COVER STORY: by Peter WestmoreNews Weekly
U.S. Elections - And the winner is ... Alan Greenspan!
, December 2, 2000
Alan Greenspan, the Chairman of the US Federal Reserve, was not a candidate in either the US Presidential or Congressional elections, but he stands to be the big winner from the stalemate which has emerged on Washington's Capitol Hill.
At the time of writing, the outcome of the Presidential battle was undecided, with postal votes still being counted, and disputed outcomes in possibly two states, New Mexico and Florida. Whatever the final outcome, the incoming President will enter the White House under the cloud of illegitimacy, of a type which has not been seen for generations.
If Vice-President Al Gore wins, his many opponents will say he has done so on the basis of successive recounts until getting a favourable outcome. If - as seems more likely - it is President George W. Bush, he will be attacked in the pro-Gore national media as a person who commanded a minority of the popular vote, and won Florida only because his brother is Governor of the State.Stalemate
Either way, the new President will face an unusual constellation of forces arrayed against him.
As far as the US Congress in concerned, the Republicans seem likely to retain control of both the House of Representatives and the Senate, but by paper-thin margins.
Given the fluidity of the US party system, and the traditional willingness of Congress to accommodate the White House on most issues, the stalemate will have little effect on the domestic economic program of the next President.
But on trade policy, Congress seems certain to continue the America-first policy of the Clinton administration - which has punished Australian exporters of lamb and leather goods, and heavily subsidised American exports to other parts of the world.
One area of continued uncertainty is the social policy of the next Administration. President Clinton's administration was heavily influenced by the radical feminist network, in relation to population policy, support for the radical feminist agenda at the UN, and abortion - where Clinton vetoed a ban on partial-birth abortion, which had been adopted overwhelmingly by the US Congress.
Depending on who is appointed in the next Administration, there could be change here. But don't hold your breath waiting, as neither Presidential candidate has committed himself to anything.
Writing of Al Gore in The Times Literary Supplement recently, columnist Christopher Hitchens wrote, "Politicians are expected to be flexible, but it is almost impossible to find a subject on which Gore has not occupied both positions. He has reversed himself on abortion, on gun control, on nuclear missiles, on homosexuality, on tobacco and on unsuitable lyrics in popular music.
"One reason for the rallying of Greens to Ralph Nader this year is the disappointment, to put it mildly, of environmentalists with the Vice-President's performance in office."
As far as George W. Bush is concerned, his political opponents and the media have been filled with endless stories of his verbal faux pas, but underneath his simple exterior, his political enemies from Texas have warned, "Don't under-estimate him."
Unlike Gore, Bush seems to have the virtue of sincerity, which one columnist described as "a political asset of incomparable value in America." Amidst all this uncertainty, it is clear that the outcome will leave the next President with a contested mandate, and the Congress divided down the middle on legislative initiatives.
Enter the Chairman of the Federal Reserve, Alan Greenspan, who has been strongly opposed to key elements in the electoral platform of both candidates: Bush's proposed $US1300 billion in tax cuts, and Gore's planned increase in social security spending.
Greenspan's position is strengthened by the fact that 70 per cent of those who cast a ballot were shareholders, although only 50 per cent of eligible Americans bothered to vote. So to win the election in 2004, the next President will have to massage the shareholder vote, which is heavily influenced by the policies of the US Federal Reserve.
As Robert Reich, former Secretary of Labor in the first Clinton Administration, recently observed, "Mr Greenspan must be pleased. The [Federal Reserve] Chairman was never happy about the Republican tax cut or Democrats' spending plans. Either one would stimulate the US economy and Mr Greenspan does not want the economy stimulated. Nor does he want investors to expect that it will be.
On the contrary, he is trying his best to engineer a 'soft landing' featuring slower (and in his view more sustainable) growth, slightly higher (and again, more sustainable) levels of unemployment and therefore less chance of runaway inflation ...
"Mr Greenspan can stay on course toward a 'soft landing' only if the President and Congress co-operate by doing nothing. Presumably, he would like nothing better than gridlock in Congress and paralysis in the White House, which is exactly what he is going to get."