The Internet in Y2K: Good, Bad and Ugly
By Matt Fong

As we enter the year 2000, my favorite Clint Eastwood movie, The Good, the Bad & the Ugly, describes the potential Y2K impact of the Internet on our society.

As 2000 approaches, let’s celebrate the good, avoid the bad, and use our political will to prevent the ugly.

Here’s the good part: The Internet will transform our democracy.

Most Americans feel disconnected with their government. Only small percentages vote. Fewer have the time, money or network to run for office. Many Americans shrug their shoulders, feeling that government doesn’t care and politicians don’t listen.

The Internet offers hope of reconnecting citizens. In one survey, 70 percent said they would log on to obtain information about candidates and elected officials. The ’Net also makes it far easier to raise money. While direct-mail fundraising can cost as much as 95 cents for every $1 raised, solicitations through Web sites or e-mail cost far less.

Presidential hopefuls are finding out about the potential power that the Net can add to their own campaigns. Democratic hopeful Bill Bradley’s campaign, for instance, has raised over $1 million through the Web. Gov. George W. Bush’s Web site gets over 300,000 hits a day -- greatly exceeding the number of hands anyone could possibly shake, even on a good day.

Presidential campaigns aside, the power of the Internet is starting to be felt all the way down to City Hall campaigns. San Francisco’s mayoral campaign, which ended Tuesday, came complete with Web site wars and candidate chats.

Ordinary people (not political professionals) who desire to help lead their communities on city councils or school boards now will have a fighting chance to win. As more voters get their information about candidates from the Internet (very inexpensive) and as more candidates raise money through the Internet (very inexpensive), more candidates will be able to run for office without being professional politicians or hiring expensive campaign consultants.

The impact on Asian Americans may be significant. As a group, our voter participation is lower than that of many other groups, but our ’Net usage rates are higher. Hopefully, the Internet will result in a reversal of our below-average political participation. With 20 percent of the Congressional districts across the country having at least 5 percent Asian American voters, our input could impact elections across the country and determine winners and losers in close races.

Now for the bad part: Politicians from both political parties are counting the hours for the Internet tax moratorium to end -- so they can tax the ’Net!

Despite the smiles, governors and mayors behind closed doors are fighting on how to carve up the e-commerce tax revenue spoils. Certain large states, like California, want to collect the tax from the customers (California has more than 33 million). Smaller states, fearing loss of sales tax revenue, are likely to want to collect tax from the sellers.

A new e-commerce sales tax will put the brakes on the economy when we can least afford it. That is because growth can be attributed to three factors: 1) the Fed’s lowering of interest rates allowed consumers to buy more on credit while paying less to use their credit card; 2) increased productivity has been gained from technology and the Internet; and 3) mergers and acquisitions have proliferated. While the latter create efficiencies, consolidations don’t necessarily result in real net growth. The only path for true growth will be from increased productivity from technology gains and the Internet.

Therefore, politicians would be unwise to throw a political wrench into a frictionless e-commerce economy.

There’s an ugly part, too: The digital divide can widen demographic divisions into ugly economic ones.

A digital divide is being created in the “new economy.” Students that have classroom computers and teachers that can teach them are on one side of the divide. Those that don’t are on the other. Unfortunately, those classrooms that don’t have the computers or teachers are found in our inner cities -- home to many ethnic minorities.

A demographic divide is in the making. By 2010, 60 percent of California’s workforce will be non-white, meaning the future of the 40 percent of whites will be dependent on the minority majority. In the Los Angeles of 2040, 64 percent of residents are expected to be Latino, 14 percent of Asian descent, 15 percent white and 5 percent black.

What happens when the great prosperity of America is not shared by all? The answer: an economic divide is created. If the economic divide is tailored to ethnic communities, chaos can result.

Technology and the Internet are neither the cause of our problems nor are they the solutions. They can be enablers and accelerators of old problems or of new solutions. Political leadership is needed to bring America together, to find common ground, to move us through the reforms to solutions.

Our country is by no means perfect. But despite our warts and imperfections, the United States is still the best nation to live in. In Y2K and beyond, the United States must be one country. There cannot be one country for the rich and one for the poor. Nor can there be one for ethnic Americans and one for mainstream Americans. In the 21st century, our goal should be to have an undivided America -- with no digital divide, no economic divide and no racial divide. Just one America.

Hacienda Heights resident Matt Fong served as California state treasurer and in 1998 ran for the U.S. Senate.