Wall Street scandals leading to the loss of American leadership


One White House official argued that Bush’s popularity is far more enduring than the fleeting support his father had during the Persian Gulf War. “Nine-eleven had a huge, deep, social-psychological effect unlike anything since the Kennedy assassination or Pearl Harbor,” the official said. But the stock market has disproved this claim. It has recently gone down to the levels of post September 11. A falling stock market leads to a fall in the savings and thethe in the investments and never to a rise in the popularity index of the President Bush.

The danger for Bush, said GOP pollster John McLaughlin, is that 70 percent of voters who owned stocks supported Bush and the Republicans in 2000. Now those voters have seen their savings shrivel. “It’s not a detriment to Bush right now because the market was already going south in 2000,” McLaughlin said, but “it has to be going up heading into the last year of his presidency.”

Bush appears to be following the trail of his father. During the Gulf war, his father was quite popular. But the repercussions of war resulted in the weakness of economy. That led to his failure in elections and he could not continue as the President of the United States for the second term despite his hilarious military victory in the war. He was defeated by the economy. A similar fate appears to be looming ahead for his son as well.

Bush had an approval rating over 90% during the Afghanistan war. Thereafter, it started sliding downward. Still the approval rating for George Bush is more than 70%. It is still a high percentage for winning incoming elections for the GOP candidates in November. Democrats have been looking out for some non-terrorism issue. They have found one now in the manifestation of the increasing scandals in the corporate America.

“You see now what it means to have an administration that’s that committed to fighting and working on behalf of the powerful, and letting the people of this country get the short end of the stick,” Gore told his supporters at a Manhattan fund-raiser. It was his strongest attack yet on Bush’s economic policies and a preview of the likely Democratic strategy for November’s elections. “What we see now is a lack of confidence in our national economic policy, in the integrity of our accounting system, in the way government is being run,” Gore told in Lot 61, a trendy Chelsea night spot. The private companies, he said, “are not telling the truth about their future liabilities so they can shovel money out to executives at the top. That is exactly what the Bush-Cheney tax plan will do. They are misleading the country about the extent of the liabilities they are putting on us … on you.”

The concerns of the voters in the countryside are completely different from the terrorist scare Bush is trying to stir up to boost his popularity ratings. From sparsely populated Montana and North Dakota on the Canadian border to booming Arizona and Texas on the Mexican line, in all, 13 plains and mountain states provided Bush with 99 of his 271 electoral votes. He needs them all for re-election in 2004. But there are rumblings among his farmland faithful that the president has become too globally concerned at their expense. Afghanistan. Israel and the Mideast. India and Pakistan. Terrorist threats everywhere. Here’s what was found uppermost in the minds of people in a dozen Midwest and Western states: * Natural disasters, from fires and floods to droughts and tornadoes. * The price of corn and cows, soybeans and sows.

A Press report in USA Today says, “Cowboys in Cheyenne and their farmland friends are used to helping people — or animals — in trouble. That’s why they rallied to support victims of the 9/11 terrorist attacks. But the continuing and constant scare talk by ”Bushpeople” of the ”certainty” of more terrorist attacks in the USA and the huge price tag to prevent them is beginning to stir up doubters hereabouts. They remember Aesop’s Fables and the little shepherd boy watching sheep who cried ”Wolf!” once too often, when there was no wolf. If the Bush scare-spreaders keep crying ”Wolf” and there is no wolf, they will lose some of their loyalists out here.

It is the same strategy which Vajpayee was following in India by raising the nuclear war specter. His party, BJP, had suffered big electoral reverses in the elections held last February. To prepare his strategy for the incoming elections, he decided to recall his success experience of the past. He refreshed the lesson learnt earlier in winning the elections owing to the defeat of Kargil strategy of Pakistan’s Premier, Nawaz Sharif, regarding Kashmir. He amassed over 750,000 Indian soldiers along the Pakistan border in Kashmir on flimsy pretexts in order to create nuclear war hysteria. The country gets united and the people stand behind its leader as long as this hysteria could be maintained. Similarly, Bush is trying to keep America scared of the terrorist threats beyond all proportions. People have started gradually realizing that it is nothing more than the legendary crying “Wolf!éEof Aesop’s Fables.

The revelation of massive bookkeeping fraud at the telecommunications giant is unlikely by itself to be particularly injurious to Bush, Republican and Democratic strategists agree. At the same time, however, both sides believe accumulating economic bad news may be reaching critical mass, creating a public disenchantment that could stick to the Bush administration and congressional Republicans in November.

