It's the economy, stupid

Republican leaders have told their congressional colleagues that on the issue of corporate governance, they can't expect Bush to bail them out. Bush is looking out for #1, the rest be damned.

So, congressional Republicans are introducing toothless "corporate governance" bills and blaming the scandals on Clinton's, er... cigar. They issue talking points about "moving forward" and how Harken was a long time ago, blah, blah, blah.

But what everyone seems to be forgetting is that the GOP's biggest threat is NOT from Harken itself. Or Enron. Or Halliburton. Or whatever company joins that list tomorrow. Voters expect Republicans to be corrupt business people. Just like they expect Democrats to have sex. Harken shouldn't be a big surprise to the electorate.

The GOP's threat comes from the struggling economy and an administration unable to do anything about it. Last year's tax cuts weren't the panacea Bush promised. And the markets have been taking a beating, bleeding trillions of dollars from the economy.

And everyone knows who the villains are -- the CEOs and corporate directors who propagated a fraud on investors. The investors have fled the markets, voting with their money. A low stock price all but guarantees that companies will not make new capital investments as they hoard cash and protect whatever profits they can eke out. Less spending means more pain for the economy -- more layoffs, fewer new hires, lower pay raises, etc. 401(k)'s are losing their values, erasing the hard-earned nest eggs of many workers. And if the housing market is impacted, look out. Real trouble.

Harken/Halliburton/Enron is nothing more than a symbol of everything that is wrong with corporate America, and by direct extension, the economy. And, voters can't expect these problems to be solved by Bush, Pitt, and the Republicans in Congress, defenders of the unregulated capitalist system.

The lower the Dow drops (and it closed lower today, again), the bigger the pain on the economy, and the more seats the Democrats will pick up.

Posted July 11, 2002 02:57 PM | Comments (0)