The New Power

It seemed appropriate to begin my series of modest screeds with a short pre- millennial analysis of where power is moving to in America.

Here's who's losing it:

Giant corporations and their CEOs. They've made money in the current expansion, but they're losing clout. Vast industrial- age bureaucracies can't move fast enough. All are downsizing, and many CEOs are losing their jobs. Since 1990, heads have rolled at IBM, AT&T, General Motors, Sears, and other corporate behemoths. As the economy slows, expect more heads, lower profits, and downsizings on a monumental scale.

Labor unions. Even with the tough- minded John Sweeney at the helm of the AFL- CIO, the percentage of private- sector workers belonging to labor unions continues to drop. Unless the AFL- CIO succeeds in organizing vast numbers of low- wage service workers in hotels, hospitals, retail stores, restaurants, and laundries, as well as platoons of overworked and underpaid high- tech workers, organized labor is in danger of disappearing.

The federal government. When Bill Clinton said the "era of big government is over," he was understating. Without a Cold War to wage, a national crisis to manage, or a public aroused about anything loftier than the value of their 401(k) plans, the federal government has all but vanished from the public's mind. So long as right- wing Republicans and a centrist White House remain unwilling to do anything of importance about health care, education, Social Security, Medicare, or campaign finance, Wash ington's irrelevance will solidify into a gelatinous mass of indigestible spin.

The military- industrial complex. Dwight Eisenhower's farewell warning now seems quaint. Yes, military contractors are still collecting billions, but the money is really supporting the nation's largest jobs program, and it can't last. The fanciest high- tech gadgets now come out of commercial firms, not from military contractors. Big weapons systems won't work against global terrorism. The International Monetary Fund has more influence over the world's fate than America's military muscle does.

Here's who's gaining it:

Big institutional investors. Forget the day traders. Giant pension funds and mutual funds are the major players on Wall Street. Some 44 percent of adult Americans are investing part of their savings in the stock market these days, and almost all this money is moving through these institutions. Fidelity, TIAA- CREF, CalPers, and a dozen others are telling global CEOs what to do and toppling those who won't listen.

Venture capitalists. Fewer than 100 of them are single- handedly creating the companies of the future. They're not only bankrolling the "dot.coms" (the stock- market value of Amazon.com is twice the value of the entire U.S. steel industry) but are also supplying most of their key talent.

The Federal Reserve Board's Open Market Committee. Alan Greenspan and 11 other people run the American economy. Now that fiscal policy (using government spending to fuel economic growth) is dead, monetary policy (raising and lowering interest rates to slow or accelerate the economy) is the only game in town, and the Fed is the sole player. They're largely responsible for America's Roaring '90s, and they'll be responsible for the great crash to come.

The telecommunications- entertainment complex. Eventually, almost everyone in America will be working directly or indirectly for MCI WorldCom, Micro soft, Disney, or AT&T. Only a handful of giant brands will have the scale to offer a full range of phone, wireless, data, Internet, and entertainment services. These giants will both define American culture and spread it around the world at the speed of an electronic impulse.

The new power centers are far less visible than the old. Big corporations, big labor, big government, and the military couldn't be missed. Almost everyone knew the likes of GM's Charlie Wilson, Walter Reuther of the United Auto Workers, Henry Kissinger, and the boys from Bechtel. The public didn't always know exactly what these guys were up to, but there was at least some semb lance of accountability- if not directly through laws and regulations then indirectly through countervailing power, as John Kenneth Galbraith once termed it. Big labor, for example, provided a degree of balance with big business.

But institutional investors, venture capitalists, the Fed, and big entertainment- telecommunications companies all deal in intangibles, and they operate without anyone being particularly aware of what they're up to or how it affects everyone else. For the most part, reporters don't cover them. Who runs Fidelity? Who sits on the Fed's Open Market Committee other than Greenspan? Who's the CEO of MCI WorldCom? And what exactly are all these people doing? On the new frontiers of finance and technology, there are few laws or regulations, no oversight, and a total absence of countervailing power.

Americans' lives are affected no less by these new power centers, but Americans know far less about them than they did about the old. As long as the economy appears to be doing well for most of us, that doesn't seem to matter very much. But should a giant investment house go under and destabilize the world market, or should Wall Street crash, or should America's entire tele communications system explode in a Y2K spasm, it would be well to discover whose actions or inactions precipitated these crises. There is also value, within a democracy, in citizens knowing where power lies and understanding how it is being exercised. It is when everything appears to be beyond anyone's control that all manner of bad things happen.

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