Editor John Harwood: Corporate Gate
Hosts Mort Kondracke and Fred Barnes
Monday, July 01, 2002
This is a partial transcript from The Beltway Boys, June 29, that has been edited for clarity. Click here to order the complete transcript.
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((BEGIN VIDEO CLIP)
GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Corporate America has got to understand there's a higher calling than trying to fudge the numbers, kind of try to slip a billion here or a billion there and may hope nobody notices. But you have a responsibility in this country to always be above board. We expect high standards in our schools, we expect high standards in corporate America as well, and I intend to enforce the law to make sure that they're high standards.
(END VIDEO CLIP)
FRED BARNES, CO-HOST: Welcome back to The Beltway Boys.
Joining us to talk about the impact the recent corporate scandals are having on the stock market and the political landscape is John Harwood, the national political editor for The Wall Street Journal, one of the best reporters in Washington as well.
Welcome to the show, John.
JOHN HARWOOD, NATIONAL POLITICAL EDITOR, THE WALL STREET JOURNAL: Hi, Fred.
BARNES: You just heard the president there, and of course Democrats believe that they can turn this issue of corporate corruption against Republicans. Will they really be able to do that, or might the response of the sort that we just heard from President Bush be enough to thwart them?
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HARWOOD: Well, the White House is obviously taking this very seriously. Throughout the week, the administration has come out, put the president himself out there with very strong language. That quote you just ran sounded a little bit like Al Gore in the fall of 2000.
So, you know, Democrats think this can be a major theme. They're going to talk about deregulation and Republican contributions to these things. Republicans have a different objective. They're trying to take the edge off the issue, and Bush is their best weapon to do that.
BARNES: Well, do you think he can convincingly act like Teddy Roosevelt?
HARWOOD: Well, it's going to be hard. You know, everything about Bush, substantively and stylistically, makes him vulnerable to this kind of an attack. You know, he — his management style is a CEO kind of style, everybody's talked about that, and he's been — run a couple of companies, he's been for partial privatization of Social Security. There's a lot of stuff in his policy proposals and his bearing that, that make this ripe for Democrats.
Democrats have to be worried, on the other hand, that they don't overplay their hand. You know, people don't like class warfare in this country. They do want to vent. And there's more and more of them who do want to vent right now because there's a lot of anxiety about the economy.
MORT KONDRACKE, CO-HOST: Isn't it fair to say, John, that, that when it comes to proposing legislation to deal with corporate corruption and corporate responsibility, that the Democrats have been harder-line, more forward- leaning, whatever the term is, and the Republicans have been resistant, and won't that give the Democrats a chance to say, Hey, you know, the Republicans have been letting corporations get away with murder?
HARWOOD: No doubt about it. And you see it in this accounting bill, which Tom Daschle, within hours of these WorldCom disclosures, said he was going to move up on the Senate calendar. The House has passed a bill. It is not as tough as the Democrats in terms of cracking down on how accounting firms can relate to the companies that they audit. You've just got a real burst of rocket fuel for that legislation.
And Democrats are looking at a whole range of other sort of anti- corporate fraud measures to lay on as amendments. They're gong to force Republicans to take a bunch of votes on that, and a bunch of legislation that looked like it was dead a few days ago has suddenly got some new life.
BARNES: John, but do you really think that the public out there is demanding a whole hurricane, a whole storm of new regulations?
HARWOOD: Well, this is where the balance has to be struck. You know, when Al Gore tried this populist tack in the fall of 2000, it wasn't enough, it didn't work sufficiently, I think in part because it didn't ring true to people. Times were good, the economy was reasonably good. Who exactly were we supposed to be fighting?
The difference now is, there are more people out of work, there are more people who are worried about losing their jobs. And so they're receptive to this kind of rhetoric, but they've also got a commonsense attitude toward it. They know that a lot of these big corporations are needed in their communities. They — that's where they're looking to for jobs.
So they're not ready to have a wholesale government attack on corporations, but they are going to be a lot more open-minded about tougher government regulation.
KONDRACKE: Let me ask you about what I call the 401(K) factor. That is, you know, everybody, everybody's invested now, and they look at their 401(K) returns and they see cratering, you know, big losses they thought were coming out of the, out of the recession, growth rate is 6 percent, and yet they're in, their, their retirement's no safer.
Now, how does that play politically?
HARWOOD: Well, it just fuels the search for scapegoats. And unfortunately for Wall Street and the business community, there's just one scapegoat after another being served up in this, from Tyco, Martha Stewart, Ken Lay, and now this WorldCom disaster.
So, you know, they've got a lot of people that they can point to, and this is something, again, the administration needs to be aggressive. Republicans were talking in the Capitol this week, the president cannot be as passive as he had been in the past, he's got to get out there. And we saw that Wednesday, Thursday, Friday.
BARNES: John, don't you think this issue is used demagogically by both Democrats and Republicans? You wrote in The Wall Street Journal about Erskine Bowles, who's running for the — as a Democrat for the Senate in North Carolina, being accused of a billion- dollar debacle because a company he's — debacle because of a company he's involved in gave some bad corporate advice — investment advice to as pension fund in Connecticut.
That seems to me like a ridiculous charge.
HARWOOD: Yes, be nice to see Elizabeth Dole try to use that in the fall campaign. But certainly the Republican Party — You know, a lot of this is political operatives in campaigns are throwing stuff up against the wall and seeing if it sticks. The same in Colorado, Wayne Allard is an incumbent Republican senator. The Democrat was charging him with being too cozy with the accounting industry, not a good place to be right now. He comes back and says that Strickland used to work for Global Crossing.
So people are trying, trying lines, seeing what works.
KONDRACKE: OK, John, thank you so much for being with us.
HARWOOD: Thanks for having me.
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