[Mb-civic] Make or Break in Manhattan Economist

Wed Sep 1 14:50:33 PDT 2004

Make or break in Manhattan

Sep 1st 2004 
>From The Economist Global Agenda

The ³Grand Old Party² is making its case for re-electing George Bush at the
party's convention in New York. The tone will be inclusive, but Mr Bush¹s
proposals for a second term could look like a continuation of his polarising
first four years

Get article background

LAST year, in a bold and controversial move, the Republican leadership
launched an invasion of a hostile country. This week has something of the
feel of an invasion too. The Republican National Convention began in New
York City on Monday August 30th, and the liberal metropolis could prove
difficult ground for the party of George Bush. But, as last year, he and his
troops are upbeat.

The line-up of convention speakers has been one of the biggest surprises of
the gathering. Just as the choice of New York was a gesture towards the
centre of America¹s left-right divide, most of the big-name speakers are
from the moderate wing of the party. On the opening night, Rudy Giuliani,
New York¹s Republican mayor during the September 11th 2001 attacks, talked
emotionally about Mr Bush's response to them; and John McCain, a popular
maverick senator, gave a ringing defence of the war in Iraq. The next night,
Laura Bush, the president¹s wife, described his human side, and Arnold
Schwarzenegger, immigrant bodybuilder turned governor of California, talked
of America as a land of opportunity and the need to ³terminate terrorism².
The keynote address will be given by a conservative Democrat, Senator Zell
Miller, on Wednesday. On Thursday George Pataki, New York¹s centrist
governor, will introduce Mr Bush.

Where the Republicans need a tougher edge, it could be supplied by
Vice-President Dick Cheney, who recently demonstrated his talents in this
area by inviting a Democratic senator to perform an anatomically unfeasible
sex act. He has often been his party¹s man for describing the world as a
dangerous place that needs Mr Bush¹s decisive leadership. He is also likely
to find some unflattering language for John Kerry, Mr Bush¹s Democratic
opponent, as did Mr Giuliani on Monday. The Republicans are portraying Mr
Kerry as an unreconstructed lefty and a serial flip-flopper. The convention
began amid a flap over whether Mr Kerry exaggerated his heroism and injuries
in the Vietnam war.

But the main event in New York, of course, will be the president himself. On
Thursday, he will lay out his agenda for a second term. On foreign policy,
he is likely to be cautious, staying with the themes he has developed since
September 11th. He will no doubt repeat his mantra that America cannot sit
back and wait for another terrorist attack, but must take the ³war on
terror² to its enemies. The surviving members of the ³axis of evil², Iran
and North Korea, may feature in his speech, though with America so deeply
involved in Iraq and still taking casualties, he is unlikely to be
aggressive. And, of course, he will defend the wars in Iraq and
Afghanistan‹despite admitting this week for the first time that
miscalculations were made after the overthrow of Saddam Hussein, in an
interview with the New York Times. A recent Republican television
advertisement tells viewers that ³freedom is spreading throughout the world
like a sunrise², a note that Mr Bush is sure to hit too.

On domestic policy, the theme is expected to be ³ownership². Like the
³compassionate conservatism² Mr Bush touted in the 2000 election campaign,
this is an inclusive, embracing term‹in capitalist America, few are opposed
to the concept. But the substance of the policies Mr Bush is expected to
unveil will be a continuation of his first term¹s tendencies, especially
tax-cutting. He will call again for Congress to make his tax cuts permanent.
And other likely proposals are designed to move more income out of the
government¹s control. Encouraging ³ownership² might include tax breaks for
savings to buy a home or private health care. Another area in which he would
like to put more control‹and more risk‹into voters¹ hands is pensions. He
could call for the expansion of popular retirement accounts, which offer tax
breaks to savers who set aside money for their golden years.

 Most controversially, Mr Bush is expected to push again for a partial
privatisation of the cornerstone federal pensions system, Social Security.
At present, pensions are paid directly from current workers' contributions.
Without modification, the system is facing huge deficits when the baby-boom
generation retires. Mr Bush¹s economic advisers favour letting workers put
part of their Social Security contributions into an investment account of
their choosing, which would be available on retirement. But such a change
would be expensive, and administration officials concede in private that the
fiscal deficits expected for at least the next decade could constrain their
plans.

 A more immediate concern is jobs. Since Mr Bush took office, a net 1.1m
workers have disappeared from the payrolls. Many disgruntled workers accuse
America¹s trade partners, particularly in Asia, of manipulating their
currencies to gain unfair advantage for their exports and of dumping their
goods on American markets below cost. America, like other countries,
regularly imposes anti-dumping levies on foreign goods it deems unfairly
priced. But America does not leave it at that: under the so-called ³Byrd
amendment², sponsored by Robert Byrd, a Democratic senator, it distributes
the proceeds from these levies, about $240m last year, to aggrieved American
companies.

The amendment violates global trade rules, and on Tuesday August 31st, the
World Trade Organisation (WTO) gave eight of America¹s trade
partners‹including Canada, the European Union, Brazil and Japan‹the right to
retaliate with tariffs of their own. A creature of Congress, the amendment
damages the ³overall economic well-being of the citizenry,² according to
Congress¹s own budget office. Nonetheless, the WTO ruling offered the Kerry
campaign a golden opportunity to bash Mr Bush over his jobs record, at the
height of his party convention‹and they duly seized it, accusing the
president of failing to fight America's corner in the world trade body.

Chicago or sideshow?

Before the delegates could take to the convention floor to promote their
man, protesters had already begun taking to the streets to bring him down.
On Sunday, a huge column of the dissatisfied (the police say 120,000, the
organisers 400,000) marched past the convention site to oppose Mr Bush and
the war in Iraq. The organising group, United for Peace and Justice, had
hoped to take their faithful to Central Park for a rally. But a judge ruled
that they could damage the park, and kept them out.

 The stage appeared set for an angry confrontation with police. Many feared
a repeat of the Democratic convention in Chicago in 1968, when anger over
Vietnam led to violence that tarnished the party and paved the way for
Richard Nixon's victory later that year. In the end, despite a number of
arrests, the protest went largely peacefully. Other, smaller demonstrations
in subsequent days have also resulted in numerous arrests for small acts of
civil disobedience, but little violence. The Democrats hope that large and
repeated protests will undermine Mr Bush's claim that only he can unite and
lead America in tough times. But, now that the convention is under way, the
spotlight is on the president and his troops, as he tries to convince voters
otherwise.