|BUSINESSWEEK ONLINE : DECEMBER 20, 1999 ISSUE|
|NEWS: ANALYSIS & COMMENTARY
Fighting Words from a Feisty Al Gore
The newly assertive Vice-President on the WTO, tax cuts, and just about everything else
Al Gore has played supporting actor to Bill Clinton's leading man. Now there's a new, improved Gore on the campaign trail who's feistier, more outspoken, and eager to set his own agenda. On Dec. 7, the Vice-President spoke to Business Week reporters and editors about his Presidential aspirations. Here's an extended, online-only version of the interview that appears in the Dec. 20 issue of Business Week:
One of the principal issues in this race for President is who has the experience to keep our economy growing. And that means, in part, who can apply the lessons of the last decade that prove fiscal responsibility supports progressive priorities, harmonizing fiscal and monetary policy to keep interest rates down, and allowing higher levels of growth than would otherwise be possible. I have been a part of a team that changed our country's economic policy. It would be a terrible mistake if we blew the entire budget surplus either on a risky tax scheme or a risky spending scheme.
On the New Economy:
I have long been a believer in that phenomenon. Nobody's repealed the business cycle, but I've felt for a long time we were in the early stages of a pretty dramatic transformation. The single most important way to [achieve that] is by adapting to the Internet. We've barely begun to see the changes that are on the way. When Bill Clinton and I went into the White House, there were 50 sites on the World Wide Web. Pretty amazing how rapidly this [change] has taken place.
On the collapse of the the World Trade Organization talks in Seattle:
These rounds are inherently difficult -- all the more so because most objective observers believe we do indeed need to integrate labor and environmental concerns more thoroughly into the fabric of trade negotiations. I think we'll regroup and continue the process with some meetings next year.
On developing nations' resistance to the U.S. agenda in Seattle:
Europe's not in favor of eliminating grossly obscene agricultural subsidies. Others aren't in favor of having the Internet be a free-trade zone. Japan and others aren't in favor of antidumping remedies. So none of these things are going to be easy. But when you say that developing countries aren't in favor of any labor protections, I'm not sure their people feel the same way.
Now I think there a variety of motives involved in what happened inside the negotiations. I mean, I don't think Japan really was prepared to negotiate seriously. I don't think Europe had any intention of taking on agricultural subsidies. I think both of them hid behind the developing countries a little bit --not for the first time. I think the whole process was premature. A lot of people said ahead of the round that it was hard to push it right now. It takes time. It always does.
On President Clinton's call for "enforceable" labor standards:
That's an aspirational goal, not a short-term possibility. That has to be mutually agreed on by the [WTO] countries. What we were seeking was hardly a radical shift. What the President said in his interview with the Seattle newspaper was a speculative musing on the distant future. It wasn't a description of what our goals in the negotiations were. Our goals in the negotiations were very modest: Let's set up a working groups to try to figure out how to reconcile these factors that are important to us, not only in America, but all over the world.
On the impact of the Seattle protests:
If we react by taking sensible steps to open the process, integrate labor and environmental concerns, and continue moving forward to open markets, then it will be remembered as a temporary setback. If it is used as an excuse by those opposed to a new round for other reasons, to try to point the finger of blame and delay progress, it could be looked upon as a much more significant turning point. I think it's going to be the former rather than the latter.
On his own views on trade:
I'm a big proponent of free trade. I mean, I come from the hometown of [renowned internationalist] Cordell Hull. I'm the only politician who looks to Cordell Hull as an ideological ancestor.
On pressure from unions to soften his support for China's entry into the WTO:
The labor supporters who honored me with their endorsement supported me in spite of my view on trade. I support the [China WTO] agreement. Getting permanent normal trade relations through Congress may require some other steps to put together a coalition. We have to keep an open mind.
On Texas Governor George W. Bush's tax-cut plan and the sweeping health-care proposal of former Senator Bill Bradley:
Both Governor Bush and Senator Bradley completely blow the surplus in their first campaign proposals. That's a problem for our economy, because it threatens to push short-term interest rates higher. The Federal Reserve will have less flexibility if there are doubts about the ability of our political system to maintain fiscal discipline. If short-term interest rates go up, it could touch off pressure on long-term rates.
