Did the country deserve it?
Some will never admit that Bush is getting flack that he deserves. Richly, shall we say, laughing at "rich" being most of "richly."
But does the country deserve it?
Do the repubs deserve it from the dems, just because they did it to the dems?
Ah, the complexity. Ah, the inevitability.
Was it worth it? Only the repubs can say, and they don't know yet.
whatgoesaroundcomesaround
But this says it might not come around too hard:
DAILY EXPRESS
Flickering Scandal
by John B. Judis
Only at TNR Online
Post date: 07.03.02
In a none-too-subtle attempt at damage control, President George W. Bush plans to give a speech next week on corporate responsibility. In part, the administration is worried that the spate of business scandals like Enron and WorldCom are driving down the stock market and the dollar, imperiling the fragile economic recovery. But they are also worried about what the scandals might do to Republican candidates in next November's elections.
It's a reasonable concern. Current polls suggest that the public is identifying Republicans with the scandal. For example, a CNN/USA Today/Gallup poll conducted after the WorldCom scandal broke found that, by 62 to 30 percent, respondents thought that the Republicans in Congress are "more interested in protecting the interests of large corporations" than "ordinary Americans." By contrast, just 36 percent of respondents thought the Democrats were more committed to large corporations than ordinary Americans. In the past, these sorts of perceptions have helped Democrats running for office. In 1930 and 1932, and--to a lesser extent--in 1990 and 1992, scandals played an important role in discrediting Republican candidates.
But the Republicans may not fare so badly this time around. The war on terrorism, which has rallied Americans around the president, is just one of several mitigating factors that should help bolster the GOP's image in the fall campaign. And while it's hard to know for sure how the 2002 elections will turn out--a lot will depend on what happens to the economy in the next four months--it's unlikely this Bush administration will suffer from scandal in the same way his father's, or much earlier Herbert Hoover's, did.
he scandals of the early 1930s, along with the stock market crash of 1929, punctured a mood of euphoria that had surrounded the economy during much of the 1920s. Rising productivity and profits had economists and politicians alike convinced that the American economy was on a permanent path of prosperity. Popular culture idolized businessmen, not just for their ingenuity, but also for their integrity: In Bruce Barton's The Man Nobody Knows, one of the 1920s best-selling books, Jesus Christ returns to earth--as an American businessman.
Then came the crash of 1929, which shook Americans' faith in capitalism, and the ensuing scandals, which shook Americans' faith in businessmen. It was discovered, for instance, that Wall Street executives from J. P. Morgan & Co. were benefiting from insider stock tips even while their clients were going under. In addition, banks were calling in loans to small businessmen while making interest-free loans to their own officers so they could cover their own investments. As Gerald Johnson wrote in The New Republic in 1932, "It will be many a long day before Americans of the middle class will listen with anything approaching the reverence they felt in 1928 whenever a magnate of business speaks."
Politically, the public blamed the Republicans, who had controlled Congress and the White House since 1921, for both the crash and the scandals. They came to identify them not simply with the rich, but with the greedy, corrupt, and incompetent rich. And this perception was politically fatal to the Republican Party. In the 1930 Congressional elections, Democrats gained 53 seats. In the 1932 election, they gained 97 more seats--a modern record--while taking the White House in the landslide. Democrats would benefit from this populist perception (resting not on envy of wealth, but on anger at its misuse) for the next three decades.
uring the late 1980s, Americans were not as buoyant about their economic prospects as they had been during the 1920s or would be in the 1990s. Still, the 1980s--the age of the yuppies--were also an era that celebrated wealth and worshipped the brilliance of the new entrepreneurs. Conservative economists and politicians also believed that they'd finally conquered the economic cycle, banishing recessions forever. "We see no credible reason why a recession is likely to occur," Michael Boskin, the chairman of George Bush's Council on Economic Advisors, declared in October 1989.
Eight months later, the economy plunged into deep recession. And with the economic downturn came a flood of political and business scandals involving Reagan administration officials like Samuel Pierce, the Secretary of Housing and Urban Development; Wall Streeters Dennis Levine, Ivan Boesky, and Michael Milken; the Savings and Loan industry; and S&L magnate Edward Keating and the Capitol Hill "Keating Five."
