Jewish World Review May 2, 2002 / 20 Iyar, 5762
http://www.NewsAndOpinion.com | Aging but beloved rock stars and falling stock values can combine to cause potential political pitfalls.
Sometimes great American presidents, such as George W. Bush, can become the political victims of the bureaucratic blunderings of the very government they are supposed to be running. Whether it's a "me, too" Security and Exchange Commission (SEC) or a goofy Immigration and Naturalization Service (INS), the results can be damaging.
First, the big blunder. In early March, this column predicted that leading economists and federal officials would soon be declaring an end to the recession. Just days later, Federal Reserve Chairman Alan Greenspan suggested a mild recovery and, just a week later, he revised his opinion to indicate that the recession was coming to an end.
So why isn't Wall Street singing "Happy Days Are Here Again"?
The answer certainly isn't in the true economic numbers. The facts back up the objective claims of a recovery. Last week, the government released numbers showing the biggest growth in GDP (Gross Domestic Product) since 1999. Meanwhile, more companies were, as we predicted in our March column, providing quarterly earnings reports that surpassed expectations. And the fact is that such lowering of expectations occurs every quarter -- the gains in these successful reports withstand any "apple-to-apple" comparison with past quarters.
The real cause for the continued doldrums on Wall Street is the overwhelming fear (especially among those who understand the relationship between business and government) that 2002 will soon become known as "the year of the corporate witch hunt."
Just as the stock market started to lift early this year, Enron exploded into a true-blue financial scandal. But at the time it was first emerging as an issue, SEC Chairman Harvey Pitt said he didn't see any need for major reform in corporate accounting or reporting.
Of course, when the roof collapsed on the entire Enron debacle, Pitt changed his tune completely, and his commission suddenly began investigating seemingly every company under the sun.
Now, Pitt, in an effort to not be caught off guard again, is joining New York's ambitious Attorney General Eliot Spitzer in an inquiry into potential improprieties relating to investment firms and their analysts.
Suddenly, we've gone from Pitt's January opinion that everything in the corporate world was relatively fine to an April assessment that everyone from accountants to analysts to brokers might be crooked. Add to this the usual set of civil lawsuits that follow any media frenzied set of allegations, and one can start to understand the inside reason for Wall Street's sluggishness.
Certainly there is evidence of wrongdoing. But are we going to overreact to every new issue that arises in this nation? Are we ready to sit by and witness our bureaucrats and lawyers do the equivalent of what the famed Andy Griffith Show character Deputy Barney Fife did when Sheriff Andy left him in charge one week -- arrest the entire town?
It's bad enough when "protecting the public" from financial improprieties becomes so threatening as to stall economic recovery that could put people back to work and guarantee others job security. Let this panic keep up and President Bush, through no fault of his own, and his party will appear to be domestic policy failures during crucial midterm elections.
Add to this serious issue another little wrinkle -- one that may seem silly but nevertheless impacts certain voters.
In recent weeks, MTV's "reality television" episodes of the day-to-day life of famed rocker and self-proclaimed "Prince of Darkness" Ozzy Osbourne have become the hottest thing on the tube. Some may find the family's language and behavior offensive, but many in the 40-plus age group, who normally avoid MTV like the plague, have been drawn to the show. Osbourne was a star when these viewers were teenagers, and they find some satisfaction in seeing that, like them, the "Prince of Darkness" now lectures his kids on not using drugs, has a bum leg and spends much of his time watching The History Channel.
Here's where bureaucrats enter the scene again. This week, several national entertainment programs reported that there may be a problem with some members of this lovably dysfunctional family keeping their "green cards." The hottest family on television might have to abandon the United States.
Surely this would leave the more savvy Bush political advisers, much less the president, wondering why a government agency would posthumously give visas to known hijackers involved in 9/11 but refuse them to a family who captivates the attention of moderate swing voters.
The good news is that Congress is moving this week to abolish the INS and create a more effective dual-agency system. Maybe the new approach will save the Osbournes.
The bad news is that all of the "late to the scene" corporate cops and lawyers might pile on so high that, like in Andy's town of Mayberry, there's no one left to spend a dollar or make an investment.
Not good news in an election
04/25/02: One step ahead of devious minds capable of unthinkable crimes?