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The Real Third Party Is... The Greenspan Party
Published in the November 22, 2000 issue of the Village Voice
The Real Third Party Is... The Greenspan Party
by James Ridgeway
 
While the Clinton and Gore legions have been fighting it out in Florida, the real work of government is being done not in Congress or by the lame-duck president, but by Federal Reserve boss Alan Greenspan. In a menacing speech to the Central Bank of Mexico last week, Greenspan warned that youthful street uprisings against free trade must now be crushed lest they endanger "market-oriented systems."

"The progress in lowering trade barriers since World War II marks the triumph of putting an important idea into practice—that international trade benefits all nations," Greenspan said. "Indeed, in every nation, those benefits are shared by people spread across quite different income brackets." And he warned that any weakening of the strong economic growth of recent years "runs the risk of reviving mistrust of market-oriented systems, even among conventional policy-makers. . . Clearly, the risk is that support for restrictions on trade is not dead, only quiescent."

Greenspan's speech gave the clearest example of how Washington might function over the next four years under some form of national-unity regime. It's pretty simple. With Congress and the president unable or (in the case of Congress) unwilling to run the country, real power concentrates in the quasi-independent agencies such as the Federal Reserve, which are prepared to act. Like high officials in Iran, who can operate in their own sphere as long as they do not intrude into the power base of the clergy, the leaders of these institutions can issue policy directives on their own as long as they do not intrude overmuch on Wall Street. It should be noted that lately in this regard there have been some storm clouds brewing for Greenspan on the Republican/libertarian right in response to his spate of interventions as the market has fluctuated.

Once right-wing Republicans adjust to the horror of it, a weak national-unity government would not necessarily be regarded negatively. The right has always worked for the withering away of federal institutions, including Congress. They prefer to see power draining out of Washington into state capitals, where, conservatives believe, what social-welfare policies that are allowed ought to be established. The model for national unity was set in the mid-'90s when Bill Clinton essentially capitulated to Newt Gingrich and the congressional Republicans, joining the conservatives in a sea change to the right on major issues such as welfare reform.

Although in theory a national-unity government should be feasible since it is in the parties' own self-interests and they agree on most major policies, there are—in addition to the bottom-line question of patronage spoils—basic differences: on, for example, defense funding, medical insurance, and the privatizing of Social Security. In Congress, national unity faces pitfalls, not the least of which entails divvying up committee slots and chairmanships. Needless to say, this would involve dealing in some way with far-right ideologues of the Armey-DeLay-Gramm stripe, who, before they were muffled, governed by screaming across the aisles in the protracted impeachment battle—which itself precipitated many of the present divisions.

Late last week, Gore took the first opportunistic step toward national unity with his call for a meeting with Bush to smooth the way for a new government. More important than the fact that Gore was abruptly rebuffed, members of Congress were hurling wild accusations before the vice president even spoke, with Texas's Phil Gramm accusing Gore of trying "to steal the election."

Nevertheless, on Monday the conservative Heritage Foundation, which more than any other group sets the agenda for the Republican right, magnanimously called together representatives of the neoliberal New Democratic Progressive Policy Institute and the liberal Urban Institute to try to forge "a strong bipartisan consensus on a number of key public policy issues," from taxes to education to health care.

Copyright 2000 Village Voice

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