By Sara McPeak
Rightgrrl Feature Writer
August 1, 1998
In a recent interview on CNN, Al Gore was questioned about his optimistic feelings toward the Russian recovery from its financial crisis. "I want to encourage them (Russia) and put an optimistic face on it," Gore explained. "But I think that's justified, really." When asked, however, why he felt his optimism was justified, Gore had no substantive explanation, giving instead what I like to call a typical Algor(e)ithm:"They just -- they just reached an agreement with the International Monetary Fund. They just put in place a whole series of new reforms that are going to open up this economy and create more jobs. And, incidentally, that will mean they buy more of our exports, and it will create more jobs in the Unites States, too."Has Gore been possessed by the spirit of Pollyanna? His radical optimism is clearly inconsistent with the facts and promotes a false impression of Russia's economy and the future economic benefits that the U.S. economy can expect from trade with Russia.
In the wake of Russia's 6-month-old market slide, and in response to Russia's promise of reforms, the $22 billion dollar bailout which Gore applauds is seen by many as sending good money after bad. According to the July 11 issue of The Economist:". . . the Fund, which is cash-strapped itself, has already provided Russia with generous loans (more than $9 billion over three years) whose conditions, as things stand, are periodically flouted. Over the past few years, Russian governments have solemnly promised to enact rafts of economic reforms - especially in the field of taxation - but have failed to deliver. Why should this one behave differently? . . . The entire economic system in Russia is so crooked and leaky that there is no knowing where the money will go."The Clinton administration is perhaps too optimistic that this influx of dollars will suddenly and simultaneously correct currency devaluation, political unrest and unscrupulous legal and trade systems. Mr. Gore sees the International Monetary Fund agreement as a cure to the economic woes of Russia, and in so doing he is totally ignoring the fact that this was recently tried and it failed.
Mr. Gore next alludes (and not for the first time) to the imminence of reforms in Russia; but according to Steve Forbes, in his August 10 editorial, argues that "The Kremlin shows no sign of real reform, such as simplifying the tax code, establishing the rule of law in commercial transactions and allowing a genuinely open market for buying and selling land." Gore states as a consequence of these illusive reforms that the Russian economy will surge, thereby increasing purchase of U.S. exports and creating more U.S. jobs. However, as Robert Reich, the Clinton administration's liberal economic ally, has said, U.S. corporations are edging ever closer to globalism and are changing their national allegiance to one of international scope. As a consequence, the increased exports mentioned by Gore from U.S. companies to Russia may indeed be actually manufactured in Russia or in many other third world countries, creating new jobs in Russia or other countries at the expense of new jobs in the U.S. Mr. Gore's syllogism, based on a vestigial image of U.S. corporations, perceives a totally incorrect conclusion in the modern global economy. In fact, in Mr. Gore's example it would be more likely that U.S. jobs would be lost.
More apt would be an overly pessimistic point of view in discussing the Russian economic situation. For instance, Russian national and global space endeavors are devastated due to a monetary void. According to CNN, a Russian experiment to launch a space mirror (a plan called Znamya [Banner] 2.5) to "reflect sunlight onto some northern parts of Russia during the long nights . . . has been thwarted by the lack of funds, (Russian) space officials said . . . 'We are struggling to raise funds to send regular supplies to the (Mir) station, let alone the Znamya,' Gorbunov said." CNN has also reported that, "Yuri Semyonov, head of the state-run RKK Energiya corporation that built Mir and has been running it since it was put in orbit in 1986, has said Russia might be forced to discard the station as early as this fall because of the space industry's desperate cash shortage."
Our own congress is very concerned over Russia's inability to come up with its financial share of the International Space Station, and is even more concerned, according to the June 27 issue of the Congressional Quarterly Week Report, that "NASA has generally paid for Russian financing delays in the past." Our congress and certainly each and every one of us would argue that we are not able, much less willing, to subsidize Russia's space endeavors!
Gore's above-quoted statement to CNN regarding Russia's economy seems to embody the Clinton administration's misunderstanding and incorrect assessment of the economy of a foreign nation. Such a misunderstanding has far-reaching importance in a global economy where international interdependence and alliance is crucial.
In the new millennium, our perception of the American economy will be constantly changing as will our perception of our economic institutions. And as the global economy further evolves, so too is a global check and balance structure. These changes must be interpreted accurately by our government, and with a true commitment to our national interests. Analysts and strategists will constantly devise innovative economic suggestions. Our leaders must then be competent enough to determine which actions to implement and which to discard. The occupants of the White House must not be glued to the economic principals of the 20th century. What's more, they must realize that the populace, both global and national, is able to discern fact from hopeful optimism.
This article copyright © 1998 by Sara McPeak, and may not be reproduced in any form without the express written consent of its author. All rights reserved.