Jewish World Review Oct. 8, 2002 / 2 Mar-Cheshvan, 5763
http://www.NewsAndOpinion.com | The most obviously false of the canards of the Left, expressed most recently by ditzy diva Barbra Streisand in her "confidential memo" to House Minority Leader Dick Gephardt (D-Mo), is that businessmen want war in order to bolster their bottom lines.
"How can we ignore the obvious influence on the Bush administration of such special interests as the oil industry, the chemical companies, the logging industry, the defense contractors, the mining industry, and the automobile industry?" Streisand wrote. "Many of these industries, run by big Republican donors and insiders, clearly have much to gain if we go to war against Iraq."
If Bush truly were acceding to the wishes of his former colleagues in the oil patch, he'd be sounding a lot more like Al Gore. Businessmen hate uncertainty and instability. The last thing oilmen want is the disruption in oil supplies that war with Iraq is almost certain to bring, at least in the short term.
While oilmen may be the biggest doves in the business community, they have a lot of company. The stock market has just completed its worst month in the last four years. While investors have many reasons to be nervous, war jitters may be foremost among them.
Wall Street's war jitters are an argument for bringing matters with Iraq to a head sooner rather than later. The longer the uncertainty, the more the markets will be roiled, and the greater the harm to our economy.
Victory in Iraq should give a big boost to the stock market. But it may not be enough, because the world economy was ailing before war clouds formed. One reason why I am not sanguine about "globalization" is because I think it more likely the rest of the world will drag us down than that we will lift the rest of the world up.
Japan has been in a recession for more than decade, a recession which may be worsening. The stock market there hit a 19 year low this week. The entire Japanese cabinet has resigned.
Germany is fast becoming the Japan of Europe. The head of Germany's stock exchange said last week he plans to shut down Germany's equivalent of the Nasdaq early next year. The Neuer Markt has lost nearly half its value in the last two and a half years.
The Chinese economy, whose claimed growth rates were the envy of the industrialized world in the mid-1990s, has been stagnant since 1998, said economist Thomas Rawski.
Sickly as they are, the German, Japanese and Chinese economies look robust compared to most in Latin America. The economy of Argentina is in free fall. Argentines has so little faith in their currency and in their banking system that barter is supplanting cash transactions. The Argentine collapse has pulled down the Uruguayan economy, and Brazil seems to be following them into the toilet. In Venezuela, Castro wannabe Hugo Chavez is plunging his country to the brink of civil war. And Mexico is trying to export its unemployment problem by encouraging illegal immigration into the United States.
We may be on the verge of a worldwide depression, the first since the Great Depression of the 1930s. We need to think carefully about how we might head it off...or at least, how we might ameliorate its effects on the United States.
We must stop trying to assign political blame for economic conditions politicians had little to do with, and try to figure out what our political leaders can do to make things better, or at least to keep them from getting worse.
We need measures to stimulate the economy in general, and to revive the stock market in particular. A 20 or 25 percent reduction in the capital gains tax would be a very good idea, because history shows cuts in capital gains rates produce, over the intermediate term, increases in federal tax revenues. Congress should also increase the amount investors can deduct from their income tax for capital losses, and raise the ceiling on contributions to 401(k)s.
If the price of these reforms is to repeal the income tax rate cut for those in the highest bracket, it's well worth paying. It is more important to get our economy growing again than to fatten further the fattest wallets in the land.
Correction: An earlier column said Sen. John Kerry (D-Mass) had won the Medal of Honor while serving in Vietnam. This is untrue, as many readers have reminded me. John Kerry was awarded the Silver Star and the Bronze star for his service as a naval officer in Vietnam. It was former Sen. Bob Kerrey (D-Neb) who won the Medal of Honor.
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