Robert B. Reich, a co-founder of The American Prospect, is a Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. His website can be found here and his blog can be found here.
T here's no longer any countervailing power in Washington. Business is in complete control of the machinery of government. If corporate America understood its long-term interest, it would use this unique moment to establish in the public's mind the principle that business can be trusted. But it's doing just the opposite. Every industry and every major company is cashing in as fast as it can while the good times last. The danger for business is profound. Credit-card companies are getting a bankruptcy bill that will make it harder for overstretched people who succumb to the companies' blandishments ever to get out from under their debts. Energy companies are on the way to obtaining rights to drill for oil and gas on Alaska's coastal plain. Cigarette manufacturers are confident that the administration will drop the federal lawsuit against them. Pharmaceutical companies will get longer patent protections and more federal dollars. Big labor-intensive businesses will get rules that weaken...
D ot-com billionaires are sprouting like spring crocuses, and their money is trickling down through the rich topsoil of America. The average pay of chief executives of major companies rose 18 percent in 1999, to $12 million. (Back in 1990, it was a modest $1.8 million.) Fearful of the dot-com brain drain, big law firms just hiked the pay of first-year associates to $120,000, not including signing bonuses. Wall Street investment banks, facing the same threat, are even raising the pay of analysts just out of college, to more than $75,000. The frenzy knows no bounds. Setting a new moral example for college students across America, the president of Brown University, not content with a meager $300,000 salary, just jumped ship after only a year and a half for another university that offered three times as much. Fed chief Alan Greenspan fears that all this prosperity is causing consumers to buy more than the economy can produce, which means that inflation is just around the corner. So...
I f they were true profit-maximizers--textbook illustrations of rational self-interest--American corporations and their top executives would be flooding Al Gore's campaign with money, and not George W.'s. Rather than gamble on an unknown W., they'd bet on a proven Al Gore.
No administration in modern history has been as good for American business as has the Clinton-Gore team; none has been as solicitous of the concerns of business leaders, generated as much profit for business, presided over as buoyant a stock market or as huge a run-up in executive pay. And no vice president in modern history has had as much influence in setting an administration's agenda as has Al Gore.
Consider fiscal policy. You'll recall that by 1992, after 12 years of Republicans in the White House, the nation's debt had almost quadrupled, from $914 billion to $4 trillion, and yearly deficits had quintupled from $59 billion to more than $300...
Any time now, government economists will decide whether America Online's (AOL's) $165-billion proposed take-over of Time Warner is likely to be good or bad for consumers. If good, the government will sign off. If bad, there'll be negotiations with AOL and Time Warner until an agreement can be reached on what the new company would have to do to answer economic objections. The inquiry will be quiet and businesslike, occurring in colorless offices and occasionally in meeting rooms filled not only with economists but also with government lawyers and the counsel and investment bankers representing AOL and Time Warner.
I'll save all those economists and lawyers and bankers a lot of time and trouble, and answer their questions right here:
Is the combination efficient? Yes. AOL serves about 20 million Internet subscribers. Time Warner serves 13 million cable subscribers and also has a lot of content--magazines, movie and music studios, and...
Among the hottest regulatory issues today are these: How to prevent kids
from smoking cigarettes? What to do about the flood of handguns? How to
end sweatshop labor in the apparel industry? How to cope with new kinds of
market power in high-technology industries?
In the old days, state legislatures or Congress would enact laws, which
would be administered by regulatory agencies. But now the era of big
government is over. "Regulation" is a bad word. So how are these regulatory
issues being handled? Through lawsuits.
Consider tobacco. Last spring, Congress punted. It gave up on a bill to jack
up the price of cigarettes. But that didn't mean tobacco companies were off
the hook. The state attorneys general, who had sued the tobacco
companies, settled for $246 billion.
In his State of the Union Address, President Clinton announced he wanted