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March 7 1997 3:30 AM

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The Large Curd Giveth and the Small Curd Taketh Away

Jacob Weisberg couldn't have been more wrong when, in his Feb. 15 column, "Corporate-Welfare NIMBYs," he implies, with no supporting documentation, that I am selective in my commitment to deficit reduction and eliminating corporate welfare.

Weisberg correctly notes I am a Democratic co-sponsor of S. 206, a bill to establish an independent commission to review and recommend termination of corporate-welfare subsidies. However, he is incorrect when he states, four sentences later, "Feingold, who is up for re-election in 1998, carries a different tune when it comes to aid to families with dependent cheese."

Weisberg also poses a rhetorical question in his column, asking if my commitment to reducing corporate welfare "would ... include, say, federal dairy supports and marketing orders for the milk industry, which somehow escaped being scaled back in the 1996 Farm Bill?"


I voted against the 1996 Farm Bill, in large measure because it did so little to eliminate market distortions and bring needed reform to the antiquated Milk Marketing Order system, or MMO, to make it more reflective of supply and demand. The current system, instituted in the 1930s, distorts the market, discriminates against the dairy farmers of the Upper Midwest by providing higher prices (called "distance differentials") to farmers who live far from Eau Claire, Wis., (the city from which these "distance differentials" are calculated) and puts Wisconsin producers at an artificial competitive disadvantage. The current MMO system survives because it is defended by powerful interests who are its beneficiaries.

I have, in fact, worked hard to create dairy-policy reform, including introducing two bills in the 105th Congress: S. 52, which would eliminate the distance differential in dairy pricing, and S. 322, which would repeal the creation of the Northeast Interstate Dairy Compact, a dairy cartel created last year that allows six Northeastern states to fix higher prices for milk in their region.

I have often stated that if the MMO system cannot be reformed, it should be eliminated, and Wisconsin farmers have probably been more active than farmers in any other part of the country in calling for deregulation of this system.

Weisberg's assertion that "federal dairy supports ... somehow escaped being scaled back in the 1996 Farm Bill" is also incorrect. Federal dairy supports have, in fact, been cut dramatically. In 1983, the price support was $13.10 per hundredweight (about 11 gallons of milk), and the program cost taxpayers about $2.6 billion. By 1995, the price support had been reduced to $10.10 per hundredweight, and, while the myth persists that the dairy program costs billions, the facts are that, in 1996, the program operated at no cost to the taxpayers. Moreover, the 1996 Farm Bill completely eliminates the dairy price support by the end of 1999. The dairy industry is the only commodity group to have its support terminated by the most recent Farm Bill. Some other commodities, such as wheat and feed grains, were provided with hefty annual guaranteed government subsidies in that same legislation.


So exactly what is the corporate welfare Weisberg is talking about?

Deficit reduction and balancing the federal budget are serious, complex, and demanding tasks, and the policy implications of our efforts reach across the nation, even around the world. These efforts are not advanced by unsupported suggestions of hypocrisy, such as are contained in Weisberg's column.

--Sen. Russell D. Feingold

Jacob Weisberg Replies


Read Sen. Feingold's letter carefully. He does not say he wants to end corporate welfare for dairy farmers. He says he wants Wisconsin farmers to get a better deal. Feingold wants to "reform," not eliminate, the Milk Marketing Order system, though he acknowledges that it constitutes a "cartel" designed to keep dairy prices high. Sounds a lot like NIMBYism to me. I should add that I would have been in a better position to reflect the subtleties in Feingold's position if his press office had returned repeated calls asking about it.


I was revolted by the reference to JonBenet Ramsay in "Thank Heaven for Little Girls," by Larissa MacFarquhar. I felt that you were trying to capitalize on the savage bestiality committed on a small child by whoever strangled her, as well as the abuse committed by her parents, who put her on display in a manner no 6-year-old should be forced to endure. When will publications such as yours manage to develop some sense of human moral responsibility?

--Oakes Ames


Michael Kinsley, Socialist

Michael Kinsley's recent article "Eight Reasons Not to Cut the Capital-Gains Tax" truly proves the adage that liberals cannot stand success.

Using Kinsley's analogy, if we observe that we have too many bakers and not enough butchers, it is reasonable to suggest that we ought to reduce the tax on butchers. Our rates of saving and investment are staggeringly low, in both historical and contemporaneous contexts. There is ample reason to believe that increasing the rates of saving and investment would be beneficial to the economy. Hence, reducing disincentives to save and invest (e.g., the capital-gains tax) seems to make sense.

The evidence that a capital-gains tax would pay for itself is a bit stronger than Kinsley would care to admit. First of all, people are going to do something with the money they have made as a result of realized capital gains. Either they will spend it, in which case local sales-tax receipts will increase, or they will move it into some other form of investment, which will be taxed in turn. Having the government take nearly one-third of the amount of your investment earnings is way too much.

The purpose of tax policy should be to generate income for the government, so that it can perform its necessary and essential functions, with the least distortion and effect on the overall economy as possible. Kinsley seeks to remedy, through the coercive power of government, those circumstances and conditions in society that he finds troubling. I would respectfully suggest that this makes him much more of a socialist than his Republican critics.