The scandals tarred Republicans and, eventually, the administration of George H.W. Bush. In May 1990, according to polls taken at the time, 51 percent identified the Republicans with the interests of the rich--up from only 18 percent in 1987. On the eve of the November 1990 election, Kevin Phillips commented that the Republican party had "appeared to become the defender not so much of free enterprise as of big business, and the greed that now seems to have characterized the 1980s: the Milkens, Silverados and HUDs." Phillips' opinion was echoed by Rep. Guy Vander Jagt, the chair of the Republican Congressional Committee. "Many of our candidates around the country are dropping precipitously," Vander Jagt said. "We are being perceived as favoring the rich."
The combined effects of the downturn and these scandals showed in the 1990 and 1992 elections, although not as dramatically as in the early 1930s. In the 1990 congressional elections, Republicans had initially hoped to undo the gains the Democrats had made in the prior two congressional elections. Instead, they lost eight seats in the House and one in the Senate. In 1992, Bill Clinton, abetted by independent candidate Ross Perot, revived the New Deal era-identification of the Republicans with the "forces of greed." While there were numerous factors that led to Clinton's victory that year, the perception of Republicans as the party of the irresponsible rich was certainly one of them.
n terms of sheer magnitude, today's scandals are certainly comparable to those of the 1930s and the late 1980s--and, in some cases, a little worse. The collapse of Enron matches the collapse of Samuel Insull's Ponzi-like, 65-company utility holding company in 1932. The perfidy of Arthur Andersen easily exceeds that of Milken and Drexel Burnham. Public confidence in business has also fallen, although it did not have as far to fall as it did in the early 1930s. According of the Gallup survey of public confidence in American institutions, only 20 percent of Americans express confidence in business as an institution, down from a previous low of 28 percent last year. (The only institutions that do worse on the Gallup scale are Wall Street at 19 percent and HMOs at 13 percent.)
Predictably, Democrats are trying to awaken the historic identification of the Republicans with the irresponsible rich. And there are signs they are succeeding. In the bipartisan poll conducted last January by Lake, Snell, and Perry and Tarrance Associates, more respondents disagreed than agreed with the statement that "George Bush is too tied to the wealthy and big business." However last month, 51 percent agreed and 46 percent disagreed. More to the point of the November congressional elections, last month's CNN/USA Today/Gallup survey found that 76 percent think "big business has too much influence over decisions made by GOPers in Congress." These numbers suggest trouble for the Republicans in the fall.
There is one additional factor that could hurt Republican chances. In 1990, the first Bush administration was able to neutralize the savings and loan scandals as a political issue by acting swiftly and decisively. George W. Bush and his administration are promising similar action against today's scandals, including "the most sweeping re-writing of the security laws since the creation of the SEC [Securities and Exchange Commission] in 1934." But it's highly unlikely that they will do what they say. As the public senses, the administration and Republicans in Congress are too closely tied to the business lobbies that oppose any dramatic change in securities or accounting rules.
House Republicans, for instance, have passed an administration-supported bill that makes minor alterations in accounting regulations but won't prevent accounting firms from being hired as consultants for the firms they also audit--the very practice that got firms like Arthur Andersen into so much trouble. In addition, House Republicans and the administration have opposed reforms that would prevent accounting executives from forming long-term ties with the firms they audit. The conflict over these rival bills, and similar reform measures, can only reinforce the public's perception that congressional Republicans are "more interested in protecting the interests of large corporations" than those of "ordinary Americans."
Still, there are reasons to wonder just how important those perceptions will become in November. The Great Depression was an essential ingredient in the political backlash of the 1930s and the recession, and fear of economic decline, in the Republican losses of the 1990s. In each case, hard times got voters thinking about the workings of business and the economy--and looking for a political scapegoat. Today's economy isn't exactly strong; indeed, there are (some) signs that it may be slipping back into recession. But it's still much more vibrant than the economy of the early 1990s, to say nothing of the 1930s. And to the extent the economy is in rough shape, the Bush administration--which, after all, just got into office two years ago--can convincingly blame its predecessor for some of the problems.
Most important of all, public support for the president's conduct of the war on terrorism could overwhelm, or at least overshadow, anger and disgust over the scandals. Voters preoccupied with terrorist attacks may simply not consider business scandals all that important when it's time to vote in November, even for congressional representatives. None of this is guaranteed: Enron and WorldCom will certainly take a toll, plus there are plenty of other issues that might give the Republicans fits this year. But the scandals themselves seem unlikely to unravel this presidency or to precipitate a Democratic landslide in November. Unless the economy turns decisively downward in the next four months and new even larger scandals emerge, Worldcom and Enron may prove less salient than the Democrats hope or Bush fears.
John B. Judis is a senior editor at TNR. |