A wave of corporate scandals — WorldCom, Tyco, Global Crossing, Adelphia Communications, Andersen, Enron — has hammered consumer confidence and plunged stocks deeper into a bear market. The employment picture is sluggish, the federal budget has returned to the red, and Congress must pass a law to borrow more money. The trade deficit is growing, the dollar is falling, and health care costs are rising. The Democratic Party, hoping to build this sentiment, circulated an editorial from the Des Moines Register stating that “President Bush’s economic policies aren’t working. The government is plunging deeper into debt while the stock market falls, corporate scandals mushroom and the economy seem to be in a state of limbo.”

Besides, Bush advisers also acknowledge that the economic bad news could eventually be damaging to the president. “Obviously, if events in the economy and the stock market don’t improve and there are not a lot of barometers of victory in the war on terrorism, those can have a cumulative effect,” said Matthew Dowd, polling coordinator for the Republican National Committee. “In the long term, things like that will have an effect.” In the Pew poll, 35 percent of those who approve of Bush said they would vote for Democrats in the fall — a greater percentage of defectors than the 24 percent of Clinton supporters in 1998 who said they planned to vote Republican. And slightly more voters said they planned to back a Democrat in November than a Republican.

An independent pollster, John Zogby’s latest survey gave Bush a support level of 69 percent — but only 51 percent said Bush deserved to be reelected. At the same time, polls indicate fewer Americans think the country is headed in the right direction. A poll released Wednesday by Democratic pollster Stanley Greenberg found that Americans, by 10 percentage points, think the country is on the right track; late last year, the margin was as high as 38 points.

People are feeling that there is another crisis of stunning proportions unfolding before them, this one a crisis of confidence in the markets and the economy. Enron, Global Crossing, Tyco, and now WorldCom have all become household names – not, however, for the reasons that corporations routinely spend millions to make their names into brands. But Bush, the nation’s CEO, has had little to say about it, in public at least.

Bush has a chance to be the Teddy Roosevelt of his time. It was 100 years ago, and Roosevelt, a Republican president, stood up to the most powerful businessmen of his generation – J.P. Morgan, John D. Rockefeller, James J. Hill – and declared that the giant financial and industrial trusts had to be stopped. Roosevelt pounded the table, drafted legislation, and directed his Justice Department to sue to break up the trusts run by men whose ambition had grown into a threat to the nation.

“He was willing to put the whole power and prestige of the White House on the line,” says presidential scholar Douglas Brinkley of the University of New Orleans. “It took extreme courage to do what Roosevelt did. He never cared about public opinion polls.” But unfortunately Bush is not like Teddy Roosevelt. He cares for the opinion polls. He cares for the interests of the Big Business. He and his Vice President are both big businessmen. He has planned a $200 billion tax cut to favor the Big Business in the name of the fiscal stimulus. But the weakening of demand caused by lower share prices will offset both the effects of the presumed fiscal stimulus as well as of the further reductions in interest rates. Both these weapons of boosting the economy will become ineffective. Only the rich will be benefited by tax cuts in a depressed stock market atmosphere.

Commenting on this situation, the Times of London writes, …..The congressional election is therefore wide open and the Wall Street scandals have greatly improved the chances of Democrats upsetting conventional wisdom, winning control of Congress and turning Mr. Bush into a lame duck.

The possibility of a lame duck President brings me finally to the most interesting if farfetched consequences of the Wall Street scandals. By weakening Mr. Bush, discrediting the US economic model and undermining America’s moral authority, these scandals will confirm a trend which began with the Axis of Evil speech and Mr. Bush’s over-enthusiastic embrace of Ariel Sharon. By threatening to go to war against countries which have never attacked the United States, and boasting about his power to dispose of any political regimes not to his liking, Mr. Bush has lost the respect of both America’s military enemies and its allies. Now the loss of international respect for the United States is moving a step further.

America has forfeited its global military leadership by blustering against President Saddam Hussein and failing to curb Mr. Sharon. It has forfeited its global diplomatic leadership by abrogating treaties on climate change and criminal justice. It has forfeited its global economic leadership by protecting its steel companies and increasing subsidies to farmers. Now America is forfeiting its global business leadership by failing to enforce proper financial practices and ethical standards. This loss of American leadership will probably be the most enduring legacy of the scandals on Wall Street.