--Stephen J. Konig

Master of Deceit

It astonishes me that Ann Douglas, in "Psycho Dramas," her review of the Sam Tanenhaus biography of Whittaker Chambers, acknowledges that Chambers was right about everything, but still maintains the old liberal condescension for this perennially maligned figure. She recognizes that Chambers' Witness is "one of the great American autobiographies," even a "masterpiece," yet still regards it as "torrential" and "lurid." She notes Chambers' "susceptibility to ridicule and parody," and concludes that "he was a pulp-fiction Dostoyevsky, an author he admired above all others."

Douglas writes as if Chambers was not really involved in the Communist conspiracy inside this country, but somehow fictionalized it. She implies that he was ridiculous for admiring Dostoyevsky. Finally, and worst of all, Douglas prides herself for being able to "believe ... Chambers' testimony against Hiss without accepting his interpretation of the Soviet-American confrontation." She faults the biographer, Tanenhaus, for sharing his subject's viewpoint and not doubting "the Soviets' more or less total culpability for the long disaster we call the Cold War." She recommends that Tanenhaus should read some revisionist works that challenge such an assumption.

But what is her assumption? That there was a chance for meaningful cooperation with the Soviet dictatorship? That its recruitment of Alger Hiss, a top official present at the Yalta conference (which set the conditions for the Cold War by selling out Eastern Europe) and an architect of the United Nations (which granted independent votes to Soviet subject states of Eastern Europe), was an exception, or a trifle? That the Communists in America were really grand old troopers with a different vision of the future?

She should take time from reading revisionist works to look at the revelations of the VENONA files, those hundreds of intercepted telegrams from Soviet agents in America that reveal the tip of an enormous iceberg of espionage and subversion. She characterizes Chambers as a Dostoyevskian figure, "trying to break what he saw as the 'invincible ignorance' of a nation blinded to the 'crisis of history' by its prosperity and misguided generous-mindedness." Here she is right: The ignorance does indeed appear to be invincible.

--Gary Kern

In Defense of Alexis

Jacob Weisberg's article "Washington Swingers" was both inaccurate and unfair when it comes to Alexis Herman, President Clinton's nominee to be secretary of labor.

Let's start with a simple, central factual error in the first substantive paragraph about Alexis: "After she left the Labor Department, she set up a firm to advise companies on how to comply with those [affirmative-action] regulations." Baloney. That was not why she set up her business. She set up her firm to provide advice to corporations, local governments, and nonprofits on dozens of aspects of labor and marketing issues.

She started this business to see if she could make some money by making the workplace work better. This was what she was trained to do, and what she was accomplished at. Remember, this was at the dawn of the Reagan era. We of the policy-wonk elite were all a-titter about the theory of federalism, public-private partnership pablum was first beginning to gurgle from the mouth of a Massachusetts governor, and every program to help black kids get jobs with federal help was being axed. So Alexis hit the road, trying to help localities figure out how to get the most out of what was left and trying to help corporations make more progress on hiring minorities and marketing to African-Americans. Her first, most lucrative, and longest-standing client was Procter & Gamble--a contact she had made before she ever entered government.

But wait--that's not the half of the misleading errors in Weisberg's paragraph. His accusation by innuendo when it comes to the Rev. Jackson needs to be spelled out. He implies Alexis funneled money to Jesse Jackson when she was at Labor, in exchange for being the beneficiary of Jackson's largess when she went to the private sector. Weisberg further implies that there's something wrong with Jackson's Operation Push negotiating agreements with corporations that included monitoring arrangements.

Most of Alexis' business did not involve any relationship with Operation Push. But some contracts did, and here is how they worked. Jackson and others spotted in the early 1980s that there were no white-collar minority employees in lots of major companies, and no black franchises in major franchise businesses. The companies realized they had to do better or face marketplace consequences, so they set out to hire more minorities. They then turned to Alexis for help--sometimes at Jackson's suggestion, sometimes because other companies had recommended her firm. Her work ended up delivering radical reductions in turnover, and that made them more money, provided revenue for Alexis' business, and opened doors for women and minorities.

Now we get to the "appearance of impropriety" card. Market Square: Alexis, as a private businessperson, provides valuable help to a developer. He gives her an ownership stake. Weisberg agrees nothing is illegal, but he elliptically implies there's a problem. He implies that Herman later helped Herb Miller--even though there is no evidence of it. He then adds in a passing shot at Vernon Jordan--as if Vernon needs Alexis' help.

Alexis should be and is proud of her career before and after the Labor Department. Apparently with little or no knowledge of it, Weisberg chose to believe the smug, cynical view--odd that he didn't bother to check with her clients. He may dislike anyone who goes from government to business and back, but to make it sound like Alexis is at the head of the class for likely wrongdoing is unsupportable.

This woman has 20 years of real experience making progress on the critical problem of diversity in the workplace, but Weisberg and others are making her sound as if she's been a product of Washington, D.C., all the time. That is unfair and harms her ability to help us all later. When she talks about teaching kids the "culture of work," she isn't speaking dry corporate prose, nor is she speaking the fashion-sensitive policy prose. She's speaking with some actual experience.

Alexis deserves full and fair reporting and an open hearing. The Senate committee needs to do its job and get these issues into a forum where the nominee can respond, rather than leeching them through repeated, incorrect media stories. Weisberg needs to do his and get a full picture of a person before he chooses to dismiss her life's work as a trip through the revolving door.

--Mark Steitz

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