On the appropriate time for a major tax cut:
My [proposed cuts] are relatively modest, between $200 billion and $350 billion [over 10 years]. I don't rule out [a larger cut] in [a slowdown]. It depends on the circumstances. But I rule out a tax increase, barring some dramatic change in our economic circumstances. Senator Bradley is talking about the possibility of a tax increase to fill a gaping hole in his health-care proposal.
On the national debt:
If I'm elected, I have pledged to reduce it each year. I haven't pledged any specific targets on how much the reduction should be. But if we go back into deficit spending, we put our monetary policy at risk and put new political pressure on our ability to invest in research and development and education.
On possible reappointment for Federal Reserve Board Chairman Alan Greenspan:
Senator Bradley has been lukewarm about Alan Greenspan. I gave him an A++.
On how an economic slowdown might change his budget priorities:
I'm a veteran of the Reinventing Government push, one who believes that eliminating waste doesn't have to be a meaningless mantra. That kind of fiscal challenge -- which I hope doesn't occur -- could serve as an opportunity to push much more dramatic reengineering of the way government operates.
I'm not trying to take credit for [the Clinton boom]. I played a role, along with other members of the Clinton-Gore team. The concepts we put in place made a difference. I cast the tiebreaking vote for [the '93 Clinton budget], a plan that passed on a straight party-line vote. Prior to that, we had a series of intermittent dips into recession. We broke that cycle.
On the threat from higher oil prices:
As a young congressman, [in the late '70s] I said that this oil crisis is based on false assumptions about the expected expansion of [the] oil supply. The North Sea fields were just beginning to have a big impact on supply. A variety of other sources all were combining to undermine the ability of OPEC to have that kind of leverage over the supply and demand relationship. And the U.S., in its hyperbolic reaction, was playing into OPEC's hands at that time. I made a speech, put out the numbers, and said, "Look there is not a shortage of supply. Look at the emerging production numbers." It went against the conventional wisdom at that time and was criticized, but it turned out to be right. And I think that we're going to see something similar this time around.
It will not last. That is my prediction. Other sources continue to come on line. New fields are being found. Old fields are being worked over, and some of them are actually being replenished. The flexibility we have in fuel substitution and energy-use management is much greater now than it was in the past. I just don't think they're going to be able to sustain this over the mid-term, much less the long-term.
In the information economy, [costlier oil] doesn't have the same effect that it did. Just as we had an external price increase for oil that cascaded through the industrial economy and bumped the inflation/unemployment relationship into [stagflation] territory, we have a continuing price decrease in information-processing costs that cascades through the economy.
On keeping the Internet tax-free:
Ideally, it should be tax-free. It is now tax-free. But in the real world, we cannot ignore the fact that our democracy thrives in a federal system in which state and local governments derive one-third of their revenue from sales taxes. Look at the numbers you all have been reporting -- appropriately breathlessly -- about the growth of e-commerce, especially for toys. And you look at what's happening to some traditional retailers as a result. Put yourself in the position of these governors and mayors and what that means for their ability to finance a self-government process. I do not think that we can just stiff the local and state governments as they contemplate a potential fiscal catastrophe.
On Silicon Valley's support for other candidates, despite his reputation as Mr. Tech:
Let a thousand flowers bloom. It's the same as the business community in general.
On hostility among some business leaders to his environmental views:
I stand by every word in the book. I guess I was wrong to talk about phasing out the internal combustion engine in 25 years. It should be much sooner than that. [Laughter.]
On his top domestic issues, other than maintaining prosperity:
No. 1: Bring about revolutionary improvements in public schools. Extend the Internet productivity revolution to the education and job-training process, at long last.
No. 2: Extend health care to every child in America in the first four years of a Presidential term and expand it to as many of their families as possible. Make other changes I've outlined in health-care policy.
No. 3: Protect the environment in a way that creates new jobs. Stimulate the emergence of a new generation of products and technologies that safeguard American leadership in the consumer economy of the 21st century. The partnership for a new generation of vehicles is only one example. I think it's increasingly obvious that nations around the world are going to be demanding the opportunity to buy products and technologies that allow them to increase the standard of living without increasing the burden of pollution....
