a President Tsongas: They will flee south of the border, to Mexico. There, the prevailing wage levels are guaranteed to postpone the day of reckoning for years and preserve the fabulous disparity between executive salaries in the United States and most of its competitors. Tsongas, like the frontrunners Bush and Clinton, favored the proposed MexicanAmerican Free Trade Agreement \(itself a component of a prospective North American course accrue to the United States from the agreeme i nt, but, given Mexico’s proximity to the United States and the temptations the current crisis offers to American management, it should not be treated as just one more trade compact. In all probability, its real implication is that we are about to exchange the U.S. economy for the Mexican political system. No matter who wins the election, accordingly, Tocqueville’s rumblings are likely to continue. Continued on pg. 22 THE TEXAS OBSERVER 9