And fourth, I would accelerate and complete the Reinventing Government process and adopt campaign-finance reform because those changes are needed to insure success in those other three areas.
On his top foreign-policy priorities:
We are now in a period of dramatic transformation of the world system. We are in a different position than most nations because we were the first nation to coalesce around a set of principles, and not ethnic identity. In many other nations, you are seeing a greater investment in subnational identities and supernational identities like the European Union. We should continue promoting American values of political, economic, and religious freedom in the world, ethnic harmony, respect for differences.
Second, we have to stop the spread of weapons of mass destruction and the delivery systems for weapons of mass destruction. Third, we have to address the global environmental issues by continuing to work for a consensus on global warming and related issues. And fourth, in promoting democracy, we have to recognize that the way we recognize ethnic harmony at home is the most powerful message we can send to the rest of the world as they try to deal with ethnic hatreds and conflicts of the post-Cold War world. We ought to pass a national hate-crimes law. We ought to continue affirmative action. We ought to vigorously enforce civil-rights laws. The President ought to provide continuing bold leadership in his use of the bully pulpit to bring our people together. It's in our political interests. It's in our spiritual interests.
On critics' charges that the Administration bungled Russia policy:
Russia inherited a lot of problems from the former Soviet Union, corruption being high on the list. The Soviet Union was the most corrupt place on the earth and Russia hasn't escaped from that problem. They're going through the equivalent of the Roaring '20s in compressed form. I hope it's compressed.
They have made some progress that has partly been overshadowed by all of the problems. They have achieved levels of privatization that now exceed the levels in many Western European countries. They have a free, vigorous press that's not afraid to criticize the government, the military, the intelligence services. It has problems, but it is a free, vigorous press. They have free elections and everybody assumes that the upcoming Duma elections will be fair and free. Within six months, they'll have a new President and who is chosen will have a profound influence, obviously, on the future U.S.-Russia relationship because it is the first post-Communist succession.
We should [continue to] condemn and try to stop their brutal action in Chechnya. We should continue to try to support and encourage economic reform. And [Prime Minister Vladimir] Putin, even though he is responsible for this horrible policy in Chechnya, is a pro-reform Prime Minister [and] former vice-mayor in St. Petersburg. [He] knows his stuff. We should continue promoting the good and discouraging the bad.
The battle against corruption is not being won yet. Ultimately, they have to do it. I don't think history is likely to criticize this Administration for doing too much with the Yeltsin government. I think it's more likely that history will criticize, first the Bush Administration, and then possibly us, for doing too little in the immediate aftermath of the Cold War.
On the nuclear threat:
In the past 6 1/2 years, our top priority has been to safeguard the [former Soviet Union's] nuclear weapons, and the potential threat from their arsenal. They've got 30,000 nuclear weapons. So far as we know, not a single one has ended up in the wrong hands. We have tried to employ their nuclear scientists and tried to keep them from drifting into rogue states. I personally helped to negotiate the transfer of the nuclear arsenal of Kazakstan and Ukraine to Russia. I think we have a little more progress than has generally been acknowledged.
On his preferred opponent in the 2000 general election:
In 1980, when I was in the Congress, I said repeatedly that if the Republicans will nominate Ronald Reagan, we will clean up in the election in 1980. I have been humbled by the aftermath of that prediction, and I have refrained from trying to pick Republican nominees since then for fear that I will once again pick one who turns out to be a winner. I was dead wrong. I'll just pass.
On whether he is repeating ex-President Bush's '92 mistake of labeling Clinton-Gore's calls for change "risky":
I don't think I am. I am advocating change. I think that the economic success that we're having today is in stark contrast to the economic problems that we were having in 1992. We were emerging from a 12-year period in which the national debt had quadrupled. We've now reduced the national debt. We had a triple-dip recession [under President Bush]. Now, we've tripled the stock market. We were losing jobs. Now, we have 20 million new jobs, and African-American and Latino unemployment are about at the lowest levels ever measured.
It's not good enough, and I'm advocating change. But I'm advocating economic responsibility in the management of our policies so as to continue economic growth. That's not the situation that President Bush faced in arguing for the continuation of an economic disaster.
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